Putting a lump sum down on the roulette table and hoping for red or black is a popular method gamblers use to try to double their money.
If their colour comes up they stand to make a return of 100 per cent on their investment. However, if they are unlucky then they stand to lose the lot. This double-or-nothing approach is compounded by the fact that the number 0 on the roulette wheel is green, meaning they are statistically guaranteed to lose money over time.
Take a hypothetical gambler who walks into his local casino every first day of the month and puts £100 down on red, stays for one spin of the wheel and then leaves, win or lose. Over the course of five years they would have put down a total of £6,000 onto the table and, according to the laws of probability, seen £162.16 taken away by the dealer, leaving them with just £5,837.84.
If our gambler had instead decided to take his/her £100 a month and invested it in gaming company Paddy Power then they would be sitting on £13,143.71 instead.
While Paddy Power has been the best-performing stock from the gambling sector over the period, 32Red would also have converted the stake into a winning return (£10,501.57).
Returns on £6,000 invested in monthly £100 instalments over 5-yrs
Source: FE Analytics
Investing in William Hill would have seen the gambler down on their initial stake, with a value of £5,865.49. However they would at least be better off than if they had "invested" it in the casino.
Incredibly, the performance of 888 Holdings and Ladbrokes has been so poor over the last five years, investors would have been better off playing roulette. The stocks would have lost the investor £3,159.31 and £1,023.19 respectively over the period.
However, since the benefit of gambling on the stock market is that the stock does not represent a loss until it is sold, our gambler has the option of leaving his money where it is and keeping his fingers crossed for better times.
Keen gamblers may say that betting on the stock market lacks the excitement of the casino, however, Juliet School-Latter, head of research at Chelsea Financial Services, says the comparisons are much closer than you would expect.
"Investing in the stock market has felt a little bit more like gambling in recent months, with volatility weighing heavy on returns," she said. "However, the corporate sector is still in really good shape and it’s only a matter of time before structural problems are sorted out."