When Shirley and I finished a cruise recently, we scheduled separate flights back home from Orlando because she was planning on visiting a girlfriend there for a few days. Those plans got cancelled for some reason and Shirley was able to get on a flight a couple of hours after mine.
When I checked in, I told the Southwest Airlines (SWA) people that if the flight was oversold I was willing to be placed on a later flight so long as I got to Las Vegas before midnight. I ended up getting bumped, catching a non-stop flight four hours later that arrived in Las Vegas within minutes of Shirley’s arrival.
There are various “payment plans” SWA uses to pay their “bumpees,” and I received a $530 voucher to be used on future SWA flights. We fly SWA enough that this is almost as good as cash. The only downside is that when you use this voucher you don’t get frequent flyer miles — so that might reduce the value of the voucher to $500 or so. Still good.
A few days later I was playing at the Palms. They don’t have drawings in November, but the combination of PEW (Play, Earn, Win) gifts, playing for future mailers, and the rather miniscule gift card promotion they have going on made it an okay play. I ended up losing $500 that day.
To many people, this would be a wash. $500 ahead one day. $500 behind a few days later. Not to me.
To me, the $500 loss at the Palms isn’t a real loss. I know there are swings up and down. I STRONGLY BELIEVE I’m going to come out ahead at gambling over the course of a year. Whether today is slightly ahead or slightly behind is irrelevant. I don’t celebrate too much over royals, and I don’t worry about it too much over losses.
I can’t GUARANTEE that I’ll be ahead for the year on December 31, but I’m willing to bet you 5-to-1 that this will be the case in any year you choose, be it 2011, 2012, or 2013. (I have confidence that I’ll be able to do it after that, but it’s just a guess. Who knows what the state of video poker gambling will be in three years?) And I think you’d be a fool to bet against me on this. Both because I believe my methods work, and also because I would be in control of my betting over the last few days of the year. If I were a little ahead, I might shut things down if I had a bet riding on whether the result is positive. If I were a little behind, I might use some sort of double-up-to-catch-up system to get positive. While that’s not an intelligent way to gamble on a regular basis, if there were a sizeable bet involved, it just might be the smart way to go in that particular case.
At the end of the year, it doesn’t matter much to me whether this year’s wins came from Palms, Gold Coast, South Point, Silverton, M, Sam’s Town, Planet Hollywood, or any of the other places I play. From experience I know that my annual score at some of those places will be negative and at some of these places it will be positive. But at the start of any year I have no idea which will be which. Ranking the casinos top to bottom in terms of actual profit, the ranking in 2010 was different than it is in 2011, and I expect that 2012 will be different again. I’m generally playing with a relatively small edge — and the swings can go either way.
But the $500 from SWA is “found money.” This is outside of my business plan. While Shirley and I together have averaged about $1,600 a year (I think — I don’t have an exact accounting for this) from this source over the past 15 years, it’s not money I count on. To me this is like shopping during sales. Or buying a car from the auction rather than from a dealer. Or even turning off the lights when you leave a room. This $500 received is a result of spending/conserving my wealth wisely.
I keep close track of my gambling wins and losses. The $500 loss at the Palms went on my gambling log. That’s a taxable loss. (At least for me. I file as a professional gambler.) The $500 from SWA didn’t go on that log. Since it’s in the form of a gift certificate, I’m not reporting it as taxable income. And I don’t have a special list for it. Any more than when Shirley pays $20 for something on sale rather than $80 retail do we record that $60 savings anywhere. It’s an untracked wealth addition that occurs naturally if you live thriftily.
These things are important. Gambling at a 101% rate while having money-leaks in the rest of your life isn’t a winning way to go. Although it is better than gambling at a 99% rate while having the same money-leaks.