Gambling – just a fun flutter or more?
Bermuda’s Cup Match holiday is half over. It always reminds me of the Crown and Anchor booth, legalised betting allowed on one of the few events a year in Bermuda – for just about everyone participating it is a harmless, fun tradition.
So, readers and listeners – to the podcast – did you win?
Answer, probably not – the odds are against you.
Gambling is an ancient sport, if one can call it that, and one of mankind’s oldest activities evidenced by writings and equipment discovered in archaeological finds.
European history is riddled with edicts, decrees, and encyclicals banning and condemning gambling, which indirectly testify to its popularity in all strata of society.
Organised sanctioned sports betting dates back to the late 18th century, and there began a gradual, albeit irregular, shift in the official attitude towards gambling, from considering it a sin to considering it a vice and a human weakness and, finally, to seeing it, for most individuals, as a mostly harmless and even entertaining activity. Britannica.
Gambling has taken on thousands of formats since then. It is possible to wager online, or physically, while formalised by contract and regulation on just about anything in our current era: political elections, possibility of war, sports, romance, spread betting, even betting in celebrity death pools. The kinds of best are only hindered by imagination.
The basics are defined with just three simple concepts.
First, the action needs an individual(s), or entity who is willing to wager a sum (or other asset) taking a risk to win high or lose all.
Second, a counterparty, an individual(s), or entity who will take the opposite side of the equation by accepting the risk, calculating the odds of staying in a winning position.
Third, gamblers should expect to lose because the odds (probability of winning) work against you.
Gambling has two basic categories. Chance-based where the outcome cannot be influenced. The results are random. All players have an equal chance to win, e.g. lotto, bingo, gaming machines, roulette.
And skills-based gambling where certain experience skills, such as card counting, can influence the outcome. The odds are not equal for all players and always favour the house. Even so, there is no certainty of winning.
Here are a few odds, taken from various country information websites, rounded:
Megamillions – one in 302.6 million
Powerball – one in 76 million
Poker machines – one in 9.7 million
Slot machines – one in 360,000
Casino roulette single number – one in 35
The stories abound of the personal catastrophes experienced by megamillion winners. Sadly, their lives are changed for ever, not in a good way.
Poker card games have become famously recognised with numerous books written (Bringing Down the House: The Inside Story of Six MIT Students Who Took Vegas for Millions by Ben Mezrich), and movies made on the skill of legal card-counting. An experienced poker player skilled at card-counting has a strategic advantage over other players, but not the house.
The odds of winning are difficult to state generically as numerous factors come into play: number of players, frequency of different suits, probability of drawing a good hand, say a royal flush is 1 in 649,739. Wikipedia poker probability
Lastly, we briefly look at high stress, high risk, complicated investor gambling – if you can even understand the rules of the game.
Specialist financial market trading websites provide access to spread betting, a financial derivative that allows traders to speculate on assets like forex, indices, commodities, or shares without buying the assets. Spread betting is legal in the UK but only brokers that are regulated by the Financial Conduct Authority can offer said services to investors.
You can see why this comes with a caution warning!
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Probably, not the best choice for the average once-a-year bettor!
Why do we gamble, given all the propensity to lose more than win, if you do win at all?
To answer, we look to the psychology and physiology of human behaviour – a fascinating area for understanding how we humans think, react, make decisions, and experience hindsight regret.
When we think about even harmless gambling, having a flutter at a card game, slot machine, or buying a few lottery tickets, the prospect of winning predicates the decision to buy that ticket, or sticking your credit card into a slot machine.
The process stimulates your brain to release dopamine, a neurotransmitter that makes you feel good, excited in anticipation of winning, but conversely, even when you are losing your brain keeps releasing this transmitter. You still feel great!
While most people walk away after losses, and even some winnings – this feeling good when both winning and losing becomes a need for a constant brain reward circuit, a significant problem for some individuals.
They have difficulty knowing when to cut their losses, or not being able to stop gambling at all.
A purported fun time may then become an addiction as the individual wants to recover losses, too, and continues gambling.
More than a few celebrities in our time have had huge gambling addictions – the losses from just one such uncontrollable impulsive behaviour could have kept a hundred families or more afloat during these inflationary times.
You can contrast this feeling good physical syndrome from gambling – to the impact that long-distance running or fast-walking has on the brain to produce endorphins, another neurotransmitter, that helps you cope with stress and pain.
According to VeryWell Mind, an award-winning website resource of highly-qualified healthcare professionals, higher endorphins can also lead to higher dopamine production, combining the sense of overall wellbeing.
So, readers, enjoy rest of your Cup Match holiday. If your gambling flutter was just that, then take the time for a long walk or run to achieve that optimum feeling – these activities are a free contribution to your wellbeing.
• Martha Harris Myron is a native Bermudian, author of the Bermy Island Finance Blog – Illuminating All Things Financial Bermuda www.marthamyron.com and The Dawn of New Beginnings: Bermuda’s First Financial Literacy Primer. Contact her at firstname.lastname@example.org