Why Martingale Betting Works – Until It Doesn’t

When you visit a casino or a sportsbook, there’s not a lot of innovations developed in the 1700s that are still being used today. Save for one. It’s the Martingale betting Ssystem and it’s guaranteed to be profitable – until it isn’t. 

Hi, I’m Jack from Unabated. In my 20-plus years of being a professional gambler, I’ve seen a lot of systems and strategies. Probably the most simple strategy is the Martingale system. In fact, it can be explained in seven words: If you lose, double your wager size.

The Martingale system is actually effective but also deeply flawed. We’ll explore exactly why you may want to rethink your guaranteed path to riches in a minute.

But how did we get here?  We’re not really sure who first discovered the Martingale system. But it was named after London casino owner John H. Martindale. Yes, Martindale. With a “D.” He used to encourage the patrons in his casino to bet this way. Now Martindale’s casino actually went bankrupt. Was it because the bettors were all using this system to get the edge over the house? 

Fast forward to 1891 and a gentleman named Charles Wells got a group of investors from London to stake him and he went to the famous Casino in Monte Carlo. Back then each table had a bank of 100,000 francs and if a gambler was able to beat the table out of all that money they were said to break the bank at Monte Carlo. Charles Wells did that. Table after table. Eventually he won the equivalent of $13 million dollars in today’s money. All using a Martingale strategy. He became famous as a result and even songs were written about him.

That’s Biaheza. We’re very much alike –except he’s younger, more charismatic, and has about a million more subscribers than I do. He decided to use a Martingale system in betting binary options on currency pairs at a sketchy crypto trading site.  What could go wrong? 

Since this is a sports betting channel we’ll translate the example to sports bets.

Suppose you bet on a team against the spread at -110. You risk $110 to win $100. If the bet loses, you find another team against the spread. Now you need to win back that $110 you lost, plus the original $100 you wanted to win.

So you bet $231 to win $210. If it wins you’re ahead $100 and go back to the $110 bet size.

If it loses, you have to win back the $231 + the $110 + the original $100 you wanted to profit.

That’s $485 to win $441. If that wins you’re ahead $100 and back to the $110 level.

If it loses, the slope is getting slippery. Your next bet amount is $1,019. After that comes $2,139. After that is $4,493, and if you’ve managed to pick incorrectly six times in a row, then your next bet would need to be $9,434 to come out a net $100 ahead.

Biaheza is no dummy, he recognized this flaw before he even got started. He realized he’d need to lose six in a row to get into deep water.

I asked my AI buddy ChatGPT to flip a fair coin 1,000 times and then save the output to an Excel spreadsheet. Then I asked how many times there was a streak of at least seven heads or tails in a row? Turns out 12 times in 1,000 coin flips there was a streak that would exceed Biaheza’s loss limit. 

In fact, in that AI coin flip example the longest streak was 11 tails in a row. If you were betting on a team at -110, and started with $110 to win $100. You would have needed to wager $385,305 on that 12th bet to win $350,277 to net that $100. 

That’s pretty crazy, and that’s just the first major problem with Martingale betting. You risk huge losses.

Casinos have evolved since Charles Wells broke the bank at Monte Carlo and modern casinos have table limits that eventually thwart even the deepest bankrolled gamblers. Same with sportsbooks, despite what they like to promote on social media, almost every bettor has some kind of limit.

Many bettors don’t realize that a betting strategy doesn’t change the inherent odds. The house edge remains the same, meaning that over time, the bettor is still expected to lose. A popular system that bettors try to use in betting on baseball is betting on the home team each game in a regular season series.

If they lose the first game, double up on them in the second game, and if they lose the second game double up again on the third game. Because the odds of being swept at home in baseball over the last 50 years is some small number. 

One of the more annoying fraudulent touts, Vegas Dave, used to sell this exact system. In fact, a loss wasn’t a loss if he advised you to double up on that team in the next game. He used that to have a flashy record despite the wins being just one unit and the losses being debilitating to a bettor’s bankroll. 

You see, the odds to win each game are independent of what the last game’s result was. In fact, if you used this system in just the first weekend of the 2024 baseball season, you would have lost big with the Astros, the Mets, and the Marlins. All got swept at home.

There’s also a psychological effect. If you go poking around YouTube, you’ll find people demonstrating their experience with Martingale betting. Usually on roulette. An interesting phenomenon tends to occur. They become very comfortable betting bigger and bigger amounts. 

In fact, the minimum bet, their starting point in their martingale progression always seems to creep higher. It’s the dopamine effect of winning. When you end up risking a lot to win a little, that dopamine effect is decreased. It doesn’t feel as good. If anything, winning is more of a relief instead of being a joy inducing moment. 

They start to become numb to taking bad risks. The smaller bets don’t trigger enough dopamine. It begins to lead to problem gambling behavior. 

With Biaheza, the lesson cost him $1,000, but it appears he quickly realized the flaw of his system.

Some bettors aren’t so quick to learn. Especially those who have short-term success with something like a Martingale strategy. I often say the worst thing that can happen when you gamble is you lose, but sometimes the second-worst thing that can happen is you win. It gives you false confidence that you’re doing something right when you’re really not.

Meanwhile, remember Charles Wells, the man who broke the bank at Monte Carlo using Martingale? Well, it turns out he was a con man. He defrauded the investors that he used to get to Monaco and he was eventually arrested and returned to Britain where he stood trial for a few different cons he had pulled. He served time in prison and eventually died penniless.

If you ever hear of a betting strategy that proposes to beat the house, keep in mind that no betting progression or bankroll management strategy can itself overcome the inherent probability in a gambling game. 

Sports betting is all about price and probability. The path to success in betting is to find places in the market where the price offered by the sportsbook is less than the probability of an event occurring. Price and probability.

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