The difference between gambling and investing

The current hot topic in Cranleigh is about the relocation of a betting shop to a more prominent position in the High Street.

Many businesses and local residents are opposed to the application from bookmaker Betfred who want a licence to trade from a vacant shop unit at 122 High Street.

Like many other local businesses, we oppose the application and would prefer not to see a bookmaker move into this prominent High Street location.

But what is the difference between gambling and investing?

John Maynard Keynes once said, “It is generally agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of stock exchanges.”

It could therefore perhaps be argued that some similarities exist between gambling and investing.

Gambling is about playing games of chance for money or betting a sum of money in such a way.

Investing involves the commitment of money to earn a financial return. Definitions of each are broadly similar then.

Several things differentiate gambling and investing.

The former is generally considered to be a ‘bad thing’, from a moral viewpoint. It is the virtues associated with gambling that we suspect are encouraging many residents in Cranleigh to voice their opposition to Betfred.

Investing is generally considered to be a ‘good thing’, assuming you are supportive of capitalism. It helps to support economic growth and is an indirect way of providing employment, leading to greater wealth for many.

Whilst with some investments the odds are stacked against you, with gambling with this always the case. The odds are generally in your favour when you invest money, at least over the longer term if you are prepared to stick with a strategic plan.

The long-term nature of investing (assuming you’re not a day trader) is another factor which sets it apart from the very short-term activity of gambling.

We often find that investors are risk averse, with gamblers usually characterised as risk seekers.

So depending on how you invest, it can have some similarities to gambling or it can represent something entirely different.

For the clients we work with and advise, investing is a distinct activity and has little resemblance to placing a bet on the horses or feeding a slot machine.

Photo credit: Flickr/Keith Park