Gambling

betting

betting
The term gambling has had many different meanings depending on the cultural and historical context in which it is used. Currently, in Western societies, it has an economic definition, referring to "wagering money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods". Typically the outcome of the wager is evident within a short period of time.
The term gaming[1] in this context typically refers to instances in which the activity has been specifically permitted by law. The two words are not mutually exclusive; i.e.: a “gaming” company offers (legal) “gambling” activities to the public.[2]
Legal aspectsBecause many religious authorities generally disapprove of gambling to some extent, and because gambling can have adverse social consequences, most legal jurisdictions limit gambling to some extent. Some Islamic nations prohibit gambling; most other countries regulate it.[3]
Many jurisdictions, local as well as national, either ban or heavily control (by licensing) gambling. Such regulation generally leads to gambling tourism and illegal gambling. The involvement of governments, through regulation and taxation, has led to a close connection between many governments and gaming organizations, where legal gambling provides significant government revenue, such as in Monaco or Macau.
Under US federal law, gambling is legal in the United States, and states are free to regulate or prohibit the practice. Gambling has been legal in Nevada since 1931, forming the backbone of the state's economy, and the city of Las Vegas is perhaps the best known gambling destination in the world. In 1976, gambling was legalized in Atlantic City, New Jersey, and in 1990, it was legalized in Tunica, Mississippi; both of those cities have developed extensive casino and resort areas since then. Since a favorable US Supreme Court decision in 1987, many Native American tribes have built their own casinos on tribal lands as a way to provide revenue for the tribe. Because the tribes are considered sovereign nations, they are often exempt from state laws banning gambling, and are instead regulated under federal law.
Because contracts of insurance have many features in common with wagers, insurance contracts are often distinguished under law as agreements in which either party has an interest in the "bet-upon" outcome beyond the specific financial terms. E.g.: a “bet” with an insurer on whether one's house will burn down is not gambling, but rather insurance — as the homeowner has an obvious interest in the continued existence of his/her home independent of the purely financial aspects of the "bet" (i.e., the insurance policy).
There is generally legislation requiring that the odds in gaming devices are statistically random, to prevent manufacturers from making some high-payoff results impossible. Since these high-payoffs have very low probability, a house bias can quite easily be missed unless checking the odds carefully.[4]
Gambling variablesThere are three variables common to all forms of gambling:
How much is being wagered, the initial stake (in money or material goods). The predictability of the event. In mechanical or electronic gambling such as lotteries, slot machines and bingo, the results are random and unpredictable; no amount of skill or knowledge (assuming machinery is functioning as intended) can give an advantage in predictability to anyone. However, for sports events such as horse racing and soccer matches there is some predictability to the outcome; thus a person with greater knowledge and/or skill will have an advantage over others. The odds agreed between the two (or more) parties to the wager; where there is a house or a bookmaker, the odds are (quite legally) arranged in favour of the house. The expected value, positive or negative, is a mathematical calculation using these three variables. The amount wagered determines the scale of an individual wager (bet); the odds and the amount wagered determine the payout if successful; the predictability determines the frequency of success. Finally the frequency of success times the payout minus the amount wagered equals the "expected value" The skill of a gambler lies in understanding and maneuvering the three variables so that the "actual value" is positive over a series of wagers.
Types of gambling
Casino gamesWhile almost any game can be played for money, and any game typically played for money can also be played just for fun, some games are generally offered in a casino setting.
"Beatable" casino gamesA highly skilled player with a well-designed strategy can create a positive mathematical expectation on games such as:
Blackjack—with card counting unless a continuous shuffler is used Pai Gow Poker and Tiles—player-dealt Parimutuel betting Poker (Also recognized as a game of skill) Slot machines—where progressive jackpots or bonuses reach a certain break-even point Sports betting Video poker—with proper pay table and/or progressive jackpot
"Unbeatable" casino games A pachinko parlor in Tokyo, Japan.These games have a negative expectation regardless of how few or many games someone plays. Nevertheless, this does not stop gamblers from having false beliefs (the "gambler's fallacy") that their actions or "way of playing" will influence the outcome.
Baccarat (punto banco) Caribbean Stud Poker Casino war Craps (though some believe the use of dice control can beat the game) Fan-Tan Faro Keno Let it ride Pachinko Pyramid Poker 3-card poker 4-card poker Red Dog Roulette Sic Bo Spanish 21—without counting Texas Hold'em Bonus Poker
Non-casino gambling games Mahjong tiles.Gambling games that take place outside of casinos include Bingo (as played in the US and UK), dead pool, lotteries, pull-tab games and scratchcards, and Mahjong.
Other non-casino gambling games include:
Card games, such as Liar's poker, Bridge, Basset, Lansquenet, Piquet, Put, Teen patti Coin-tossing games such as Head and Tail, Two-up* Confidence tricks such as Three-card Monte or the Shell game Carnival Games such as The Razzle or Hanky Pank Dice-based games, such as Backgammon, Liar's dice, Passe-dix, Hazard, Threes, Pig, or Mexico *Although coin tossing isn't usually played in a casino, it has been known to be an official gambling game in some Australian casinos[5]
Fixed-odds gamblingFixed-odds gambling and Parimutuel betting frequently occur at many types of sporting events. In addition many bookmakers offer fixed odds on a number of non-sports related outcomes, for example the direction and extent of movement of various financial indices, the winner of television competitions such as Big Brother, election results,[6]. Interactive prediction markets also offer trading on these outcomes, with "shares" of results trading on an open market.
Parimutuel betting Tokyo Racecourse in Tokyo, Japan.Main article: Parimutuel bettingOne of the most widespread forms of gambling involves betting on horse or greyhound racing. Wagering may take place through parimutuel pools; or bookmakers may take bets personally. Parimutuel wagers pay off at prices determined by support in the wagering pools, while bookmakers pay off either at the odds offered at the time of accepting the bet; or at the median odds offered by track bookmakers at the time the race started.
Sports bettingMain article: sports bettingBetting on team sports has become an important service industry in many countries. For example, millions of Britons play the football pools every week.
Arbitrage bettingMain article: arbitrage bettingArbitrage betting is a theoretically risk-free betting system in which every outcome of an event is bet upon so that a known profit will be made by the bettor upon completion of the event, regardless of the outcome. Arbitrage betting is a combination of the ancient art of arbitrage trading and gambling, which has been made possible the large numbers of bookmakers in the marketplace, creating occasional opportunities for arbitrage.
Other types of bettingOne can also bet with another person that a statement is true or false, or that a specified event will happen (a "back bet") or will not happen (a "lay bet") within a specified time. This occurs in particular when two people have opposing but strongly-held views on truth or events. Not only do the parties hope to gain from the bet, they place the bet also to demonstrate their certainty about the issue. Some means of determining the issue at stake must exist. Sometimes the amount bet remains nominal, demonstrating the outcome as one of principle rather than of financial importance.
Betting exchanges allow consumers to both back and lay at odds of their choice. Similar in some ways to a stock exchange, a better may want to back a horse (hoping it to win) or lay a horse (hoping it to lose, effectively acting as bookmaker)
Staking systemsMain article: betting strategyMany betting systems have been created in an attempt to "beat the bookie" but most still accept that no system can make an unprofitable bet profitable over time. Widely-used systems include:
Fixed stakes – a traditional system of staking the same amount on each selection. Fixed profits – the stakes vary based on the odds to ensure the same profit from each winning selection. Due-column betting – A variation on fixed profits betting in which the bettor sets a target profit and then calculates a bet size that will make this profit, adding any losses to the target. Kelly – the optimum level to bet to maximize your future median bank level. Martingale – A system based on staking enough each time to recover losses from previous bet(s) until one wins.
Other uses of the term "gambling"Many risk-return choices are sometimes referred to colloquially as "gambling." Whether this terminology is acceptable is a matter of debate, but generally the following activities are not considered gambling:
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 could be considered similar to calculating gambling odds. However, insurers can set their premiums to obtain a long term positive expected return. Situations where the possible return is a secondary reason for the wager/purchase (e.g., buying a raffle ticket to support 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:
Positive expected returns (at least in the long term) Economic utility Underlying value independent of the risk being undertaken Some speculative investment activities are particularly risky, but are still usually considered separately from gambling:
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) Foreign currency exchange (forex) transactions Prediction markets
Psychological aspectsMain article: Problem gambling Though many 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 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.
Sports Betting History
Sports betting in America has experienced unimaginable progress, especially in the past three decades. Betting on sporting events is the most popular form of illegal betting in the U.S. and is one of the fastest growing forms of legalized gambling. Sports wagering is commonplace from the nation’s factories to the boardroom. The growth in the popularity of legal sports wagering can be attributed to many factors. These same factors have contributed to the explosive growth and interest in illegal sports betting around the nation. These include the following:
The decrease in the federal wagering excise tax from 10 percent to 2 percent to eventually 0.25 percent on January 1, 1983. This served to convert many of those betting on sports illegally to do so in a legal manner. It made sports bookmaking a profitable business venture. The saturation of sporting events in the media has enhanced the public’s familiarity with various types of sports. Cable television and satellite technology has made it possible to bring the games live and direct to the sports books. The ever-expanding mass media marketing of professional and collegiate sports has risen to enormous levels. The three most popular sports for wagering (football, baseball, and basketball) all have major contracts with national and local television providers. The weakened stigma associated with gambling in general and specifically, with gambling on professional events Gambling, especially on sporting events, is determined a victimless crime, or a crime in which the accused has not acted in a manner considered harmful to another. The legitimization of sports gambling in the eyes of the public has been promoted by the frequent «natural» association of gambling with sport, particularly by the media. Major Nevada resort hotels and casinos discovered that in-house race and sports books were good for business and created substantial «foot traffic» through the casino. The volume of information available to the sports bettor has increased to the point that the gambler does not have to be at a severe disadvantage when compared to the knowledge possessed by the bookmaker.
The rise of professional sports, especially televised professional football, has brought about significant increases in the volume of sports betting in the United States. Moreover, legalized sports wagering in Nevada flourished considerably when the federal gambling tax was gradually reduced from 10 percent to 2 percent from 1975 to 1979. The sports handle increased dramatically from less than $41 million in 1973 to almost $258.7 million by 1979.
Gambling on sporting events involves large amounts of money, but just how large may be impossible to determine, because most sports betting is done illegally. Sports betting is legal in only two states: Nevada, through casino sports books, and Oregon, through a state lottery game entitled, sports Action. This game is based on contests played in the National Football League and would not be affected by a federal ban on college wagering. Interestingly, the proceeds derived from this sports lottery game are assigned to support college athletics in the Oregon University System. The so-called “third wave” of gaming in European-North American history, conceptualized by gaming authority I. Nelson Rose reached towards a crest during the past decade. However, the one notable exception to this liberalizing trend is sports betting. Nevada has 142 legal sports books that allow wagering on professional and amateur. The only amateur sporting events that sports books allow betting on are collegiate and some Olympic sports. Nevada’s sports books gross gambling revenues (GGR) for 1994 were $118.6 million. Gross gambling revenue is used because it is a true measure of the economic value of sports betting. In 1998, legal bookmaking operations' gross gambling revenue were $122.5 million («Gross Annual Wager Supplement,» 1999, p.49). Betting on college events accounted for 33 percent of the total sports wagering revenue, or $40 million. The decline in sports book retention is due in large part to increased competition from Internet wagering on sports. The betting action in Nevada sports books breaks down as follows: professional and college football combined ? 39%, professional and college basketball combined 34.5%, baseball 23%, and hockey 2%. Boxing, golf, and tennis wagering make up the remaining 1.5%. These rankings are similar to the transactions handled by illegal bookmakers; the difference is that professional football games draw an even larger share of the illegal betting action.
The actual wagering can occur under a variety of circumstances. The most common of which are: a bet between friends on an individual game, an office pool (i.e. NCAA Men’s Basketball Tournament), fantasy football or hockey drafts (drafting and auctioning players based on their actual performance), in a legal sports book in the State of Nevada, or with an illegal bookmaker or bookie. The majority of sports betting in America occurs between friends or acquaintances and involves relatively small amounts of money. Another large portion of the sports betting population wagers larger sums of money with illegal bookmakers. From small towns to large metropolises, cities in the United States are inundated with vast networks of illegal bookies. The total dollar volume of sports betting in this country can only be approximated, like any illegal activity it is near impossible to determine the actual amount of money transferred. However, the National Gambling Impact Study Commission in 1999, estimated that the scope of illegal sports betting in the United States ranges anywhere from $80 billion to $380 billion annually, making sports betting the most widespread and popular form of gambling in America.

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