Betting on Excel to enliven the teaching of probability

The study of probability has its roots in gambling problems, and the gaming industry remains a source of interesting applications of many of the methods taught in beginning probability courses. The use of examples from gambling can enhance the interest and usefulness of courses in probability, and equip students to participate intelligently in this form of entertainment. This paper explores how the many statistical functions of Microsoft Excel and utilities such as solver can be used to solve gambling problems. We use a simulation of roulette as a vehicle for experimentation; introduce means as a measure of house percentage; variance as a measure of volatility; Hypergeometric and binomial distributions to calculate chances of winning single bets and of being ahead after many bets; and use solver to balance a sports book. The use of Excel allows key ideas in probability to be explored through the investigation of realistic examples.