This past week I was surprised at how many friends, neighbors and acquaintances made a pilgrimage. No, this was not a religious outing in pursuit of a higher Lenten experience nor in preparation for Passover. It was a quest to buy lottery tickets for last week’s largest-ever jackpot of $640 million which ultimately was divided among three lucky winners.
These folks, in pursuit of a chance at a lifetime of ease and financial security, drove to outlets in Arizona or California so they could stand in line to spend their money purchasing tickets. They were participating in the “new American Dream” which suggests that the two ways to achieve success are either to “Win the Lottery” or “File a Law Suit.”
Games of chance have been around since man learned how to carve bones into dice cubes. But all games of chance, whether they use dice, cards, lotteries or slot machines have one underlying principle. They are designed to re-distribute wealth among the game participants.
It surprises me how so many people who live here in Las Vegas, a city that has been built on gambling, are unaware of the true fundamentals of gambling. They go to the casino, play slots or video poker and occasionally win – sometimes big and are delighted that they “beat the casino”. Many more times they return home with less money than they started and complain that “the casino beat them”. The fact is that neither of these statements is true.
Their winning episodes were the result of their taking home the money of other players who had previously played that particular machine. And their losing episodes will allow those who play that machine after they have made their donation to walk away with some or all of their money. The casino is a mere intermediary – collecting a percentage of all the monies that have been fed into that particular machine. In essence, they are little more than a banking facility – charging a fee for their services to cover overhead and earn a profit.
Gambling, unlike capitalism, neither creates nor destroys wealth. It merely moves it around. A friendly home game of poker will demonstrate the concept. Each of six players invests one hundred dollars in the game and at the end of the evening when the game breaks, six hundred dollars remains on the table. Some players will have more and some less than their original starting investment. No wealth has been either created or destroyed – merely re-arranged among the participants.
Most of us would feel that if we went over to a friend’s house and saw one hundred dollars lying on the coffee table it would be wrong to pick it up and put it in our pocket. In essence that is exactly what happens when we gamble in a casino – and in that venue we seem to feel that “winning” is perfectly acceptable. However, it is little different than the example of picking up our neighbor’s money – only in this case the “neighbor” is a nameless and anonymous person.
The purpose of this post is not to discuss the virtues or lack of virtues of gambling but to draw a parallel between it and the fundamental principle underlying the present administration’s view of how to “fix” the American economy – through wealth re-distribution. It is a fundamental talking point that President Obama has made a cornerstone of his platform and seems to be a basis of his economic philosophy.
It is the same concept which Karl Marx espoused in “Das Kapital”. It is an economic system that a significant portion of the world adopted and subsequently abandoned for one simple reason – it doesn’t work and never will as long as some of us are willing to work harder and longer than others to achieve their economic dreams.
The prudent among us would not develop a financial plan based on the outcome of a game of chance. It’s unfortunate that those in elected office don’t understand this. Perhaps they were among the many in line buying lottery tickets last week.