Who Are the Gamblers?

February 1, 2008 by Nez
Filed under: Philosophy, Smarter View 

In recent days, I have both received in the mail and seen on television advertisements for California Propositions 94 – 97: Indian Gaming Compacts.

While this is not a political blog, seeing the ads on Indian Gaming reminds me of my thoughts on gambling in general.

The Truth about Gambling

To stay in business, a casino must earn more in revenues (e.g. the “house” must win, the players must lose) than it spends on expenses (e.g. restaurant buffets, staff, decor, power, etc.). The fact that gambling is a multibillion dollar industry means that the business model must be working pretty well. And doing any sort of research will tell you that all games are stacked in the house’s favor, some more so than others, but in the house’s favor nonetheless. So, the question is whom does the casino “earn” their money from?

Gambling is Marketed to People Who Should Not Gamble

I see the ads on cable, the billboards along the freeways — these are meant to be seen by everyday people. With gas prices soaring, and housing in the Bay Area among the most expensive in the nation, should people be gambling, hoping to get easy riches?

The Illogic of Encouraging Gambling As a Means to Raise Funds

I have been known to visit a casino or two, usually during “downtime” on a ski trip — we usually just eat at one of the buffets in the evenings and a few of my friends would try their luck at the craps or blackjack tables. What I’ve noticed is that the majority of the gamblers are very “average”, normal clothes and attire, nothing like the glamor of a James Bond movie or anything like that (maybe I’m in the wrong casino). So, the very people that are supposed to be helped by social programs, are the ones that are footing the bill. But guess what? It’s not a dollar-to-dollar transfer. The money that the Indian casino wins are divvied up along the way to middle-men (administrators, campaign contributions to politicians, to name a couple), and who knows how much actually comes back to those social programs — certainly a lot less than what left the gamblers’ wallets.

What about the Rich?

I have to think that 99% of the Rich did not get wealthy through gambling, but rather through hard work, investing, stock options and the power of compound interest. Once they HAD the money, that’s when they can go gamble as “high rollers”.

The End Does Not Justify the Means

As for the propositions, we’ll see what happens in next Tuesday’s elections, but I certainly don’t think encouraging gambling ever helps anyone except whoever owns the casinos.

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Comments

5 Comments on Who Are the Gamblers?

  1. Hunter Nuttall on Fri, 1st Feb 2008 11:30 am

    2. Hi, Nez. I definitely agree with you about gambling not being a good thing (see my linked post for my recent experience with the lottery). The only good thing I can really say about it is that for some people it might be an acceptable entertainment expense (not for me though).

    I wanted to add a note to your final point about how gambling doesn’t help anyone except whoever owns the casinos. Keep in mind that the stocks of many casinos are publicly traded, so we can own them if we want!

  2. Barbara on Fri, 1st Feb 2008 2:52 pm

    3. Hi Nez,

    I find it ironic that Donald Trump built casinos, as well. But, I bet you wouldn’t find him participating in the games.

    I don’t see anything wrong with casinos, however, the gambling process is very tempting to those who don’t have a lot of money, or are struggling financially. They see pictures of past winners, or hear about the latest kazillion dollar Mega Bucks winner, and may tell themselves, “that could be me”.

    I have played slot machines (poor payouts), but what I find fascinating, is that they are almost like a form of electronic “therapy”. You sit, watch the colorful characters spin around, wait to see if you win a coin or two, and are concentrating so much on that, that your brain lets you forget about your other problems. With that being said, if one was not careful, you could also end up spending more time and/or money than you had planned, and end up in GA (Gamblers Anonymous) or another 12 step program.

    Hunter has a great point about being able to invest in a casino…anyone know if you get a good return on your investment?

  3. Nez on Fri, 1st Feb 2008 6:47 pm

    4. @Hunter: Thank you for the comment — I like your post as well, thanks for explaining the astronomical odds in concrete terms.

    As for casino ownership, I was not aware they (or some) were publicly traded — that’s interesting.

    So if you own equity in a casino, do you gamble at it, knowing that any loss “comes back” to you?

    @Barbara: I agree that most casinos are designed to stimulate the senses — all the blinking lights, beeping sounds, and exclaimations of joy from winners all serve to raise the hopes of others, to make them think, “Maybe I’ll be next!”

  4. Hunter Nuttall on Mon, 4th Feb 2008 10:33 am

    5. One casino I know about is Harrah’s (ticker symbol HET). I just looked them up, and over the last ten years they’ve returned 308% compared to 12% for the S&P 500! But they don’t always go up. I know some of Trump’s casinos have been on the verge of bankruptcy before–I don’t know how it turned out.

    As for gambling at a casino you own, I guess it would come back to you, but only about a billionth as fast as you lost it. Maybe if you’re a major shareholder you get perks.

  5. And You Say You Are Not A Gambler : Blogging Without A Blog on Thu, 21st Feb 2008 10:44 pm

    6. [...] On two of my favorite blogs, both authors have written about gambling, in December 2007, Hunter published an article titled “I won the lottery”, and recently, Nez wrote a post titled ” Who Are The Gamblers?” [...]

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