My wife, Andrea, won $120,000 at Resorts Casino in Atlantic City playing Caribbean stud poker in 1997, before I even knew her. She parted with exactly $16 in that fateful hand, and received 7,500 times her investment after being dealt a royal flush of a-girl’s-best-friend diamonds. For the abstainers, that’s a ten, jack, queen, king and ace of the same suit—the best possible hand in poker. The chances of being dealt such a hand are one in 649,740. To put that in perspective, the odds of getting struck by lightning throughout your lifetime are one in 3,000.
Luck Be a Lady
After playing for over four hours with a $100 budget for the night at the Caribbean stud tables, Andrea was down to six dollars in chips and expecting it to be her last hand. Indeed it was. She made the minimum blind bet of five dollars to play and anted up an additional dollar to be eligible for the progressive pot. The progressive pot fills up (and up and up) with the aggregate of the one dollar side bets at a collective of tables in the casino until someone with a qualifying hand earns some or all of it. The dealer shuffled and dealt. Andrea peeked at her five cards to reveal a royal straight flush arranged in the following order, from left to right: ace, king, queen, ten, jack.
As she choked down her leaping heart, she realized she needed to borrow a $10 chip from a friend to satisfy the minimum raise to win. But even then, the dealer had to have a qualifying hand of at least an ace and a king, the hand that falls just below a pair of twos. If the dealer has bupkis, so do you, receiving only a doubling of your initial bet—and no progressive pot. The dealer qualified. Then his face turned white when he saw Andrea’s hand. Then everyone at the table saw Andrea’s hand. Then everyone in the casino heard Andrea’s table erupt with a noise that sounds like corporate joy, but actually represents exasperated, alcohol-soaked, oxygen-infused envy.
Everyone now darted their gaze to the centrally located progressive pot sign, as the dealer struggled to turn the key to stop the number from rising, faltering enough to add a few more thousand dollars to Andrea’s winnings—in all, $118,529. The dealer was whisked away by the pit boss and Andrea was escorted to the casino teller as zombie-eyed gamblers pawed her in hopes of a mystical transmission of luck. After tapes were reviewed to confirm she hadn’t gamed the system and taxes were withheld, Andrea walked with a pocketful of cash and a check for $81,786. Not bad for a night on the town.
THIS is the story the casino wants you to hear. (They don’t want you to hear that Caribbean stud offers some of the worst odds at the casino.)
THIS is called survivorship bias, and it’s the foundation upon which casino empires and the “success business” have been built.
Survivorship bias draws our attention away from the failures which are more numerous to the successes which are fewer. It makes us think that because Andrea won $120,000 off of a $16 hand of Caribbean stud poker that it is somehow more likely that we will. Survivorship bias inclines us to believe that following the prescription of someone who’s enjoyed abnormal success—in their career or marriage or parenting or investing or any number of pursuits in life that require an incalculable number of variables to align in our improbable favor—will help us achieve a similar level of success, when the success guru du jour may have simply been dealt the 649,740th hand.
David McRaney gives a much more thorough explanation of survivorship bias in his article of the same name, warning us that “the advice business is a monopoly run by survivors,” invoking Daniel Kahneman’s brilliance: “If you group successes together and look for what makes them similar, the only real answer will be luck.” But McRaney’s is not a pessimistic manifesto for underachievers. He addresses the noticeable differences seen in the lives of those deemed lucky contrasted with those who aren’t. Based on compelling research collected over a decade of observance, the following conclusions are reached:
Unlucky people are narrowly focused…crave security and tend to be more anxious…remain fixated on controlling the situation…as a result, miss out on the thousands of opportunities that may float by.
Lucky people tend to constantly change routines and seek out new experiences…tended to place themselves into situations where anything could happen more often…exposed themselves to more random chance than did unlucky people…try more things, and fail more often, but when they fail they shrug it off and try something else.
This, however, is far from the self-deceptive “gotta play to win” approach off of which casinos have thrived. The lucky put themselves in situations where they have a chance to succeed today, but never take such enormous risks that they lose the ability to take a chance tomorrow. Yes, the optimist who falls down indeed gets back up, but the overly-optimistic gambler who gets hit by an 18-wheeler typically stays down. As McRaney puts it, “success boils down to serially avoiding catastrophic failure while routinely absorbing manageable damage.”
In keeping with this theory, Andrea’s big take in Atlantic City wasn’t her first or last display of luck. But to her, suffering the embarrassment of, say, calling a radio station for the chance to win a trip to the Emerald Isle, is a small price to pay. And this gent of Irish descent very much enjoyed that trip.