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Tempting Fate

James McGlynn

ONLINE SPORTS BETTING is currently legal in 30 states but eventually will be legal everywhere—because the tax revenue is simply too attractive. All this was made possible by the Supreme Court, which in 2018 struck down federal legislation prohibiting online sports betting.

The sports leagues spent decades denouncing gambling, saying it threatened the integrity of the game. But my concern isn’t the “integrity” of the game. Rather, I worry about the individual bettor who ends up wagering too much.

Fortunately, I’m stingy when it comes to betting, which has kept me out of trouble. Forty years ago, when I would gamble in Las Vegas, I would limit myself to losing $200 per trip. I never inflation-adjusted my limit and still hold myself to that $200 limit. I thoroughly enjoy many types of gambling: craps, Kentucky Derby, March Madness, the Super Bowl and even betting on local college sports teams—when they have a chance at a championship. I may seem like a degenerate gambler. But the key for me is to bet in such small amounts that, even if I lose money, it’ll have zero effect on me.

The NFL is putting out public service announcements, with Coach Steve Mariucci advising gamblers to “bet responsibly.” Still, many folks will likely end up gambling too much—because the temptation will soon be everywhere. The NFL is now partnering with DraftKings, the online sports company. I’m a regular viewer of sports talk shows, and I’m bothered by the gambling advertisements that surround the screen when I’m trying to enjoy the broadcasts.

HumbleDollar readers are well trained to buy index funds, while only occasionally “gambling” a little on active funds. The same should be true for actual gambling. If you have a limited amount of entertainment dollars set aside for gambling, that strikes me as fine. But if you’re gambling constantly or borrowing money to bet, there’s a chance you have a problem—and you should likely to talk to someone.

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James McGlynn CFA RICP®
James McGlynn CFA RICP®
4 months ago

Remember March Madness fans- the underdog team ALWAYS wears the darker jersey!

Cammer Michael
Cammer Michael
4 months ago

The $400 or so per year I spend on lottery tickets is well worth the entertainment factor. Similar with the $1500 I put into bitcoin and ether (did it during covid shutdown, so no huge gains to report).
What’s really gambling? The money I spend on theatre tickets. Sometimes awesome. Sometimes the shows suck.

Last edited 4 months ago by Cammer Michael
David J. Kupstas
David J. Kupstas
4 months ago

I love the online sports gambling. I don’t expect to make money*. Rather, I am purchasing some enjoyment. I would not be interested in some of the sporting events I bet on if I had no money riding on it. The amounts are very small. I also like to bet against my favorite teams in big games, which I consider “paying for a victory.” When I am in the running to win our weekly NFL office pool, I can bet the other way on the Monday night game as a hedge. * While I know in my head the odds are against me in the long run, I still like to think that I am smarter than Vegas and will more often than not make good choices. So far, that has not been borne out.

Thomas Taylor
Thomas Taylor
4 months ago

The only reason the sports leagues previously denounced gambling is because they couldn’t participate in monetizing the activity to their coffers. Now that it’s been cleared to go, all of a sudden, it’s a great idea. My state has an “Education” lottery. My opinion is this lottery and all lotteries in general are for people who are bad at math. I’m not a saint or a prude, but I’m glad the gambling bug never bit me.

Scrooge_McDuck88
Scrooge_McDuck88
4 months ago

My father-in-law responded when I asked him if he gambles… “No, those palaces aren’t built on the backs of winners”.

George Counihan
George Counihan
4 months ago

My favorite “In the casino the cardinal rule is to keep them playing and to keep them coming back. The longer they play, the more they lose, and in the end we get it all!” Robert DeNiro in “Casino”

James McGlynn CFA RICP®
James McGlynn CFA RICP®
4 months ago

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OldITGuy
OldITGuy
4 months ago

I grew up in Las Vegas and watched legalized gambling destroy my parents marriage when I was about 12 as my dad was clearly addicted to gambling and his persistent losses were a constant conflict at home. I’m conflicted in that I don’t “like” excessive government intervention in our lives and I agree many people can easily control their gambling. But for people who are addicted and can’t control it, it’s an incredibly destructive vice to the individual and surrounding family. It’s painful to remember those times when dad came home having lost his paycheck and “sure” he could’ve won if he’d just had a “little more” cash to gamble. I guess the good news is that seeing that when I grew up really turned me away from any interest in gambling. To this day, I still can’t enjoy even being around people gambling. So yeah, I agree with you and “I worry about the individual bettor who ends up wagering too much” and everyone around them who’ll be impacted.

James McGlynn CFA RICP®
James McGlynn CFA RICP®
4 months ago
Reply to  OldITGuy

I recently visited a friend in Las Vegas who succumbed to video poker and got in debt and is driving a Lyft to pay off his debts. That might be a common story but he is a Harvard and Stanford grad and worked for Goldman Sachs straight from grad school. He needed the dopamine hit from $100 video poker while I was always too cheap!

steveark
steveark
4 months ago

I have been to the casino a couple of times and we went to the horse races a couple of weeks ago. It is so boring! I just can’t find a thrill in a negative sum game, might as well be feeding twenty dollar bills into a paper shredder. I do have friends who enjoy gambling but I’m too big a math nerd to understand their motivation. I get poker where you just have to be smarter than your opposition but the house games aren’t beatable on a consistent basis. I do not have a moral issue with gambling, it just is not nearly enough fun for me to waste precious time on.

Newsboy
Newsboy
4 months ago

FWIW, I find gambling quite boring. Being a novice to the culture of casinos, In the early 90s, while on business in Atlantic City, I opted to follow my co-workers into a slots parlor. I had a single $20 bill in my pocket, which my buddies goaded me to insert in one of the hundreds of “one-armed bandits” .

After inserting my twenty in the first machine I found inside the casino’s entrance, multitudes of silver coins rained down into the till! As I happily gathered up my ill-gotten reward, a security guard gently tapped me on my shoulder and explained that I was “playing” the bill changing machine.

“You’ve been a great audience – I’ll be here until Thursday…Try the veal, and tip your waitresses and bartenders…”

Last edited 4 months ago by Newsboy
R Quinn
R Quinn
4 months ago

I agree with your concerns. The amount of advertising by states and now the sports betting industry is incredible – and we have the never to criticize the pharmacy companies.

Gambling is a form of taxation as you said – even more so when run by the states and the sad part is that most gamblers are people who cannot afford it – lower income, including seniors.

I wrote an article on Humble Dollar on lottery gambling https://humbledollar.com/2021/09/take-a-chance/ awhile back

I have been told for many people gambling is merely a form of entertainment. That may be so, but it’s still a risky business for many people who are searching for a pot of gold that isn’t there.

Newsboy
Newsboy
4 months ago
Reply to  R Quinn

Indeed – an excerpt from The Millionaire Next Door (1996), penned by the late great Dr. Thomas J Stanley:

“Not one millionaire I interviewed had one nice thing to say about gambling.” One respondent who had a net worth in the mid eight figures summed it up by saying: 

My source of wealth? . . My business. . .any economically successful man doesn’t gamble. . . . I-don’tgamble . . . . I . . . worked too hard for what I got.”

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