The way these games usually work is that we must put up $12 to play, and the other party returns our $12 to us along with another $25 if we win = $37 "payout"
If so, on any one draw, we stand to be a loser.....here's why :
The probability of us drawing a card 5 or less * [$37 payout for us - $12 we must put up] + The probability of us not drawing a card 5 or less * [-$12 loss for us] = the expected value for us
(16/52) * [ 37-12] + (36/52) * (-12) = about - 61.5 cents
On average, we will lose -61.5 cents every time we play.........
P.S. - We could do better at playing roulette.......the average loss there is only about 5.3 cents per play......!!!!!
The one rule in gambling is......the house always has the "edge"
Now you know why there are all those big buildings in Las Vegas.......!!!!
