The Wager is expressed dialectically, so it needs to be broken down into its dialectical elements to be interpreted properly. Indeed, it is virtually certain from the way the Wager fragments are organized that Pascal intended to write it as a dialogue; failure to recognize this has been one of the most common errors in attempts to interpret it. Unfortunately, because we are dealing with fragmentary notes, we have to reconstruct a bit. Here's my rough-draft attempt at a dialogue-paraphrase that stays close to Pascal's actual notes. At the end I will make a few remarks about some common misguided criticisms of the reasoning. It should be noted that there are several different sorts of arguments deriving from Pascal's own, and not everything I say will be relevant to all of them; I am interested in Pascal himself.
Context: Let us now speak according to natural lights.
A: We cannot know if God is or what He is, for we have no affinity to the infinite and incomprehensible. If this is so, who will dare try to decide the question of whether God exists? Not us.
B: But if we can't decide the question, how could one blame Christians for not giving a reason for their belief? After all, they don't claim to be able to prove the mysteries of God; and yet, despite not considering the question decidable yourself, you blame them for not giving proofs!
A: Well, yes, they don't claim to be able to prove divine mysteries, so fair enough on that point. But this still doesn't excuse people who believe what Christians are claiming.
B: Let's look at this point. The question is whether God is or is not. But we are already presupposing that reason can't decide this issue. "A game is being played at the extremity of this infinite distance where heads or tails will turn up." So what will you wager? According to reason, there isn't any basis either way (according to our supposition). So you really have no right to reprove people for having made a choice without proof; you yourself admit that you don't know anything more than they do.
A: True; but I don't blame them for having chosen to believe that God exists, but for having chosen at all rather than suspending judgment. Whether you choose heads or choose tails, you are still in the wrong. "The true course is not to wager."
B: Ah, but that really doesn't seem to be an option. [Admitting a choice, you have already embarked on thinking through the wager, which involves considering what you might wager.] So what would you choose? On the assumption that you must choose, let's see what's less in your interest. You have two things to lose, the true and the good; two things to stake, knowledge (pertaining to reason) and happiness (pertaining to will); two things you are trying to avoid, error and misery. By our supposition, reason isn't shocked at either of the options available, and we have to choose anyway. Let us estimate the gain and loss of happiness in wagering whether God is. If you gain, you gain all. If you lose, you lose nothing. So wager that God is.
A: OK, let's go with that for the moment. Even then we are still faced with a problem, since gain and loss are not the only things to consider in a wager. We also must consider how much we are wagering. Even if I must wager, I might end up wagering too much.
B: Let's consider that. Since by our supposition we have no particular reason to choose either side over the other, if we wagered one life of happiness for the possibility of gaining two lives of happiness, we still could wager. If we stood three lives to gain, however, on our supposition that we must play, and on our supposition that reason is indeterminate on the issue (which implies that for all we know the chance of gain on either side is equal), we would be stupid not to wager one life of happiness for the chance of gaining three lives of happiness. But suppose there are infinite lives of happiness on the table. Since we can be right to wager one life of happiness against two, and since it would be stupid not to wager one life of happiness against three, what shall we say about wagering one life of happiness against infinite lives? What we stake is finite. What we can gain is infinite. So long as we don't stand to lose an infinite, the reasonable thing is to wager everything on the chance of infinite gain. And it doesn't seem that we have anything to lose.
A: But it isn't certain whether we will gain anything, whereas it is quite certain that we are risking something. There is, as it were an infinite uncertainty about our gain, and this cancels out any reasonableness in risking what we are certainly risking.
B: Not so. Everyone is staking something certain for something uncertain; but we are weighing a finite certainty (our stake) against a finite uncertainty of gain. Uncertainty of the gain is related to the chances of gain and loss; and this, on our previous supposition, is for all practical purposes even. Reason has not shown us any more chances on one side than on the other - this is what started us off. So our game is one of finite risk, equal risk of loss and gain, and infinite possible gain. "This is demonstrable; and if men are capable of any truths, this is one."
A: OK; but it would still be better if we could see the cards - get some sort of inside tip to help us make a better bet.
B: And so we can; we have things like Scripture and all the things to which Christians appeal.
A: Yes, but if I must wager, I'm in a bind. I simply am not made so that I can believe these sorts of things.
B: Then at least learn what's involved in your inability to believe. The issue is a matter of passion, emotion, rather than reason, for reason allows one to believe, but you cannot believe. This is a disease that can be cured. See if you can become convinced, not by piling arguments on top of each other, but by getting your passions under control. The remedy for unbelief is to do what others in your place have done. If you do what they have done, getting involved in the spiritual disciplines that abate the control of the passions over us - attending mass regularly, taking the holy water, or whatever - then this will fix your problem and bring you naturally to believe.
A: But this is what I'm afraid of.
B: Why? What do you have to lose? Your stumblingblocks here are your passions, not your reason; your emotions are getting in the way. And doing these sorts of things is precisely what will lessen your slavery to your passions.
[They continue to discuss this issue a bit, talking about what is really lost and won through these spiritual disciplines. We now come to the end.]
B: What harm will come from taking this side? Due to this spiritual discipline, "you will be faithful, humble, grateful, generous, a sincere friend, truthful." To be sure, you'll lose out on those poisonous pleasures of fame and luxury, but surely these other things more than compensate. By doing these things you will gain so much in this life, and you will see so great a certainty of gain at every step you take, and you will see that what you lose will be so worthless, that you will at last recognize that your risk is virtually nothing, whereas your gain was actually certain and infinite all along.
A: That is a very charming idea!
B: If this pleases you or seems impressive in any way, you should know that it is made by someone who has prayed to God, laying all before Him, asking that you in your doubts may be given such strength that you too can lay before Him everything you have -- for your good and His glory.
(1) Note that Pascal is very explicit that the dialogue is "according to natural lights". This is very important; it indicates that he is not speaking in his own person here, at least in the sense that he is not bringing in his full views. The Wager is concerned to make people aware of the need for faith. This faith, which (one would presume) is temporarily set aside to consider the various risks and gains of different beliefs, is nonetheless continually in the background. Pascal's argument, in other words, is not (as it is sometimes treated) an argument for God's existence. It would be more accurate to call it an argument for the conclusion that faith in the existence of God is possible, reasonable, and potentially desirable, even according to natural lights, i.e., even according to ordinary reason, and (toward the end) that what really keeps people from recognizing the viability of faith is not reason but the prejudices of the passions. This is confirmed by another statement of Pascal's, closely associated with the Wager itself:
But by faith we know His existence; in glory we shall know His nature. Now, I have already shown that we may well know the existence of a thing, without knowing its nature.
Note that it is by faith that we know His existence. The Wager argument immediately kicks in, looking at how this claim fares even according to natural lights. And Pascal's answer: it is very defensible.
(2) Recognizing the point in (1) immediately eliminates a large number of attempted criticisms of the argument. The argument is not a wager on God's existence. Pascal is not claiming that you should wager that God exists. He is not arguing that God's existence is the "safest bet". The Wager argument is an argument that faith in God's existence has something to say for it even when treated as a gamble by natural reason. Some people want to deny that we know enough about the question to say one way or another, and that faith that God exists is therefore unreasonable ("who will dare try to decide the question"). They think the issue is too uncertain or too risky for faith. Pascal argues that these people are mistaken.A confirmation of this interpretation is the line about inside information: Pascal is not saying that the assessments of risk and gain are the real risks and gains. In fact, he explicitly denies it; we have "inside tips" in the form of Scripture, the Church, and "all things to which Christians appeal". The assessments of risk and gain are simply those given "according to natural lights," without considering the inside tips.
(3) So the Pascalian is in a much stronger position than he might seem: he is arguing that even under very skeptical constraints faith in God can be rationally defensible -- and the Christian has far more than just a gamble to undergird his faith. Pascal's Pensées show that Pascal has in mind not merely the Wager, but also things like prophecy, typology, miracles, the superiority of Christianity over other religions, &c. as part of his apologetic argument. His primary interest at this point is to argue that we do not need to be certain to believe. There are quite a few aphorisms in the Pensées that are devoted to precisely this subject, e.g.:
(234) If we must not act save on a certainty, we ought not to act on religion, for it is not certain. But how many things we do on an uncertainty, sea voyages, battles! I say then we must do nothing at all, for nothing is certain, and that there is more certainty in religion than there is as to whether we may see to-morrow; for it is not certain that we may see to-morrow, and it is certainly possible that we may not, see it. We cannot say as much about religion. It is not certain that it is; but who will venture to say that it is certainly possible that it is not? Now when we work for to-morrow, and so on an uncertainty, we act reasonably; for we ought to work for an uncertainty according to the doctrine of chance which was demonstrated above.
He wishes to insist that people genuinely be seeking; this is the whole purpose of the Wager as we find it in Pascal. Others might try to twist it, in a misguided way, to other purposes; but Pascal is only interested in underlying the need to seek for faith:
(236) According to the doctrine of chance, you ought to put yourself to the trouble of searching for the truth; for if you die without worshipping the True Cause, you are lost. "But," say you, "if He had wished me to worship Him, He would have left me signs of His will." He has done so; but you neglect them. Seek them, therefore; it is well worth it.
We are back to the inside tips again. And, in a sense, Pascal's whole point is that the skeptic needs to take these tips (Scripture, the Church, miracles, etc.) seriously, and not ignore them or facilely dismiss them. Pascal has considerable sympathy with them. In his view, they are not wrong in saying that there is a great deal of uncertainty in this matter; they are only wrong in thinking that this precludes faith. This is the point of the Wager.