The House Always Wins
This last week, I was in Las Vegas presenting training on customer service for a work conference. While there I couldn’t help but notice the amount of people gambling. Gambling in the morning at 6 am, in the afternoon, and late into the night. I grew up in a very conservative religious family, and gambling was not allowed or practiced in my home. I no longer am practicing that religion, however I’m so grateful that I was raised without the habit of gambling. It’s not only my background that makes me avoid gambling, it’s my desire for control. This is probably a blessing and a curse in my life, but as far as gambling goes, I see it as a blessing. My need to know where my money is going, and that it’s not wasted, drives me to be frugal. So naturally, I did a little research to see what the average american spends on gambling. According to the Las Vegas Visitors and Convention Authority, 73% of visitors to Las Vegas gamble, and the average budget was $578.54.
Let’s put this in a scenario format. If the person gambling invested the $578.54 each year into a Roth IRA with a modest return of 10%; and they started at the age of 21 (the first year they could legally gamble) until they are 72 (seems like a good age to stop gambling in Las Vegas), according to my retirement calculator (EZ Calculator), this person would have $738,028 in their retirement account. Just from forgoing their Las Vegas gambling habit.
According to the Economist in an article entitled Gambling: The Biggest Losers, the average american has $375 in gambling losses per adult per year. So if there are two adults per home, this works out to be $750 annually. For this couple, that works out to be $968,662 with a 10% return over 55 years (starting at 21 to age 72).
Let's take a look at some other numbers.
The above information came from an article on the website www.fool.com (the Motley Fool)
As you can see, the house always wins. Each slot machine makes the Wynn Las Vegas $276 a day. Each gaming table makes them $8,130 a day. Even though everyone knows intellectually that the house always wins, they still gamble. This is a form of “entertainment” that people enjoy and will forever be fascinated with. So I don’t think I will convince anyone today to stop gambling, but only hope that their eyes are opened a bit wider to the amount of money being spent.
Also, I’m thinking, if I invest in a slot machine, and get $185 a day, I would have $67,525 gross in revenue for one year. Talk about passive income! Now…..where can I place this machine? Location, location, location. I would never have to work for money again!