Is Gambling a Losing Game? It Doesn’t Have to Be
Posted by Harry Kane on Friday, March 18, 2022
There’s a superb Amy Winehouse song entitled ‘Love is a Losing Game’, and some would argue that the same description can be applied to all forms of gambling. Certainly, there’s some evidence that the majority of gamblers regularly lose money when the wager, while the revenues and profitability of betting brands continues to increase with every passing quarter. In this detailed post, we’ll look at the numbers in closer detail, while suggesting why gambling either on or offline doesn’t need to be a losing game!
The State of Gambling Markets in the UK and US
We’re going to focus our attention on two of the biggest betting markets in the world, namely the UK and US. The gambling market in North America has grown exponentially during the last three or four years, while the sector in the UK is among the most mature and well-regulated in the world.
In the States, it was reported in the American Gaming Association’s State of the States 2021 report that there were 450 commercial casinos active in 2021. These establishments generated $6.7 billion in taxation revenues for state and local governments through 2018, before a major legislative change blew the market open even further.
More specifically, May 2018 saw the US Supreme Court overturn the so-called “Professional and Amateur Sports Protection Act of 1992” (PAPSA) legislation. This had previously prohibited sports gambling and betting at state level, preventing local authorities from legalising the practice and generating much-needed tax revenues.
Since this law was struck down and individual states were empowered to legalise sports betting, more than two dozen authorities have permitted either online or retail sports wagering. Close to 20 have fully legalised online sportsbooks, while several others are expected to follow suit in the months ahead.
This has created a true behemoth of a gambling market, with iGaming having generated increasingly impressive huge revenues for states over the course of the last three-and-a-half years. As a result, Americans gambled more money than ever before in 2021, with casinos, apps and sportsbooks cashing in!
According to the American Gaming Association, the nation’s off and online establishments generated a total of $53 billion last year, significantly more than the $6.7 billion banked just three years’ previously. Revenues increased by 21% from the previous annual record during this period (in 2019), before the pandemic struck to temporarily hinder the sports betting market.
To provide further context, market leader New Jersey generated a total of $6.43 million in tax revenues in April 2022 alone, while four-weekly returns in excess of $8 million have been recorded previously. In this respect, the US has begun to realise its potential as a gambling hub and evolved to outstrip the gambling sector in the UK. On these shores, total revenues peaked at £19.2 billion in the year ending March 2020, while iGaming grew exponentially during this period to account for just shy of 40% of this turnover.
In the financial year running from April 2020 to March 2021, the total gross gaming yield (GGY) for remote betting, bingo and casino gameplay peaked at a record high of £6.9 billion. Incredibly, this represented an 18.4% increase on the previous financial year, while further, double-digit growth is forecast for the foreseeable future.
Clearly, both the US and UK markets continue to experience marked growth, with this especially prominent stateside due to the less mature nature of the sector. At the same time, we can also see how online casino gaming and remote sports betting are the key drivers of market growth, as they contribute to increasing revenues significantly across all viable verticals.
More Opportunity to Wager – But What About the Returns?
Of course, the emergence of online gambling and remote sports betting has increased accessibility to the market, affording a larger number of people the opportunity to wager across the board. This is especially true in the age of native mobile apps, smartphones and 5G connectivity, with more than 50% of bettors in the UK alone now known to wager frequently through their mobile device.
This increases the opportunities to bet even more, while opening up in-play betting markets across multiple sports and disciplines. Of course, many will argue that it’s the emergence of casual gamblers and a larger demographic of customers that’s contributing to increased operator revenues, especially in sports mad nations like the US and UK.
There are two questions at this stage. Firstly, are online gamblers more likely to see a return than their offline counterparts, whether they like to wager on the spin of a roulette wheel or bet on their favourite soccer or American football team? Secondly, are online players compelled to spend more when compared with offline gamblers in an accessible niche packed full of betting markets and opportunities?
Starting with the first question, it appears as though you’re not more likely to win to bank significant returns whether you wager on or offline. This shouldn’t really come as much of a surprise, especially as sports betting is focused on corporeal events regardless and most casino games carry the same house edging irrespective of their setting.
Sure, you may be able to access a higher volume of game variations (especially disciplines like roulette and blackjack) which offer superior house edges and return-to-player (RTP) rates from a gambler’s perspective, but this alone isn’t enough to drive a consistently higher or tangible return. Overall, the facts remain quite start as around 98% of people who gamble are likely to lose money overall.
This statistic applies across all verticals and disciplines, suggesting that the old mantra ‘the house always wins’ is as applicable today as it ever has been. Of course, this has much to do with the opportunistic nature of gambling, even when dealing with games of skill such as blackjack. Sure, this particular discipline offers the most favourable casino house edge (which is low as 0.42% with some online iterations), but this still translates into an RTP rate lower than 100% and affords an advantage to the casino in question.
Conversely, playing American roulette forces you to embrace a house edge of 5.2% due to the presence of an additional zero on the wheel, which creates an RTP rate of just 94.8% and an average return of $94.80 for every $100 wagered either on or offline. Put simply, no on or offline casino vertical offers an RTP rate in excess of 100% or a house edge of 0% or better, so you’re always predisposed to lose money from the outset.
Still, the fact that at least 2% of gamblers generate money through gambling means that this endeavour isn’t completely forlorn, and we’ll touch more on this in more detail a little later in the piece. As for the question of whether online gamblers spend more than their offline counterparts, the statistics seem to suggest that this isn’t the case (particularly in the UK).
According to figures collated in 2020, the average Brit spends just £2.60 per week on gambling, creating an annual investment of £135.20. Much of this is spent on the National Lottery too, so it doesn’t appear as though online casino betting or remote sports wagering is dramatically increasing the average player’s spend.
At the same time, a government review has found that just 0.5% of the adult population has a population with gambling, with 3.8% are considered to be ‘at risk’. In total, 7% of the population is affected negatively by the gambling of others, but these figures have remained largely unchanged over the course of the last decade.
So, while we now have greater awareness of problem gambling through increased reporting and the rise of VIP schemes that see some operators take a disproportionately high amount of their revenue from a vanishingly small number of players, there’s no evidence that iGaming is encouraging players to spend more across the market as a whole.
Instead, it can be argued that the increases in gambling revenues in the US and UK are being primarily driven through a rise in the number of players and the larger number of betting markets available.
How to Ensure That Gambling Isn’t a Losing Game
Ultimately, while there’s no difference between the probability of winning when wagering on or offline, with all verticals set-up to ensure that the overwhelming majority of players will lose money overall.
However, a small number of players continue to generate returns when wagering, while there are steps that you can take to minimise risk and optimise your chances of winning. These include:
#1. Develop Your Bankroll and Betting Strategy
Before you even start wagering, you’ll need to establish a fixed bankroll that you can adhere to rigidly within a predetermined time-frame. This can be set on a weekly or monthly basis, depending on your wider financial circumstances and how frequently you wager or deposit money into your account.
As a general rule, your bankroll should also never exceed an amount of money that you can comfortably afford to lose, as this affords you fiscal peace of mind and can help to minimise damaging losses before you place your first bet.
When it comes to your betting strategy, this should see you create a single betting unit, which ideally has a finite and low value that you can build each wager from. Then, you can scale this according to each outcome and its associated odds, ensuring that you prioritise value and delicate balance between risk and reward.
For example, when betting on relatively likely outcomes with extended odds, you should minimise your stake and betting units in play. Conversely, you can increase your stake when backing short price favourites, in order to increase your potential return in relation to a relatively low-risk wager.
From these solid foundations, you can minimise your real-terms fiscal losses and while creating a more enjoyable gambling experience that’s responsible and based on your own financial circumstances.
#2. Target Games and Outcomes with the Highest RTP Rates
As we’ve already touched on, there’s no casino games or sports bets with a zero-house edge or RTP rate on 100% or above. So, the key here is to prioritise games or bets that have the highest possible RTP rates, in order to minimise gambling losses and increase your chances of earning a return.
For example, some blackjack iterations offer an RTP rate as high as 99.58% and a corresponding house edge of just 0.42%. Playing this type of game optimises your returns over time, with this key to making the most of your starting bankroll. When it comes to slots, the variance in play here is much higher, but some online titles are classed as certified as they boast an RTP rate in excess of 97%.
In the case of sports betting requires you to leverage your knowledge of specific disciplines to make informed selections, while simultaneously identifying value in published odds. Obviously, short price favourites have a higher probability of winning, and combining such selections with an appropriate stake can really boost your coffers.
#3. Increase Coverage to Optimise Your Chances of Winning
The final step is to increase the coverage and scope of your bets, in order to optimise your real-time chances of winning and make it increasingly likely that you’ll bank some form of return per spin, card draw or remote sports bets. In the case of roulette, for example, you can leverage outside bets such as odds or even to ensure a much broader coverage of the wheel and increase your chances of winning.
By combining multiple bets of this type, you can make it more likely that you’ll win on every single spin while regulating your stake to optimise returns. In the case of sports betting, the practice of matched betting</strong can guarantee a win and potential return when deployed on outcomes with specific odds.
This works by leveraging free bets promoted through target sportsbooks. For example, you can utilise a free wager to place a ‘back’ bet on a particular outcome (such as the result of a football match), while placing an opposing lay bet on the other team through a betting exchange.
This ensures that one of your wager’s will come in, while the deployment of a free bet will minimise your financial outlay and optimise the value of your final return. Of course, each of these individual tactics should be used as part of a much wider betting strategy, which also includes you bankroll management and individual wager selection.