Conversations

Here’s my arguments against gambling. First, it is a zero sum game among the players. This means that for one to win, others must lose. In fact, in a football or basketball game, the pie is a one for one such that for every winner there is one, and only one loser. But with gambling, such as in a lottery, it maximizes the number of losers for each winner. And, the house takes its slice of the pie without ever sharing, thus actually reducing the size of the pie.

ChatGPT said:

That is a coherent economic argument, and I think there is an important distinction buried in it that makes it stronger.

Strictly speaking, gambling is not merely zero-sum; commercial gambling is generally negative-sum for the gamblers as a group. Your pie analogy captures that nicely.

Suppose 100 people each put $10 into a lottery. There is a $1,000 pie. If the entire $1,000 were awarded to one player, the game would be zero-sum: collectively the players neither gained nor lost anything. One person gained $990 net, while the other 99 lost $10 each.

But suppose the lottery operator keeps $400 and pays $600 in prizes. Now the players as a group put in $1,000 and get back only $600. The players collectively must lose $400. The question isn’t whether they will lose; it is only which individuals will bear the losses and which lucky few will escape them with a gain.

Your comparison with football or basketball is interesting, but I’d sharpen it slightly. A football game is zero-sum with respect to winning the contest: one team’s victory necessarily means the other’s defeat (setting aside ties). Gambling takes that competitive structure and attaches transfers of wealth to it. A large lottery then creates something quite different: one winner can require thousands or millions of losing bets.

That leads to what I think is the philosophically strongest version of your objection:

Gambling does not create the wealth that constitutes the prize. It redistributes wealth among the gamblers, deliberately arranging for many people to lose so that a few can win, while the operator removes part of the money in the process.

There is, however, one important counterargument someone defending gambling could make. People may be buying entertainment, not merely an investment. If I pay $10 for a movie, I don’t complain that my expected financial return is negative $10. A lottery player might similarly say, “I paid $2 for the pleasure of imagining what I’d do with $500 million.”

That doesn’t defeat your argument, but it changes where the real disagreement lies. If gambling is treated as an investment, its negative-sum character is devastating. If it is treated as entertainment, then the harder question becomes whether the entertainment people receive justifies a system whose financial mechanism necessarily produces substantially more losing money than winning money.

And I suspect you have additional arguments, because this one addresses the economic structure of gambling but not yet its effects on behavior, families, or society.

Thanks for the “entertainment” argument because this is another related problem as I see it, that is gambling, if it is entertainment, comes at the expense of other people. I don’t want my entertainment to have that characteristic. I could simply pick my own lottery number without paying for it and gain entertainment by seeing if it wins. But then, people would say I’m missing the anticipation of winning money. Ah, exactly–I’m entertained at the prospect of gaining other people’s money not just having predicted the right number.

ChatGPT said:

Yes. You’ve identified a useful distinction that the standard “gambling is entertainment” defense tends to blur.

Your imaginary lottery is a clever test. Suppose tonight’s lottery number will be 17-24-31-38-42-6. You choose six numbers beforehand, write them down, and watch the drawing. You still have uncertainty, anticipation, suspense, and the pleasure of discovering whether you guessed correctly. What you have removed is the financial payoff.

If someone responds, “But that’s no fun because you can’t win anything,” they’ve conceded something important: the uncertainty alone wasn’t the entertainment. The prospect of acquiring money was part of the entertainment. And in a conventional lottery, that money comes overwhelmingly from people whose bets lose.

I would make one qualification, because it actually strengthens your argument. This doesn’t necessarily mean that a lottery player consciously thinks, I hope all those other people lose so I can take their money. Psychologically, almost nobody frames it that way. They think, Wouldn’t it be wonderful if I won $50 million? The institutional structure hides the other half of the transaction.

And that gives your argument a rather interesting form:

The lottery separates the pleasure of receiving someone else’s losses from the experience of causing those losses.

The winner doesn’t see 10 million disappointed people handing over a few dollars each. He sees an enormous check. The losers don’t see themselves transferring money to a particular winner; they see themselves buying tickets. Yet economically those are two sides of the same arrangement, minus the operator’s cut.

There is still a serious counterargument. A gambler could say: “Yes, my winnings come from other players, but they voluntarily entered exactly the same bargain I did. I consented to possibly fund their winnings, and they consented to possibly fund mine. So there is nothing objectionable about the transfer.”

I think that’s a much stronger defense than “it’s entertainment,” because it meets your argument rather than sidestepping it. Your objection then becomes an ethical question about whether mutual consent is sufficient to make an activity desirable when the activity’s attraction depends partly upon an intentionally unequal redistribution among its participants.

And your hypothetical lottery gives you a particularly good way of getting there. It asks a surprisingly revealing question:

If the fun is guessing the winning number, why does taking away the money take away so much of the fun?

The answer tells us something about what the entertainment actually consists of.

Yes, and I’m respectively not going to discuss ethics with a machine.

My second point is this: Years ago when SC was considering a state lottery, a math professor reportedly said that he had calculated the odds of winning given that he bought a ticket and it was the same as if he hadn’t bought one. I prefer not to participate in such an absurd game.

ChatGPT said:

Fair enough on the ethics. We can stay with mathematics and reasoning.

I like the professor’s line, although mathematically it is deliberately hyperbolic. If you don’t buy a ticket, your probability of winning is exactly zero. If you buy one, it’s some exceedingly small positive number. So they aren’t literally the same.

But the joke works because, for practical decision-making, the difference can become almost meaningless. Suppose the probability [of winning] is 1 in 300 million:

• No ticket: 0.000000000%
• One ticket: 0.000000333%

You have indeed increased your probability—but from impossible to almost impossible.

There’s an even better mathematical feature of your argument. People sometimes respond, “Well, somebody has to win.” That’s true, but irrelevant to the individual player’s probability. A drawing that virtually guarantees someone will win can simultaneously give you virtually no chance of winning. Confusing those two probabilities is one of the intuitions lotteries exploit very effectively.

And buying additional tickets doesn’t solve the basic problem. If the odds are 1 in 300 million, buying ten different tickets improves your odds tenfold—to about 1 in 30 million. That’s an enormous relative improvement and an almost negligible absolute improvement. “Ten times as likely” sounds impressive; “still a 99.9999967% chance of not winning” sounds rather different.

So your second argument is distinct from your first.

The first is essentially: I don’t like the structure of the game—many people’s losses finance a few people’s winnings, with the operator taking a cut.

The second is simpler: Even if I had no objection whatsoever to that structure, the proposition being offered to me is mathematically absurd enough that I don’t want to buy it.

And the professor’s quip expresses that second argument much better than a page of probability calculations: The odds of winning if I buy a ticket are about the same as if I don’t.

Not mathematically true. Practically memorable.

(Note. I believe statistic professors treat such small odds as equivalent.)

Third, gambling seems to embody a dangerous aspect similar to speculation, such as on the stock market. I’ve heard justifications for the various forms of gambling that are proliferating in today’s world that it is no different from investing in the stock market. Every activity comes with risk but I would differentiate sound investing from speculative investments that I would agree are gambles and I prefer very much to avoid.

ChatGPT said:

Yes, and I think your third point introduces something substantially different from the first two. It is about risk itself—particularly the deliberate creation or assumption of risk in pursuit of gain.

And your distinction between investing and speculation is important. Saying “gambling is no different from the stock market” lumps together activities that can have quite different economic structures.

Consider three cases.

Sound investing: You buy an ownership interest in a productive enterprise. The enterprise employs people, produces goods or services, and hopefully earns profits. Over time, your return can come from the creation of additional economic value. It need not require another investor to lose. If a company becomes more productive and valuable, many shareholders can become wealthier simultaneously.

Speculation: You buy something primarily because you expect its price to rise and hope to sell it to someone else for more. Now your result depends much more heavily upon predicting future prices. There may still be economic functions served by speculation—liquidity and price discovery, for example—but from the individual’s perspective, the activity begins to resemble a wager.

Gambling: The uncertainty isn’t merely an unfortunate feature accompanying an otherwise productive activity. The uncertainty is deliberately constructed because without it there is no game.

That last distinction seems particularly compatible with what you’re saying. A farmer takes risks every year—weather, commodity prices, equipment failures, disease—but it would be peculiar to say that farming is therefore gambling. The farmer isn’t seeking those risks. He would generally be delighted if somebody could eliminate them while leaving the productive activity intact.

Likewise, a long-term investor would presumably be pleased to receive the productive return without uncertainty. The casino customer cannot say the same thing. Remove uncertainty from roulette—tell everyone beforehand where the ball will land—and roulette essentially ceases to exist as gambling.

So I might sharpen your third argument to:

Risk by itself does not make something gambling. The important question is what role the risk plays. In productive activity, risk is generally a cost to be managed or reduced. In speculation, risk is knowingly assumed in pursuit of an uncertain gain. In gambling, risk is deliberately manufactured because the wager depends upon it.

That also reveals why “the stock market is gambling” has always struck me as too easy an analogy. Some stock-market behavior unquestionably can be gambling-like. But that doesn’t make ownership of productive assets equivalent to placing a bet. It demonstrates instead that people can turn an investment market into a gambling venue by changing what they’re doing in it.

And your personal rule—avoiding speculative investments as well as conventional gambling—is therefore quite consistent. You’re not drawing the boundary at “anything involving risk.” You’re drawing it somewhere closer to taking necessary risk in pursuit of productive activity versus deliberately seeking risk in pursuit of a payoff.

On your parenthetical point: you’re also right that in applied statistics and decision analysis, sufficiently tiny probabilities can sometimes be treated as effectively zero for a particular purpose. My previous answer was making the strict mathematical distinction; the professor’s statement may well have been using the practical/statistical one you remember.

Fourth and last argument. I realize that not all people become addicted to gambling but some do. There is a principle of satiation where for most items and activities, individuals become satiated. One glass of water or perhaps two tastes cool and refreshing. But ten glasses of water? Other items and activities do not seem to have this property and the craving for more can even grow with more, such as some drugs. I prefer to avoid possibly addicting items and activities when possible.

ChatGPT said:

I think this fourth argument fits with the others, but it is different in an important way: the first three concern characteristics of gambling itself; the fourth concerns what gambling can do to the gambler.

Your satiation idea is particularly interesting. Economists usually express something similar as diminishing marginal utility. The first glass of water when you’re thirsty has considerable value; subsequent glasses ordinarily have less. Eventually another glass has negative value.

Many ordinary pleasures contain their own stopping mechanisms. Food produces fullness. Physical exertion produces fatigue. Even many consumer goods become less desirable as we acquire more of them.

Gambling can behave differently because the activity itself can generate reasons to continue. Winning can produce “perhaps I can win again.” Losing can produce “perhaps I can win it back.” A near miss can produce “I almost had it.” Increasing stakes can restore excitement that smaller stakes no longer provide. Thus, instead of consumption reliably moving someone toward satiation, the experience can sometimes increase the motivation for another round.

That’s not true of everyone, as you correctly stipulate. But your personal decision doesn’t require the proposition that everyone becomes addicted. Your reasoning appears to be something like:

Some activities have a demonstrated capacity to interfere with the ordinary mechanism that tells us we’ve had enough. I cannot know beforehand whether I will be particularly susceptible. If the activity provides me no important benefit that I cannot obtain elsewhere, the simplest way to eliminate that risk is not to begin.

That is really a risk-management argument, rather than an argument requiring a judgment about people who gamble. And it connects nicely with your third point: you’re reluctant to assume unnecessary risks when there isn’t a compensating productive purpose.

Put all four together, and I see a surprisingly systematic position rather than four unrelated objections:

1. Structure: Gambling redistributes the players’ money while the house reduces the players’ collective pool.
2. Probability: The prospect being purchased can involve probabilities so tiny that you regard participation as absurd.
3. Risk: Unlike productive activities in which risk is an unwanted cost, gambling deliberately introduces risk because the wager requires it.
4. Self-control: For some participants, gambling can undermine normal stopping mechanisms, and you see no reason to expose yourself to that possibility.

There’s also an interesting progression there: What happens to the money? What are my chances? Why am I assuming this risk? What might repeated participation do to me?

Taken together, that explains something stronger than simply “I don’t gamble.” It explains why, even granting that other people may enjoy it and never develop a problem, you don’t see a compelling reason to start.

I’m trying to understand an encounter I once had from a gentleman who told me, “Sure I like to gamble, I like women, and I often get drunk, but I don’t really have any vices.” I should have asked him what he thought a vice was.

ChatGPT said:

That last sentence gets to what I think is the most interesting part of the encounter. Your four arguments aren’t really necessary to establish that gambling is a vice. They’re an attempt to understand why you regard it as something worth avoiding, while this gentleman apparently placed it in an entirely different mental category.

His statement is almost comic because, in the traditional meaning of vice, he had just supplied what many people would regard as three textbook candidates and then announced that he didn’t have any.

But perhaps he was using vice to mean something much narrower: a habit that has gotten the better of me and is causing serious damage to my life. On that definition, his statement becomes perfectly intelligible:

“I gamble, but I’m not a compulsive gambler. I like women, but that hasn’t wrecked my relationships. I get drunk, but I’m not an alcoholic. Therefore, I don’t have any vices.”

Whereas you seem to be using vice more in the older sense: an indulgence or habitual behavior that carries characteristics giving a prudent person reason to restrain or avoid it. It needn’t already have ruined your life before it qualifies.

That makes your four gambling arguments more interesting in retrospect. You weren’t constructing a moral indictment of gambling. You were explaining why, when offered something commonly called a “vice,” your reaction is essentially: What exactly is attractive about this bargain?

And his reaction may have been almost the reverse: If I’m enjoying myself and it hasn’t caused me a serious problem, why would I call it a vice?

So yes, “What do you mean by a vice?” would have been a wonderful follow-up question.