Playing as a type of Financial savings

thinkingthursday Can playing be seen as a type of financial savings, given the concept payouts are random and comprise huge sums, and given common playing, are …

28 Replies to “Playing as a type of Financial savings”

  1. So many iPhone games have that lotto like random aspects to them, I played a card based iPhone game called Legendary & nearly everything in the game revolved around random drops. I spent over 1,000 on that game. I’ve currently spent over 2,000 on another iPad game called War Robots, but thankfully very little in this game has any gambling involved.

  2. It is an interesting premise but there are a number of variables. First off of course is that there are forms of ‘savings’ that are risky, a lot of people ‘lost’ a lot of money from their ‘savings’ in 2008 when the value of their stocks and shares fell. Likewise you have to know what you are doing to a fair extent to gamble ‘successfully’, if I were to gamble I would lose pretty consistently because I have no idea when it comes to odds and probability. On the other hand simply putting money away in the bank over a long period at present earns a very low interest rate which is arguably outstripped by inflation which mimics the gamblers losses on fixed rate betting machines. All that said my father-in-law would bet on horses and over the many years probably lost a lot of money but when he won he was very generous to his family and friends. He had other ‘demons’ which meant that gambling was not the only drain on his disposable income so it is not like he could say “well other people drink/smoke/whatever but I gamble”, it would have been better if he had not gambled but then a lot of things would have been different if he had not been who he was.

  3. I have no problem with gambling as a form of entertainment. Some people drop $20 on beer, movies, or poker. But this seems like a pretty flimsy thesis. If someone doesn't have the money to save $20 a week then where do they find the $20 to put in a video poker machine?

  4. I think the only time I've ever gambled with money was when I was stationed in Korea, back in 2000. I put a quarter into a slot machine and won back $8. I thought to myself, "Well, that was a satisfactory bit of beginner's luck," and I never gambled again. Even on multiple trips to Las Vegas, I've never felt the urge.

    I've never been someone who has much interest in saving money and have found that buying collectibles that will at least maintain their value and have a good chance of increasing in value, has been a much more reliable form of "alternative savings". For example, if I spend $200 on a vintage Star Wars collectible, from the 70s or 80s, then there is a really good chance that item will still be valuable in 5-10 years. There is also a really good chance that it will increase in value. However, this doesn't work for Star Wars items produced after 1994, because there are too many toy collectors out there storing modern toys away, in the hopes that they will someday increase in value, for them to ever increase in value.

  5. Maybe I misunderstood your video, but the point of gambling for a casino, or lottery, or whoever is offering gambling services, is that the odds of winning are such that the total amount of money that gamblers spend vastly outweights the winnings that the casino has to pay, otherwise there would obviously be no profit for them. It would be sort of the equivalent of a saving account with massive negative interest rates, in which you can't even decide when to get your money back. Frankly, if it can be considered a form of saving, I can't really think of a worse one. Even for people with low income and bad spending habits there are better savings options available. Even asking someone to steal your money every once in a while and store it away and keeping only part of it for themselves is a better saving option than this.

  6. The model is closer to insurance then actual savings though you could say insurance could seen as advanced for of saving; both are risk management strategies.

  7. It's a failed equivalent because of taxes. A savings account taxes you only on the interest earned, not withdrawals. Casino winnings would be taxed, so a withdrawal from this "savings account" would eat up the "principal" savings amount, if you could call it that. Gambling winnings are subject to a flat 25% tax rate.

    A $2000 withdrawal from this casino savings account is really only a $1500 withdrawal once the IRS takes their share.

  8. Interest isn't caused by fractional reserve banking. Fractional reserves impact the availability of your money (in a 100% reserve system, deposits might more closely resemble CDs), but not the fact that depositors are paid interest. Interest is the amount paid to someone to forego other opportunities. It's about opportunity costs. If, for instance, you could invest your money in the stock market (or some other opportunity) for a year and receive a 4% return, then in order for me to get you to loan me that money for a year, I would have to offer you a commensurate rate to forego those other opportunities. You wouldn't loan the money to me at 2% if you could get 4% elsewhere. There are, of course, other factors that go into determining any given interest rate, such as risk, but opportunity costs form the basis of interest rates. As long as there are opportunity costs, then loans must pay interest. Even under a 100% reserve banking system, the bank could just go put the money into a mutual fund and receive some return. In order to get the bank to forego that opportunity and loan you the money, you have to agree to pay them interest. What you were saying about paying the bank to store your money would be true if the bank couldn't both loan out the money you deposited and promise to give you your money back at any time, as with fractional reserve banking. You're correct there. But that doesn't have anything to do with how interest itself functions, or why banks pay interest or are able to demand interest. Just imagine a CD in a 100% reserve banking system and it should be obvious what's going on.

  9. It’s a pretty ridiculous idea. The whole point of savings is to store money because you don’t know when you are going to need it. When you gamble, you are not storing money. Your money is gone until you get lucky.

    You can’t access the money you have gambled away when you actually need it.

  10. I moved away from Vegas a little over a year ago. When I lived there I used to enjoy going to the local bar and playing video poker while eating dinner once or twice a week. Back in the day it seemed like you had a decent chance to hit a 4 of a kind and every once in a while 4 aces with a kicker. I noticed after the recession the machines seemed a whole lot tighter and even a regular 4 of a kind seemed fairly rare to get. After a few months of this it truly felt like I was just throwing my money away and I quit gambling entirely. Don't know if the machines ever got looser, didn't care.

  11. If you're going to gamble as a means of saving (or just acquiring money in general), then you're better off gambling on sports, because there are many algorithmic programs that can predict the odds of a team winning under particular circumstances. They are also seldom rigged against you like nearly all casino games are. However, sports betting without these tools is less productive than casino gambling.

  12. I think rather than it being like savings, it's more like an investment; the difference is that like gambling, an investment has no obligation to payoff (or at the very least, its not paying off is no indication of some wider market failure that would result in peoples savings being denied them).

  13. If quitting gambling requires not gambling, then they should take that bet instead of settling on getting €1 back for every €1000. No matter how hard quitting gambling may be, they shouldn't give up. Especially not for €1. Because if they win at quitting gambling, that would be their life's biggest payout.

  14. In theory this could work… but the kind of people with the discipline to only gamble (say) 20$ a time will also have the discipline to save it somewhere else

  15. Everyone thinks this is a vegas deal… how do you people think Wall Street works? Anyone who plays the stock market is gambling as well, just not in the exact same way.

  16. Gambling? No. How do they all keep the lights on at casinos? Or just about anywhere where large scale gamling goes on? Because there is always more money coming in, than would be going out to anyone even winners. Even states largely EARN money when it comes to lotteries. You don't win that often. And even if you stayed at it long enough to get that $2000 dollars you use as an example, it is likely most of the average gamblers spent probably north of $5000 over time to get that 2k. Which makes it really detrimental. Even not saving it all properly as you say, due to paycheck to paycheck things, that type of money is still very much better spent on real things, that way your position is still strengthened, and not wasting thousands.

    Never look at the winnings when it comes to chronic gamblers. Yes, sometimes people hit it big. But look at the average gambler, and how much they are losing over time. Not something you should ever allow yourself to entertain being enthralled in.

  17. Interesting idea. I could never see it as savings though, because a large part of the concept of savings is that you have money that is liquid and available when you need it. Until you actually hit that jackpot your odds of being due arent worth anything.

    I like going to the casino once in a while. But I just see it as entertainment, like going to the movies or buying a round of golf. $40 on the slot machines will usually buy me a few hours of entertainment. I have no expectation of winning, or temptation to throw in more money.

  18. this got me thinking about steam market, how people are buying crates in online games/ hope for good loot, and then sell it on steam market. but then i thought, omg, just who are those people who actually buy those super rare items for up to 1k $ on the steam market…

  19. That's not how odds work, just because there is a set odds doesn't mean you will get any pay off if you play it long enough. That's the gambler's fallacy.

  20. Wouldn't 'Investment' be the more appropriate term rather then 'Savings' ? The concept of savings to me means that the money is 'saved away' from spending. But with gambling the money isn't being saved away but is being spent in the hopes that you will earn more then you put in at the risk of losing money – aka an investment.

  21. It works in games where a player doesn't really benefit from betting more than a small amount every week but has an edge over the field. There's a sports betting game like that here, where the rake is very high but other players are simply awful. I used to sell that game and people literally played it as a lottery with the same results every week regardless of what matches were on the coupon.

    Now having to guess the outcome of 13 soccer matches is very difficult, so I imagine a good player will win a 6 figure score about once in a lifetime with very little investment weekly. But because of the gamblers risk of ruin, even the best gambler shouldn't bet too much on any given week.

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