One, two, three…
[all cheering]
[narrator] We love watching people win.
I just won 250,000.
[others chuckling]
-I'm not joking. -[woman] You're not?
[narrator] Their reaction when they hit a jackpot…
[woman 2] Oh, my God! Oh, my God!
[all cheering]
-[narrator] …bet on the right horse… -Oh, my God!
What! What'd I tell you!
[narrator] …or get that giant check.
[all cheering]
[narrator] The moment their lives change.
A hundred and fourteen million dollars!
How does that sound?
Ooo-wee!
[narrator] But wins like these…
[overlapping crowds cheering]
[narrator] …are rare.
The gambling industry is built on losers,
and it's one of the biggest industries in the world.
It's worth slightly more than sports, which we really like betting on.
And it dwarfs other forms of entertainment.
In the ten countries where people spend the most gambling
across Europe, East Asia, America, and Australia,
the average adult loses hundreds of dollars a year doing it.
But that's just the average.
I think the last time I checked on my, sort of, net balance, as it were,
um, I was at around the negative two or £3,000 mark.
Within that four-hour period, I lost the 5,000 I came in with,
the 25,000 I won,
and then I took another 10,000 off of my cards.
The most I've ever won in a single day of gambling was 1.6 million,
and, um… the most I have ever lost in a single day of gambling was,
I would say, 1.6 million and change.
A lot, to me, would be losing…
$200?
[narrator] And a lot of people play apps like these,
where there's no chance of winning money.
Their games look like gambling games, but the payout is virtual.
What's real is the money you spend to keep playing.
They're called social casinos,
and they now generate nearly as much revenue
as all the casinos on the Las Vegas Strip.
Clearly people don't just gamble for money.
There's something else going on.
So, what is it?
Why do we gamble?
[narrator 2] That's the way it is with gamblers.
Easy come, easy go.
Here's the $5,000 ticket!
[woman] Everybody would like to have a taste of being rich.
And you're looking at the next billionaire, okay?
Step up! Last chance to bet!
-[bell clanging] -[shouting] Buy, sir, on the bell!
[narrator 3] A 14-million-to-one chance is a lot better than no chance at all.
Gambling on fixed-odds betting machines is spreading like an epidemic.
[narrator 2] The urge to get something for nothing has Joe in a vice-like grip.
[narrator] Gambling has been around for a long time.
Dice have dots instead of numbers because they predate our numbering system.
But gambling became big business
when we figured out how to calculate probabilities.
Gambling operators are like insurance companies.
Every year, homeowners pay for insurance.
A lot of homeowners.
And then every year, some of those homes will flood.
For insurers, a flooded home is a lost bet.
They're gonna owe the homeowner money.
But if they do their math right,
the money they make is still far greater than the money they pay out.
Casinos use the same math.
Take American roulette.
It has 38 slots.
Eighteen are red, 18 are black, and two are green.
The casino tends to win on those.
You can bet on red and win three spins in a row, or even ten spins in a row.
But the casino knows, with enough time,
your wins will get canceled out by your losses, plus a little extra.
That's called the "law of large numbers."
In a small slice of time, you can beat the odds,
but with enough play, you can't escape them.
Chance is math,
but feeling lucky…
It's more like magic.
I had… many of the gambler, uh, philosophies.
[narrator] Like the "gambler's fallacy."
[Tiffany] I felt like if there were
four spins where I didn't win,
the fifth spin had to be a big one.
[narrator] We keep playing because we believe a win is due,
and are surprised if it doesn't come,
because we intuitively think outcomes should break down more or less evenly,
even though that's only true for really large samples.
And then there's the "illusion of control,"
the belief that you can increase your odds in the face of pure chance.
Lottery players know it well.
[Adam] If I see a bus in front of me, the plate number,
I will memorize that plate.
They don't really mean anything,
but in your mind you're thinking that,
you're putting some value to it in order to win.
[narrator] Or take dice.
People tend to roll more softly when they're trying to roll a low number.
This magical thinking is part of what makes gambling fun.
Take slot machines.
They're the biggest money-maker at most major casinos,
even though if you strip them down, they're just random number generators
rigged in the casino's favor.
So the original one-armed bandits were mechanical devices
that had big levers that you pulled, hence the one arm, right?
And you wouldn't even sit down because typically they didn't have seats.
They were really meant as entertainment devices
to quickly get your money
or entertain you while you were waiting in line
to play "real gambling" at the tables.
[narrator] The invention took off across America.
By the 1930s, New York City was home to an estimated 30,000 machines,
thanks to the Mob,
because slots were illegal.
Operation of these machines for many years in New York City has challenged
the city authority and the police department.
[narrator] The mayor launched a war on slots,
calling them "mechanical larceny," because they were secretly rigged.
And while he won the battle,
the war… not so much.
This was the Great Depression,
and to raise revenue, Nevada legalized casinos.
New York's mobsters headed west.
[narrator 3] The main business of the town is gambling,
perfectly legal under Nevada law.
The most popular form of gambling in Las Vegas is the slot machine,
which requires some muscle but no skill.
Occasionally, he collects a few coins,
just enough to keep him playing.
[narrator] And slot machines have evolved a lot since then.
I met a game designer in Las Vegas once.
He drew me a picture on this napkin.
It was a simple graph: money and time.
He drew a really, really spiky, jagged line.
[narrator] These were the original slot machines.
[Natasha Schüll] It was the experience of someone putting in money,
winning a lot, and then losing it all very quickly.
Then he drew me another line.
[narrator] These were the next generation of slot machines.
They had chairs, so you could sit down,
and no more coin payoffs interrupting your play.
If you let people sit there longer,
maybe even made it comfortable and less fatiguing,
you could get more money out of them in the end.
[narrator] And no more handle.
Slot machines have a button.
[Natasha] So you're just there with your finger, touching like this.
[narrator] As often as 20 times a minute.
And they kept innovating.
The mechanical reels are now screens.
[Natasha] The way that your eyes are directed into the screen,
it's all about reducing your fatigue
and moving you from one event to the next event
to the next event, in a seamless and frictionless way.
[narrator] And with more reels and rows, there were more pay lines,
patterns that give you a win.
And with penny slots…
[Natasha] You've got 50, 100, sometimes 200 lines,
and you are putting in pennies for each line.
And if you think about it,
if you're betting on 50 lines,
you're going to get some of that back almost every time.
[narrator] It's usually less than what you bet,
but it still feels like a win.
The industry hit the sweet spot.
It learned how to give players…
[Natasha] A smooth ride down to zero.
[narrator] No more big wins or big losses.
It just gently drains your money.
That doesn't bring to mind
gambling and suspense and risk and volatility.
It brings to mind comfort and rhythm and lulling.
And this is exactly
how, uh, regular slot machine players talk about their experience.
It's soothing for me, and kind of takes me away from everything for a while.
That three to four seconds that that machine was spinning,
there was nothing, nothing that mattered.
I could sit there for hours and just entertain myself.
I felt… free.
I felt peaceful.
[narrator] There's a name for this feeling.
[Natasha] "The zone" is not where you're even worried about winning
or being in control.
You really just want to keep going.
[narrator] The zone is the hold,
but it all starts with "the hook."
It's all about the pause, that moment between
when we place a gamble and when the possible outcome may occur.
[narrator] Monkeys have taught us a lot about this.
In one study, researchers gave monkeys juice,
and the dopamine activity in their brains increased,
a reaction associated with pleasure in humans.
Later, the researchers added a step.
They gave the monkeys a signal,
and if the monkeys touched a lever,
then they got some juice.
Once they trained the monkeys…
Signal, touch the lever, reward.
…they measured the monkeys' dopamine activity.
And when the monkeys got the signal,
that's when their dopamine activity increased.
Then it went down, they touched the lever, and it stayed down,
even when they got the reward.
There's evidence this happens in our brains, too.
[Mike Robinson] We start getting a flutter of dopamine increasing
in anticipation of the possible reward.
[narrator] That's the pause.
It didn't even matter what the spin showed.
I got the high off of the actual spin itself,
the… the anticipation of the win.
There's uncertainty, which is kind of uncomfortable,
but, you know,
just uncomfortable enough to be… appealing.
It is likely that some of that additional dopamine
is what makes reward gambling so fundamentally attractive.
[narrator] And potentially addictive.
Just like drugs, you build a tolerance
to the high that you're getting from gambling.
I've probably gambled straight for 30, 32 hours.
This is just to show you
how much I played over the years.
I lost my house, I lost my car.
I lost my belongings, my kids' belongings, my husband's belongings.
It destroyed my marriage of almost 20 years.
It, um, hurt everyone I knew.
[narrator] We know that some factors mean a higher risk for issues with gambling.
More than three-quarters of people with a gambling problem
have also had an anxiety disorder,
and almost as many have struggled with depression or substance abuse.
And the more disadvantaged your neighborhood,
the higher your risk, too.
In the poorest American areas, 10% of adults are problem gamblers.
But the risk is also higher for certain types of games.
According to one study, people who bet on sports or play cards
get addicted, on average, in three and a half years,
but for slot players, it takes just a little over one.
Every single spin, every single play that an individual does
is actually going to give that dopamine response.
[narrator] Have all those design innovations made the problem worse?
We don't know for sure.
The ICRG is the largest funder of this type of research,
but they haven't looked into it.
One possible reason?
They are funded by the gaming industry,
um, which might be somewhat…
I don't know to what extent it is truly problematic,
it just has the risk of being problematic.
[narrator] Other major funders of gambling research in the UK and Australia
also get a lot of money from industry.
The gambling industry is a prime case of what's called industry capture,
in terms of the industry, uh, capturing
the work of scientists to support what it does,
and to deflect attention away from the harms
that its products and practices creates.
[narrator] The gambling industry doesn't rig the games like the Mob once did.
If you see three bars, for example, on this wheel,
that doesn't mean that the machine has three chances to stop at a bar,
because two of them are probably dead.
[narrator] They found smarter, legal ways of getting us to lose.
But some people still manage to win.
My name is Semyon Dukach.
I run a venture capital fund called One Way Ventures
that backs immigrant founders.
And long ago, I did play on and help run one of the MIT blackjack teams.
[narrator] You might have heard of them.
[Semyon] Blackjack is both a game of chance and a game of skill, right?
It's not a perfect game of skill, uh, because chance plays a big factor,
but it-- it has a component of skill.
[narrator] And poker is also a game of skill,
especially if you're a professional
who's won a lot of money playing it.
[reporter] Maria Konnikova called her opponent's bluff,
-winning nearly $85,000. -[crowd applauding]
[commentator] And Maria Konnikova KO's Maduka Meragal.
[chuckles] Whoa.
[commentator 2] He misses on this occasion, and Maria Konnikova survives.
I'm not a gambler, I'm a poker player. Good gambling,
which means gambling where you can have an edge
and take calculated risks where you're a favorite,
where you understand the odds,
is much more calculated.
[narrator] Poker and blackjack aren't games of skill
in the same way chess is a game of skill.
Modern computers have learned to defeat world chess champions,
every game.
That's a pure skill game.
If you play perfectly, you're unbeatable.
But in 2019, when a computer program named Pluribus
played five poker pros in no-limit Texas hold 'em,
it didn't win every hand,
though it did win the vast majority of them.
In both poker and blackjack, there's the luck of the draw,
but since there's more skill than chance,
the best players still win the long game.
The basic idea of card counting
is keeping track of the cards that came out of the deck,
because that affects the probabilities of the cards that are remaining in the deck.
[narrator] Here's how to do it, the 30-second version.
The "count" is your record of the cards that have been dealt.
The higher the count, the more you should bet.
You can ignore these three cards, but for every small card that's dealt,
add one to your count,
and for every high card, subtract one.
Because the more high cards that come out in a deal,
the less likely you are to get one later,
and these cards…
On average, help the player a little bit more than the dealer.
When you get into a situation where randomly a bunch of little cards came out,
it means there's extra big cards left in the deck.
So you would bet a lot more in that situation.
That's the basic concept.
[narrator] If your mind wandered during that,
then you probably shouldn't try it yourself.
Let's not kid ourselves.
Almost all blackjack players are, in fact, terrible blackjack players.
The casinos are in the business of making money,
not in the business of losing money.
[narrator] Because casinos are always playing the long game.
But it's hard for players to do that.
We're human.
We never allowed the emotions of winning or losing to interfere with optimal play.
That's what made us a professional team.
You have to learn to manage your emotions.
[narrator] So you can see the patterns that are real
and ignore the ones that aren't.
And it's the Godfather lesson of poker.
It's not personal. It's strictly business.
For me personally, I view the MIT Blackjack Team
as my first startup company,
and also my first investment fund.
[narrator] Investing well involves skill,
but even if you're really good, there's always an element of chance.
In the long run, the market has always gone up.
So the longer you let your money sit there,
the more likely you are to come out on top,
but in the short-term, like a single day,
it can be a real roll of the dice.
Let me just clarify, day-trading isn't investing.
Day-trading actually is gambling.
[narrator] Robinhood is one of the most popular trading apps,
especially with younger people.
When you sign up…
It came reeling up like a slot machine, ding, ding, ding.
[narrator] Three big question marks.
New users get a free stock,
or rather, they get to "choose" it.
[Natasha] I had to take my finger, and on my phone,
actually scrub off one of the question marks
like I was playing a lottery ticket, like a scratch lottery ticket.
[narrator] You can buy other stocks in a matter of seconds.
And when you're not on this app,
alerts to price movements nudge you to trade more.
It's good for people to think about investing,
it's educational, but it's also dangerous,
of course, because if people start day-trading,
if people start gambling with their investing,
they could lose a lot of money.
[narrator] The gambling industry has known this simple truth for a long time:
when it's easy to gamble, we gamble more.
If you live within 10 miles of a casino,
you're more than twice as likely to have a gambling problem as someone who doesn't.
Think about people who are online gamblers.
They're potentially walking around with a casino in their pocket.
I can't imagine how much harder my recovery would have been
if I had to, um… think to myself, "Well, I can just download an app."
When I look this back,
I see a part of my life that was really in a bad, bad place,
but I'm no longer there anymore.
In those rooms in Gamblers Anonymous,
I felt like I'd just made a mistake, and that I'm a human.
Whatever works for you…
uh… get-- get help.
The most important thing is to get help.
The availability for gambling is-- is terrible.
It's-- it's horrible now, and it…
seems like it's only gonna get worse.
[narrator] In 2020,
as the COVID-19 pandemic swept across the globe,
sports went on hiatus.
Racetracks shut down.
Casinos closed their doors.
People are bored, anxious and isolated.
[narrator] In the US, trading on Robinhood soared.
So did playing state digital lotteries,
where you can play scratch-offs with your mouse.
And online slots with more themes than you'd see on a casino floor…
[man] Never trust a woman with a grudge.
[narrator] …and internationally betting on eSports, all kinds of them.
[commentators overlapping] …biggest game of NBA2K…
…bracket final of Secret versus…
[narrator] The online gambling market had already been growing fast,
and because of the impact of COVID-19, it's expected to grow even faster.
And these games have new ways to keep us playing,
like home pages tailored to your tastes,
or apps that remind you of your past wins,
asking if you want to bet again.
The company that designed this feature explained,
"With this emotional trigger,
customers were more likely to stay active."
Game design has the potential to hook us more,
but we can also make it help.
Some gambling machines in the UK are required to get a software update.
So if someone plays for too long,
it automatically triggers a 30-second cool-off period.
But it can't stop us from going back.
Humans gamble because life is a gamble.
The future is always uncertain.
[officer] Six foot, please, six foot.
[narrator] When casinos reopened in 2020…
[reporter] As you can see, the line continues here outside the front doors.
Came to get that money!
[laughing]
[narrator] The feeling that we can beat the odds
and that randomness has design,
it runs deep.
Our minds are-- have evolved to be very good at pattern recognition.
If, uh, you're in the woods and some leaves move,
you'll think there's a tiger.
It's a useful skill to have if you live in the woods,
but it's not a very useful skill
if you think you're developing a system to beat roulette.
[narrator] Because you can't outsmart something
when there's nothing to figure out.
But it can be really fun to try.
There's always that rush of…
the chance that something big could happen.
[theme music plays]