Gambling and Debt

What might be news is that as many as 23 million Americans go into debt because of gambling and the average loss is estimated to be around $55,000.

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Gambling is essentially anything that starts with the phrase “I bet…”

It’s a wager. You bet something of value – usually money – on an event with an uncertain outcome hoping to take home a bigger return. That shouldn’t be news to most people; about 85% of adults in the U.S. have gambled at least once in their life and the gambling industry takes in about $500 billion a year.

What might be news is that as many as 23 million Americans go into debt because of gambling and the average loss is estimated to be around $55,000.

So how do gamblers pay for their problem?

They use credit cards, savings accounts, investment portfolios, retirement funds – anywhere there’s money or credit available – hoping to hit the one big bet that gets them back to even.

But if you’re out of luck and that pile of chips has turned into a pile of debt, the answer is not to go all in.

The first step is to stop gambling altogether, and seek psychological help for the addictive nature of the problem.

The next step is to talk with a nonprofit credit counseling agency about how to straighten out your financial situation. The debt-relief options for gamblers include a debt management program, debt consolidation or even bankruptcy, depending on the level of debt.

Odds Are Not with You

There is a tiny minority of people who make a living by gambling, but unless you are an expert in statistical analysis, you are most likely in the vast majority who don’t win.

And if you are an expert in statistical analysis, you would know that the odds are stacked high against you. It’s one of the reasons the United States leads the world in gambling losses. According to the Economist magazine, U.S. gamblers lost $119 billion in 2014 and they had plenty of places to lose it.

The casinos in Nevada and New Jersey are the most obvious spots, but hardly the only places to gamble. Native American casinos operate in 28 states with annual revenue of nearly $30 billion.

And gambling does not have to take place in a casino at all. There are horse tracks, dog tracks, jai-alai frontons, daily fantasy leagues and online gambling sites for those so inclined. In fact, gambling of some kind is permitted in every state in the U.S., with the exception of Utah and Hawaii.

The easiest place to gamble is probably right in your neighborhood where you can buy a state lottery ticket or play in the weekly card game at a friend’s house. Either place can take a big bite out of the family budget if the gambler spends $200-$300 a week to get his fix.

Gambling Common in U.S.

Betting on sports and gaming in other areas is easy to find in the United States. There are many outlets. They include:

  • Card playing
  • Commercial and American Indian-owned casinos
  • Charitable games like bingo
  • Sports betting
  • State lottery games
  • Pari-mutuel wagering on horse and dog racing and jai alai
  • Electronic and internet gambling
  • Fantasy sports leagues

Most Americans are casual gamblers and can indulge from time to time without suffering any negative emotional or financial consequences. They gamble for relatively small sums and don’t bet more than they can afford to lose.

They just want some action. It’s a form of entertainment to them, and their small losses are simply the price of admission. And there is the thrill of winning. The satisfaction that you beat the odds, and I swear this time it wasn’t luck!

Problem Gamblers and Debt

Many other Americans are not casual gamblers. In fact, according to the National Council on Problem Gambling (NCPG), an estimated 2 million people in America meet the accepted criteria for addictive or pathological gambling.

As many as 4 million to 6 million people are classified as problem gamblers, and perhaps another 15 million are thought of as at-risk.

Problem gambling is a mental health disorder, in which the individual can’t control the urge to gamble. Like any addiction, problem gambling can cause major disruptions in personal, professional, and family life. It can also precipitate serious financial difficulties.

A problem gambler cannot stop gambling behavior in spite of the recognition of ever-increasing, serious negative consequences.

He or she may exhibit any or all of the following characteristics:

  • A preoccupation with gambling and thoughts of gambling
  • Borrowing from co-workers, friends or family in order to gamble
  • Lying about money lost and/or the amount of time spent gambling
  • A growing need to continue betting larger amounts to overcome gambling losses
  • Shifting money around in various accounts to hide gambling activity
  • Selling possessions to finance a gambling habit
  • Restlessness or irritability when attempting to stop gambling
  • Continued unsuccessful attempts to stop or limit gambling
  • Neglecting to pay bills on time and/or taking out many loans
  • Taking money from a spouse or children
  • Criminal activity for the purpose of funding a gambling habit

The most consistent distinguishing aspect of the problem gambler is that his or her finances are usually in some state of disorder. That means maxed-out credit cards, overdue bills, overdrawn checking accounts, and/or unpaid or neglected loans.

And they are often in debt.

The average debt generated by a man addicted to gambling is between $55,000 and $90,000. Women gamblers average $15,000 of debt.

In extreme cases, problem gambling can result in serious legal problems or financial ruin. More than 20% of compulsive gamblers end up filing for bankruptcy because of gambling losses.

The personal damage is also great: the divorce rate for problem gamblers is twice the rate of non-gamblers, and 1 in 5 addicted gamblers attempt suicide – 20 times the rate of non-gamblers.

Contributing to the debt problems of the compulsive gambler is all-too-easy access to credit: 90% of those suffering from gambling addiction withdraw cash advances from their personal credit card accounts in order to gamble.

Also, long gone are the days when a gambler has to leave the table because of a lack of funds. Casinos extend billions of dollars of loans to their customers each year in the form of credit markers. For that service they charge 3 to 10 percent interest or more. In fact, only about half the money wagered in casinos are funds physically brought onto the premises. The rest is borrowed.

College Students and Online Gambling

College students are among the most vulnerable when it comes to gambling. The combination of free time and easy access to student loan money doesn’t mix well. About 75% of college students have gambled in the last year, and 6% of young adults have a gambling problem— a rate higher than adults— according to the National Center for Responsible Gaming.

There are state lotteries that 18 year-olds can play, and some casinos have an 18+ policy on poker, but the real cause has been the rise of online gambling.

The Unlawful Internet Gambling Act of 2006 tried to restrict online gambling, targeting poker sites such as PokerStars, Absolute Poker and Full Tilt Poker. Online poker has survived in the U.S. and these days online sports books like Bovada and 5Dimes are thriving.

Fantasy sports were declared a game of skill and excluded from the UIGEA, giving way to an explosion of daily fantasy sports leagues, like DraftKings and FanDuel, in recent years. You may remember them from their $200 million add campaign in 2015. Fantasy sports have long been a popular recreational activity, with 57.4 million people playing in the U.S. and Canada in 2016.  Now it has become a feeding ground for former online poker professionals.

When the U.S. Department of Justice indicted three of the main poker sites in 2011, they fled the U.S. market. Online poker players turned to daily fantasy sports. It’s a lucrative business for professionals with access to spreadsheets and algorithms that give them all the advantage over your average sports fan. DraftKings and Fanduel have faced their own legal problems of late, and are currently banned in 11 states.

A credit card is all it takes to get wrapped up in the world of online gambling. Before you know it, you’ve landed in a pile of credit card debt.

Don’t be afraid to seek help.

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Max Fay
Staff Writer

Max Fay is a recent graduate from Florida State University's Communications School. He has written for several newspapers in the state, including the Miami Herald, Orlando Sentinel, Tallahassee Democrat and Florida Times Union.


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