The Addiction to "Gambling"

Let me preface by saying this: not all gambling is the same. We associate gambling with risks and negativity, failure, addiction, etc. But at its core, its simply a risk against return way of thinking. Everything you do is a gamble. No, this is not an exaggeration. Driving a car, eating certain foods, drinking alcohol, sleeping a certain amount of hours, spending money on new clothes are all gambles. They all involve a risk/return analysis followed up by putting some capital on the line. That capital can be cash, your body, your friend's health, or your life. Extreme, but needed to be said to understand how many risks (aka "gambles") we take every single day.

Yet, not all trigger the same feeling of risk and thrill. Driving a car seems normal, yet there are 36k deaths/year in the United States.¹ That number can seem scary yet its 1 death for every 1,000,000 miles traveled per year. Should you drive to work everyday still? I would say yes, carry on as usual. How about eating unhealthy? That has been linked to 400k deaths by year according to a study by the University of Washington.² Should you stop eating? No, of course not, you'll die anyway. Now how about if I said you have a 50/50 chance at winning 1,000,000 million dollars by way of a coin flip. The kicker? I get 10k if I win. Would you take the bet?

Some people would immediately say "yes" or "no." This logic is wrong going both directions, too much risk is dangerous while risk aversion leads to a sheltered and limited lifestyle that means you miss out on opportunities others take advantage of. The answer is to take the bet after considering you both have equal odds (50/50) yet your opportunity is 100x higher than the loss. You take the bet 10/10 unless you need that 10k to survive through the next month.

We live our lives everyday with this idea. We make decisions where the odds are so far in our favor that it seems like a "no-brainer." And that's how we should live.

Yet, the phenomenon on sports and stock gambling have engulfed our lives. Millions of people bet everyday on games or stocks where the odds at 99% against us. Why? It is all about the reward. Most individuals look at the payoff while downplaying the odds against. This logic has made sportsbooks and the stock market billions (to possibly trillions) throughout the years. I get it completely; I own stocks and have sports gambled (a lot). I get the feeling and thrill of winning along with the despair of losing. I can see where the dependency comes in. 

There is a whole market out there of individuals addicted to taking risks, regardless of odds. Is it a bad thing? All depends on what your putting on the line as your capital.

Links:

1. Motor Vehicle Deaths by State: https://www.iihs.org/topics/fatality-statistics/detail/state-by-state

2. Deaths by Food: https://www.ndtv.com/health/unhealthy-eating-linked-to-400-000-us-deaths-per-year-study-1668102