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"Overall, 86 percent of Americans report having gambled at least once during their lives.  Approximately one third of the population consists of non-bettors (have not gambled in the past 12 months). About 46 percent of legal-aged adults gamble in casinos: seven in 10 also gamble in other formats. More frequent gamblers who visit casinos once or twice per week represent 17 percent of the population, while 21 percent of the population chooses other forms of gambling." (Source)

Probability and statistics is my thing. I understand it, and I do my best to apply it by choosing to minimize certain risks in order to avoid certain consequences. To the mathematical mind, gambling makes about as much sense as throwing your money out a 10 story window. Its popularity remains a mystery. Consider the following:

You Have a 1 in 32,000 chance of hitting the Jackpot on any basic, small payout, slot machine. You actually have a better chance of being invited to the Annual Christmas Tree Lighting at the White House. Or, about the same odds that any given  $100.00 bill is counterfeit.   (source)

"For those slot machines that pay larger maximum jackpots, they will have an even greater number of virtual stops (64, 256, 512), thereby decreasing the odds of winning.  What this means, is that the odds of hitting a symbol combination are not based on the amount of actual stops on the reels, which is what many slot players fallaciously believe.

As for a slot machine's RNG, which ultimately determines the payout percentage, it is tested by gaming regulators to insure it is paying back a minimum percentage of funds that are deposited into it.  A machine with a payout percentage of 95 would be paying out 95 cents for every dollar put into it by bettors.  Even with only a 5% profit, it is easy to see why the casino never loses." (Source)

We could talk about the lottery: 195 million to 1 (Better chance of dying from contact with a marine animal), bingo (depends on the game and number of players and cards played per player), blackjack (.17% house advantage for 1 deck game) or keno (house edge 17-60%)

Casinos, and those that profit from gambling, use quite a bit of behavioral psychology to "condition" players to take greater risk. In simple terms, "That behavior which is reinforced, will continue". Think about the rat and the food pellet dispenser. If the rat gets a food pellet every time he presses the release bar, he grows bored and tired of "the game".

However, if you use an intermittent reinforcement schedule, that rewards him every 5 or 6 times he presses the bar, with a pellet, you can keep the rat interested longer in "the game". Vary the times that the rat has to press the bar to get a pellet and the rat will play the game until his whiskers "fall off". Hoping for a pay-off keeps rats and people, "pressing the bar". The anticipation of a reward, followed by the letdown of an "empty hand", followed by the anticipation of the next try being the lucky one, is what causes the addiction.

It gets worse when the Casino "rewards" the behavior by sending a few of your coins back to you on a low payout, which it is programmed to do at the very moment you grow weary of the game. This renews your hope and expectations through positive re enforcement and keeps you putting quarters back in the machine. Since the house never gives back $100.00 for every $100.00 it takes in, you are guaranteed to walk away with less money than you brought with you over time. You can't beat the house.

An average for payout on slots is 90 cents on every dollar (or 90 percent return). If casino revenues ($91 billion) are considered representative of the gambling trade's gross revenue (about 10 percent of all money wagered), then we can estimate that Americans likely spent close to $910 billion total on all forms of gambling in 2006. Not all forms of gambling return 90 percent, but we can use this for a ballpark estimate. (Consider what Americans spent on some durable and consumable products by comparing the top five Fortune 500 Companies' revenue for 2006: #1 Exxon/Mobile = $339.9B; #2 Wal-Mart Stores = $315.7B; #3 General Motors = $192.6B; #4 Chevron = $189.4B; #5 Ford Motor = $177.2B.) (Source)

The real issue is what economists call "opportunity cost". That same 90 billion, invested in gold back in 2006, would now be worth 216 billion dollars today (120% increase since 2006). Silver would have doubled it to 180 billion. That would be enough to fund our military budget for 1 year!

As for the lottery, the average American family spends $525 per year (Source). From 2000 to 2010 that would be $5,250 for the average family. That amount invested in gold in 2001 would be worth $16,578.95 today.  the numbers are far worse for addicted gamblers:

"Addicted gamblers, unfortunately, account for the lion's share of gambling profits. Around 50-60 percent of the adult population can be classified as light bettors—gamble some, without apparent issue, while another 33 percent or so don't gamble. It's the remaining 10 percent that represents the heavy, frequent bettors who are likely addicted and account for approximately 61 percent of all casino revenues in table and slot gambling.  Among lottery gamblers, the top 10 percent of heavy players account for 65 percent of all lottery revenues." (Source)

About 7.5 million American Adults have a serious gambling problem. About 7.9 million adolescents (illegal and under-age) have a serious problem. Consider the following:

We will explore this in future articles. To comment email