Gambling
Overview
 
Gambling is the wagering of money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...

 or something of material value
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...

 (referred to as "the stakes") on an event
Event (probability theory)
In probability theory, an event is a set of outcomes to which a probability is assigned. Typically, when the sample space is finite, any subset of the sample space is 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.

The term gaming in this context typically refers to instances in which the activity has been specifically permitted by law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...

.
Quotations

Gambling is risk-taking. It might be said the owner of a casino gambles, takes risks, but he has the odds in his favour, so that’s intelligent gambling. If I wanted to gamble, I’d buy the casino.

John Paul Getty|John Paul Getty. From his interview with Alan Whicker, as quoted in his book, Within Whicker’s World (1982)

When you’re betting and you win, naturally you have that satisfaction, and the profit.

George Soros, From an interview with Niall Ferguson, in the Channel 4 television series, The Ascent of Money, broadcast on 22nd December 2008

That the chance of gain is naturally over-valued, we may learn from the universal success of lotteries.

Adam Smith, The Wealth of Nations (1776)

Encyclopedia
Gambling is the wagering of money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...

 or something of material value
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...

 (referred to as "the stakes") on an event
Event (probability theory)
In probability theory, an event is a set of outcomes to which a probability is assigned. Typically, when the sample space is finite, any subset of the sample space is 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.

The term gaming in this context typically refers to instances in which the activity has been specifically permitted by law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...

. The two words are not mutually exclusive; i.e., a “gaming” company offers (legal) “gambling” activities to the public and may be regulated by one of many gaming control board
Gaming Control Board
A gaming control board , also called by various names including gambling control board, casino control board, gambling board, and gaming commission) is a government agency charged with regulating casino and other types of gaming in a defined geographical area, usually a state, and of enforcing...

s, for example, the Nevada Gaming Control Board. However, this distinction is not universally observed in the English-speaking world. For instance, in the UK, the regulator of gambling activities is called the Gambling Commission
Gambling Commission
The Gambling Commission is Great Britain's regulatory body for most, but not all, gambling.-History:It was established under the Gambling Act 2005 and assumed full powers in 2007, taking over responsibility from the Gaming Board for Great Britain, in regulating arcades, betting, bingo, casinos,...

 (not the Gaming Commission). Also, the word gaming is frequently used to describe activities that do not involve wagering, especially online
Online game
An online game is a game played over some form of computer network. This almost always means the Internet or equivalent technology, but games have always used whatever technology was current: modems before the Internet, and hard wired terminals before modems...

.

Gambling is also a major international commercial activity, with the legal gambling market totaling an estimated $335 billion in 2009. In other forms, gambling can be conducted with materials which have a value, but aren't real money; for example, games like Pogs
Pogs
Pogs is a game that was popularized during the early 1990s. The word "pog" also refers to the discs used to play the game. The name originates from POG, a brand of juice made from passionfruit, orange and guava; the use of the POG bottle caps to play the game pre-dated the game's commercialization...

 or Magic: The Gathering.

Religious

Religious perspectives on gambling have been mixed. Both the Catholic and Jewish
Judaism
Judaism ) is the "religion, philosophy, and way of life" of the Jewish people...

 traditions have even set aside days for gambling, (for Jews Hanukkah
Hanukkah
Hanukkah , also known as the Festival of Lights, is an eight-day Jewish holiday commemorating the rededication of the Holy Temple in Jerusalem at the time of the Maccabean Revolt of the 2nd century BCE...

), although religious authorities generally disapprove of gambling. Ancient Jewish authorities frowned on gambling, even disqualifying professional gamblers from testifying in court. Gambling has often been seen as having social consequences
Social cost
Social cost, in economics, is generally defined in opposition to "private cost". In economics, theorists model individual decision-making as measurement of costs and benefits...

. For these social and religious reasons, most legal jurisdictions limit gambling. Some Islamic nations prohibit gambling; most other countries regulate it.

Origins

Many popular games played in modern casinos originate from Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

 and China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

. Games such as craps
Craps
Craps is a dice game in which players place wagers on the outcome of the roll, or a series of rolls, of a pair of dice. Players may wager money against each other or a bank...

, baccarat
Baccarat
Baccarat is a card game, played at casinos and by gamblers. It is believed to have been introduced into France from Italy during the reign of King Charles VIII , and it is similar to Faro and Basset...

, roulette
Roulette
Roulette is a casino game named after a French diminutive for little wheel. In the game, players may choose to place bets on either a single number or a range of numbers, the colors red or black, or whether the number is odd or even....

, and blackjack
Blackjack
Blackjack, also known as Twenty-one or Vingt-et-un , is the most widely played casino banking game in the world...

 originate from different areas of Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

. A version of keno
Keno
Keno is a lottery or bingo gambling game often played at modern casinos, and is also offered as a game in some state lotteries. A traditional live casino keno game uses a circular glass enclosure called a "bubble" containing 80 balls which determine the ball draw result. Each ball is imprinted...

, an ancient Chinese lottery game, is played in casinos around the world. In addition, pai gow poker
Pai gow poker
Pai Gow poker is an Americanized version of Pai Gow . The games of Pai Gow poker and Super Pan-9 were created by Sam Torosian and Fred Wolf.The game is played with a standard 52-card deck, plus a single joker...

, a hybrid between pai gow
Pai Gow
Pai gow is a Chinese gambling game, played with a set of Chinese dominoes. Pai gow is played in unsanctioned casinos in most Chinese communities...

 and poker
Poker
Poker is a family of card games that share betting rules and usually hand rankings. Poker games differ in how the cards are dealt, how hands may be formed, whether the high or low hand wins the pot in a showdown , limits on bet sizes, and how many rounds of betting are allowed.In most modern poker...

 is also played.

Regulation

Many jurisdictions, local as well as national, either ban gambling or heavily control it by licensing. Such regulation generally leads to gambling tourism and illegal gambling in the areas where it is not allowed. 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
Monaco
Monaco , officially the Principality of Monaco , is a sovereign city state on the French Riviera. It is bordered on three sides by its neighbour, France, and its centre is about from Italy. Its area is with a population of 35,986 as of 2011 and is the most densely populated country in the...

 or Macau
Macau
Macau , also spelled Macao , is, along with Hong Kong, one of the two special administrative regions of the People's Republic of China...

.

United States

Under US federal law
Law of the United States
The law of the United States consists of many levels of codified and uncodified forms of law, of which the most important is the United States Constitution, the foundation of the federal government of the United States...

, gambling is legal
Gambling in the United States
Gambling is legally restricted in the United States, but its availability and participation is increasing. In 2007, gambling activities generated gross revenues of $92.27 billion in the United States. Commercial casinos provided 354,000 jobs, and state and local tax revenues of $5.2 billion...

 in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, and states are free to regulate or prohibit the practice. Gambling has been legal in Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...

 since 1931, forming the backbone of the state's economy, and the city of Las Vegas
Las Vegas metropolitan area
The Las Vegas Valley is the heart of the Las Vegas-Paradise, NV MSA also known as the Las Vegas–Paradise–Henderson MSA which includes all of Clark County, Nevada, and is a metropolitan area in the southern part of the U.S. state of Nevada. The Valley is defined by the Las Vegas Valley landform, a ...

 is perhaps the best known gambling destination in the world. In 1976, gambling was legalized in Atlantic City, New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...

, and in 1990, it was legalized in Tunica, Mississippi
Tunica, Mississippi
Tunica is a town in Tunica County, Mississippi, United States, located near the Mississippi River. Until the early 1990s the town was one of the most impoverished places in the United States, semi-famous for the particularly deprived neighbourhood known as "Sugar Ditch Alley", named for the open...

; both of those cities have developed extensive casino and resort areas since then. Since a favorable U.S. Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...

 decision in 1987, many Native American
Native Americans in the United States
Native Americans in the United States are the indigenous peoples in North America within the boundaries of the present-day continental United States, parts of Alaska, and the island state of Hawaii. They are composed of numerous, distinct tribes, states, and ethnic groups, many of which survive as...

 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 restricting gambling, and are instead regulated
Indian Gaming Regulatory Act
The Indian Gaming Regulatory Act is a 1988 United States federal law that establishes the jurisdictional framework that governs Indian gaming. There was no federal gaming structure before this act...

 under federal law. Additionally, almost all states have legalized gambling in the form of a state-run lottery
Lottery
A lottery is a form of gambling which involves the drawing of lots for a prize.Lottery is outlawed by some governments, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments...

 and most states allow for limited non-profit organizations to host Bingo nights.

Insurance

Because contracts of insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...

 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). Nonetheless, both insurance and gambling contracts are typically considered aleatory contract
Aleatory contract
An aleatory contract is a contract in which the performance of one or both parties is contingent upon the occurrence of a particular event. The most common type of aleatory contract are insurance policies...

s under most legal systems, though they are subject to different types of regulation.

There is generally legislation requiring that the odds in gaming devices are statistically random
Statistical randomness
A numeric sequence is said to be statistically random when it contains no recognizable patterns or regularities; sequences such as the results of an ideal dice roll, or the digits of π exhibit statistical randomness....

, to prevent manufacturers from making some high-payoff results impossible. Since these high-payoffs have very low probability
Probability
Probability is ordinarily used to describe an attitude of mind towards some proposition of whose truth we arenot certain. The proposition of interest is usually of the form "Will a specific event occur?" The attitude of mind is of the form "How certain are we that the event will occur?" The...

, a house bias can quite easily be missed unless checking the odds carefully.

Casino games

While 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
Casino
In modern English, a casino is a facility which houses and accommodates certain types of gambling activities. Casinos are most commonly built near or combined with hotels, restaurants, retail shopping, cruise ships or other tourist attractions...

 setting.

Table games

Non-casino gambling games

Gambling games that take place outside of casinos include Bingo (as played in the US
Bingo (US)
Bingo is a game of chance played with randomly drawn numbers which players match against numbers that have been pre-printed on 5x5 matrices. The matrices may be printed on paper, card stock or electronically represented and are referred to as cards. Many versions conclude the game when the first...

 and UK), dead pool
Dead pool
A dead pool, also known as a death pool, death watch, dead cert or ghoul pool, is a game of prediction which involves guessing when someone will die. Sometimes it is a bet where money is involved...

, lotteries
Lottery
A lottery is a form of gambling which involves the drawing of lots for a prize.Lottery is outlawed by some governments, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments...

, pull-tab
Pull-tab
A pull-tab is a gambling ticket that is sold as a means to play a pull-tab game. The object of the ticket is to open the perforated windows on the back of the ticket and match the symbols inside the ticket to the winning combinations on the front of the ticket. The winning Pull-Tab ticket is turned...

 games and scratchcard
Scratchcard
A scratchcard is a small card, often made of thin paper-based card for competitions and plastic to conceal PINs, where one or more areas contain concealed information which can...

s, and Mahjong
Mahjong
Mahjong, sometimes spelled Mah Jongg, is a game that originated in China, commonly played by four players...

.

Other non-casino gambling games include:
  • Card game
    Card game
    A card game is any game using playing cards as the primary device with which the game is played, be they traditional or game-specific. Countless card games exist, including families of related games...

    s, such as Liar's poker, Bridge
    Contract bridge
    Contract bridge, usually known simply as bridge, is a trick-taking card game using a standard deck of 52 playing cards played by four players in two competing partnerships with partners sitting opposite each other around a small table...

    , Basset, Lansquenet
    Lansquenet
    Lansquenet is a card game. Lansquenet also refers to 15th and 16th century German foot soldiers; the lansquenet drum is a type of field drum used by these soldiers.-Game play:The dealer or banker stakes a certain sum, and this must be met by the nearest to the dealer first, and so...

    , Piquet
    Piquet
    Piquet is an early 16th-century trick-taking card game for two players.- History :Piquet has long been regarded as one of the all-time great card games still being played. It was first mentioned on a written reference dating to 1535, in Gargantua and Pantagruel by Rabelais...

    , Put
    Put option
    A put or put option is a contract between two parties to exchange an asset, the underlying, at a specified price, the strike, by a predetermined date, the expiry or maturity...

    , Teen patti
    Teen patti
    Teen Patti is a gambling card game that originated in India and became popular in South Asia. This game is also called Flash- Game Start :The game starts with one of the players dealing the cards...

  • Carnival Games
    Carnival game
    A carnival game is a game of chance or skill that can be seen at a traveling carnival, charity fund raiser, amusement park, or on a state and county fair midway....

     such as The Razzle
    Razzle (game)
    Razzle is a game sometimes presented on carnival midways and historically, in the casinos of Havana, Cuba. The game is also known as Razzle-Dazzle. This generic name is seldom known to players, as it is generally presented as Football, Ten Points Win, Baseball, Mo-Co, Indian Poker, Cajun Bingo or...

     or Hanky Pank
  • Coin-tossing
    Coin
    A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....

     games such as Head and Tail, Two-up
    Two-up
    Two-up is a traditional Australian gambling game, involving a designated 'Spinner' throwing two or three coins into the air. Players gamble on whether the coins will fall with both heads up, both tails up, or with one coin a head, and one a tail...

    *
  • Confidence trick
    Confidence trick
    A confidence trick is an attempt to defraud a person or group by gaining their confidence. A confidence artist is an individual working alone or in concert with others who exploits characteristics of the human psyche such as dishonesty and honesty, vanity, compassion, credulity, irresponsibility,...

    s such as Three-card Monte
    Three-card Monte
    Three-card Monte, also known as the Three-card marney, Three-card trick, Three-Way, Three-card shuffle, Menage-a-card, Triplets, Follow the lady, Les Trois Perdants , le Bonneteau, Find the lady, or Follow the Bee is a confidence game in which the victim, or mark, is tricked into betting a...

     or the Shell game
    Shell game
    The shell game is portrayed as a gambling game, but in reality, when a wager for money is made, it is a confidence trick used to perpetrate fraud...

  • Dice-based
    Dice game
    Dice games are games that use or incorporate a die as their sole or central component, usually as a random device.-Collectible dice games:Patterned after the success of collectible card games, a number of collectible dice games have been published...

     games, such as Backgammon
    Backgammon
    Backgammon is one of the oldest board games for two players. The playing pieces are moved according to the roll of dice, and players win by removing all of their pieces from the board. There are many variants of backgammon, most of which share common traits...

    , Liar's dice
    Liar's dice
    Liar's dice, or Liar dice, with roots originating in South America and popularized in early Spanish History, was brought to Spain by the Spanish conqueror Francisco Pizarro during the 16th century. It became extremely popular in Hong Kong and consequencially China...

    , Passe-dix
    Passe-dix
    Passe-dix, also called passage in English, is a game of chance using dice. It was described by Charles Cotton in The Compleat Gamester thus:"Passage is a Game at dice to be played at but by two, and it is performed with three Dice...

    , Hazard
    Hazard (game)
    Hazard is an Old English game played with two dice which was mentioned in Geoffrey Chaucer's Canterbury Tales in the 14th century.Hazard is not interchangeable with "Grand Hazard," which is played with three dice; Grand Hazard is similar to Sic bo....

    , Threes
    Threes
    Threes is a dice game. It typically figures exclusively into at-home and private-party gambling; while the origins of its names remain unknown, some speculate the game originated with illicit drug users, who played the game while waiting for their dealer...

    , Pig
    Pig (dice)
    Pig is a simple folk jeopardy dice game first described in print by John Scarne in 1945. As with many games of folk origin, Pig is played with many rule variations. Commercial variants of Pig include Pass the Pigs, Pig Dice, and Skunk...

    , or Mexico
    Mexico (game)
    Mexico is an elimination-style dice game, in which several players agree to play a set number of rounds. After each round, one player is eliminated. When all players but one have been eliminated, the remaining player wins the game...



*Although coin tossing isn't usually played in a casino, it has been known to be an official gambling game in some Australian casinos

Fixed-odds betting

Fixed-odds betting and Parimutuel betting
Parimutuel betting
Parimutuel betting is a betting system in which all bets of a particular type are placed together in a pool; taxes and the "house-take" or "vig" is removed, and payoff odds are calculated by sharing the pool among all winning bets...

 frequently occur at many types of sporting events, and political elections. In addition many bookmaker
Bookmaker
A bookmaker, or bookie, is an organization or a person that takes bets on sporting and other events at agreed upon odds.- Range of events :...

s offer fixed odds on a number of non-sports related outcomes, for example the direction and extent of movement of various financial indices
Stock market index
A stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used as benchmarks, to measure the performance of portfolios such as mutual funds....

, the winner of television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...

 competitions such as Big Brother, and election
Election
An election is a formal decision-making process by which a population chooses an individual to hold public office. Elections have been the usual mechanism by which modern representative democracy operates since the 17th century. Elections may fill offices in the legislature, sometimes in the...

 results. Interactive prediction market
Prediction market
Prediction markets are speculative markets created for the purpose of making predictions...

s also offer trading on these outcomes, with "shares" of results trading on an open market.

Parimutuel betting

One of the most widespread forms of gambling involves betting on horse
Horse racing
Horse racing is an equestrian sport that has a long history. Archaeological records indicate that horse racing occurred in ancient Babylon, Syria, and Egypt. Both chariot and mounted horse racing were events in the ancient Greek Olympics by 648 BC...

 or greyhound racing
Greyhound racing
Greyhound racing is the sport of racing greyhounds. The dogs chase a lure on a track until they arrive at the finish line. The one that arrives first is the winner....

. Wagering may take place through parimutuel
Parimutuel betting
Parimutuel betting is a betting system in which all bets of a particular type are placed together in a pool; taxes and the "house-take" or "vig" is removed, and payoff odds are calculated by sharing the pool among all winning bets...

 pools, or bookmaker
Bookmaker
A bookmaker, or bookie, is an organization or a person that takes bets on sporting and other events at agreed upon odds.- Range of events :...

s 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 betting

Betting on team sports has become an important service industry in many countries. For example, millions of Britons
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

 play the football pools
Football pools
A football pool, often collectively referred to as "the pools", is a betting pool based on predicting the outcome of top-level association football matches set to take place in the coming week. The pools are typically cheap to enter, with the potential to win huge money. Entries were traditionally...

 every week. In addition to organized sports betting, both legal and illegal, there are many side-betting games played by casual groups of spectators, such as NCAA Basketball Tournament
NCAA Men's Division I Basketball Championship
The NCAA Men's Division I Basketball Championship is a single-elimination tournament held each spring in the United States, featuring 68 college basketball teams, to determine the national championship in the top tier of college basketball...

 Bracket Pools, Super Bowl
Super Bowl
The Super Bowl is the championship game of the National Football League , the highest level of professional American football in the United States, culminating a season that begins in the late summer of the previous calendar year. The Super Bowl uses Roman numerals to identify each game, rather...

 Squares, Fantasy Sports Leagues
Fantasy sport
A fantasy sport is a game where participants act as owners to build a team that competes against other fantasy owners based on the statistics generated by the real individual players or teams of a professional sport...

 with monetary entry fees and winnings, and in-person spectator games like Moundball
Moundball
Moundball is a side-betting game typically played by spectators at Major League Baseball games. Often played to pass the time during slow games, Moundball has a simple ruleset and requires little to no equipment. The game is turn-based, with the goal of having the ball remain on the mound at the...

.

Arbitrage betting

Arbitrage 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
Arbitrage
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...

 trading and gambling, which has been made possible by the large numbers of bookmakers in the marketplace, creating occasional opportunities for arbitrage.

Other types of betting

One 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
Bet exchange
A betting exchange is an entity which provides "trading" facilities for retail or bookmaker customers to buy and sell contracts. Contracts are structured as binary options. Some betting exchanges may also offer CFD products...

 allow consumers to both back and lay at odds of their choice. Similar in some ways to a stock exchange, a bettor may want to back a horse (hoping it will win) or lay a horse (hoping it will lose, effectively acting as bookmaker)

Staking systems

Many 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:
  • Card counting
    Card counting
    Card counting is a casino card game strategy used primarily in the blackjack family of casino games to determine whether the next hand is likely to give a probable advantage to the player or to the dealer. Card counters, also known as advantage players, attempt to decrease the inherent casino house...

     - Many systems exist for Blackjack
    Blackjack
    Blackjack, also known as Twenty-one or Vingt-et-un , is the most widely played casino banking game in the world...

     to keep track of the ratio of ten values to all others; when this ratio is high the player has an advantage and should increase the amount of their bets. Keeping track of cards dealt confers an advantage in other games as well.
  • 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.
  • Fixed profits – the stakes vary based on the odds to ensure the same profit from each winning selection.
  • Fixed stakes – a traditional system of staking the same amount on each selection.
  • Kelly
    Kelly criterion
    In probability theory, the Kelly criterion, or Kelly strategy or Kelly formula, or Kelly bet, is a formula used to determine the optimal size of a series of bets. In most gambling scenarios, and some investing scenarios under some simplifying assumptions, the Kelly strategy will do better than any...

     – the optimum level to bet to maximize your future median bank level.
  • Martingale
    Martingale (betting system)
    Originally, martingale referred to a class of betting strategies popular in 18th century France. The simplest of these strategies was designed for a game in which the gambler wins his stake if a coin comes up heads and loses it if the coin comes up tails...

     – 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:
  • Emotional or physical risk-taking, where the risk-return ratio is not quantifiable (e.g., skydiving, campaigning
    Political campaign
    A political campaign is an organized effort which seeks to influence the decision making process within a specific group. In democracies, political campaigns often refer to electoral campaigns, wherein representatives are chosen or referendums are decided...

     for political office, asking someone for a date, etc.)
  • Insurance
    Insurance
    In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...

     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
    Insurable interest
    Insurable interest exists when an insured person derives a financial or other kind of benefit from the continuous existence of the insured object...

    , 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 a secondary reason for the wager/purchase (e.g. buying a raffle
    Raffle
    A raffle is a competition in which people obtain numbered tickets, each ticket having the chance of winning a prize. At a set time, the winners are drawn from a container holding a copy of every number...

     ticket to support a charitable cause)


Investments are also usually not considered gambling, although some investments can involve significant risk. Examples of investments include stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...

s, bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...

 and real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...

. 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
Speculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...

 investment activities are particularly risky, but are sometimes perceived to be different from gambling:
  • Foreign currency exchange (forex) transactions
  • Prediction markets
  • Securities derivatives
    Derivative (finance)
    A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...

    , such as options
    Option (finance)
    In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...

     or futures
    Futures contract
    In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...

    , 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)

Psychological aspects

Studies show that though many people participate in gambling as a form of recreation
Recreation
Recreation is an activity of leisure, leisure being discretionary time. The "need to do something for recreation" is an essential element of human biology and psychology. Recreational activities are often done for enjoyment, amusement, or pleasure and are considered to be "fun"...

 or even as a means to gain an income, gambling, like any behavior which involves variation in brain chemistry
Neurochemistry
Neurochemistry is the specific study of neurochemicals, which include neurotransmitters and other molecules such as neuro-active drugs that influence neuron function. This principle closely examines the manner in which these neurochemicals influence the network of neural operation...

, can become a psychologically addictive
Behavioral addiction
Behavioral addiction is a form of addiction which does not rely on drugs or alcohol. Increasingly referred to as process addiction or non-substance-related addiction ) behavioral addiction includes a compulsion to repeatedly engage in an action until said action causes serious negative consequences...

 and harmful behavior in some people. Reinforcement
Reinforcement
Reinforcement is a term in operant conditioning and behavior analysis for the process of increasing the rate or probability of a behavior in the form of a "response" by the delivery or emergence of a stimulus Reinforcement is a term in operant conditioning and behavior analysis for the process of...

 schedules may also make gamblers persist in gambling even after repeated losses.

The Russian writer Dostoevsky
Fyodor Dostoevsky
Fyodor Mikhaylovich Dostoyevsky was a Russian writer of novels, short stories and essays. He is best known for his novels Crime and Punishment, The Idiot and The Brothers Karamazov....

 (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
Russian roulette
Russian roulette is a potentially lethal game of chance in which participants place a single round in a revolver, spin the cylinder, place the muzzle against their head and pull the trigger...

.

Evolutionary psychology
Evolutionary psychology
Evolutionary psychology is an approach in the social and natural sciences that examines psychological traits such as memory, perception, and language from a modern evolutionary perspective. It seeks to identify which human psychological traits are evolved adaptations, that is, the functional...

 suggests that women more than men tend to select mating partners based on their resources. Thus, from an evolutionary perspective men may have had more to gain from a large increase in resources than women have had, which may be one explanation for why men, and especially poor men, tend to gamble more than women.

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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