Are You Stupid if You Gamble?

by Miranda Marquit · 13 comments

Recently, with the huge Mega Millions jackpot, a lot of attention has been paid to lottery, and even gambling. Much has been written about the odds of winning, as well as the folly of staking your financial future on nothing more than chance.

But is gambling always a bad thing? Are you an idiot if you buy a lottery ticket or play the slots in Vegas? I’m not so sure that gambling always equals stupidity. Sometimes, gambling is just entertainment.

How Do You View Gambling?


One of the main issues is how you view gambling. Do you view the lottery, or some other gambling game, as your only chance at a successful financial future? If this is the case, you might have a gambling problem, and it could be a real issue in your life. This could ruin your finances too.

But for some people, gambling is more of entertainment. I recently went to Las Vegas. I didn’t play the slots, since I had my son with me the whole time, but I usually like to put in a few bucks – just to see what happens. I have a friend who, when she had a spare hour, just took $20 and played that until it ran out. She won enough to keep going for the hour, even though at the end she didn’t come out ahead. She, however, considered the expense a fair trade. That $20 was part of her entertainment budget, and she didn’t spend a cent more.

When I play the slots, I don’t expect to win. In fact, I assume that whatever I win will probably go right back into the machines. I plan for the splurge. I usually allot $5 to $10 for the slots. If I win $1.25 (happened once), I can put that back in, but I don’t dip into additional money to keep going. Once that allotted amount is gone, I’m done.

This view, of course, doesn’t work for someone with an addiction. But for someone who views a little gambling as part of the entertainment experience, it’s not a bad way to spend a few minutes. The same is true of playing the lottery. I rarely purchase a lottery ticket. In fact, I almost never purchase lottery tickets. However, for a little bit of fun, I will occasionally buy a $1 scratch off ticket (I didn’t buy a Mega Millions ticket). I’ve never won more than $5, and I don’t consider the tickets as any sort of investment.

Use Your Entertainment Budget

While I know people who actually make a decent living playing poker (including online poker), it’s not really my thing. Instead, I view gambling – especially Vegas-style slots and the lottery – as entertainment. I never use money earmarked for my retirement account, bills, or emergency fund. Instead, I pull anything I use for gambling out of the entertainment spending. If I set aside money for a lotto ticket, or for the slots, it means that I probably won’t watch a movie, or that I won’t be eating out for lunch one week.

What do you think? Is gambling always stupid? Or can it be entertainment if you stick to a budget, and don’t view it as your ticket to financial success?

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{ 13 comments… read them below or add one }

Jean April 17, 2012 at 5:47 am

I think gambling in moderation is ok as long as you plan properly. Allocate a fixed amount from your monthly budget after factoring in the essentials plus emergency money, etc. and if there’s something left after that, only then gamble with it. I have been known to buy a lottery ticket every now and then. Nothing harmful I figure as the rewards can be huge with not much expense. But blowing a ton of money in desperation at the tables are definitely bordering on stupid.

-Jean

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Brad Cole April 17, 2012 at 5:21 pm

Hmmm, I wonder who you were referring to when you said you knew people who made a living at on-line poker ;)
It all depends on the expectation of the gamble. If you play roulette you will lose in the long run. If you gain no pleasure from playing then you are being irrational or stupid. Lots of people do gain some pleasure from these games and I can’t fault them, they can be fun from time to time. A second case is when the expectation is neither positive nor negative. Let’s say you bet a friend on the Super Bowl point spread. The bet is fair and so in effect you are flipping a coin at even money. You don’t stand to lose in the long run and you gain some fun by rooting for a team in a game you didn’t care about. That seems like a good gamble because your long term expectation is positive when you account for the fun you had. The last and best case is when your gamble stands to show a profit in the long run. In that case it seems pretty smart to gamble so long as you have the bankroll to withstand fluctuations. That last part is the key; you must have enough money to withstand fluctuations. There are no shortage of these gambles and most of them do not take place on the Las Vegas strip: stocks, bonds, futures contracts, etc are these gambles. If you are good a poker, an expert at sports handicapping, or a talented pool player those could be good gambles as well. Call me crazy or perhaps just biased from paying the bills via poker and sports betting for a few years but I have trouble seeing the difference between risking my money at poker with a long term expectation of making money and risking my money on 10-year treasuries with a positive expectation as well. Heck, I price sports bets using the same math as I would to price European options. The important part is to never bet too much on any one investment, sporting event or turn of the card.
As an aside I would contend that people who play poker for a living and have done that for longer than a year are some of the most responsible people in the world with money. You have to be in order to deal with fluctuations and still keep a roof over your head.

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Miranda Marquit April 17, 2012 at 6:01 pm

You’re one of two people I know ;) Anyway, I was totally hoping you’d write a reply, and you’ve exceeded my expectations!

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Financial Advice for Young Professionals April 18, 2012 at 11:40 am

As long as you’re gambling with the mind set that you are not going to make money, that’s fine. I don’t mind gambling for an hour or two and losing $100 bucks because I expect to. Anything else is a nice bonus. Gambling is a negative sum game.

There will be some outliers that win, but the majority will always lose. So think of it more as entertainment. How much are you willing to pay for that?

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Carl Lassegue April 18, 2012 at 2:34 pm

I agree with you. The way you go into it is key. As long as you do not put your financial future in the hands of the lottery or gambling and if you know when to stop.

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MoneySmartGuides April 18, 2012 at 7:09 pm

I see gambling as a fun activity. I use money that I can afford to lose. I expect to lose it, but I hope to keep it or win more money. I would never view gambling as a way to set me up for retirement.

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Marbella April 19, 2012 at 5:00 am

I never play, there’s only one winner, the owners of the lottery, casino, government, etc. the other, we – the players are the losers.

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Dale Christophersen April 19, 2012 at 7:33 pm

Been playing low (mostly) stakes poker since about 1955, primarily for the
enjoyment of the company as well as making a little bit of money over the
years. I don’t do much in casinos–I’ll invest $40 in blackjack and a roll or two
of quarters in slots, but that’s it–entertainment.

A dozen or so of us (not all can make it any week) still do it every Tuesday night and not enough money changes hands to hurt anyone, though it’s enough so one pays attention. Unless one plays really stupid, it would be difficult to win or lose more than $300 — and that much would be quite unusual.

I wish more would be legalized in Texas since it would be good for the state’s overall economy. Addiction, however, is a real hazard for some and those I see buying lottery tickets are those who can least afford it — a symptom of our gross income/wealth economic system.

With a good deal of retirement money invested, I am much more worried about the rigged games in our financial markets! That is real money, not entertainment. It should not be at such great risk, as it is today.

Nothing wrong with a bit of gambling, so long as it is voluntary. Unfortunately, what passes for a U.S. economy today does not leave us many real choices to choose to not participate.

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Emily @ evolvingPF April 19, 2012 at 8:38 pm

I can see the argument that a small amount of money spent on gambling can be considered entertainment. I don’t find throwing money away entertaining, though – it would just make me upset. So I don’t gamble.

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Pattie RN April 20, 2012 at 8:41 am

A couple of dollars of lotto tickets a few times a year when the jackpot is sky-high is all we do, just as a lark. Sadly, I know too many people who are SURE they will win, and usually can ill afford the amount they spend for that :sure-thing” payoff that never comes.

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Jennifer from Credit Karma April 20, 2012 at 3:14 pm

Great post, Miranda! Personally, I think gambling is just a waste of money. However, my sister and I bought some of those lotto scratchers for my grandma for her birthday and she ended up winning a bunch of money AND had lots of fun! But, like Emily said, throwing money away would just make me upset as well.

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Shaun May 31, 2012 at 1:48 pm

I’ve only been to a casino a few times, and each time I assumed that I would lose all of my money. I ended up being right. ;-) In moderation, it’s no different than buying a game or a movie or something — it’s just entertainment. :)

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jim August 31, 2012 at 3:12 pm

I enjoy gambling as a form of entertainment. I think its just fine as long as you don’t spend more than you can afford to lose.

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