Gambling

Abstract

Gambling, in its strictest sense, is the staking of any form of valuable item on a game of chance. By this definition, the staking of a bet on, for example, a game of football or pool is not gambling; however, in contemporary parlance it is widely accepted to be so. Gambling is often referred to as “gaming.” In the United Kingdom, for example, the regulation of gambling takes place under the Gaming Act. The words are often used interchangeably, but technically gaming refers to the operators of gambling companies, as opposed to the individual games that they may offer; “The gaming company offers gambling services.” Under the definition offered above, services such as insurance and markets such as the stock exchange could be considered gambling. These are often not considered as such on the basis that an involved party has an interest in the outcome of the bet beyond the financial terms offered. For example, in the insurance of a house, it is assumed that the person needs a roof over their head, independent of the financial aspects of the insurance “bet” that has been entered into. There are factors common to all forms of gambling, and these are the stake, the (predicted or definite) probability, and the odds on offer. Games are usually measured by their expected value, which is calculated by multiplying the stake and odds (in decimal form), and then multiplying this by the probability. For example, if you were to stake $100 on the flipping of an unbiased coin, and make this as an even money bet, the expected value is (100 × 0.5) x2 = $100. If you were to be offered 2.1, the expected value is (100 × 0.5) × 2.1 = $105, and if you were to be offered 1.9, the expected value is (100 × 0.5) × 1.9 = $95, so you can see that depending on the odds, it is possible to make a profitable (+EV) or negative (-EV) value bet. In sports betting, the overall expectation is usually expressed as the total percentage of the odds offered on any given market, be it a football match, tennis tournament, or any other market in which there is only one winner. This becomes more complex for markets that may have several winners; for example, the “Top 10” market in a golf tournament would be an equal proposition (for bookmaker and client) at 1000 percent. Traditionally in the United Kingdom, bookmakers priced a single-winner market to 117 percent, meaning that if you were to place a bet on each outcome to ensure the same result, you would lose 17 percent. A market priced to over 100 percent offers a bookmaker advantage, and a market priced to under 100 percent entails a player advantage.