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Gambler's RuinThe basic meaning of gambler's ruin is when a gambler loses the last of his bank of gambling money and is unable to continue gambling. "Gambler's ruin" is also sometimes used to refer to a final large losing bet placed in the hopes of winning back all the gambler has lost during a gambling session. More generally however the phrase refers the ever decreasing expected value of return on a gambler's bank as he continues to gamble with his winnings. Theoretically the house has only a slight advantage over the gambler, but in practice the house advantage compounds with each successive bet. For example, the official house advantage for a casino game might be 1%, and thus the expected value of return for the gambler is 99%. However, this math would only be true if the gambler never used the results of a winning bet again. Thus after gambling 100 dollars the idealized average gambler would be left with 99 dollars, but, if he continued to bet using his 99 dollars in winnings, he would again lose 1% on average and his expected value would go down to 98.01 dollars. This downward spiral continues until the gambler's expected value approaches zero: gambler's ruin.
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