William Shakespeare once wrote: “The whole world is a stage and all men and women are just players.” Philosopher or layman, life is all about how you play the game – do you play or invest? If you invest and play in casinos, sports and money markets, the question is certainly worth considering!
Gambling and investing: defining the difference
Investing refers to the systematic risk of money for an expected result with an explicit forecast of a positive return. As such, an investor “expects” a long-term profit. For example, a card counter can have a positive advantage over a Vegas casino and therefore set up a bankroll with the projection of gradually doubling the money. Other examples are sports betting with mathematical and statistical systems.
In contrast, gambling refers to the act of randomly risking money for a result, with no predictions for a positive return. Therefore, a player cannot reasonably expect long-term profit. Random games like online slots have a built-in casino edge and therefore cannot be played with authentic skills. As a result, they can only be considered “gambling” because you always rely on luck to win (although very lucky players can win millions from progressive jackpots and huge sports betting collectors).
Like everything in life, both investing and playing involve a risk. For investors, however, the risk is taken as part of a system and a strategy and therefore has a predicted positive expectation. In contrast, gambling is based on random luck, where there is no system and no long-term strategy to make money.
Turn a game of chance into an investment
Assuming a bet or trade has a potential advantage in your favor (e.g., a sports betting system or a qualified casino strategy), your mindset and actions can instantly transform it from a game of chance to an investment – or vice versa. In his book Enemy Number One, professional horse racing weather patrick Veitch explains how he made millions with British bookmakers. However, he also notes that the agents with whom he placed the tips would not have made any money in the long run if they could have made a lot with online bookmakers.
How can that be? The answer is simple: they lacked the patience to rely on Veitch’s selection only with an investment strategy. Instead, they became greedy and placed other bets, losing the investment advantage and making it a reckless game of chance. An investor can use the following strategy to make long-term money with qualified selections:
Bet all selections on a unit win or in any direction with an online bookmaker.
Use a bet of 1% of the bankroll. Over time, the effects of compound interest would make money grow faster, potentially leading to the maturity of a large sum of money. In contrast, the player can use random bets, track losses during drawdowns and do not implement rules. In addition, the player’s psychology and understanding of compound interest can be flawed.
This concept is therefore an important point for anyone with knowledge of sports, casino or financial betting markets: who you are and your integrity can determine whether you play or invest. From this perspective, something is not inherently a game of chance or an investment – it is an opportunity. You define yourself whether it’s an investment or a game of chance – it’s just different shades of the same thing.
Responsible Gambling using Investing Principles
The goal of most online players is to have fun and occasionally hit the book or online casino. The rush to make a bet or have a spin is ultimately all about. And when you’re done with the right mindset and bankroll management, online gambling can be an incredibly fun way to have fun. Likewise, the player can dream of winning a progressive jackpot or a 50,000-1 battery in soccer, and for some, the dream can become a reality. Interestingly, elements of successful investing can be used here to make gambling much more responsible, even if the market you’re playing in can’t be beaten with real skill – just with luck. Here are some pointers:
Budget / Capital: Only risk money that you can really afford to have fun because you know you could lose everything.
- Risk management: Establish a strict operational policy and meeting, as well as weekly and monthly limits.
- Discipline: Don’t go back on your budget and risk.
- Honesty: Don’t blindly ignore how much money you are spending on gambling.
Compliance with these rules does not result in an investment from a game of chance, but ensures responsible gaming and maximum fun. Ultimately, the markets in which you risk money can inherently define whether you have the potential to gamble or invest in them. However, in beatable markets where qualified betting can give you a mathematical advantage, you and your actions can determine whether you are a player or an investor.