On Online Gambling

 

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Is it just me or has there been a noticeable increase for online gambling site advertisements both on TV and social media?  It has been noticeable enough for me to blog about it.

Gambling and games of chance are a form of entertainment.  I have enjoyed it on rare occasions.  Most of my gambling was done in the Dominican Republic because there was both a casino and a fine cigar shop in the hotel in which I was staying in.  I would first buy a Montecristo #2 from the cigar shop and head to the casino.  There I would get a roll of quarters which was 40 quarters.  I would then go to a video poker machine, sit down, and light up my cigar.  (Yes, smoking was allowed in the casino, at least when I was infrequently frequenting the place).  I would play video poker, a quarter at a time, and enjoy the gaming and the cigar.  I would play until I ran out of quarters or won enough to buy another cigar for another evening.  That was it.  I gambled for small stakes, with set limits of gains or losses for when I would cease play.  The most I could lose was $10 the cost of a roll of quarters.  It was indeed relaxing and entertaining.

It should be noted that, now and then, I like to play video poker and blackjack on my phone.  I have apps that cost nothing and for which there is zero real wagering involved.  The are basically video games that emulate the odds of playing in a casino.  It is entertaining and costs nothing.  Sadly, unless I am doing this outside in nice weather, there are no cigars involved. 

Having a degree in mathematical statistics which includes courses in mathematical probabilities, I known the odds, which are the ratio of the probability of winning to the probability of losing, are in favor of the house.  The odds of casino games are never in the favor of the customer.  Casinos, brick and mortar or online, exist to make money not to give it away.  They have to give some of it away, that is have customers win, because otherwise people will think the games are all rigged and stop coming.  They are rigged but not so obviously to most of the players.

Per a 2013 article in the Wall Street Journal, “How Often Do Gamblers Really Win?:”

On any given day, the chances of emerging a winner aren't too bad—the gamblers won money on 30% of the days they wagered. But continuing to gamble is a bad bet. Just 11% of players ended up in the black over the full period, and most of those pocketed less than $150.

 

The skew was even more pronounced when it came to heavy gamblers. Of the top 10% of bettors—those placing the largest number of total wagers over the two years—about 95% ended up losing money, some dropping tens of thousands of dollars. Big losers of more than $5,000 among these heavy gamblers outnumbered big winners by a staggering 128 to 1.

My Dad more than once told me that “Gambling is more addictive than drugs.”  I have witnessed at least five acquaintances who became compulsive gamblers to the point of destroying their marriages, losing their homes, and their livelihoods.   Per the Mayo Clinic:

Gambling can stimulate the brain's reward system much like drugs or alcohol can, leading to addiction. If you have a problem with compulsive gambling, you may continually chase bets that lead to losses, hide your behavior, deplete savings, accumulate debt, or even resort to theft or fraud to support your addiction.

In the United States, gambling has seen periods and locales where it is lawful and and others where it is illegal.  In 1917, the same forces that drove prohibition at the same time strove to make gambling illegal.  In both cases they succeeded. The prohibition on alcohol end abruptly.  The relaxation of the prohibition on gambling has been more gradual and still ongoing.

In the case of both gambling and alcohol, the consequence of prohibition made both industries operate on the black market.  Gambling has been considered a form of entertainment and been classified as a vice.  When it was a vice (defined by Oxford Languages via a Google search as “criminal activities involving prostitution, pornography, or drugs”), it was prone to be run by organized crime.  A racket is an illegal business run organized crime for profits.  Rackets often profit off of the vices of their “customers.”  From a gambling perspective, rackets have included underground casinos, the numbers game, and sports betting. 

With the inception of state lotteries, the government essentially took over the numbers racket.  Some states have allowed sports gaming which have set the stage for sports books like FanDuel and others to make inroads on the bookies.  The creation of Las Vegas, presumably by the legit side of organized crime, opened the door for Atlantic City, Indian casinos, riverboat casinos, and finally casinos in major cities like Detroit and Chicago.  The rise of the online casinos and sport books is the latest manifestation of this trend.

So, now we are making it easier for people to gamble wherever they are.  It is certainly a growing industry per Statistica.  Worldwide sales for online gambling was $59.9 billion in 2019.  In 2020, it was $66.7 billion.  At an annual growth of 11.4% a year, the projection is $92.9 in 2023.  Total worldwide gambling revenues are projected to be $592.7 billion in 2023 per playtoday.co.  Which means, in 2023, online gambling could be 15.6% of the entire industry.  With this kind of growth potential, it is no wonder they are advertising a lot.

It is funny how we view and in which aspects we take actions to enhance social welfare.  What was a vice is no longer a vice?  Yet, the reasons they were vices still remain the ruin of individuals and their families.  Governments have wrested revenues from racketeers.  We freely allow gambling to grow almost freely knowing it will lead some percentage of society to ruin.  Where do we draw the line?  Should we even be worrying about drawing the line?

The whole oxycodone debacle was basically a legalized drug racket until it got out of hand because so many people died.  The company and family were prosecuted.  No one so far is going to jail.  Should we legalize oxycodone and sell it over the counter?  How about heroin?  Fentanyl?  Most would say no.  Destroying families with these kinds of drugs is bad and should be illegal while destroying families via gambling is OK.  Why? Is it just a numbers game?  Or is it just what Professor Adrian Vermeule of Harvard Law School called “orthodoxy of the present” in today’s New York Times.   

Of course, there is no easy answer.

Me?  I will continue to play video blackjack and poker as the mood occasionally strikes me without wagering a cent.