A couple weeks ago, the Federal Government announced new regulations for gambling advertising: no longer will people be encouraged to “Gamble responsibly”; now they will be informed that “Chances are you are about to lose”. They will be encouraged to reflect on “What’s gambling really costing you?” and to “Imagine what you could be buying instead”, and so on. Which will fix everything.
Gambling is a massive problem in Australia, and elsewhere, and I’d readily support any serious and plausible effort to address the problem. I loathe the manipulation of suckers by gambling companies, some of which could be banned immediately if the various governments were willing to forgo their own cut of the action, or if not-all-wise judges and the ACCC had an ounce more mathematical sense. I’m not convinced, however, that these message campaigns do one iota of good. I’m not convinced that they connect whatsoever with the minds of committed gamblers.
This latest anti-gambling push is based upon “extensive behavioural research”. So you know it’s good. My all-time favourite campaign is Love The Game, Not The Odds, targeting teenagers getting sucked into sports gambling. I’m willing to bet that Love The Game was also based upon extensive behavioural research.
The signature ad of Love The Game begins with the pretty girl announcing “My favourite sport is netball …”, which is simply hilarious: no one’s favourite sport is netball. (I say this as a one-time enthusiastic wing defence.) It doesn’t improve.
Admittedly, I’m conflicted. I am a (now infrequent) gambler, and I’ve spent a decent amount of time gambling and thinking about gambling. I have fun stories I could tell, particularly of card counting in the early, Wild West days of Melbourne’s casino. Not stories of great wealth, but of decent profits and weirdness and great fun. I like gambling. And I like stirring the possum, by talking about gambling seriously and honestly and humorously, without sanctimony.
My very first public talk, in 2001, was on gambling. That talk launched me and Burkard on our popularising way, and by a sort of cannon shot resulted in the Mathologer. Overruling my objections, Burkard insisted upon creating a Mathologer on gambling, based on my talk. It is popular.
Part of my annoyance with these anti-gambling campaigns is the careless language. Is it really the case, for example, that “the chances are you are about to lose”? Not if your plan is to bet on France to beat Australia at the World Cup. It’s likely a bad bet, but not because of the (low) chances of losing.
It obviously doesn’t help a campaign if it contains falsehoods. But that is not the main problem. The main problem is that gamblers are not listening. Gamblers are well practised at being stupid. Sermonising at them is pointless.
14 Replies to “The Joy of Gambling”
What is gambling? Most people would agree that putting money into a poker machine is gambling. Similarly, betting on a football match is gambling. Many would think that investing in the stock market is gambling.
Is taking out an insurance policy gambling?
I’d argue that a Term Life or Disablement Insurance policy for example is hedging against an unlikely event for most people
Likewise with most General Insurance Products
I think you could define gambling as opposed to investing or insuring as any case where the players have a zero sum or net negative total return.
So playing poker with your pals is zero so is gambling, playing at a casino is negative for the players as the house is taking a cut. With insurance you are paying to avoid a nonlinear worse outcome. So despite the insurers cut you are ahead as long as you have the right policy. That is why a lower payment and higher deductible is better if you won’t be ruined by the occasional deductible payment.
Thanks, Stan. I think that perhaps captures “gambling” as the campaigners perceive it, but I don’t think it ends up being a clear or helpful definition. Is, for example, betting on horses gambling?
Statistically, if you have enough skill, your expected value from blackjack, poker, sports betting, and some other games is positive. So are those investing? I’d say no.
I don’t buy your argument for insurance, as insurance definitely has a negative expected value, as otherwise there would be no way the insurance companies would be able to make money. So is it gambling? (I’d say yes, but I’d bet that the consensus would be no.) I suppose you could argue that you should buy insurance because of the Kelly criterion.
Thanks, Anonymous. A complicating factor is that many gamblers honestly but mistakenly believe that they have sufficient skill. It’s not all that helpful if distinguishing “gambling” from “investing” requires a fine-tuned analysis of the gambler’s/investor’s techniques.
But this also seems just weird to me. If I take insurance in blackjack because the count is sufficiently high, that is the expectation-wise correct decision. But the outcome still depends upon chance. It feels like gambling to me.
It seems to me much more real-world and useful to refer to intelligent vs unintelligent gambling, or positive-expectation vs negative-expectation gambling, rather than investing/insuring vs gambling.
Check Bonhoeffer’s Theory of Stupidity on you tube. I found this a most enlightening view of why logical argument fails to convince people.
As applied to the gamblers? Or to the people who repeatedly come up with these dumb campaigns?
The one time I played netball (for a social league team led by my housemate Kate; I was filling in for a late scratching I think) I touched the ball only once. I was out on the wing by myself. By which I mean there was no opposition player within 10-15 metres of me. One of the regular and presumably competent players in Kate’s team projected the ball in my direction reasonably quickly over a quite flat sort of parabola. Perhaps sensible to or suspicious of my lack of chops, the said regular and presumably competent player called my name out at about the same time as sending the ball on its flat parabola. The good bit was that I caught the ball. The slightly less good bit was that, immediately thereafter, my legs tangled into an angry mess which, now in the recollection of it, reminds me of some of the YouTube videos I see of Russian military helicopters catching a cheerful shoulder-launched MANPAD thingo and then thrashing about on the ground for a while, chopping up foliage and fauna and bits of itself with rapidly-decelerating components. The last thing I remember seeing before I slunk off the court in disgrace, disarray and not-inconsiderable pain, was the image of Kate, at the other end of the court in her GS bib, perfectly still, and staring at me in a magical sort of appalled, incredulous dismay. The most I think I can say in my own defence is that, had anyone been running a book that day, I would have placed a large wager on our oppenents.
Thanks, Toby. But after all that, you didn’t say whether netball’s your favourite sport.
Let’s say that Netball provided me the greatest degree of excitement and eventfulness as a function of the time and energy invested.
Ah, yes. Year 7 field hockey did it for me.
People do not regard insurance as gambling because insurance is good, and gambling is bad.
A story: When we bought a house, I took out a life insurance policy. I did not want my wife saddled with paying off the mortgage in case I died.
Suppose that we borrowed $ 150,000. The bank offered us two policies. (1) One would pay out what remained of the mortgage when I died. (2) The other would pay out $ 150,000 indexed by CPI over the years when I died.
Which would I prefer? I asked, “Which is the cheaper premium?” (2) was the answer.
“Why is that?” I asked. I was told that this is because the longer I live the more likely it is that I will die. I replied “That is true in any case, and has nothing to do with the policy.”
The banker rang head office to get advice.”Accounting fees” was the answer. We accepted (2).
More mathematicians should think about a career in insurance.