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 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

MatchPrizeOdds 5 + Power BallGRAND PRIZE 1 in 146,107, $200,000 1 in 3,563, Power Ball$10,000 1 in 584, $100 1 in 14, Power Ball$100 1 in 11, $7 1 in Power Ball$7 1 in 146,107, Power Ball$4 1 in $3 1 in The overall odds of winning a prize are 1 in 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, /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= 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,

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