Gambling as entertainment commodity
Pub Date: 1/1/2003
Is money wagered on games of chance money "lost" or money "spent?"
That question is a bone of contention between opponents of gambling and those who play the games and run them.
Since it is understood there is a less-than-even chance that money wagered may return more than the amount of the bet, gambling opponents state that players "lose" the money kept by the house to cover the game's expenses and produce a profit margin.
Players and game operators, however, see things from a different perspective: that since it is known that odds are tilted in favor of the house (if they weren't , there would be no game operators), rational people who gamble do so for the entertainment and recreation value received.
Say you recently attended a concert and paid $60 for a pair of tickets. After the show, you leave without your $60. Did you "lose" your $60 or did you "spend" it? After all, you left the concert empty handed'; you did not have a new pair of shoes or a couple of bags of groceries. You purchased no merchandise, and your money was gone.
If, as a consumer, you were to measure the value of your discretionary expenditures based only on material goods acquired, you could say you "lost" your $60. But perhaps you would conclude you got your money's worth and maybe more.
If the concert performers made a return appearance, would you again spend $60 to see them? Only if, in making a rational assessment, you determined you had gotten your money's worth the last time. If you thought the performance was only worth $20 if you thought you had gotten less than you had paid for you would not go again.
And this analysis describes the behavior of any rational consumer.
Admittedly, there is some small percentage of adults who do not behave rationally when it comes to decision making, whether those decisions involve their personal safety, their daily routines, gambling, shopping even sex.
But we do not structure our entire society and economy to accommodate the irrational few'; it is designed to function for the rational many.
Rational behavior in humans is the essential premise of many of the social sciences, but especially in the study of economics. The entire science, and all of its theories and models, rely on the principle that, in the aggregate, rational people will behave in predictable rational ways.
In Bronfenbrenner Sichel Gardner's "Micro-economics" textbook, they succinctly lay out their "utility analysis" which explains why consumers do what they do.
The very first premise underlying the study of consumer behavior is the assumption that consumers are rational. If rational, that consumer will seek to maximize his or her satisfaction, the authors explain.
Further, rational consumer behavior means people will "try to get the most out of one's income by selecting the mix of goods and services that promises to offer the greatest amount of personal satisfaction."
Logical enough.
If you have $30 in discretionary income to spend on entertainment, you have a considerable number of options. You could spend it on a rock and roll concert, or you could perhaps attend a baseball game. Which will it be?
That depends on which option would yield the most entertainment value for you, personally. Which option yields the most value depends entirely upon the individual's perceptions and measures. Some would pay for the rock and roll, others the ballgame, and others still, might choose to play video gaming machines.
The textbook says the value we receive in our consumer choices utility "is subjective, or personal, in its meaning;" one choice is not inherently superior to another.
One further point needs to be made: that each additional unit of a commodity consumed yields less satisfaction than the last unit, and that includes any recreational or entertainment activities which are, in fact, commodities.
The same is true of rational gambling machine players: they reach a point where continued play yields less and less satisfaction. Soon, they've had enough. Or, they make a rational decision as a consumer to spend discretionary entertainment money on other activities or other goods.
It's really pretty simple and logical: Many people choose to spend their entertainment dollars on gambling and do so rationally, responsibly. To assume or assert that money "spent" on gambling is "lost" is irrational.
We should give these adults (78 percent of Montanans gamble) a little credit for their ability to make rational choices.
Source: Montana Gaming Player Magazine, published by Continental Communications, summer 2002.