ABSTRACT
T he gambler’s ruin formula plays a prominent role in thefield of probability. This formula, which goes all the wayback to Christiaan Huygens (1629-1695) and Blaise Pascal (16231662), relates to cases where two players, A and B play a game of chance. They stake one unit of money on each gamble until one of the players goes broke. The gambler’s ruin formula gives the ruin
probability for each of the two players. It can be applied in many situations, and, perhaps surprisingly, has turned out to be a useful tool for deciphering the facts in the famous lawsuit of Zarin v. Commissioner.
