Are Investing and Gambling Inherently Related Ideas?
The famous financial investor, Warren Buffet, once installed a slot machine in his house and allowed his kids to play on it with their pocket money. Buffet predicted that they'd love gambling on the machine so much, that they'd blow their cash every week and leave him the winner – and he was right! Buffet, acting as an investor with an edge, just collected the cash.
While it doesn't mean you can't try your luck on the progressive jackpots and enjoy sensible gambling for entertainment, if your goal is long-term profits then investment has the edge. But there are ways to apply investment strategies to sports, casino or financial betting.
Why Gambling and Investing are Different
According to Google, gambling and investing have very different definitions:
- To gamble: to take risky action in the hope of a desired result.
- To invest: to put money into a financial entity with the expectation of achieving a profit.
Gamblers seek lucky returns, by placing bets to try and win fast money. A lucky gambler can become an instant millionaire by winning games such as progressive jackpots, sports pools and lotteries.
Investors seek long-term bank growth by using systems and strategies that have a predicted edge against the casino, sports book, financial or business market. An investor's approach tends to be slow and steady, such as a horse racing professional who becomes a millionaire over ten years of systematic betting.
Gambling and Investing – Games of Perception
It's important to realise that your approach to placing bets can turn a potential investment into a gamble - and vice versa.
Take Patrick Veitch, one of the most successful 'professional gamblers' who in reality was a highly successful sports investor who took millions from bookmakers.
Although Veitch made a literal fortune by betting on horses using mathematics and investing strategies, many of the agents who he used to covertly place bets on his behalf with bookies who had banned him, ended up losing money!
It's not just about your skill on the horses, dogs, footie, or poker table. It's about your capacity to use skill to create a systematic edge and long-term profits.
Can You Invest Betting?
You can try to develop an investing approach by playing games that are playable with legitimate elements of skill and strategy, in niches such as mathematical sports betting and poker:
- Sports betting systems - can be approached with statistics and mathematics
- Poker - winnable by developing your skill, mindset and strategy
- Video poker - one of the best strategic games for skilled players
- Blackjack - playable with strategies that reduce the house edge
- Roulette - theoretically a game of chance but playable with systems and strategies
The aim of an investor is to use systems that deliver a small advantage on a consistent basis: the 'edge'. If you take a bankroll of 500.00 and make 1% profit a day on it for a year, you'd have around $10,000; after two years you'd have over $200,000 and would theoretically be a millionaire in less than three years. Compound interest is the key.
To succeed with investing takes positive personal traits, including emotional control, discipline,