I’ve asked myself: is gambling really so different from financial day trading, and is there any particular reason why so many people consider it a taboo?
Trading and gambling are similar in that they both attempt to create a capital gain through risk taking, over a relatively short period of time, without creating a new product. Yet within our society gamblers continue to be seen in a negative light.
In this post I explore the social factors that contribute to this bias.
7 Factors That Make Gambling A Taboo Within Our Society
1. No “New Wealth”
What this means is that, whilst you may earn an income from gambling, no additional product or “wealth” is created. This isn’t unique to gambling, and it’s equally true for financial trading.
So what exactly is “new wealth”?
Well, it can come in many forms. Generally it’s a product or service that others find valuable. For example, a suit tailor, psychologist, mechanic, baker or police officer.
Arguably, financial or sports traders create market liquidity to the benefit of long-term investors/bettors, and that this in itself has value, similar to “new wealth” creation. But because trading and gambling involve capital transfer without capital creation they are viewed sceptically, especially when their outcomes are unpredictable. Society generally prefers the tailor-type endeavour because it creates something others find valuable.
Side thought: Does Punter2Pro.com create "new wealth" by providing its readers with honest betting tips?
2. Casinos & Bookmakers Have an ‘Edge’
It’s widely known that Casinos & Bookmakers have an ‘edge‘ or ‘overround‘. With the odds against us, society treats gambling in a similar regard to alcohol or tobacco: it’s legal, regulated, but we’re constantly warned of the risks involved.
In contrast, financial trades aren’t deemed unfair as the markets don’t have an advantage — therefore it doesn’t have such strong negative connotations in the public eye. It’s not such a taboo to trade.
However, for sports betting there is a counter-argument to all of this: the betting exchange. Indeed the sports betting industry already offers exchange platforms that mimic, and rival, the stock market in terms of transparency and fairness. Sports betting no longer deserves its longstanding reputation for being a “mug’s game” — because the advantage need not be given to the Bookmakers. Punters have had exchanges like Betfair at their disposal for almost 2 decades.
Despite Betfair (and it’s other imitators) bringing such revolutionary products to the market, the average gambler doesn’t really recognise the breakthrough. In fact, Betfair themselves realised this and resorted to incorporating a traditional Bookmaker — with inferior odds — into the very same website as their exchange product. Crazy, right?
The tradition of the Bookmaker lives on. Whilst it does, I don’t envisage that any form of sports betting will be regarded as an ‘investment’. It’ll remain a taboo.
Learn more about Bookmakers from my post: How Do Bookmakers Earn? How Big Is Their Edge?
3. Unsophisticated & Lazy
Gamblers can come from any educational background — but it doesn’t tend to change the way they are viewed by those around them. Aspiring to earn a living by gambling doesn’t gain you much respect in our society. It’s perceived as being ineffective, flawed, unsophisticated… and lazy.
Ironically, the new generation of bettors are far from lazy. Prediction models for sports events can take years of research to build, and they’re becoming increasingly sophisticated. The efforts of intelligent quantitative analysts and programmers have helped to make the exchange odds increasingly efficient, meaning its both competitive and challenging to become a professional bettor nowadays. Whilst the rewards can be high, it’s naive to believe that taking the pro-gambling route is an easy way out.
Sports betting is following the financial markets in terms of trend/statistical analysis. Expect to see many more index-type sports betting products springing up over the coming years. It’ll attract a new crowd, and to an extent alter the public’s “unsophisticated & lazy” perception in due course.
4. Professional Gambling isn’t a “real” Occupation
Unlike finance, there’s hardly any jobs that enable professional gamblers to trade sports. There’s no large scale company to work for in the city centre — no glamour. In our society professional gambling isn’t a “real” job. As a result it’s reserved for entrepreneurial individuals who quietly operate without speaking of it too loudly.
I have experienced the stigma attached to gambling first hand. Several freelance programmers declined to work on Betfair trading projects in fear that doing so would tarnish their CV. They recognise the taboo of gambling. My response to this was “but we’re building algorithms for Betfair trading programs. Why’s that so different to working in the financial markets?”. But it’s like converting the unconverted: the assumption is that sports betting is not a “real” industry, and that taking a role like this one only narrows your career prospects.
5. Associations to Debt, Addition & Problem Gambling
This is a big one. Whilst financial trading is often linked to prosperity, intelligence & wealth, gambling is associated to debt, addiction & losses. That’s the difference — and to an extent it’s true.
People often start trading as a full-time occupation which requires either a relevant degree university, or the undertaking of a trading course (or both). It’s relatively complex to understand financial trading, so only some people will even approach it to begin with. Then there’s the deposits required to trade on your own account, which ranges from hundreds of pounds and well into the thousands. Therefore the entry requirements for trading are high, and the average trader typically benefits from both higher education and sound finances. Whilst not immune to addiction, the likelihood of a trader getting in serious debt is fairly low.
In contrast, the barrier of entry for gambling is incredibly low. You only need to be 18+ years old, with as little as £1 to bet with. Wherever you are, it’s easy to start gambling. Walk through any town in the UK and you’ll find at least one betting shop — even if the rest of the town is completely boarded up. Betting shops thrive in poor areas as well as the rich. This suggests that many people gamble when they do not have the sufficient disposable income.
In many respects gambling a bit like smoking. Infrequently — let’s say once a month — it probably isn’t going to cause you serious harm. But it’s all too easy to start doing it more. Once you start making an impulsive habit of it then you’re inevitably going to lose out in the longterm. Addiction and debt are serious issues, and it’s those who cannot afford to handle gambling losses that suffer the most. Unfortunately this leaves some social groups, or personalities, more vulnerable than others. Society is well aware of these issues.
6. Criminal Activity
Our society associates gambling with criminals. Consider some of the popular TV or film characters of our generation — Tommy from Peaky Blinders, Tony Soprano, Brick-Top from Snatch. How about Sam Rothstein (Robert De Niro) in Casino or Lester Murphy (Edward Norton) in Rounders. Pretty much every mainstream depiction of gambling involves criminals.
The stereotypical & fictional mob-like gangsters that we associate with gambling often commit crimes such as money laundering through casinos, loan sharking to addicts, unlicensed bookmaking and betting scams. These evidently still take place in the real world, there’s no doubt about it. But this isn’t to say that financial trading doesn’t have it’s fair share of crooks; plenty of illicit activities take place within both industries.
7. Religious Factors
In our diverse society there are mixed religious views on the acceptance of gambling. Not all religions specifically consider gambling a taboo.
Gambling is specifically forbidden according to most ascetic Hindu practices, while less stringent sects tend to look at the motivations and outcomes of gambling to determine its morality. Jews believe gambling to be a sin because the loser in gambling wasn’t expecting to lose. Muslims view the addictive nature of gambling as destructive to the security of family and society. Christians, however, have no solid stance since Jesus said little specifically about gambling.
Religious views don’t explicitly condemn trading, though. Trading isn’t technically “gambling”, despite it’s similarity. Furthermore, financial trading was non-existent — and probably inconceivable — at the time that most religious scripts were written; gambling was not. Therefore it’s now down to one’s own interpretation of their religion to decide what really constitutes “gambling”. Thus trading may circumvent the rules.
Do you consider gambling a taboo?