The Gambling Guide You Didn’t Know You Needed (Until Now)
I thought it would be fun to put together a gambling guide that could serve as an overview of the entire hobby itself. Most of the gambling guides I’ve written in the past have had a more specific focus. A lot of times I’ll write about specific games, for example, or even specific strategies for those games.
Other times I’ll write about broader activities, like casino games, sports betting, card games, or dice games. And sometimes I’ll write about concepts that apply to almost all aspects of gambling, like probability and gambling math.
My goal with this post is to write an introduction to gambling that will give you the basics of what gambling is and how it works, both from the perspective of the hobbyist and from the perspective of the businesses that offer gamblers action.
It’s impossible to cover a subject like this broadly without touching on the biggest gambling activities of all, which are:
- Bingo games
- Casino games
- The lottery
- Poker games
- Sports betting
1- What Is Gambling and How Does Gambling Work?
You’re gambling when you bet on something where you’re not sure what’s going to happen. If you lose, the person or company you bet with gets your money. On the other hand, if you win, you get their money.
Here’s an example:
You’re playing poker. You don’t know who’s going to win the hand. But you put money into the pot (betting). When you get to the showdown, if you have the best hand, you win the money in the pot. If you don’t have the best hand, another player gets the money in the pot — including your contribution.
You’ll often see gambling referred to as “gaming.” I’m not crazy about this phrasing, because I think it’s an industry term that isn’t specific enough. Gaming also refers to playing video games, board games, and roleplaying games. The industry’s goal seems to be to make gambling seem more innocuous and less “sinful.”
I’m convinced that gambling isn’t a sin, although for some gamblers it might be a vice. Trying to make it sound like something it isn’t seems silly to me. Also, gaming usually refers to casino-style gambling. You’ll rarely hear lottery players or sports bettors talk about their activity as “gaming.”
Gambling is nothing new. It’s as old as humankind itself, in fact. We have historical records of people shooting dice 5000 years ago. Even the word “lottery” comes from an ancient practice called “casting lots.”
Card games have been around almost as long as dice. Games that use spinning wheels, like roulette, also have a long and proud history.
As with most vices, the government gets involved in regulating the gambling business. This is often for the protection of consumers, but it seems like it’s also an opportunity to legislate morality. It’s useless to hope for some kind of libertarian Utopia where everyone can ingest any kind of drug and engage in any kind of activity without the law being involved.
It’s just not going to happen.
2- How Bingo Games Work
Let’s talk about bingo games as our first gambling activity. Bingo is arguably the most socially acceptable form of gambling in the world. As far as I know, it’s the only kind of gambling allowed in churches — many of which consider other kinds of gambling sinful.
Bingo’s a simple enough game. It has much in common with the lottery, in fact.
To play bingo, you buy a bingo card. Across the top are the letters B-I-N-G-O. These letters signify the 5 columns on the card, which each have 5 numbers in them.
A bingo caller randomly selects bingo numbers from a machine with ping pong balls in it. Those ping pong balls each have a letter and number combination on them.
You use a dauber to mark which numbers on your card have been called. When you get 5 in a row ticked off, you win. The trick is to get 5 in a row before one of your competitors.
The problem is, there’s no strategy for winning at bingo. It’s a game of pure random chance. The only thing you can do to improve your chances, strategy-wise, is buy multiple cards and make sure you keep up with all of them. It’s useless to buy more cards than you can manage, though.
The prize money for a bingo game comes from the purchase of the bingo cards. The more competitors you have, the more the prize pool is worth. The host of the bingo game usually keeps a percentage, too. (They have to stay in business, right?)
Many bingo games use different patterns than just 5 numbers in a row. Blackout is one of the most common of these kinds of games, where you’re expected to get every number on your card marked.
Bingo’s a lot of fun, but it’s almost not considered gambling by a lot of people. It’s so much more mainstream than other gambling games.
3- How Casino Games Work
Casino games are games hosted and banked by a casino. That means the casino pays off your bets if you win.
Casino games all have one thing in common:
You have payout odds that don’t correspond to the odds of winning.
What does that mean?
When you look at the odds of winning something, you compare the number of ways you can lose with the number of ways you can win. Roulette is a good example:
A roulette wheel has 38 numbers. If you bet on any single number, the odds of winning are 37 to 1. (You have 37 ways to lose, and 1 way to win.)
The payoff for a single number bet at roulette is 35 to 1. For every dollar you wager, you get paid $35 if you win.
But as you can see, the odds of winning are worse than the payout odds. This mathematical difference is the house edge. All casino games have a house edge.
That measure is always expressed as a percentage. It’s a mathematical projection of what the casino expects to win every time you place a bet.
In the example above, the house edge is 5.26%.
As a general rule, the lower the house edge, the better — although there are other factors.
Casino games can be broadly separated into 2 categories:
- Table games
- Gambling machines
Table games include card games, dice games, and spinning wheel games. Baccarat and blackjack are probably the most common card games played at a casino. Craps is the classic example of a dice game played in a casino. And roulette is the most popular game that uses a spinning wheel.
Gambling machines, on the other hand, include all slot machines. But they also include games like video blackjack and video poker. These games have been proven to be more addictive, psychologically. I despise video blackjack, but video poker offers some of the best odds in the casino.
That is by no means an exhaustive list of casino games — it’s merely representative. Keno is a lottery-style game that’s hosted by the casino. It still counts as a casino game, even though it’s so closely associated with the lottery.
The other thing to remember about casino games is that casinos rarely cheat. They don’t have to. The games are fair in respect to the randomness of their results.
The casino makes its money from the difference between the odds that they’re paying out and the odds you’ll win. As long as they’re sufficiently bankrolled, they’ll always come out ahead in the long run.
4- How the Lottery Works
I’m not a fan of the lottery, and I’ll tell you why in 2 reasons:
- The payback percentage is atrocious.
- The government has no business running a casino.
Let’s talk about the second item on my list first — the government has no business running a casino. That’s exactly what they do when they offer a lottery. Historically, it’s common. That doesn’t make it appropriate or right, though.
Think about it this way:
Most people agree that alcohol should be available to citizens old enough to drink responsibly. Most people agree that drinking is a vice, but it’s a vice that you should legally be allowed to participate in if that’s what you want to do.
But most people would also agree that the role of government, as it relates to alcohol, is to regulate and protect consumers. It is NOT the business of the government to open government-run bars and liquor stores.
Why do we think it’s appropriate for the government to run gambling games, though?
It might not be so bad if the payback percentage were better.
What’s a payback percentage?
Remember earlier when I wrote about the house edge?
The payback percentage is the flip side of that.
If a game has a house edge of 5%, the payback percentage is 95%.
It’s the amount the casino expects to pay back to the gambler in winnings on average over a large number of bets.
Most table games have a house edge of around 5% or so, but it goes up and down based on the game. Slot machines aren’t as generous. The house edge on most slot machines is at least 6%, but they can be as high as 25%. (Don’t play at the airport.)
The payback percentage for the lottery is about the same as the house edge. If you guess it’s 50%, give yourself a gold star.
No one should offer — and no one should play — a gambling game where the house edge is 50%. That’s just a sucker bet.
How does the lottery actually work, though?
It’s pretty straightforward, actually.
You buy a lottery ticket where you choose a certain set of numbers (usually 6 of them). If a certain number of those get drawn, you win money. Payouts usually start if you get 4+ numbers.
That’s not the only kind of game that’s played. Scratch off tickets are inexplicably popular, too. You pay for the ticket, scratch off the surface that covers up the results, and find out whether you’ve won.
In most states, you can buy lottery tickets at most gas stations and convenience stores.
5- How Poker Games Work
Sometimes I see poker games lumped in with casino games. In fact, there are several casino table games based on poker—Caribbean Stud, 3 Card Poker, and Pai Gow Poker are all casino games based on poker. Of course, video poker is one of the most popular gambling machines in any casino, too. That’s also based on poker.
But these aren’t truly poker games.
In real poker games, you’re playing against the other players at the table. That’s the biggest difference between poker games and casino games.
When you’re playing a casino game like blackjack, you’re playing against the dealer, who represents the casino. You lose money over the long run at casino games because the casino doesn’t offer mathematically “fair” payouts. (I covered that earlier.)
But in a poker game, it’s you against the other players at the table. At some home poker games, nothing else affects your profits or losses besides the skill and luck of the other players.
But in most poker games, the house takes a cut of each pot. This percentage is called “the rake”.
Here’s how it works:
When you play poker, you place your bets, calls, and raises into a pot. At the end of each hand, that pot is awarded to either the player with the best hand at the showdown or the only player still in the hand after everyone else has folded.
Before awarding the pot to the player, the dealer puts 5% of the pot into the rake. Most casinos have a minimum pot size before they take a rake. In Texas hold’em games, there’s often a “no flop, no drop” rule. In other words, if everyone folds before the flop is revealed, the house doesn’t take a rake.
I’ve read some writers who have pointed out that the distinguishing factor behind poker has little to do with the cards. It has to do with betting with limited information.
But all the forms of poker I know of do involve playing cards. Like casino games, poker games can be categorized:
Community card games include various forms of “hold’em”. The most popular of these, of course, is Texas hold’em, where you get 2 cards in your hand (the hole cards) and 5 cards on the board (the community cards). Omaha is another popular variation, where you get 4 hole cards and 5 cards on the board. The cards on the board are used by everyone at the table to complete their hands.
Community card games are played with a variety of betting rules. Limit games are common. In those games, the size of your bets and raises are limited by the stakes of the table. Pot limit games are also common. In such a game, you can bet and/or raise an amount equal to the size of the pot. And no-limit games allow you to bet as many chips as you have in front of you.
Stud poker games feature hands where some of the cards are dealt face up and some of the cards are dealt face down. These games are slower and reward people with good memories. Stud poker used to be the most popular kind of poker in the country, but it’s not as popular now as it used to be.
Draw poker games feature hands which are dealt face down. In draw poker games, after a betting round, you get to discard some of the cards in your hand and replace them from the deck. Probably the first poker game most people learn is 5-card draw.
You’ll often see many of these games played in “hi-lo” format, which means that the player with the lowest possible hand splits the pot with the player with the highest possible hand. You’ll occasionally see games played in “lowball” format, too — in these games, the person with the lowest possible hand wins the entire pot.
Poker shows no signs of slowing down in popularity. It’s always been a quintessentially American game. Its main attraction is that a skilled player can get a long-term edge over weaker players and make a profit.
6- How Sports Betting Works
Few gambling activities can compare with sports betting in popularity. It might be the most popular illegal activity in the United States. An estimated $150 billion a year is wagered illegally on sporting events.
The Super Bowl alone makes up almost $5 billion of those wagers.
The concept behind betting sports isn’t complicated. People in bars and in homes often place friendly wagers on who’s going to win a baseball game or a football game. Often these wagers are straightforward enough — whoever wins gets the money that’s put up.
But many people bet through bookmakers, who have made a business of taking the action of eager sports bettors. They make their profit largely by charging a “vig” or “vigorish” on their action.
Here’s how the vig works:
For most sports bets with most bookmakers, you have to place a bet of $110 to win $100. This doesn’t mean your bet has to be $110. It just means the payout is based on that ratio. In other words, if you want to bet $50 on a game, you really have to put up $50.
The other wrinkle in the sports betting industry has to do with point spreads. Some football teams, for example, are clearly stronger than other teams. If they have to face each other, one team is almost certainly going to beat the other group.
To compensate for this, bookmakers use a point spread. If you bet on a strong team to win a game, they have to win by an amount that makes up for the point spread. If Dallas is a 7-point favorite over Cleveland, they have to win by at least 7 points for you to win your bet.
And if Cleveland can come within 6 points of winning, you can win a bet on them even though they lost the game.
The point of the point spread is to stimulate action on the other side of the contest. It’s better for the bookmaker to have equal amounts of action on both sides of an event. That way the losers cover the winnings, and the bookmaker is guaranteed a profit because of the vig.
Here’s an example:
Vinnie the Bookie takes 10 bets of $110 each on Dallas. He also takes 10 bets of $110 each on Cleveland. He’s got $2200.
When the game is over, he has to pay the 10 winners $210 each. (They get their original bets back along with their $100 winnings.) That’s $2100.
Since he took in $2200 and only paid out $2100, he’s made $100 in profit — no matter which team wins.
Sports betting is legal in 4 states, but it’s a thriving business underground in almost every other state. If you want to start betting on sporting events, the easiest way is to make bets with your buddies. Failing that, you can open an account with a bookmaker in another country on the internet. You can also find neighborhood bookies by asking around in your local bar or tavern.
7- The Psychology of Gambling and How to Avoid Gambling Addiction
People gamble because winning at gambling stimulates the pleasure centers of your brain. In this respect, gambling works like any other drug, including alcohol. When I was younger, I was skeptical of the entire concept of gambling addiction.
But as I’ve grown older and wiser and read more research on the subject, I’ve come to realize I couldn’t be more wrong. If an activity has the same effect on your brain as a substance, then of course you can become addicted to it.
I think the most dangerous gambling activity, in terms of addiction, is playing slot machines. I recently read a book called Addiction by Design: Machine Gambling in Las Vegas by Natasha D. Schull. It’s a remarkable book about a remarkable industry.
Suffice it to say that casinos and slot machine designers have an enormous amount of data to help them create machines which are psychologically addictive in insidious ways.
This doesn’t mean that you can avoid slot machines and avoid gambling addiction. Nor does it mean that if you play the slots for a little while, you’ll ruin your life by becoming a gambling addict.
It does mean that you need to monitor your behavior, regardless of what kind of gambling you prefer. Some people are able to drink moderately their entire lives. I know people who even use some kinds of drugs on a regular basis, and that doesn’t seem to affect their quality of life.
Here are some things to watch for as they relate to your gambling hobby. Any of them might mean you’re developing a problem:
If you’re missing work, school, or other appointments because of your gambling, that’s bad. If you have a bad reputation as a direct or indirect result of your gambling hobby, that’s a warning sign, too. You should never have any unhappiness at home related to your gambling.
Gambling addicts are more likely to borrow money to finance their hobby. I always suggest you only gamble with money you can afford to lose. Gambling with borrowed money is exactly the opposite.
Naturally, if you’ve ever experienced severe depression or suicidal thoughts because of your gambling, you need to get help right away.
Finances are important to your quality of life. I don’t think everyone needs to be rich to be happy. But if you’ve gambled your way to poverty, you might need to start reconsidering your choices.
All that said, I think gambling can be a lot of fun. Smart gamblers can even make a profit.
That description doesn’t apply to most gamblers (myself included).
Gambling can be a rewarding and exciting hobby. You just need to decide what kind of gambler you want to be. I’ve tried to cover all the major types of gambling in the post above so that you can make an educated decision about how to proceed.
If you love watching sports, then your path forward as a gambler is clear. Watching sports is always more fun when there’s a little money riding on the game.
If you enjoy getting the better of other people during a competition, consider poker.
Social gamblers who don’t have much money might enjoy bingo.
Casino games are great for anyone who doesn’t mind paying the casino for their entertainment. Slot machines are good if you’re an introvert who doesn’t want to make decisions. Video poker is great for introverts who want to feel some control over their destiny.
Table games sometimes require you to make decisions, too. Blackjack is an example of one of these.
But plenty of casino table games offer reasonable odds with no pressure to make decisions, too. Baccarat, craps, and roulette all require no decisions on your part other than what bet to place.
The only form of gambling I recommend avoiding completely is any state-run lottery. But if that really floats your boat, ignore my advice and go for it.
The most important lesson to take away from this gambling guide is that you should treat the activity the same way you’d treat any kind of drug use, including alcohol. Yes, it’s okay to drink alcohol in moderation. It’s also okay to gamble moderately for entertainment.
Just get away from the activity if it starts to become a problem for the rest of your life.