Gambler Nation
December 2, 2005
Tim Iacono is a software engineer working in Southern California and publishes the blog, “The Mess that Greenspan Made.”
In a recent trip to visit relatives in Pennsylvania, the following conversation was overheard as family and friends were catching up on how their children were faring in life. "Our oldest son was in an accident a while back - he's recovering, but slowly", she said.
Then she paused, rolled her eyes, and continued, "And our youngest quit his job and gambles full-time now - on his computer. He says he's able to support his wife and their newborn, but it's only been a couple months."
Talking about their offspring is something that aging parents are wont to do - sometimes not so much to share or inform, but just to have something to discuss. There is much to be learned by paying close attention to conversations like this - sometimes the body language speaks louder than the words.
It seems that the older generation has much to say about what the younger generation is doing these days, but often times they are not heard.
Things haven't always been the way they are today.
One thing that has been pretty much the same over the years is the purchase of Christmas gifts around this time of year. What's popular this year? By the looks of what's for sale in local stores and at Costco Online, poker sets seem to be a hot item. Look at all the neat gambling accessories you can get:
* Bellino Poker Table with 4 Swivel Chairs - $1,999.99
* Sportcraft 56" Gaming Bar Table - $629.99
* Texas Hold'Em Casino Table & Poker Set - $379.99
* 1000-Chip Tournament Poker Set w/ Case - $129.99
* Spades Deluxe 500pc Embossed Poker Set - $69.99
* Texas Hold 'Em Folding Game Tabletop - $47.99
* Bellino Bar w/ Two Bar Stools & Poker Table - $3,499.99
It's a pretty safe bet that very few retired adults are buying items on this list for the parents of their newborn grandchildren.
These items do, however, seem to find their way into the living rooms and basements of baby boomers - in many cases baby boomers with teenagers. Gambling has sky-rocketed in recent years among the nation's youth - many parents apparently feel it's better to have their children gambling at home than roaming the streets, as evidenced by this PBS NewsHour segment:
LEE HOCHBERG: A dozen teenage boys in the Seattle-area town of Snohomish gather after school and on weekends, sometimes twice a day, and the poker bets and the money fly. They said the purse could reach $150 before long. Seventeen-year-old Seth Follis said he's walked away from poker games with twice that in his pocket.
TEEN: In a night, I've lost 50 bucks. But then the next day I won close to $300, so...
LEE HOCHBERG: So you're a net winner.
TEEN: Yeah. Since the beginning of last summer, I've won, like, $700.
Gambling just seems to be part of the culture now - European teenagers drink wine at the family's dinner table, American teenagers gamble at the family's poker table.
Then there is real estate - everyone needs a place to set up that new poker table. The real estate gamble has paid off handsomely for many Americans in recent years, though many of its participants don't see it as a gamble at all. The risk-free interpretation of real estate investing often includes the logic, "Real estate is only going to go up. People are always going to need a place to live".
Thanks to easy home equity extraction, many millions of people now have easy access to many millions of dollars that can be wagered on investment property and second homes. There seems to be little desire to build home equity in a first home when investing the equity can be so much more exciting and rewarding.
As David Lereah, chief economist of the National Associate of Realtors once said, "If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It's as if you had 500,000 dollar bills stuffed in your mattress." He called it "very unsophisticated."
Paying off your mortgage is apparently for old people - unsophisticated old people.
At a seminar some time ago, the Citibank home loan specialist commented that this sort of "mattress money" was in fact "dead money" - just sitting there, doing nothing. He argued that it should be put to work - investment real estate was his recommendation.
Today, some people combine card playing with real estate careers until one of the two emerges as the clear winner - professional gambler or real estate tycoon. In this case, a big win tipped the scales:
Aaron Kanter in Elk Grove, Calif., parlayed a $50 buy-in at PartyPoker.com into $2 million this summer when, by playing on the website, he won his way into the World Series of Poker in Las Vegas and took fourth place in that event, the richest casino tournament.
At home, Kanter, who recently ditched a real estate career to play poker full time, competes in as many as four games at once on his 23-inch computer monitor. "Any more than that, it's hard to pay attention," he said.A necessary prerequisite for playing poker and investing in real estate is easy access to credit (Aaron's case above is the exception to the rule). Access to credit is one thing that has been a constant in recent years - something that senior citizens knew little about when they were young adults.
Many years ago, the only reason people needed credit was to start a business or if they were in trouble. Borrowing against the family home was done only to help pay for medical expenses due to some tragic accident or illness, or as a last ditch attempt to save the family business.
Today, credit is too easy. Too routine.
From credit cards funding Party Poker accounts and Las Vegas cash advances, to all-too-easy home loans - the amount of credit available and the ease with which debt is acquired surely must surprise the older crowd. "I don’t' know how they do it", they say, "Where do they get the money?"
Nothing exemplifies this credit-debt-gambling connection better than seeing house-rich Californians spending their home equity in Las Vegas or at Indian casinos that seem to grow like weeds around the country. At the craps tables or in line for pre-construction condo sales, they are ready and willing.
Ready, because they are now wealthy beyond what they or their parents could have ever imagined just five years ago, willing because this sort of thing is now accepted behavior - everyone is doing it.
Craps, condos - this is the way the world now works. You've got to play to win.
To really appreciate how much the world has changed in the last twenty years, you must go to Las Vegas - to see the new casinos and the new condominiums. The scale of things is breathtaking. The amount of money people have to spend is daunting.
While the younger generation crowds around the craps table, the older folks contently sit in front of the quarter slot machines, avoiding the condo sales offices completely.
Casinos and condos and generational changes in attitudes toward credit, debt, and risk.
What will Las Vegas look like in another twenty years? Who knows?
Today it is just another part of our gambler nation. |
