Do people play more in times of crisis?
Believe it or not, many investors and gamblers believe that the best time to find value in the stock market is during a crisis. It is a time of economic downturn when stocks are beaten up and shares of good companies can be bought at a discount.
While many gamblers may not feel comfortable in the stock market and prefer to opt for gaming tables, this is not sure they will bet either. After all, just because the economy is going through a downturn doesn’t mean that the chances of buying a house have changed.
It is a popular theory that in times of crisis, more money is spent on investment, gambling, alcohol, or other, not necessarily profitable or not so healthy sinful pleasures. This begs the question, is it really true? Do people play more in times of crisis? COVID-19 and the impending recession will raise its ugly head, will it send more gambling betting sites, both son-friendly and Bitcoin-friendly?
A 2012 study by Dutch researchers suggests that this is not actually true. People are, in fact, less likely to part with their money during a recession.
The only form of gambling that grows during an economic crisis
The studies cited above examined three different types of gambling: pair-mutuel gambling, casino gambling, and lottery gambling. For those who don’t know, pair-mutuel gambling is any form of gambling where players bet together and the house only decides because it makes the game available and determines the odds. Betting on sporting events is an example of a pair-mutuel game.
You might think that a knowledgeable, sharp sports bettor can double your bets in difficult times and make a special effort to increase your bankroll, but that’s not really what happens.
It turns out that the more risky economic conditions seem, the more gamblers are willing to leave the odds to chance. Therefore, in times of economic downturn, it is not casino games like roulette or sports books that see the most action, but lottery games.
Select the lucky number
That’s right! Lottery is the only form of gambling that is actually recession-proof.
Whatever people choose, their lucky number. This makes sense because many Americans actually believe that the lottery is a good alternative to having a robust and reliable retirement investment strategy. In fact, people think again and again that in the end they will be the one to win.
The study showed no evidence that lottery games depend at all on the stage of the economic downturn or any current economic cycle. People are always willing to put money down on lucky numbers.
Brick & Mortar casinos feel pain
There aren’t too many sites that track the projected revenue and spending of Bitcoin gambling sites. Let’s face it, many of them operate in countries and islands that act as tax and regulatory shelters for entrepreneurs looking to make money and skirt.
This is not to say that it is impossible to guess what is likely to happen on these sites. We just have to look at the performance of brick casinos during the coronavirus epidemic.
The five biggest and best-known names in the gaming world see their shares trading 35-65% cheaper than a few weeks ago. Some of these names include:
Wynn Resorts Limited
Las Vegas Sands Corporation
MGM Resorts International
Boyd Gaming Corporation
Penn National Gaming Incorporated
Caesars Entertainment Corporation
Anyone who has been to Las Vegas or even heard of Las Vegas is aware of at least some of the name brands listed above. These are not small companies. They have some of the most extravagant, beautiful and lucrative casinos in the world, but their share price has dropped significantly.
While more and more people are desperate to get into Bitcoin and other cryptocurrencies when the traditional fiat-based economy takes its nose, fans of the newly minted currencies are unlikely to go to gambling tables or sports betting anytime soon.
If history suggests something, it’s simply not worth the risk.