6: Responsible Gambling
When I first started working with poker players in 2007, people would often ask me if I was trying to get them to stop gambling. I laughed and said, “No, I’m trying to help them win more money!”
Actually, the poker players, traders, and punters I work with all have one thing in common: they’re not gambling. Gambling in my mind is betting with a negative edge, where you will lose money long term. Consider playing a slot machine where the casino has a built in edge, let’s say 10%. Regardless of how much money you’re able to make on a given night, the house makes 10 cents from every dollar that you put into that machine.
In developing your punting model, you aspire to be the casino – where you have the edge that makes money long term. And until you reach that point, you’re betting on yourself. You’re investing money like a business start-up would in the early stage of research and development, where they’re, for example, building a product to eventually bring to the market with the hopes that it can hit their sales targets. Invest money now to make more money in the future. General society doesn’t view the people who start those types of businesses as gamblers, although some of them actually are. There’s a graveyard of bad ideas that should never have been funded. Yet inventors and business owners are praised for their risk taking, not treated as the gamblers that they are.
Of course, even great ideas can be a gamble. Business books are lined with stories of well-intended failures, along with lessons on how to avoid that fate and when to quit. Punting, much like poker and trading, can easily verge into that direction and it’s important that you know where that line is for you. If you’re losing money in the pursuit of a profitable model, that’s not gambling ... until it is.
For some, gambling is just about fun, a form of paid entertainment. In that case, determine an amount of money that determines when your fun is over. But if gambling is a serious hobby or a professional aspiration, how do you know when enough is enough and it’s time to quit? I recommend you figure that out now, before you’ve gotten to that point.
At the end of the day, if punting is affecting your life in a negative way, beyond just the financial cost, you need to take a serious look at whether it’s right for you. For example, if it affects your daily mood, your exercise routine, eating habits or stops you from having fun with family and family. You may still decide punting is right for you, but you need to make changes to ensure that punting can fit into your life without impacting you so negatively.
If, on the other hand, you decide you’ve reached the point where it’s time to quit, you also need to recognize that in the moment it can be tough to follow through on that decision and actually quit.
Why Quitting is Hard
There are numerous reasons why quitting is hard, some more severe than others. Here are a few of the ones that I have found to be most common.
When you invest a lot of time, effort and money into punting it can be hard to walk away because of a bias called the “sunk cost fallacy.” This phenomenon happens when a person is so heavily influenced by the sheer amount of time, effort and money they invested that they’re unable to change course even when quitting would be better for them.
I get it, no one wants to walk away when you’ve already gone so far and you feel like you must be getting close to a breakthrough. If you feel stuck like this, it’s at least an indication that you’re not learning anything new. Step away from punting for at least a week or two to get a fresh perspective. When you’re so “in it” you can’t see the forest for the trees, you can’t see how it’s really affecting you, nor can you make a well-reasoned decision. Instead you feel forced just to carry on, when that may not be in your best interest.
Another reason quitting is hard is that we don’t have a crystal ball when we take on a new job, start dating someone new, or pick up a hobby or activity like punting. As much as we may think we’ve made the right decision, we can’t know exactly what is going to happen – we’re just making a bet. Many people go into these situations assuming that it’s the right decision from the start and so quitting is viewed as a mistake – a mistake that can be avoided by not quitting! Maybe it was the right decision at the start, but goals and motivation change. If yours have changed, that’s not a mistake, that’s human nature.
Perhaps you came into punting thinking it was a way to make easy money, or because you loved sports and this was a way to stay close to the ones you love and do something cool. As you got deeper into it, punting became more challenging than you thought and took away from the passion that you had for those sports. You could not have known these facts before you started. Some things you can’t learn from the sidelines, you have to get in there to find out. Look at this as a good thing. You’ve learned more about what you like and don’t like and will be able to make better decisions going forward having had this experience. You’re not walking away empty handed when you learn lessons like that.
Lastly when you invest a lot of your time, money and energy into being successful, your confidence can also be on the line. Quitting can feel like an admission of failure, and for some that will reinforce a sense that you are a failure. When failure cuts deep like that, it’s often associated with desperate attempts to keep it going to avoid feeling so bad. Emotions run hotter and more intense and you’ll justify decisions that are actually evidence of gambling. Desperation is the most intense performance issue I encounter, and it keeps people fighting for success when the odds are stacked against them.
At the end of the day, if it’s time for you to quit, understanding why it’s so hard to quit may help you to follow through. And, of course, if you need help quitting, there are a number of places to turn. The important thing is to take care of yourself.
Jared Tendler, MS is a mental game coach for world champion poker players, PGA Tour players, sports bettors and financial traders from 45 countries. He is the author of three highly acclaimed books, The Mental Game of Poker 1 & 2 and his newest book The Mental Game of Trading. Find out more about Jared’s work at: https://jaredtendler.com/