Standard 12.1 Gambling

The Costs and Benefits of Gambling

What is Gambling?

• 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 BadOpportunity 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. DependentIndependent Event:• Flipping a coin• The odds of getting heads or tails does not change. • 1/2

Independent vs. DependentDependent 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