My late father was a professional gambler. A good one. Towards the end of his life, he was active in helping at a soup kitchen in Cincinnati, which was run by the Sisters of Charity.

One day, as dad was dishing out food to homeless people, my father was approached by the Sister who ran the program.
“Joe,” she said, “What do you do for a living?”
“I’m a gambler,” replied my father.
“Joe,” she said “This is the first time we ever had a gambler on this side of the table.”

The key to my father’s success was that he was always on the house side of the table. He started in bookmaking, in the glory days of Covington and Newport, and moved into organizing junkets for Las Vegas casinos, when wide open gambling faded from the Northern Kentucky scene.

He understood that if the house has the odds in its favor long enough, the house will eventually and always win out. As he often noted, “You never see them tearing down a casino because people beat them out of money.”

The entities that have figured out that the house would prevail have been state governments nationwide. First with lotteries, and now through video slots and casinos, governments realized that a very easy way to gain revenues is by allowing and sponsoring gambling.

One of the problems with the games that have been legalized, especially the lottery, is that they bring in so much of their income from those on “the wrong side of the table.”

States do not target those who can afford to lose.

Some European countries limit access to the casinos to those who prove they have the assets to accept a loss. Various form of stock and option trading, which can be considered a more elite form of gambling, require that those who invest in those instruments have the net worth to survive a loss.

In my father’s era, bookmakers cut off bettors on losing streaks; Las Vegas casinos carefully monitored their customers and cut off their credit when they lost too much.

There have been few, if any, moves by states and modern casinos to monitor the losing of their customers. There have also been few moves by states to legalize gambling, like sports betting, where the odds were reasonably even for the bettor.

Instead the push has been for gaming with the longest odds, like lotteries.

Even legalized casinos, which have several games of skill and reasonable probability, gear most of their operations to slot machines and video games with high odds.

Lotteries have evolved from a form of gaming called “numbers,” formerly very popular in poor, urban neighborhoods. If you go into a grocery or liquor store in any poor neighborhood today, you will see people who can’t afford to lose even a few dollars, standing around playing scratch off lottery games until all of their money is gone. It is very sad.

I rarely if ever gamble. It is not out of moral conviction or religious conviction. It is the industry that allowed my parents to go from extreme poverty to relative affluence. I just can’t stand to part with my money on something that is such a bad bet.

My few trips to casinos have been bad experiences for the house. I bet very little and I am a terror at the low price buffet. I play high probability games like baccarat and blackjack and won’t go near a slot machine. I have a certain profit margin in mind and leave the second that I hit it. In short, I am exactly the person casinos do not want to attract.

In fairness to state governments, I must acknowledge that making gambling illegal was an attempt to protect people from themselves. Unfortunately, it did not stop the tide but pushed it underground. Gambling for rich people, such as options trading and sophisticated stock market games, have always been allowed. When I passed the stockbroker’s test many years ago, I called my father and asked, “Why is futures trading legal but betting on the Bengals illegal?” There is no logical answer.

States like Kentucky are under a lot of pressure to legalize casinos and slot machines, and just like the lottery, they eventually will. When casinos opened in nearby states, they started taking revenue from Kentucky’s racetracks and other forms of entertainment. Casinos understand their customers and some of the greatest marketers in the world have been introducing many new people to their games. Kentucky will not be able to resist the large opportunities for revenues that will exist.

When legislators do expand legal gambling in Kentucky, someone must think about and speak out for the person on “the wrong side of the table.” Monitoring of addicted customers has to be maintained and avenues for help free and available. I don’t know if it is possible to develop models of suitability, like stock investors do, but the state should definitely look at it, prospectively and not after the damage has already been done.

When I was growing up, my father would go around to the sleeping room hotels and give out bottles of low cost champagne at Christmas. Just like the patrons at the soup kitchen, many of those men were gamblers and often the bottle was the only gift they got.

Legalized state gambling is not responsible for most of these people being in these positions in life, but the state needs to take extreme care that they are not the reason we are keeping them there.

Don McNay is the President of McNay Settlement Group which has never done options or future trading for its injury clients.