摘要：Classical study of betting and gambling largely argues that, individual is able tomake more revenue from a fraction of income wagered, with utility of pleasure forparticipation being minimal. This explains why, unlike insurance, where peopleresort to reduce the impact of risk, gambling is sought to bear risk (Ankomah 2015).Reasonably so, the gain in revenue is a proximate avenue for a person to place betsto buy and bear risk of such fluctuated nature. However, inherent in this decisionmaking lie the risk of ruin (RoR) that stares the gambler as he/she struggles to earnan expected level of income from a given bankroll. Akin to the gambler’s RoR isthe optimal stopping time. The paper discusses the best point of exit for the gambler,and further derives and analyse the possible RoR of the gambler relative to therandomness and uncertain nature that characterise the game of gambling, andfurther considers the optimal betting strategy, whiles suggesting the best point ofexit using Wald’s equation. It was found that, the ruin of the gambler at any pointin time remains eminent with the randomness of the game of betting and gambling.It was concluded that, optimal betting strategy exists for the adoption of bettorsrelative to the amount for wagering and best point of exit for reason of ruinavoidance.
关键词：Gambler’s Ruin; Probability of Ruin; Random walk; stopping time;
Wald’s Equation
