Gamblers are risk takers. Investors try to avoid risk. This simple fact alone might make it appear that the worlds of gambling and investing are miles apart. A closer look at the two, however, reveals more connections that one might think.

Outcome unknown

Gambling is, by definition, a wager on an unknown outcome. If it takes place in land based casinos or in online gambling sites, whether the game is poker, blackjack, slots, or any other casino classic, gamblers never know how the game will end. Sometimes it is possible to make an “educated guess” about the outcome of, for example, a poker standoff; but other times, like in the case of online slots, everything comes down to pure luck.

In the financial realm, things are really not so different. Most investors don’t throw caution to the wind and put their money just anyplace. Instead, they research and project, trying to guess the future. There is the key word – guess. In the world of investing, like the world of gambling, money is being put towards an unknown outcome. The return might be great, or the move might bankrupt you – it is the goal of both the gambler and the investor to choose the right path.

Fun or profit?

One perceived difference between gambling and investing is that gambling is done for fun, while investing is a legitimate business. One look at the world of professional poker, however, is enough to crush this myth. There are people all around the world who make a living playing in online poker sites, or by putting money down on blackjack and building up wealth over time. Even slots players can hit big wins, like the record-breaking €6.3 million jackpot that was won in May of 2009 on the Mega Moolah progressive jackpot slot.

Investors might want to turn their nose up at “professional gamblers”, but in truth, both gamblers and investors work just as hard for their returns. From the point of view of the gamblers, their trade combines fun and profit, and poker pros might often wonder – “is investing this much fun?”

All about speed

Investing is a slow and laborious process. It can take years for a big investment to start paying off. Being a successful investor requires a great deal of knowledge, plenty of time, and most of all, quite a lot of patience.

A common stereotype of gambling, on the other hand, is that it is a quick and dirty way to get rich. This is both true and false. In the case of big jackpot wins like the €6.3 million Mega Moolah jackpot, lucky gamblers win a lot of money in a very short amount of time. After all, it just took one click of a mouse that player to go from zero to millionaire. But how many times did the player click before the big win happened?

Other games like blackjack or poker require just as much time as a long-term financial investment. Individual games might last just a few minutes or hours, but wealth is built up over long stretches of time. Just as investors must scrutinize each transaction from all possible angles before putting their hand in their pocket, poker pros must spend long hours playing, practicing, and perfecting their game before they can expect to win the big prizes.

Good versus Evil

One last alleged difference between gambling and investing that is worth mentioning is this: while investors are seen as hard-working and respectable businessmen, pro gamblers are often looked down upon as reckless thrill seekers. This social stigma against gamblers and gambling is completely unfounded. A poorly-planned, rushed investment has just as much potential to drive a person into severe debt as a misplaced bet, and investing can be just as addictive as gambling.

Moreover, while profits from the winning end of bad investments often end up in the pockets of individuals, gambling revenue is often filtered back into society. Governments around the world use gambling tax revenues to fund social campaigns and to create services for the good of everyone.

Conclusion

In the end, it is clear that the differences between investing and gambling are not so great. Investors gamble on their choices, and gamblers invest in their skills. Neither activity should be taken lightly – both require practice, knowledge, and patience if a person wants to excel and come out ahead.

Perhaps the real difference between gambling and investing is the people. Just as investing is not to everyone’s taste, gambling doesn’t give everyone the same thrills. Both are risky endeavors, and both can lead to either extreme wealth or severe debt. Whether you choose gambling or investing, let us leave you with one piece of advice: research, practice and play the odds, don’t trust your gut instincts!

David Carruthers, the former head of the online sportsbook Bet on Sports Online, has just been sentenced to 33 months in jail.

He was arrested three years ago by FBI agents for running a company that let US players wager on sports over the internet. Carruthers was charged with racketeering and conspiracy.

Telegraph: Bet on Sports Online executive jailed 

David Carruthers, the former head of an online sportsbook company called Bet on Sports Online, has plead guilty to charges of racketeering and conspiracy, and has been sentenced to 33 months in jail.

The charges are connected to the company’s operations in the US, where online gambling is restricted. The fiasco follows the government’s crackdown on offshore online gambling sites that illegally accept wagers from American players. Bet on Sports Online saw profits of $3.5bn (£2.2bn) between 2002 and 2004, and most of that revenue came from players in the US.

Carruthers has been living under house arrest in a hotel in Missouri for the last three years, ever since he was detained by the FBI at Dallas Airport while on his way to Costa Rica, where Bet on Sports Online is headquartered.

Assistant US Attorney Steven Holtshouser said: “Previously, executives, owners and investors believed that they were immune from the reach of US law enforcement. Both the conviction of, and sentence handed down against Mr Carruthers should send a message to any foreign business conducting illegal activities in the United States, that geography does not render it untouchable.”

Last year, founder of Bet on Sports Online, Gary Kaplan was sentenced to more than four years in prison after agreeing to forfeit more than £43m.

Bet on Sports Online Boss Jailed

A SCOTS gambling executive has been sentenced to almost three years in the US after pleading guilty to charges of racketeering. David Carruthers has spent the last three years under house arrest at a hotel in Missouri for violating American gambling laws.

Edinburgh-born Carruthers was chief executive of the massive internet sporstsbook BetOnSports. Carruthers appeared in court on Friday, where he was sentenced to 33 months after striking a deal with prosecutors.

Carruthers read a prepared statement at the hearing, apologizing for breaking US gambling regulations in a prepared statement to the hearing. He said: “I understand now that the business was operating outside the laws of the United States. I realize I made the biggest mistake of my life. I am sorry for the actions of BetOnSports and the trouble it caused.”

He was arrested by the FBI agents in July 2006 as he passed through Dallas Airport on his way to the company headquarters in Costa Rica. His wife Carol was with him at the time, and was also detained.

Carruthers is accused of breaking US law by presiding over a company that accepted illegal sports bets on the internet from American bettors.

Gambling Executive Sentenced to Prison

David Carruthers, the former chief executive of the online sports betting company Bet on Sports Online, has just been sentenced to 33 months in prison.

On Friday, Carruthers pleaded guilty racketeering conspiracy. Carruthers and 10 other individuals, including the company’s founder Gary S. Kaplan were indicted in 2006. Each was accused of violating an old federal law that forbids the placement of wagers by wire.

“I understand now that the business was operating outside the laws of the United States,” said Carruthers in a statement he read to the judge Carol during his trial.

Bet on Sports Online saw $1.25 billion in profits in 2004, with 98% of that revenue coming from bets made across the internet by players in United States.