Effects of sequential winning vs. losing on subsequent gambling behavior: analysis of empirical data from casino baccarat players

Abstract

Problem gambling is characterized by intense urges to repeatedly engage in gambling and is highly deleterious to individuals’ financial and social well-being. A fundamental issue in problem gambling is how repeated and risky betting behavior varies as a function of outcome history. We used empirical data on gamblers playing baccarat, one of the most popular casino games, to examine the effects of sequential winning versus losing on subsequent gambling behavior. Specifically, we analyzed data from 7, 935, 566 games played by 3, 986 players at a land-based casino to examine changes in the betting amount and in the rate of betting on hands with different dividend rates according to prior consecutive wins or losses. The results revealed that the bet amount in baccarat gradually increased according to streak length, and this effect was more pronounced after sequential winning than after sequential losing. The proportions of multiple bets, including ‘longshots’ – hands with low winning percentages and high dividend rates – decreased after sequential losing but increased after sequential winning. The present study, as the first attempt to analyze a large dataset on baccarat betting, indicates that gamblers shift their gambling behavior to be more reckless after experiencing consecutive wins more than consecutive losses.