I hear that bandied about a lot but not necessary true. For many (who aren't addicted), it's just another form of entertainment.
For example, you can take a few hundred dollars and blow it on a day at Six Flags, standing in line in the hot sun for a cold drink and an overpriced hamburger or waiting an hour or so for a 90-second ride on a roller coaster. And it costs you something like $54.99 just to walk through the gates!
Some may say that is stupidity but I guess some people actually enjoy the experience of a day at Six Flags.
Not for me however. I'd rather take the couple hundred to a casino and try my luck at the blackjack tables or a slot machine or two. If I lose it all, I'm no worse off than the guy at Six Flags except I have no sunburn and my feet aren't tired from standing in lines all day. Sometimes, I might even walk out of there with more money than I walked in with like I did at Empire Casino in Yonkers a few days back. Dropped $100 in slot machines and hit a $275 jackpot. So last night I take the wife to dinner and paid with a crisp $100 bill. Still have $75 left from that night to do something else with.
You are free to do what you like with your money, but gambling is still a tax on stupidity. Your example is excellent in the realm of consumer choice. All economics is based on preferences. When I go to Disney or Great America or the grocery store I don’t use luck in the transaction. That’s a difference.
Reliance on luck is a delusion. The gambling house is going to win. It’s designed that way. Your $275 in winnings is another sap’s losses. The house made their cut no matter what.
Gambling, other than games of skill like poker, is trying to make something from nothing. It’s anti-work and a major drain on the resources of the poor and middle-class alike. Take a look at the state lotteries. In Illinois it was sold as a way to “save the children” and “make our schools financially stable”. It did neither and simply transfers money from the stupid to the savvy (who don’t play). In too many cases that money came by way of taxes to be in the pocket of the fool who’s wasting it. The net present value of a lottery ticket is negative.
Consider also the power of compounding. At the same time the pleasure you derive in gambling might be of such value that losing doesn’t bother you. That’s your preference. It still doesn’t change the foolishness of gambling.
Here’s a quote that may help to clarify it for you:
“An investment operation is one in which, upon thorough analysis, promises safety of principle and an adequate return. Operations not meeting these requirements are speculative.” - Benjamin Graham