The House Always Wins—Unless You’re Investing

I just finished watching the Carolina Panthers beat the odds and upset the Dallas Cowboys by kicking a field goal on the last play of the game. Are we actually good again? The only thing more frustrating than realizing the Panthers have had only one playoff game since the 2015 Super Bowl season—a loss in the 2017 season—is sitting through what felt like dozens of sports betting ads, not just during commercial breaks but sometimes even between plays.

These celebrity-driven promotions often create the illusion that winning is almost guaranteed. Seeing offers like “Deposit $5 and get $200 in Bonus Bets instantly” made me stop and think about the real differences between gambling, speculating, and investing—and when each might be appropriate.

Gambling: Entertainment With a Cost

This isn’t meant to demonize gambling; as someone who named my first dog Vegas, I’ve long enjoyed the entertainment side of it. Growing up a huge sports fan, I started trying to “pick winners” in elementary school, tracking my predictions against Jimmy “The Greek” Snyder on CBS’s The NFL Today. In junior high and high school, I entered newspaper contests and won bumper stickers, T-shirts, and the occasional cash prize. In college and through most of my 20s, there were office pools, Las Vegas trips, and friendly wagers with friends. Like many young males, I enjoyed the rush of getting it right—and had an overinflated view of my own betting skill.

But the reality is simple: gambling almost always carries a negative expected return. The more bets you place, the more likely you are to lose money, because the “house” always has the edge. It’s just a matter of time before the odds catch up. Here are the odds on some various ways to gamble:

Slot machines and other electronic games, such as video poker, historically have odds most stacked in the casino’s favor. According to the Nevada Gaming Control Board, the average payout on machines on the Las Vegas Strip is only 91.84%. That means casinos keep about 8 cents of every dollar wagered.

In addition to the 18 red numbers and 18 black numbers in roulette, there are two “green” numbers (0 and 00), so your odds of winning are only 47.37% (18 out of 38) instead of 50% (18/36). Over time, you would expect to lose 5.26% of your money on each spin, whether you chose red, black, or your lucky number #17 (a winner pays 35 to 1 instead of 37 to 1).

Roulette is pure luck and a game you have no control over. In blackjack, you can reduce the house’s edge by making wise decisions around hitting, standing, splitting, and doubling down based on your initial cards. However, the casino still has a major edge in that the customer must play first. If you bust (have cards greater than 21), you lose, even if the dealer busts on the same hand. Over time, the casino wins on average anywhere from 0.5% of the amount wagered if you play “perfectly” to 4% from the casual player.

Finally, there is sports betting. Once you get past the initial lure of “deposit $5 and get $200 in Bonus Bets instantly” ads since North Carolina legalized sports betting in March 2024, the odds are once again stacked against you, the consumer. In sports betting, a point spread is set on each game. Its goal is to equalize the perceived strength of both teams so that each side has about a 50% chance of covering the spread. However, it is not 50-50 when it comes to your money. Regardless of what team you bet on, the odds are -110, meaning you would have to bet $55 (10% more) to win $50. Over time, you would expect to lose 4.55% of your money (assuming you win 50 bets and lose 50 bets). Unfortunately, these are the most favorable odds sportsbooks (or apps) offer. The odds only worsen when betting on parlays or long shots.

Bottom line: Gambling can be harmless entertainment when done in moderation—if you remember that the math guarantees the house wins eventually.

Speculating: Chasing Short-Term Moves

During the COVID lockdowns, when casinos were closed and sports were sidelined, many turned to the financial markets for excitement. Meme stocks like GameStop and AMC exploded. Bitcoin soared. Speculation was everywhere.

Speculating means buying an asset—stock, commodity, cryptocurrency, etc.—primarily to profit from short-term price movements, not from its long-term fundamental value. You take a position at one price, hoping to sell it to someone else at a higher one.

The Greater Fool Theory is the idea that even during a bubble, you can buy an overvalued asset, as there will be a “greater fool” willing to pay an even higher price. The Greater Fool Theory generally ignores valuations, earnings, and cash flows generated by an asset. Instead, “investors” flock to a security simply because the price is going up and they have a fear of missing out (FOMO). This FOMO feeds on itself, attracts more speculators, and the price of the asset will continue to spike up rapidly. History has shown that eventually, there are no greater fools left, the bubble always bursts, and prices tumble, usually faster than they rose.

Bitcoin has long been a favorite of speculators. Its price has risen roughly 25x in the past five years, fueled recently by political and institutional support. But how do you value an asset with no earnings and no cash flows? Its price depends largely on sentiment, adoption, and regulation—not fundamentals.

Gold is another speculative favorite that has seen increased interest recently. Unlike stocks or bonds, gold produces no earnings or dividends; it doesn’t “work” for you. Its value is determined by what others are willing to pay, which is why it often rises during periods of fear, inflation anxiety, or currency weakness. For investors using gold as a hedge or store of value, a small allocation may be reasonable. But when it’s bought simply because “it’s going up,” it becomes speculation—driven by emotion, not analysis.

Speculating isn’t automatically “unwise,” but it’s riskier and closer to gambling than investing. Speculating resembles gambling in that both seek quick wins. The difference is that speculation can have a positive expected return, but only if your timing, discipline, and understanding are sound. For most investors, it’s best viewed as a side activity for surplus capital, not the foundation of a long-term plan.

Investing: Endurance, Ownership, and Long-Term Value

Investing is a different discipline altogether. Rather than chasing fast gains or betting on market swings, investing means owning assets that create value over time. When you buy stock in a company, you own a claim on its earnings and cash flows. The goal isn’t to sell to a greater fool, but to share in the business’s growth and productivity.

Unlike gambling or speculation, investing offers a positive expected return when done thoughtfully. Here are several key tenets that can help you achieve that expected positive return. Or as a gambler might phrase it, how to increase your chances of “winning”:

Think Long-Term: As CEO Benton Bragg stated in this month’s commentary, the investing game is a marathon. Compounding is powerful, but it requires discipline and endurance. Stick to your plan through volatility rather than reacting impulsively to news or short-term moves. Panic selling or chasing performance can be one of the biggest destroyers of returns.

Diversify Intelligently: Don’t bet your future on any single company, sector, or country. Diversification smooths returns and reduces risk, allowing investors to stay disciplined during inevitable downturns.

Practice Humility and Control Costs: We don’t pretend to know what the market will do, so we focus on what we can control—keeping fees, expenses, and taxes low, and maintaining balance through disciplined rebalancing.

I‘ll admit disciplined investing doesn’t sound as thrilling as “putting it all on red.” But if your goal is financial independence someday, the math of compounding is far more exciting. Save $20,000 a year and increase that amount by 10% annually. Own a diversified portfolio of stocks, rebalance regularly, and earn 8.0% annually. In 35 years, enjoy the financial independence $13,300,000 will provide. That’s pretty exciting!

Investing is the most reliable path to long-term wealth, though it requires patience and discipline.

Conclusion

In many ways, today’s flood of sports betting ads reflects a broader human impulse—our attraction to excitement, instant gratification, and the belief that success can be engineered through confidence or luck. The same emotions that drive a quick wager can tempt investors to chase headlines, time the market, or pursue the “hot hand.” Yet just as in gambling, the odds in speculation are rarely as favorable as they appear.

Gambling offers entertainment and the thrill of a quick result, but it comes with a cost the longer you play. Speculation can create the illusion of control and even occasional success, but it often depends on timing and emotion rather than analysis and process. Investing, by contrast, is an act of endurance, rooted in ownership, patience, and discipline. It is built on the understanding that value compounds over time, not overnight.

Markets will always give us something to talk about, whether it’s excitement, frustration, or a mix of both. But through all the noise, the fundamentals of successful investing don’t really change. Preparation matters more than prediction. Discipline matters more than emotion. And humility—knowing what we can’t control—matters most of all.

At Bragg Financial, our goal isn’t to guess what’s coming next; it’s to help you stay invested, stay diversified, and stay confident in the process. There will always be headlines, surprises, and stretches that test our patience, but history has shown that those who endure are the ones who are rewarded.

We’re grateful for your trust and the opportunity to serve you. It’s a privilege to help you pursue your goals and navigate this journey together—one steady step at a time.

Go Panthers!

This information is believed to be accurate at the time of publication but should not be used as specific investment or tax advice as opinions and legislation are subject to change. You should always consult your tax professional or other advisors before acting on the ideas presented here.