It's the expected value. It's the weighted average of all outcomes. For gambling it's always negative meaning you're always going to lose. It's very often misused when talking about gambling. Just remember you'll always lose.
Not actually true, although casinos in particular are always in the business of offering -EV wagers.
Simple explanation of EV. The perfect example of a 0 EV bet is flipping a coin where whoever calls it wins $1. If the coin is fair, that is, lands on heads or tails equally often, if you flip it a million times, you can basically expect to break even. If you flip it a billion, or a trillion times, the results will converge toward breaking even. The equation for that is simple. 50 percent of the time, you win, 50 percent of the time, you lose, and you win or lose $1 every time.
So (.5*1) + (.5*-1). .5 - .5 = 0.
Now, rig the coin a bit. 49% of the time you win and 51% of the time you lose.
(.49*1) + (.51*-1). .49 - .51 = -0.02. So, betting a dollar each time, you will lose $0.02 on average. Keep doing this, and you will keep losing. It doesn't sound like much money, but Las Vegas is built on odds like this, converging toward the expected value over billions upon billions of trials.
A blackjack game with very favorable rules to the player actually has a house edge less than .5%. That means the house would profit less than half a cent for every dollar bet. Most games are vastly more unfavorable to the player. Shit like slots can be as bad as 10% house edge or worse, though some jurisdictions have laws against this kind of flat-out ripoff.
However, basically any time you have a wager where the EV is positive, the opposite rule applies. Whereas when you make a negative EV bet over and over, you are simply going to lose more and more money, when you make a positive EV bet over and over, your results will converge on positive, if you can play long enough. There is also a related concept called "risk of ruin," which is the odds that even on a +EV wager, you will lose your entire bankroll anyway. There is also a concept called the Kelly Criterion, which is worth Googling, which is an aggressive bankroll-maximizing strategy for deciding the proper bet size, based on your precise EV edge and bankroll size, to use to make money fast. Most consider the pure Kelly strategy to be overly aggressive and risky, but most also use some variation on the concept. When I use a Kelly-ish betting strategy, it is generally betting about half what the pure Kelly strategy would imply, but very quickly backing off if it starts to endanger my bankroll.
In any event, the concept of EV is absolutely essential to advantage playing and actually making money. Every -EV bet you make is a loser. Even if you win that particular bet. If you make -EV bets over the course of a career, you're just plain going to lose money. Maybe not on any particular day, but over the long run, if you even get there without going flat broke. If you make +EV bets, you are going to make money over the long run. You still have the possibility of going broke, but if you actually reach the long run, you're going to make money and keep making money.
Making money gambling is really, ultimately, a very simple thing to do. Just do the math and know what the EV is of every bet you make, or at least have the intuitive skill to know when a bet is +EV and when it is not. Have a grasp of the concept of "risk of ruin," especially if you have a limited amount of money (and who doesn't).
I think the most obvious thing about this exposition is that casinos do not build all those fancy buildings by offering gamblers +EV wagers, at least on purpose. They build those buildings by taking money from people willing to make horrible wagers at horrible odds for the fun of it. Or because they're preying on addicts. I'd have a moral judgment here, but I can't really afford one. Most of my profits gambling have been on poker, where to be utterly frank about it, the profits are to be made by preying on addicts.
