Monday, August 31, 2015

Are You Stupid if You Gamble?

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?

Is Gambling a Waste of Money?

The thing I really like about writing about personal finance and wealth creation is the way it helps to develop and challenge your own ideas about the subject. When I first started writing I had a pretty strong stance on certain things and couldn’t for the life of me see why people would ‘throw’ their hard earned money away on expensive items, or worse yet gamble it in various ways.
After a couple of years of writing and critical thinking I’ve started to change many of the perceptions I’ve had and view things in quite a different way.

Wealth creation is about lifestyle

It’s actually quite a long hard slog building wealth bit by bit as an average, working class person and a lot of the time it can be rather unrewarding. I know that there are some self loathing types around that get into that sort of thing, but to be honest, it just isn’t for me. I need to feel like I’m getting somewhere and be rewarded for hard work, so the odd luxury here and there certainly doesn’t go astray.
The fundamental difference that I’ve discovered though, is that a luxury to me isn’t the same for someone else.
I know it sounds absurdly simple, but this has actually taken me quite a while to work out. For years I couldn’t work out why people would spend money the way they did, it just didn’t make sense to me. Eventually though I have realised that it really isn’t about spending the money, it’s about the satisfaction, reward, sense of achievement or sheer thrill that you get as a result.
Spending your money as you see fit is exactly what wealth creation is all about.

Gambling as a reward

You know what? I’m a crap gambler, so it holds very little appeal for me, but I do know a lot of people that absolutely love it. The thrill of rolling dice, the skill in poker or the atmosphere of a race can get people pretty worked up, but more than that it can make them feel like a winner. Gambling has long been associated with class and wealth (I’ve always been a fan of the way James Bond plays big at the casino) and it is this very feeling that we all strive for, whether we are gambling or buying a luxury item that we don’t really need.
If you can’t spend some of the money you work hard to make, then it’s not really worth making. tweet this
With all the technology available to us these days, you don’t even have to visit a physical casino to participate, the online equivalent of a Mobile Casino is available and ready at most people’s finger tips if they have a smart phone. This does raise a few important points however, but really they are the same as those that apply to almost every other situation where spending money is involved;
  • be aware of what you are spending and ensure that you are doing it for the right reasons. Does this really bring you the satisfaction and thrill you are after, or could your money be better spent.
  • Stick to a budget and don’t waiver. As with spending money on anything else, you can always go bigger, better, or just one more – don’t spoil the reward and stick to the game plan.
  • Gambling is generally best undertaken in a social setting. Playing online might be convenient, but there is no substitute for interacting with real people. Sharing a win, or commiserating a loss is best done with company.
I’m pretty curious to see what others think about my approach to gambling as a reward, I’d guess many wouldn’t see it the same way. Perhaps you have a personal view about what does and doesn’t constitute good spending habits, or effective use of your money and I’d love to hear it in the comments below.
At the end of the day I think that everyone needs to feel like they can have the things they want if they work hard for them and continue to do the right thing as a result.
Do you think that gambling is a justifiable reward?


10 Tricks Casinos Use On You


Casinos are a psychological minefield. Their architectural design, as well as everything in it, has a methodical function devised to keep you, the player, inside spending your money. Some tactics they use are as conspicuous as the nose on your face, while others are guile and subtle. However, they all play on the players’ psyche and make them feel comfortable, wanted, and most of all, optimistic. Following are ten maneuvers casinos use that keep them rolling in our money.
10
No Clocks
Time-Flies-Clock-10-11-2006
It’s surprising that a lot of people really don’t wear watches. Casinos know this and aren’t about to assist people in keeping them punctual. It’s a fact that when someone is engaged in an activity time seemingly drifts by at a faster pace for them, and you will rarely see humans more engaged than in a casino. Whether it be at a slot machine, table game, or poker table, most are in a trance-like state while chasing their dreams. With no clocks adorning casino walls it is not difficult to simply let time slip away deep into the night without a care in the world. Don’t expect to get the time from dealers either since they are told not to wear watches for this very reason.
Day melds into night and night into day and schedules dissolve into nothingness. Add that to the fact that if you’re in a casino you are most likely on vacation, and that contributes to the indifferent attitude you may have about sticking to your standard routine and spend more time than you had planned repeatedly slapping dollar bills down. Some casinos, likes those in the UK, have passed laws saying that players must be aware of how much time they have spent gambling, and the casino must encourage taking breaks from playing.
9
No Windows
New-Casino-Interior-Picture
In most casinos there may be windows near the entrance or exit, but once you get inside the belly of the beast you will be hard up to see any. This tactic goes hand-in-hand with having no clocks. When they get you in, they don’t want you to have any inkling of what is occurring in the outside world. If you were to see it getting dark outside, or even getting light with the dawn, your internal clock would kick in and tell you it’s time to move on and do something else, like go to sleep. However, this will tear you away from gambling and the casino can’t have that. In addition, they don’t want you to see anything remotely interesting happening outside. If you’re playing in a casino on the Las Vegas strip, there is enough visual stimulation outside to draw anyone’s eye to it. Therefore, the casino you are in will do its best to make that outside world nonexistent.
8
Lights, Sounds and Activity
Casino Jackpot 300X225
A casino is a cacophony of wonderful and alluring stimulation: bells ringing, siren-like lights flashing, change clanging, slot wheels whirring, digital sounds beeping – it’s all captivating. Why is it captivating? Because it’s non-verbal communication saying, “Win! Win! Win!”. It gives the impression that everyone is indeed winning when, in reality, most are losing.
However, even as these people are losing, whatever machine they are on is still blaring out festive, euphoric sounds. It makes people want to get in on the action and become part of the winning as well. It’s such a happy place, how can I lose?! Everything is slick, burnished, and gleaming with a hypnotic draw to it. On some level, everyone, regardless if they are a big or small bettor, is attracted to these ostentatious displays of excess and flamboyance.
7
Ambience
Casino
Ever notice how the lighting in a casino is low and mellow? This is to give it a homey, friendly feel, kind of like sitting on your couch in your living room at home – and who wants to get off of their comfortable couch? Harsh lighting can be grating to the eyes, but a more subdued motif allows gamblers to settle in, kick back, and enjoy themselves while feeling safe, secure, and cozy.
Also, the carpeting in casinos isn’t just picked out randomly. Many may say that the patterns and designs on these carpets are downright tacky, with colorful swirls, lines, and splashes being the norm. However, to the human brain they are mesmerizing, welcoming and pleasing to the eye. In addition, the color of the walls is often times red which studies say evokes a safe, comfortable feeling.
And like shopping malls and stores, the soundtracks played at casinos are always soft, easing, and mollifying which helps get the gambler in the trance-like state that is desired.
Related to this category is the cleanliness of casinos. Any reputable one will be spotless with no clutter or waste in sight. Workers continually sweep and pick up after players which makes them feel somewhat pampered and catered to, as well as gives them a pleasing environment in which they want to stay.
6
Location of Services
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If you want to use the restroom, get something to eat, or cash out your chips, you must burrow yourself deeper into the bowels of the casino. Often, these services are wedged as far back as possible. This is a last-ditch effort to keep you inside since you have to walk through the whole place again and pass all of those tempting machines and tables. You have just cashed in your winnings and perhaps you may want to try your luck one last time before leaving. It’s the same principle stores use in hopes of getting a customer to make that last impulse buy during that long walk to the exit.
In larger casino/hotels, the casino is buried deep inside the building itself. Taking various escalators, stairs, etc. is the only way to get to and from it and is one way to keep you on the property.
5
Near Wins
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Next to actually winning, nothing gets your adrenaline pumping like nearly winning and the realization that you almost took money from the casino. But if casinos gave out money to everyone who almost won, they would be broke after one day. Every game, whether it be a table or machine, is designed to payout small wins in the short run, but eventually take more from you in the long run. Slot machines constantly make small payouts while perpetually being one cherry or star away from the big jackpot. Players always win hands at blackjack which gives them the impression that the game is winnable, but the house edge is always grinding away at their bankroll and their money slowly dissipates.
Other games give the gambler a feeling of “control” such as craps or keno. Here, the player has a direct influence on the outcome, such as throwing the dice or picking their own numbers. This is yet another ploy that gives the player a false sense that they can beat a game and therefore will cause them to play longer.
Basically, players overestimate their chances and probability of winning. Near wins are what essentially keep casinos in business. Giving players a taste of winning will almost always guarantee that they visit again.
4
Freebies
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Free or reduced services, otherwise known as comps, are another lifeblood of the casino. Players will often receive coupons for free meals, buffets, shows, etc., or point cards which enable them to win other prizes in order to get them to keep coming back. It makes them feel important, even if they are low rollers and don’t gamble substantial sums of money. Even if they lose, they still feel as if they have gained something and are more likely to return. They are important to the casinos because the vast majority of money made comes from these smaller gamblers, so their business is even more coveted than the high rollers’.
Are they simply being good hosts to their patrons? Not really. It’s all calculated to keep them there so they play more and longer. Whatever casinos give out in comps, they make back hundreds-fold from the same people. It’s sort of like persuading a child to behave well in exchange for a cheap toy.
3
Alcohol
Casino Waitress
This could have gone under the freebies category but deserves to be discussed independently. It’s as obvious and transparent a trick as freebies but may be the most powerful. Free drinks work on a couple of levels. First, they’re FREE. Unless you’re a teetotaler, who doesn’t love free drinks? Cocktail waitresses swarm the casino floor, their trays full of various drinks at all times. It’s no secret why this would keep a player put, satisfied, and feeling cheerful.
Next, alcohol makes even smart players sloppy. If you’re a player who uses basic strategy in blackjack, alcohol will slow your brain therefore corrupting your ability to make the proper decisions. Gamblers will also become more liberal with their money if buzzed or drunk, throwing their chips around like they’re nothing more than the pieces of clay that they are. To many, sucking down free drinks while playing enjoyable games is pretty much as good as it gets.
2
Keeping the Big Winners
Online Casino High Roller
Although small bettors are important, casinos surely want to keep the high rollers as well. Those fortunate enough to win big are treated like kings. They basically make these players offers they cannot refuse, from free suites to extravagant, special treatment. The longer a big winner lingers inside the casino/hotel, the more money they will inevitably spend there. The casino may lose money giving away a free suite or room, but by keeping that person there they can make it back in the casino; the house edge ensures that.
Players feel like they are treated like royalty because they are important, yet it’s their MONEY that is important. In addition to keeping the money there, casinos are also gaining free advertising and marketing when other high rollers learn how they will be treated at that particular establishment. Pandering to big winners is so crucial for casinos that a large part of their resources, from VIP hosts to limousines, is dedicated to it.
1
Labyrinth Design
Floor Plan 2
Casinos are essentially giant mazes that are intentionally set up for you to literally get lost in. A sea of machines and tables create obstacles and barriers that keep the player from leaving. There is no logical arrangement; a bank of slot machines may be in one location, then another bank of the exact same machines will be 200 feet away. Confusion is the end result. You know the exit was near the video poker machines, but which set of video poker machines?
Nooks and crannies abound with various twists and turns. This plays on the common mental error people make when they mistakenly believe that if they walk in along a certain path, they can easily turn around and walk out the same way. However, the path leading out is unfamiliar because visually it is completely different. The tall slot machines which make up most of the floor layout also hinder people from seeing far which further disorients them. Moreover, more modern casinos have lower ceilings which prevent someone from seeing any landmarks on the walls or ceiling in the distance that may help orient them, but instead keep them hemmed in. For many, especially those who have been imbibing alcohol, finding their way out is like participating in one, large, interactive brain teaser.

Dave Ramsey says: Don't waste your time, money on gambling




Dear Dave,
How do you feel about gambling at a casino, as long as you limit your spending and don’t expect to win big money? 
— Brian
Dear Brian,
I don’t really have a moral problem with it, but I don’t understand the concept. Call me crazy, but I do not get a thrill from losing money I’ve worked hard to earn. That’s not my idea of entertainment.
When people tell me they gamble for fun or recreation, my first thought is they’re delusional enough to believe that they’ll actually win — that they think they’re the exception to the rule. Otherwise, there would be no thrill. You may see a news story once in a while about someone winning big money in a casino, but that rarely happens. Think, too, about how much money those people had flushed down the toilet previously while gambling. There’s a really good chance they didn’t really “win” anything. In most cases, they probably just recouped a small portion of their previous, substantial losses.
My advice is don’t waste your time and money on that stuff. One way or another, the house always wins. That’s how they’re able to build those giant, billion-dollar places called casinos. Did you know that some of those companies are so big and expansive that they’re publicly traded entities? And guess what? The profits they make off people who are foolish enough to gamble their money away inside their fancy halls — and call that entertainment — drive their stock prices!
Think about it, Brian. Why do all the folks sitting at slot machines and card tables look like they can’t afford to lose money? Most of them look like sad, broken, lonely people. Maybe they change when they sit down. Maybe they were winners in life and with money before they walked through the doors, and their slumped body language and the look of stress and hopelessness they carry is just a coincidence or the indoor lighting. But I don’t think so.
— Dave
Dear Dave,
What happens to the money in an ESA if the child gets a scholarship and no longer needs the money?
— Jonathan
Dear Jonathan,
In an Educational Savings Account (ESA) and in a 529 Plan, you are allowed to pull out money tax-free in the amount of the scholarship. But very rarely do you find someone going to college completely free and clear. Often, tuition is covered, and even tuition and a dorm room in some cases, but zero-cost college is almost unheard of. There are always living expenses, books and other miscellaneous items, and you can use the money in an ESA for any education-related expenses.
The chances of your money getting trapped and you as parents winding up in a situation where you’ve actually saved too much and a child has leftover money — it just doesn't happen. This is a bunch of drama found only in the nightmares of nerds. Real human beings don’t have this problem, Jonathan, because nobody ever saves enough!
— Dave
Follow Dave on Twitter at DaveRamsey and on the web at daveramsey.com.

Why Gamblers Never Win

Casinos can be a lot of fun, but addicted gamblers always end up losing.  The bright, flashing lights and the flashily-dressed staff make for a real spectacle, as do the various games, with their wheels, balls, cards and weirdly arcane rules (in the case of craps.)  But what you should know is, the games the internet casino offers are almost always heavily stacked against you.  While it is possible to make money gambling at a casino, you certainly shouldn’t count on it.  Luckily for the casinos, some gamblers do count on it – and some even think they have the winning method down, when all that method will get them is broke. It is the same situation at Internet Casinos, even your playing at the best addicted gamblers will always end up losing .
Why Internet Gamblers Never Win
Most gambling systems and strategies are based on several basic errors in logic – errors that some of us commit every day, whether we’re gambling or not.  If you’re planning a trip to Vegas, Tahoe or Atlantic City soon, be sure to keep these common fallacies in mind so you don’t fall prey to them.
1)  “The ball’s hit black four times in a row, so it’s got to hit red next!” (The Gambler’s Fallacy)
You’re standing at a roulette table, watching the players make their bets.  You observe two spins, and both times the ball lands on 23.  You then decide to make a bet.  Is it wise to bet on 23, considering it’s already come up twice in a row?  Surely it’s extremely unlikely to come up three times in a row, so ignoring 23 might be a safe move, right?
An American roulette wheel is divided into 38 numbered slots: 18 of them red and 18 black, alternating every slot, plus two uncolored slots 0 and 00.  Every time the croupier spins the wheel, the ball has a 1 in 38 chance of coming to rest in any one slot.  This is the key: each number has exactly the same chance of being the winning number on each spin.  The roulette ball doesn’t remember the number or color on which it landed on the last spin, or even on the last ten or one hundred spins.  Since each spin is independent of the last, the odds of any three numbers coming up one after the other are 1/38 × 1/38 × 1/38 – including the outcome 23, 23, 23.  Therefore, 23 would be just as good a bet as any other number.
This logical fallacy is so commonly committed by gamblers that they ended up giving it its official name.  While it might not seem like the kind of faulty logic that can lead those so misguided into disaster, the Gambler’s Fallacy has lost hopeful players their share of fortunes.  As an example, imagine that instead of betting on a number, you’re now betting on a color – black.  The last twenty spins of the roulette wheel have produced outcomes of red.  Using the same logic as in the first scenario, you decide that black is sure to come up on the next spin, and you place a thousand dollars on it.
The idea that a certain outcome is “due” is enticing, and almost seems logical – that is, until you begin to examine it more closely.  As before, the color outcome of each spin is independent of the spin that came before it: you have an 18/38 chance of winning on black, no matter how many times in a row red previously came up.  If those are the kinds of odds you like, go ahead and make that huge bet – but know that it’s not even close to a sure thing.
2)  “I’ve already spent 400 dollars on this machine and I haven’t won once – I can’t let all that money go to waste!” (The Sunk Cost Fallacy)
losing at slot machines in casino
You’re sitting at a quarter slot machine, inserting five quarters into the machine every spin to give you a shot at the jackpot.  You’ve been playing for a couple of hours, and several times the reels have come incredibly close to lining up a winner.  You’ve burned through a few hundred dollars and you’re starting to run out of money, but if you get up now, all that money you’ve dumped in this machine will have gone to waste, right?  You can’t just walk away from that, at least not until you’ve made some of it back. Source at bestcasinos.me
Falling for this kind of bad logic is a fantastic way of losing 100 percent of your money.  The idea that the money we’ve already spent is somehow sunken into our game is completely false – that money is gone.  The amount of money you’ve put into a slot machine has no bearing on the outcomes of successive spins.  The odds are what the odds are.  This error, called the Sunk Cost Fallacy, is related to the Gambler’s Fallacy in the sense that both fallacies involve the assumption that a certain amount is becoming “due” – the idea that the more you play a slot machine, the “closer” you’re coming to the next big jackpot.  In reality, each spin of the slot machine has exactly the same chance of hitting a winner or the jackpot as the previous spin.
Many of us, in fact, commit this fallacy every day.  If you own an old clunker of a car that costs more to maintain than it cost to buy, you’re probably keeping it running out of a sense that you’ve “invested” too much money in the car to sell it off or trade it in.  The Sunk Cost Fallacy is, at its core, a fallacy that plays on a basic human emotion – a feeling that all the money one has spent is not gone if it “contributes” to an eventual jackpot, or to a car that continues to run.  Sadly, this kind of thinking almost always ends up costing us even more than we would have lost otherwise.
3)  “This system I found guarantees that I’ll win at roulette/baccarat/[insert game of chance here]!  I can’t lose!” (Betting systems)
This kind of thinking is driven by the belief that there is a surefire way to win at most casino games.  These methods, or systems as they are called, are available to anyone (or in some cases, anyone who pays for them), and their proponents all claim that they will allow the player to beat the house advantage and consistently win.
This is complete and utter nonsense.  Games that involve no skill whatsoever, like craps, Punto Banco baccarat, and roulette, are always statistically stacked against the player because of the way the casino has set them up.  There is no particular way to win at any of these games, aside from sheer dumb luck or tampering with the cards or equipment involved.  Be this as it may, many websites do claim to hold the one special secret of winning at craps or roulette.  Because these games lack the element of skill, the systems involved are essentially betting systems.  And none of them work.
Take the Martingale system as an example.  This is one of the oldest and simplest betting systems, devised in the 18th century in France.  When following the Martingale system, you double your bet after each loss until you win.  So if you bet $1 on red and lose, you must follow up with a $2 bet, and then $4, then $8 and so on.  The idea behind the system is that even if you lose several games in a row, your final, winning bet will end up putting you one dollar over what you’ve lost (for example, if you’ve lost five in a row and won the sixth, you’ve lost 1 + 2 + 4 + 8 + 16 = 31 dollars and won 32 dollars.)  It sounds pretty logical, right?
The reason this system doesn’t work is that it’s entirely possible, and even probable after a long enough period of play, to suffer a long enough losing streak that you end up losing everything.  Say you’re playing roulette, you bet on red twelve times, and the ball has landed on black all twelve times.  You’re now out 1 + 2 + 4 + 8 + 16 + 32 + 64 + 128 + 256 + 512 + 1,024 + 2,048 dollars, which adds up to 4,095 dollars.  For most people, this is a pretty crushing loss and probably an unsustainable one.  Since the Martingale system is designed for long-term play, as its profit margins are so small, it is almost inevitable that this sort of streak will occur.  Yet people still use Martingale and various other systems, many of which are offered online.  Some of the websites offering information on these “useful” betting systems are simply misguided, but those that offer to sell you a custom betting system sure to win are almost always outright scams.
Also, consider the fact that if any of these systems ended up working, the casinos would just as quickly make using them a ban-able offense.  There is, in fact, one system that is proven to work: counting cards at blackjack.  And anyone suspected of using this method to win is quickly hustled out of the casino and blacklisted forever after.  The casinos certainly don’t mind players using betting systems, though – because the casinos know that none of them work.  No matter what kind of bizarre or complicated rules a betting system requires you to use, at its core, it is based on the faulty assumptions of the Gambler’s Fallacy.
Odds on free games
Also do not count on the same winning odds on free casino games as on real money gambling games, we have played at a Danish gaming site called CasinoSpil.me and it semed a lot more easy to win on the free games compare to real money games. There is only one winner when gambling online and thats the casinos.