On gambling

One of my oldest friends is a chess champion. Some time in the mid-naughties, he told me that he started making regular income from online poker. ‘It’s all about playing the odds,’ he said, ‘and beating the bad players. If you don’t get emotional, over time, statistically, you win.’ And when I inquired how much: ‘It comes down to about 30-40 euros an hour.’

I wasn’t sure if I found this glamorous or dreary. Making money this way seemed atypical, bohemian, and smart – in line with my friend’s overall character. I admired him for it. On the other, the details were not attractive, and the return ultimately mediocre: you stare at a screen all night, computing statistics, for 30-40 euros an hour – strip down the glamour, how does that radically differ from an accounting job?

Today, I read a chapter of Nate Silver’s The Signal and the Noise about poker players. People picked up the game as a full time source of income during boom times in the US. Regulations against online gambling eventually killed opportunities: they were able to continue through offshore websites, but only the better players remained, while the bad ones went, raising the bar of competition too high for most.

One thing I enjoyed about Nate Silver’s book is that he never questions the ethical dimension of online poker as a source of income – thus avoiding moralistic rabbit holes, and leaving space for articulated thinking on probabilities and risk=taking. After reading him, thinking back of my friends, I wonder about my own puritanical emotions. Surely, making a living from online gambling is not entirely right – it’s a parasitic activity, nothing is created, no social value arises. Yet there are other ways to look at it.

For one, it’s allowed, it’s fun, and it does open opportunities to smart, atypical, bohemian types to make a living – or even a fortune – in their own way. David Walsh gambled, then opened Mona. Social benefits may take indirect routes, if we let them.

More arrestingly, gambling may teach us something, whether we take part, or observe. It provides clear, direct incentives to be smart, understand bluff, and think probabilistically. It creates an immediate economic need for intelligent behaviour. I can think of a few settings where this would be desirable. Maybe that’s a future for applied maths?

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