Standard 12.1
Gambling
The Costs and Benefits of Gambling
What is Gambling?
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Lotteries?
Bingos?
Slot Machines?
Poker?
Casino activities?
Video Trivia?
Gambling…
Involves taking a chance with your
personal finances, or
Risking your money or something else
of value on an activity with an
uncertain outcome.
If you budget for gambling and walk
away when the money is gone, it is
just another form of entertainment.
Why do people gamble?
• Enjoy taking a risk
• Entertainment
• Potential to win/lose
• A fun form of entertainment
• Opportunity to test their skills
and enjoy a challenge
• Thrill of winning
• Financial Gain
Gambling is a business….
• The odds are in the sponsor’s favor!
– Sponsors (lotteries, casinos, horse
tracks)
• Sponsors earn profits based on the
odds.
• Why do people play, when the
odds are against them?
Social Benefits
The gaming industry nets about $100 billion in
revenue annually (after paying out).
In Oklahoma, the gaming industry nets about
$2 billion annually.
• 97 casinos
• Over 45,000 gaming machine, which is about
5.5% of all gaming machines nationally!
• Online gambling is one of the fastest growing
segments of the industry – 10% of its
Social Benefits – The Good
• JOBS! Casinos employ thousands of
people as well as race tracks and
other companies
• Provides revenue for local
communities, various Indian nations,
and the State government
Social Benefits – The Bad
Opportunity Cost –
Casinos take revenue from other
businesses.
Lower income families have greater
impact
• Income reduced by about 5%
• Less money to purchase food, pay
rent/utilities, or put in their savings.
What happens when you
gamble?
• You and the sponsor (state, casino) are
“playing the odds”
• Odds will favor the sponsor – NOT you
• Casinos are set up to guarantee
themselves a profit
• You may win (even win big) at times,
but you will consistently lose over time
Games of chance
• The higher the odds, the higher
the potential payout.
• The greater the potential
payout, the greater the risk of
losing.
• If you want people to take high
risk, you need to offer
potentially high rewards.
Probability
- how likely it is for something to happen
Calculating the odds
Drawing an ace from a deck of
cards:
• 4/52 or a 1/13 chance
• 12/13 chance you will draw
another card
• Rather low risk of “winning”
Powerball
-Random game
-It only knows that the number
has been selected somewhere
by someone
-The only way to improve your
odds is to buy more tickets
Match
Prize
Odds
5 + Power Ball
GRAND PRIZE
1 in 146,107,962.00
5
$200,000
1 in 3,563,608.83
4 + Power Ball
$10,000
1 in 584,431.85
4
$100
1 in 14,254.44
3 + Power Ball
$100
1 in 11,927.18
3
$7
1 in 290.91
2 + Power Ball
$7
1 in 146,107,962
1 + Power Ball
$4
1 in 126.88
1
$3
1 in 68.96
The overall odds of winning a prize are 1 in 36.61.
The odds presented here are based on a $1 play.
Pick 3 Lottery Game
• You have to pick the
exact numbers
• 10 numbers
• 1/10 x 1/10 x 1/10 =
1/1,000
• 999/1000 to lose
Horseracing
Odds are 7 to 1
• You bet $20.
• You agree to pay the race track $20 if you
lose and it will pay you $140 if you win.
• You have about a 15% chance of winning
• 100/7=14.28.
• The odds of winning depend on how
many horses are in the race.
• As more horses are added, the odds
change.
Independent vs. Dependent Events
• Independent Event
– the outcome of one event has no affect
on the outcome of another, both events
have the same probability
• Dependent Event
– the outcome of one event affects the
outcome of another, changing the
probability of the second event
Independent vs. Dependent
Independent Event:
• Flipping a coin
• The odds of getting heads or
tails does not change.
• 1/2
Independent vs. Dependent
Dependent Event:
• Card games such as Poker or Blackjack
(each successive hand is dependent on
the previous)
• 4/52 chance of an ace at the beginning
of the game, until the dealer deals an
ace
• Royal Flush in Poker
• Odds are 1/2,598.950
Probability vs. Predictability
Probability
• Luck
• Little or no strategy involved
• How likely will something happen
Predictability
• Strategy based on past performance
• Some knowledge about outcome
• Informed choices (even if information is
not perfect)
Does this mean you should never take
a risk?
• Life is a risk
• Investing is a risk
• Driving is a risk
Does this mean you should never
gamble?
• Be informed about your odds
• “Don’t gamble with the rent or the milk
money!”
But, it can be addictive!!
• About 3% of those who gamble
become highly addicted to it.
• 20% of all compulsive gamblers file
bankruptcy.
• 1/3 will lose their jobs
• It’s estimated that more than 5 million
Americans are pathological or
problem gamblers.
• Another 15 million are at risk
Gambling and Teenagers
• 4% - 8% of all adolescents have a
gambling problem
• Another10% have the risk of
developing a serious problem
• Males are more likely, but
• Instances of females with gambling
problems is rapidly increasing
How to spot an addict
• Always thinks about Gambling or has
urge to gamble that they cannot stop
• Having to bet more money more often
to keep up the thrill of gambling
• Being really cranky when cutting back
• Lying to hide gambling habits
• Making bets through illegal activity
• Trying to win back money they lost
through gambling more
• Using gambling as an escape
• Making people they love unhappy
• Relying on others to help them when
they lose all their money
• Not able to control or stop gambling
• About 3% of those who gamble
become highly addicted and this ruins
their personal finances.
• Gradual process and most need
professional help to stop
Gambling is high risk!
• You are playing the odds and the
odds are not in your favor!
• It can be fun and entertaining, but
also addictive.
Gambling involves costs and benefits.
• All choices have costs!
There is no guarantee you will win; that
is why they call it “gambling.”
Oklahoma Problem Gambling Help-line
at 1-800-522-4700