What is Gambling?

From Wiki on “Gambling”:

Gambling is the wagering of money or something of material value (referred to as “the stakes”) on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Gambling thus requires three elements be present: consideration, chance and prize.[1]

In other forms, gambling can be conducted with materials which have a value, but are not real money. For example, players of marbles games might wager marbles, and likewise games of Pogs or Magic: The Gathering can be played with the collectible game pieces (respectively, small discs and trading cards) as stakes, resulting in a meta-game regarding the value of a player’s collection of pieces.

In relation to Religion from the same page:

Religious perspectives on gambling have been mixed. Ancient Hindu poems like the Gambler’s Lament and the Mahabharata testify to the popularity of gambling among ancient Indians. However, the text Arthashastra (c. 4th century BCE) recommends taxation and control of gambling.[6] Both the Catholic and Jewish traditions have even set aside days for gambling,[7] (for Jews Hanukkah), although religious authorities generally disapprove of gambling. Ancient Jewish authorities frowned on gambling, even disqualifying professional gamblers from testifying in court.[8] The Catholic Church holds the position that there is no moral impediment to gambling, so long as it is fair, all bettors have a reasonable chance of winning, such as that between two 18th century aristocrats, over whether the proposer’s raindrop would reach the window sill first – their raindrops conjoined so his counterpart won![9] and that there is no fraud involved, and the parties involved do not have actual knowledge of the outcome of the bet (unless they have disclosed this knowledge).[10] Gambling has often been seen as having social consequences, as satirized by Balzac. For these social and religious reasons, most legal jurisdictions limit gambling, as advocated by Pascal.[11] Some Islamic nations prohibit gambling; most other countries regulate it.[12]

And specifically in regards to Sharia Law:

Although different interpretations of sharia law exists in the Muslim world, there is a consensus among the ulema that gambling is haraam (sinful). In assertions made during its prohibition, Muslim jurists describe gambling as being both unquranic and as being generally harmful to the Muslim community. The Islamic terminology for gambling is maisar however this also has a second definition meaning easy money.[17] In parts of the world that implement full sharia law such as Aceh, punishments for Muslim gamblers can range up to 12 lashes or a one year prison term and a fine for those who provide a venue for such practises.[18]

Other possible uses for the word:

Many risk-return choices are sometimes referred to colloquially as “gambling.” Whether this terminology is acceptable is a matter of debate:

  • Emotional or physical risk-taking, where the risk-return ratio is not quantifiable (e.g., skydiving, campaigning for political office, asking someone for a date, etc.)
  • Insurance is a method of shifting risk from one party to another. Insurers use actuarial methods to calculate appropriate premiums, which is similar to calculating gambling odds. Insurers set their premiums to obtain a long term positive expected return in the same manner that professional gamblers select which bets to make. While insurance is sometimes distinguished from gambling by the requirement of an insurable interest, the equivalent in gambling is simply betting against one’s own best interests (e.g., a sports coach betting against his own team to mitigate the financial repercussions of a losing season).
  • Situations where the possible return is of secondary importance to the wager/purchase (e.g. entering a raffle in support of a charitable cause)

Investments are also usually not considered gambling, although some investments can involve significant risk. Examples of investments include stocks, bonds and real estate. Starting a business can also be considered a form of investment. Investments are generally not considered gambling when they meet the following criteria:

  • Economic utility
  • Positive expected returns (at least in the long term)
  • Underlying value independent of the risk being undertaken

Some speculative investment activities are particularly risky, but are sometimes perceived to be different from gambling:

  • Foreign currency exchange (forex) transactions

  • Prediction markets

  • Securities derivatives, such as options or futures, where the value of the derivative is dependent on the value of the underlying asset at a specific point in time (typically the derivative’s associated expiration date)

In relation to the brain and addiction, plus “The Gambler”:

Studies show that though many people participate in gambling as a form of recreation or even as a means to gain an income, gambling, like any behavior which involves variation in brain chemistry, can become a psychologically addictive and harmful behavior in some people. Reinforcement schedules may also make gamblers persist in gambling even after repeated losses.

The Russian writer Dostoevsky (himself a problem gambler) portrays in his novella The Gambler the psychological implications of gambling and how gambling can affect gamblers. He also associates gambling and the idea of “getting rich quick“, suggesting that Russians may have a particular affinity for gambling. Dostoevsky shows the effect of betting money for the chance of gaining more in 19th-century Europe. The association between Russians and gambling has fed legends of the origins of Russian roulette.

In regards to Dostoevsky it might be quite easy to show the pursuit of “getting rich quick” is a product of both our cognitive bias towards understanding money and our inability to properly asses the value of a certain gambling opportunity. In this way it might be able to be shown that we all gamble in our every day lives, and having proper and sharp value measurement mechanisms is a necessity that can only arise from a mind ground in the purest of science, reason, and logic.

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