Personal Finance Part 15 – The Evils of Gambling

After reading some news and forum letters in the Straits Times recently about gambling, and also after the tragic case of a man who killed his two children then committed suicide (presumably because of gambling debts), I felt compelled to write something about this topic as I feel very strongly about it. What’s more, the Integrated Resorts (IR) are about to open soon in Singapore, the first being in FY 2010 and the other in FY 2011; and this will surely add to the burgeoning problems with gambling which are already being experienced by our society. Let me delve into the details of this vice, how it can destroy people and families, and perhaps discuss what we and the Government can do to reign in this social evil.

Gambling itself is not perceived to be a vice in Singapore due to the nature of the Chinese race, where the game of mahjong has been commonplace in most households. This is treated as a game in which social ties are built and relatives and friends get to mingle and share stories, even as money is being exchanged and small fortunes are won and lost. Eventually, one “graduates” from mere mahjong to other more insidious forms of gambling such as 4-D, Toto, soccer betting and horse racing. One might argue though, that a little punting now and then should be considered harmless and can be perceived as a form of leisure, especially for retired folk who have nothing much to do with their time. It is also seen as a lottery game where a little is staked in order to win a large windfall payout. Hence, the attraction in gambling is that you can bet a small amount and the reward is large by comparison, never mind the odds. People get a quick thrill and adrenaline high when the results are announced; thus this produces endorphins which stimulate repeat behaviour. This is when someone is considered “hooked” to gambling and betting.

Many people can be classified in terms of how often they gamble, and the amounts they stake per bet. These factors are used to determine if a person is a “light”, moderate or habitual (problem) gambler. Statistics show that only about 5% of people eventually turn out to be compulsive gamblers, but the light and moderate gamblers also end up losing substantial amounts of hard-earned money over time. This is due to the previously discussed “Gambler’s Fallacy” article which I wrote, and the fact that gamblers can never seem to remember the pain of losses (I call it “selective amnesia”), but only retain the sweet memories of huge windfalls. It is the problem gamblers which form the bulk of social problems, as they are unproductive at work (as they keep wondering which numbers to buy for 4-D or Toto), not close to their family (they are shunned because of their habits) and possibly also suicidal (chased and hounded by loan sharks for excessive borrowing for gambling). Sadly, every now and then a case pops up in the newspapers about someone killing himself or getting in trouble with the law (stealing or robbery) because of their uncontrolled gambling addiction. These people do not see themselves as having a problem and frequently refuse to seek help, thus compounding the problem.

One forum letter recently criticized the Government because of the prevalence of betting outlets (there is one located conveniently in almost every HDB housing estate and heartland area); and also the “expansion” in the array of products one can bet on. It used to be just Big Sweep, 4-D and Toto; but now includes F1 racing as well as soccer betting. The Government’s stance is that it is much better to legalize these forms of gambling, rather than leave it to illegal bookies to collect bets and for unlicensed gambling dens to proliferate. While this argument does hold some merit, I question the rationale for the inclusion of so many betting avenues and the fact that such outlets are viewed as being “socially acceptable” to the general public. Generally, you won’t begrudge your friends, relatives or colleagues if they take a punt, and so there is a general reluctance to discourage someone from gambling as it is viewed as something harmless and within control. With the impending opening of the IR casinos, can families still view gambling as a suitable social activity and outlet for relaxation? If you want social life go to a club, do jogging, go swimming or meet for coffee. If you want to relax then go for a spa or massage session or just read a book and sip a milk shake. Gambling is an excuse for brain stimulation which ultimately ends in debilitating losses as the odds of winning the jackpot are so minute that almost 99% of the people will experience negative ROI. This is conveniently ignored by the adrenaline rush which accompanies each bet, as well as the aforementioned fallacy.

So what can we do as individuals to curb this unhealthy habit and ensure our money is put to better use? One method is to use education – ensure that schools teach students about the dangers of compulsive gambling, and to help them to realize that gambling is betting on an uncertain outcome, and that the odds of winning are very low. Simple examples can be used to illustrate this concept, and to help the youth understand that gambling can lead to social ills if uncontrolled. Parents and family members also play a role in this – if any of them are compulsive gamblers it becomes harder to discipline the child and prevent him/her from going astray. A supportive spouse or children can also help an errant person to mend his ways once he sees the destructive nature of his habits.

On the Government’s part, they had set up the National Council on Problem Gambling (http://www.ncpg.org.sg/) which they hope provides an outlet for families to seek help. Individuals and their families can also ban themselves from the IR if they feel they are problem gamblers. They should also set up more voluntary welfare organizations (VWO) to handle family problems stemming from gambling, and also offer more financial help to these families who have been ravaged by gambling debts, instead of letting them turn to illegal loan sharks. Hopefully, these measures will be sufficient to combat the rising incidence of problem and compulsive gambling within our society; and over time help to nip the problem in the bud.