On Gambling and Loss
I was supposed to publish a post today (5/14/19) called “The Most Addicting Game.” It discussed my grandfather’s troubles with gambling, some statistics on gaming addiction, and had a personal story—all the things that make a good blog post. But, before I could hit publish, I got the call. It was my father and it was 3:02 Pacific Standard Time.
He informed me that my grandfather had passed away last night.
There have been few moments in life when I have been struck by coincidences so eerie that they seem unbelievable. This morning I had one of those moments. What is the chance that my grandfather would pass away on the very day that I decide to discuss my family’s troubles with gambling?
There was no family incident that inspired me to write about this. I actually wanted to write about gambling because of the the man who won $1.2 million after betting on Tiger Woods to win the Masters and is now betting $100,000 on Tiger Woods to win the next 3 majors. In fact, I tweeted about it a few days ago.
But now I can’t publish that post. I have to publish this one.
There are a few things that I will always remember about my grandfather. I will always remember how happy he was to see his grandchildren and how much he enjoyed telling riddles. Every Christmas I eagerly awaited his new riddles, and he always delivered. One riddle that I remember well was:
What goes up a chimney down, but not down a chimney up?
But, I will also remember that my grandfather loved gambling. He really did. My father and I once estimated that my grandfather gambled away over $1 million in his lifetime. It’s sad, but true.
When I think about my grandfather’s problem with gambling I often wondered: What kept him going back for another hand, for another horse race?
As the saying goes, “Money won is twice as sweet as money earned.” My grandfather went back for the same thing they all go back for: the thrill of effortless money. It’s the most addicting game in the world.
In my effort to understand gambling I have come to realize that some people just can’t quit. And after thinking about this topic for a while, I now know why. They can’t quit because it’s easy for them to rationalize their decisions.
For example, the man who won $1.2 million on Tiger Woods is probably thinking that his new $100,000 bet is just “house money.” Even if he loses it, he is still up over $1 million and he is probably confident he can win it all back. He did win that Masters bet, remember?
But, what if he keeps losing? In that case, it’s easy for him to justify taking even greater risks to re-gain his losses. The cycle continues. Another loss. Another justification. Another gamble.
At every point in their downward spiral, a gambler can rationalize their behavior, even if it’s clear that their decisions (taken together) were foolish. It’s this process that makes gambling so destructive. In real time it is hard to notice, but in the long run you are left in ruin. It’s the opposite of compounding.
The North American Foundation for Gambling Addiction Help (NAFGAH) estimates that 2.6% of Americans (nearly 10 million people) had a problem with gambling addiction in 2016. This is roughly ten times greater than the number of people that used heroin in that same year. And with U.S. gambling losses totaling over $100 billion, Americans lose five times more money gambling each year than what they spend on Amazon Prime and Netflix combined.
This does not dismiss the role of personal responsibility, but it also doesn’t imply that compulsive gamblers are just individuals with self-control issues. The reality is more complex. And with some research suggesting that gambling is partially linked to genetics (see here and here), it makes it that much harder for pathological gamblers to address their bad behavior. As a result, they will act in nonsensical ways and then rationalize it. Then again, don’t we all?
My Grandfather’s Lesson
I originally was going to end this post by talking about the seduction of “investing.” I was going to talk about how some people say they are investing when they are really just gambling (i.e. excessive trading, leverage, etc.) Since investing involves stocks and not cards or horses, you can seduce yourself into thinking that you are somehow different than a gambler when you aren’t. Just because you call it “investing” that doesn’t mean that you are an investor.
But after losing my first grandparent, I have to end this differently.
I will conclude with a simple thank you to my grandfather for providing me with a lesson. Even if he didn’t realize it, my entire relationship with money was transformed by watching how my grandfather used his. For this reason, I have never wagered a single dollar in a casino or horse track and I never will. Sometimes the best lessons are the ones that are never spoken.
So thank you Thatha (the name I used to call my grandfather) for warning me about the dangers of gambling even as you fought the addiction throughout your life. I, and the future Maggiullis, will not forget you.
Please take some time today to tell your loved ones that you care about them. Because on some days we lose more than just a bet. Thank you for reading!
This is post 124. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data