"It's a lonely, lonely road we're on
This side of paradise."
My late father was a professional gambler. Towards the end of his life, he was active in helping at a soup kitchen in Cincinnati, which was run by the Sisters of Charity.
One Thanksgiving, as dad was dishing out food to homeless people, my father was approached by the Sister who ran the program.
"Joe," she said, "What do you do for a living?"
"I'm a gambler," replied my father.
"Joe," she said "This is the first time we ever had a gambler on this side of the table."
The key to my father's success was that he was always on the house side of the table.
He understood that if the house has the odds in its favor long enough, the house will eventually and always win out. As he often noted, "You never see them tearing down a casino because people beat them out of money."
First with lotteries, and then with video slots and casinos, governments realized that a very easy way to gain revenues is by allowing and sponsoring gambling.
The lottery and other games that have been legalized bring in much of their income from those on "the wrong side of the table."
Some European countries limit access to the casinos to those who prove they have sufficient assets. Various forms of stock and option trading, which can be considered a more elite form of gambling, require that those who invest in those instruments have the net worth to survive a loss.
In my father's era, bookmakers cut off bettors on losing streaks. Las Vegas casinos carefully monitored their customers and cuts off their credit when they lose too much.
There have been few, if any, moves by states to monitor the losing of their lottery customers.
Legalized casinos, which have several games of skill and reasonable probability, gear most of their operations to the highly profitable slot machines and video games.
Lotteries have evolved from a form of gaming called "numbers," formerly very popular in poor, urban neighborhoods. If you go into a grocery or liquor store in any poor neighborhood today, you will see people who can't afford to lose even a few dollars, standing around playing scratch off lottery games until all of their money is gone.
I rarely if ever gamble. I can't stand to part with my money on something that is such a bad bet.
My few trips to casinos have been bad experiences for the house. I bet very little and I am a terror at the low price buffet. I play high probability games and won't go near a slot machine. I have a certain profit margin in mind and leave the second that I hit it.
In short, I am a person casinos do not want to attract.
Making gambling illegal was an attempt to protect people from themselves.
It did not stop the tide but pushed it underground. Gambling for rich people, such as options trade and sophisticated stock market games, have always been allowed. Most of the crisis on Wall Street was caused by corporations gambling with stockholders money.
When I passed the stockbroker's (Series 7) test many years ago, I called my father and asked, "Why is futures trading legal but betting on the Bengals illegal?" There is no logical answer.
States like are under pressure to legalize casinos and slot machines, and just like the lottery, they eventually will. It is much easier than raising taxes or cutting services.
When legislators do expand legal gambling, someone must think about and speak out for the person on "the wrong side of the table."
When I was growing up, my father would go around to the sleeping room hotels and give out bottles of low cost champagne on Thanksgiving and Christmas. Just like the patrons at the soup kitchen, many of those men were gamblers. Often the bottle was the only gift they got.
Legalized gambling is not responsible for most of these people being in their positions in life, but states needs to take extreme care that we are not keeping them there.
Don McNay, CLU, ChFC, MSFS, CSSC is the founder of McNay Settlement Group in Richmond, Kentucky. He is the author of Son of a Son of a Gambler: Winners, Losers and What to Do when You Win the Lottery. The book draws parallels between his childhood as the son of a professional gambler and Don's experience in the world of personal finance. You can write to him at email@example.com or read his award winning, syndicated financial column at www.donmcnay.com