player says, “Great win mate, you’re so lucky”. However, the European man (a regular gambler) responds “I’ve lost $5,000 today already”. He then places the larger part of his winnings back on the table ready for the next spin, with the hope that there will be another winning number.
From this scenario, to which I will return later, it is obvious that people put their money on numbers in a game of chance because they hope that they will win. At this point you could roll your eyes and say “We didn’t need a psychologist to tell us that”. However, the key to understanding gambling is that people are motivated by the adrenaline-charged experience of winning, coupled with a variety of other psychological experiences, and not simply from the desire for money.
The following simple example illustrates the point. Ask a gambler two questions, the first of which is “How did you go at the casino last night?” They will probably tell you “Had a fantastic night, had some great wins” at which point you think to yourself “going to the casino is all about winning money”. However, the second question reveals the telling aspect of the psychology of gambling, and that is “So, how much money did you walk away with?” Without exception, almost everybody will tell you that they have either lost all their money trying to win more, or they lost a fair part of it before they gave up for the night. Very few experienced gamblers ever report keeping all the winnings at the highest point — they always try to win a bit more.
I remember chatting to a man placing a bet one evening in the Melbourne Casino. In the process, I asked him about winning money. He told me that he had lost $35,000 in the last 2 years. Without thinking I said to him “Why are you still here? When are you going to learn that gambling doesn’t work?” to which he replied, “If I win some money, I might win all of it back” and “I don’t lose every time”. Does he not see that he must lose more often than he wins? The answer is that he does not let himself understand that logic.
The key to understanding why people gamble is to realise that gambling is about the experience of winning more than about making money. Many people don’t realise that the casino is designed in both obvious and subtle ways to create an illusion of winning. For example, poker machines (also called pokies Australia or slot machines in America (due to the slot for money)) are placed in close proximity to one another and not spread out on their own. A psychological principle called vicarious reinforcement, which will be discussed later, helps to explain the location of machines and the social aspects of gambling behaviour.
With respect to winning, there are several psychological principles which govern the experience. These will be discussed in the following sections. These principles are fascinating because they help to explain why early-stage and recreational gamblers gamble for different reasons than later-stage gamblers. The principles help us to understand that people are motivated to gamble by both the desire for excitement and arousal, and to provide relief from stress and negative moods.
Key Points
•The first key to understanding why people gamble is to realise that gambling is more about the experience of winning than it is about making money. The money creates an illusion of winning.
•It is the adrenaline-charged experience of winning, coupled with a variety of other psychological experiences, which explains why people gamble.
•People have a way of disconnecting from their normal logical processes when it comes to losses associated with gambling.
The thrill of a big win is a marvellous experience for almost anyone. In the religious roots of Western society, the work ethic is based on Adam’s charge in the Garden of Eden that “By the sweat of thy brow thou shalt labour all the days of thy life”. The promise of a casino win is the complete antithesis of this — that is, money for nothing and worldly pleasure that does not have to be earned. In psychology we talk about the pleasure principle, which means that people seek pleasure and avoid pain. A life with money is pleasurable. Work is painful. The promise of winning is a promise of not having to work. These are core motivators etched deep within the psyche.
A friend once spoke to me about a “business opportunity”, which eventually turned out to be a multi-level marketing company. Essentially, the company sold products, however, the sales person would start their conversations with prospective clients by asking “What is your dream, and how much money will it take to fill the dream?” Therefore, they aren’t selling a business; they are selling a dream. Gambling offers a promise of money. A successful advertising slogan for a lottery in my state was “one power ball and I am out of here”. This is an example of gambling to change a person’s life — from the drudgery of working to something interesting and pleasurable — not to win money per se.
This is where gambling meets behavioural psychology. There are well-researched principles of learning which govern human behaviour. These principles are singularly unglamorous but are important to understand to make sense of human behaviour, as they represent core drivers for repetitive action (such as gambling).
At its most basic psychological level, if you reward a behaviour it is more likely to reoccur. In psychology, this is referred to as positive reinforcement and is the first of the important rules of behaviour. It can, however, be explained in lay terms as “The Grandma Principle”. That is, first you eat your dinner and then you can you’re your sweets, but if you don’t eat your dinner you don’t get your sweets. This allows parents to convince their children to eat the things that they do not want to eat, by using a reward. This principle is also used to train animals — do a trick and receive a reward. It is powerful because it works.
With respect to gambling, people are willing to give away their hard-earned money for the promise of a reward. They hope that small amounts gambled will produce big rewards. When the bets are bigger, the rewards also increase. It is an upward cycle of payout and return. Focus is placed upon the reward and not the amount spent. The gambler is not concerned about the outlay, but on the possible return (that is, not the $100 bet on the roulette table, but the possible $350 reward).
Studies show that people tend to focus on the outcome instead of the probability of an action. The bigger the outcome, the more likely they are to invest in that outcome. Games such as lotto are some of the most popular forms of gambling throughout the world. The promise of 1, 5, 10 or 50 million dollars causes people to invest in a ticket, even though the probabilities of winning are in the millions. The prize pool can increase to as much as $50 million when the jackpot has not been won. As the prize pool increases, so does the number of people who buy tickets. The odds of winning do not change, but the dream of winning and spending $50 million is far more exciting than winning and spending $5 million.
Therefore, the key to understanding gambling is that the payoffs are a reward. Every spin on a roulette table provides a possible reward. A bet on the outside of the table will result in a win almost half the time (i.e. there are 18 red, 18 black, and 1 green number on a standard European roulette wheel, and 2 green numbers on an American roulette wheel — the odds are around 47 per cent for a win). What does that mean on a practical level? It means that you can double your money.
Many casino games have bonus sections. For example, on the different forms of poker tables bonus jackpots are paid for a Royal Flush (i.e. 5 consecutive cards in the same suit comprised of the 10, Jack, Queen, King and Ace). The probability of that occurring is nearly 650,000 to 1, but the pay-off varies from $100,000 to over $3,000,000. The thought of the reward overcomes a consideration of the odds. The belief underpinning this is that “Somebody’s got to win it” (and somebody else invariably does). Books about gambling note that these side bets have the worst odds, but the bets are popular due to the size
