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Best of Alan Krigman

Gaming Guru

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Do people (you, for instance) gamble for the fun or the money?

28 March 2011

Casino gambling has advocates and detractors. Boosters deem it to be an enjoyable leisure pursuit; they picture the cognoscenti seeking the excitement offered, hoping that chance will bring them a profit but not really expecting this to happen. Detractors consider it an unproductive, wasteful, and irrational activity; this, because the house has a statistical edge but the unsophisticated believe they can win other than by random luck, counting cards at blackjack, or following optimum strategies at "full pay" video poker – the latter two giving the few players willing to diligently do their homework a slight mathematical advantage.

According to Professor Jason Zimmerman of the South Dakota State University, writing in the Journal of Business and Economic Research, these contrasting views can be examined in terms of economic theory. The methodology he uses is based on what's known as the "backward-bending labor supply curve." This suggests that, with respect to work, folks with low incomes are inclined to forego leisure in favor of activities that promise to yield financial gain, while high earners tend to prefer recreation over efforts to further enhance their wealth.

Extending this concept to casinos, Dr Zimmerman says that "if gamblers actually expect (wrongly) to increase their incomes through gambling, then gambling should be more prevalent among those with lower incomes... On the other hand, if gamblers perceive casino patronage as a leisure activity... [the well-to-do] would likely devote more time to gambling."

Dr Zimmerman investigated this hypothesis utilizing data from a survey conducted by the National Opinion Research Center (NORC). Respondents were grouped by household earnings. One question examined was the likelihood of any casino gambling at all within the various groups. The probabilities of casino patronage were found to be as follows: income under $24,000 – 41.7 percent, income between $24,000 and $50,000 – 45.2 percent, income between $50,000 and $100,000 – 48.7 percent, and income over $100,000 – 52.2 percent. These values strongly indicate that individuals were more apt to gamble in casinos as their fiscal status improved.

Another item of interest, illustrating the effect in more detail, was the frequency of visits by respondents who gambled in casinos at least once in the past year. This information is enumerated by household income in the accompanying table.

Frequency of visits as a function of household income for respondents who gambled in a casino at least once during the previous year

                                           Household income
Frequency	                 under     $24,000 to    $50,000 to      over
                                $24,000    $50,000       $100,000        $100,000
Once a year                     46.9%      40.3%         33.9%           28.1%
A few times a year              45.7%      50.3%         54.1%           56.7%
Once or twice a month            5.8%       7.4%          9.4%           11.7%
One to three times a week        0.9%       1.2%          1.6%            2.1%
Almost every day                 0.6%       0.8%          1.1%            1.4%

The table shows that, notwithstanding income level, a large majority of the solid citizens who gambled in casinos at all during the previous year went only once or a few times. The likelihood of just a single visit was greatest within the group having the lowest earnings, and decreased as household incomes rose; for instance, 46.9 percent of the bettors at the "under $24,000" level went once, in contrast with 28.1 percent in the "over $100,000" category. For those who visited more often, the effect was the opposite. Frequencies increased with affluence; for instance, although 0.6 percent of players earning under $24,000 gambled almost every day, 1.4 percent having household incomes exceeding $100,000 did so.

According to Dr Zimmerman, the most important aspect of the data is that gambling activity is positively correlated with household income. This would suggest that increasing prosperity leads to a greater frequency of casino gambling, supporting the supposition that gambling is a relatively innocuous recreational pastime rather than an activity conducted by "vice merchants [who] prey on the poor." Other data in the NORC study show that greater affluence also corresponds to larger gambling expenditures.

This doesn't prove, or even intimate, of course, that all fat cats gamble for fun while all their humbler counterparts are in it for the dough. But it does leave punters to ponder their own motivations and how they correlate with their pecuniary positions. About such introspection, the inspired inkster, Sumner A Ingmark, intrepidly intimated:

The secrets you keep from yourself,
Wreak havoc with your mental health.

Alan Krigman

Alan Krigman was a weekly syndicated newspaper gaming columnist and Editor & Publisher of Winning Ways, a monthly newsletter for casino aficionados. His columns focused on gambling probability and statistics. He passed away in October, 2013.
Alan Krigman
Alan Krigman was a weekly syndicated newspaper gaming columnist and Editor & Publisher of Winning Ways, a monthly newsletter for casino aficionados. His columns focused on gambling probability and statistics. He passed away in October, 2013.