Why the Rich Don't Gamble, and Neither Should You
James Bond doesn't pay your mortgage
It is a captivating scene. Perched high on a balcony, our man Bond, James Bond surveys the casino floor. At the Craps take he spies what he is looking for: Arch Badguy Euro McSlimy. Dripping in finery and fine women, Euro rears back, preparing to throw the dice. He never gets the chance, though. To the horror of all, he droops lifeless onto the table with one of Bond's silenced bullets through his temple. Bond slips away silently into the night.
The implied message in this and countless other Bond movies is that the rich gamble, that it is upscale and alluring, and you should too. According to Ian Fleming, the author who invented Bond, he was based on a real-life spy, in fact a Czech playboy he actually knew. But I believe Fleming would tell you that the model for Bond was engaged in the business for destroying his family's fortune, not building it.
Thomas Stanley is an author that has spent an academic lifetime studing the habits of the rich to determine in what ways they are, as the saying goes, different from you and me. In his book "The Millionaire Next Door," he notes that the rich are less likely than are the general public to buy lottery tickets, or to gamble in other ways. Further, those worth $10 million are even less likely than are run-of-the-mill millionaires, and those worth $100 million even less likely. Millionaire are generally good at math and understand that lotteries are a tax on People Bad at Math.
So let's take a look at the math, shall we? Don't let your eyes glaze over. What you're about to read could save you thousands.
Lotteries are the worst bet of all. They generally pay out about half of what they take in. If you play lotteries over a period of time, you can reasonably expect to lose half of what you pay. This is sort of like buying a house at the top of the housing bubble, only with the lottery you KNOW you will lose money.
But as the ad campaign for a large state lottery says, someone has to win, it might as well be you. Assuming this highly improbable event comes to pass, do you currently have the knowledge to wisely invest a million dollars? 10 million? My advice would be that the money you would spend on lottery tickets would be better spent on a financial education. I'd rather have the lottery endow me with the ability to manage the money than the money itself. Without the former, the latter will quickly vanish, as studies of lottery winners demonstrate over and over.
Table games at casinos pay a little better, but you still lose money. If you absolutely must lose money at a casino, plat Baccarat or Blackjack, two games where the odds are lowest at losing money. Over time, though, you can still expect to lose money at these games.
Depending on how they are set up, slot machines can lose you a relatively small amount as well. In places where casinos have to comete against each other, casinos can pay back to 93-97% of what is gambled. But let there be no mistake: over time the house still wins and you still lose, you just lose less.
Let's say that you do figure out a way to consistently beat the house, such as was done by the math whizzes portrayed in the movie "21." Do you really think that the organized crime figures that run the gaming industry are really going to let you succeed for any length of time?
I suggest reviewing this movie for the answer. Theirs is not a happy ending. Instead of gambling, simply write out a check to your favorite Organized Crime Family and mail it off; it's a lot simpler than actually travelling to a casino.
For all the damage mafia thugs can do, though, even more damaging is how gambling can destroy people and families. For those with addictive personalities, gambling can become an addiction that drains a family of all of monetary resources.
If you live in a town with a casino, have a chat with the operator of the local Homeless Shelter. He or she will tell you that when Mom decides to go gambling with the grocery money, the Homeless Shelter is the family's next stop. Have you ever seen a mother and daughter argue over who turns tricks that night for the family's income? Go to a homeless shelter and you just might, as did my father while volunteering at one. If every mother in America could simply visualize this scene, far fewer would ever set foot in a casino.