Should You Gamble

4/1/2022by admin

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Gambling budgets are only necessary to limit your losses. The reason they say “don’t bet your rent check” is that too many people have done exactly that. I look at the reasonable loss as what I’m willing to pay for an evening’s entertainment. For comparison, I look at how much it costs to watch a sports game live at the stadium. You should also keep other items as proof of gambling winnings and losses. For example, hold on to all W-2G forms, wagering tickets, canceled checks, credit records, bank withdrawals,.

You might be thinking of becoming a gambler. It’s more likely that you’re already a gambler, but you’re thinking about taking your hobby to the next level. Either way, you should go into this hobby with a firm grasp of the pros and cons of being a gambler.

I think a reasonable, sane approach to any activity starts with looking at that activity as it really is. Some hysterical people think that gambling is a sin. They think it leads to all kinds of evils.

This is the biggest argument on our list. Do a Google search for ‘arguments against.
Most people don’t need a reason to gamble. They either gamble, or they don’t. Some people, usually based on religious beliefs, believe that gambling is wrong or evil in some way. But others simply aren’t interested in games of chance.

Other people gamble unreasonably. They wager money they can’t afford to lose. They never know when to quit.

Gambling resembles drinking in that respect. It’s fine in moderation, but not everyone can handle it.

And even for those that can handle it, gambling might not be worth it. Consider the pros and cons on this list before getting started or taking things to the next level.

Some of the more Puritanical members of American society might argue that you shouldn’t gamble at all. It’s a sin. It’s bad for society. Blah blah blah.

But they ignore some of the very real pros of becoming a gambler:

Pro #1

Gambling is fun.

If gambling weren’t fun, no one would do it. Far be it from me to forget about the most important item in the advantages list.

If you’re not having fun when you’re gambling, you’re doing it wrong. Either that, or it just isn’t for you. Any time gambling stops being fun, you should stop gambling.

Deciding how much fun it is to gamble and whether or not it’s worth it is up to you.

Pro #2

Gambling encourages courage and risk-taking.

I know a man who worked hard his entire life, from the time he was 18 to the time he was 55 (when he retired). He made an okay living, but he never got rich. He was happy.

He told me a story once about how he’d been offered a job making 5 times what he was making at the job he worked for 37 years. He turned it down, reasoning that it was too big a risk. He did all right.

But that’s not the kind of lifestyle I’ve lived. I’m a risk taker. I’ve been rich, and I’ve been poor. I’m confident that if I continue to take thoughtful, courageous risks, I will grow my wealth for the rest of my life.

Being a gambler encourages these character traits.

Pro #3

Smart gamblers can make profits.

Not all gamblers can get an edge, but those that can make plenty of money. Professional sports bettors are probably the highest paid gamblers. Pro poker players do well, too. Card counting can be lucrative, but it’s a tougher nut to crack than the other two.

The only way to consistently profit as a gambler is to stick with wagers where you have a mathematical edge. Those are hard to come by, but they’re not impossible to come by.

David Sklansky wrote a great book on the subject called Getting the Best of It. It’s well worth reading if you’re interested in how to get an edge when gambling.

Pro #4

Thoughtful gamblers can learn lessons from gambling that they can apply in other areas of their lives.

Poker players, in particular, can translate lessons from their gambling to real-life situations. Being able to bluff effectively can be a huge boon during business negotiations, for example. Learning how to read others and know when they’re lying is also a handy skill to have in the business world.

On a broader level, gambling also teaches us that everything is temporary. This is an important lesson for living a fulfilled life. You can learn this lesson in other ways—in fact, you certainly will. But it’s a lesson that’s likely to be reinforced throughout your gambling career.

Pro #5

Some types of gambling teach patience.

I’m thinking of both poker and blackjack. In poker, you’re more likely to win consistently if you wait for the good hands before betting. In blackjack, you can make money counting cards. But doing so requires you to wait for the deck to become rich in 10s and aces.

The benefits of patience are obvious.

Pro #6

Gambling can be good for your math skills.

You can improve your math skills without gambling, but it can be more fun to learn math by gambling. Probability is one of the most interesting branches of mathematics. It’s also relatively easy to learn, especially when compared to stuff like trigonometry.

Being able to decide which bets are better than others is all about the math. Getting good at gambling means getting good at math. It’s impossible to be a good gambler if you’re not reasonably fluent in some basic math.

Pro #7

Gambling stimulates the economy.

The gambling industry is huge. Money spent in that industry employs thousands of people in dozens of destinations. Some people don’t like gambling, and they say it’s bad for society.

But I live near the WinStar Casino in Oklahoma. I can see how many jobs that business has created here and near here.

People are going to gamble one way or the other. We might as well keep the money in the mainstream economy so that the revenue can be taxed and used to benefit the public.

The Cons of Gambling

Of course, I have a certain amount of self-interest in terms of stoking your enthusiasm for gambling. After all, I’m a writer working in the industry. If you’re interested in gambling as a hobby, you’re more likely to want to read what I’ve written. Without an audience, I’m sunk.

But I’d be remiss in my duties if I didn’t cover some of the reasons you might not want to gamble:

Con #1

Gambling can be addictive.

I used to be skeptical of the claims that gambling can be addictive. Since you’re not putting a substance in your body, you can’t become dependent on it.

That was a short-sighted view of the situation. Any minimal amount of research into what happens to a person’s brain chemistry when they’re gambling makes it clear that gambling can be just as addictive and damaging as alcohol or drugs.

Con #2

Almost all gambling activities put you at a mathematical disadvantage.

This is especially true of casino games. The bets don’t pay off at the same odds of winning them. The difference between those odds is the house edge. It’s a mathematical force as powerful as compound interest.

If you gamble at casino games long enough, you will eventually lose all your money. The math will ensure that.

The simplest example of this is the game of blackjack. Most of the time you win even money. The game is more-or-less fair, but the house has an edge because of one simple fact:

The dealer acts last.

If you bust before the dealer, you automatically lose your bet. If the game were mathematically fair, you’d push or tie with the dealer if you both were to bust.

Poker has its own way of putting you at a mathematical disadvantage—it’s called the rake. When you play poker in any kind of professionally run cardroom, the house keeps 5% of each pot.

Unless you’re better than the other players at the table, that 5% will eventually eat up all your money. You don’t have to just be better than the other players. You have to be so much better that it compensates for that 5% rake.

Sports betting, too, puts you at a disadvantage. It’s not called the rake in sports betting; it’s called the vig. With most bets, you have to wager $110 to win $100. That extra $10 is pure profit for the bookmaker—unless you’re good enough at picking winners that you can win 53% of the time or more.

This doesn’t mean you can’t get an edge by counting cards, playing expert poker, or by handicapping games well. It just means you have to be really good those things.

Con #3

Most people lose money when they gamble.

Even people who understand the mathematical principles behind gambling often lose. Some of them are just recreational gamblers who are willing to accept those long-term losses. Some are confused and think they’re winning in the long run even though they’re not.

Think about this:

If most people won money when they were gambling, the casinos couldn’t stay in business.

And have you seen those casinos in Las Vegas?

They’re big and fancy. That costs money.

They make their money from people losing it in the casinos.

Con #4

Some profits from gambling don’t go where they’re supposed to.

I’m talking about most state lotteries here. Those funds are supposed to be earmarked for education in most states, but that’s not how most state budgets work.

A state’s budget is like a bucket. Money is like water in that bucket. Where the water gets poured is also part of the budget.

But states don’t categorize that x number of dollars came from the lottery, so we have to increase educational spending by that amount.

In fact, in most states with a lottery, the extra revenues usually pay for tax cuts for corporations—NOT education.

Con #5

Your money would probably work for you if you invested it.

I’ve mentioned compound interest as a force of nature a couple of times. It’s true. If you invest small amounts of money consistently over a long period of time, compound interest will ensure that you eventually have a large sum of money.

If you start by saving $500/month, and if you can earn 6% interest, you’ll be a millionaire in 40 years. You’ll only have invested $6000 a year for 40 years, so your total investment is only $240,000. The rest of the money comes from compound interest.

If you can save more than that, or if you can earn a higher return on your money, you can become a millionaire even faster.

Pump that same $500/month into the slot machines over at Harrah’s, and in 40 years, you’ll almost certainly have nothing to show for it. Sure, some people get lucky and win a million dollars. But even some of them put it back into the machines and lose it.

Con #6

It’s an expensive form of entertainment compared to most other activities.

I like to think of gambling in terms of how much it’s going to cost me on average per hour. That’s an easy enough mathematical formula when it comes to casino games:

Total hourly action X the house edge = expected hourly loss

Of course, you also need to be able to calculate the total hourly action. One way is to just total up all the bets you make over a 60-minute period. But most gamblers I know vary their bet sizes at least a little, just to keep things interesting.

Casinos calculate hourly action by estimating an average bet size and an average number of bets per hour, then multiplying one by the other.

For example, an average slot machine player makes 600 spins per hour. If you’re playing for $5 per spin, you’re putting $3000 per hour into action.

Another example is a blackjack player who bets on 70 hands per hour. If he’s playing for $10 per hand, he’s putting $700 into action per hour.

The house edge for table games (and video poker games) is a known quantity. For example, if you’re playing blackjack with perfect basic strategy, the house edge is between 0.5% and 1%, depending on the rule variations in place.

If you’re putting $700 per hour into action at the blackjack table, and if you’re facing an edge of 1%, you’re looking at a predicted hourly loss of $7.

But with a slot machine, you’re not sure what the house edge is. You can look at estimates from publications like Strictly Slots or American Casino Guide for overall estimates for specific destinations or even specific casinos.

Most slot machines have at least an 8% house edge, though. (Online slots are marginally better, as they have less overhead and can afford to offer better games.)

So the $5 per spin slot machine player, putting $3000 into action per hour, will lose an average of $24/hour.

This doesn’t automatically make blackjack better than slot machines, by the way. Some people think blackjack is about as exciting as watching paint dry.

But if you compare that cost with the price of seeing a movie, you might find that movies are a cheaper form of entertainment. Most movie tickets in my area cost $10 or $11, which means I’m spending $5 or $6 per hour for that entertainment.

I can borrow movies on DVD from my local library for free, though, too. I can also borrow books there for free. Entertainment doesn’t get much cheaper than that.

I don’t make value judgments about how a person spends his or her entertainment money. But I do hope to educate my readers so that they can make their own informed judgments.

Should You Ever Gamble

Con #7

Gambling contributes little to society.

Even if you’re an advantage gambler, like a card counter or pro poker player, you’re not contributing anything to society when you’re earning your money. Recreational gamblers are contributing even less to society.

Compare that with schoolteachers. They work hard for their money, and their contribution to society is clear.

I don’t think every activity should be measured exclusively by how much it contributes to society. But I do think it’s a consideration to think about when deciding whether you want to become a gambler.

Other hobbies arguably offer more to society. I have a friend who’s a retired schoolteacher, and he doesn’t gamble. He’s a painter. He derives a lot of satisfaction from his hobby. And so do the customers who buy his paintings and display them in their homes or offices.

Conclusion

You might decide to become a gambler, or you might not. I think it’s an individual decision, much like deciding whether to drink alcohol. Most people agree that adults have the right to decide whether they’re going to do things like drink and gamble.

My hope is that you have enough data to make an informed decision. You might agree or disagree with any of the pros and/or cons on this list. But at least you have something new to consider when deciding whether to start (or continue) a gambling career or hobby.

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