Money in the Bank

Not long ago Bonnie and I invited a friend to join us for dinner at a casino restaurant. The friend, a woman in the same improv group in which I participate, was not a gambler. “Sandy” was a senior citizen and was retired. 

At one point, Bonnie and I told Sandy of a time I was playing in downtown Las Vegas and had gone through all of my cash on hand. I was playing a slot machine, in significant positive territory, and I didn’t want to walk away and leave the machine for others to capitalize on. So, I called Bonnie and asked her to get some cash and take Lyft to downtown (Bonnie no longer drives.) She agreed.

Sandy asked how much we were talking about. 

I didn’t remember for sure, but I told her it was probably $10,000. It was very likely more than enough, but if she was going to make the trip, we wanted to make sure we didn’t run out again.

Sandy remarked that this was way too large of an amount not to be earning interest.

I conceded her point — but suggested that it was a different calculation for a professional gambler.

“How come?” she asked. “Interest given up is interest given up, no matter what your profession is.”

I changed the subject, but have been thinking about this. While Sandy wasn’t wrong, here is my thinking on the subject:

1. Gamblers have bigger cash swings than most people. Sometimes the swings go against you, and you need a “cushion” available for when that happens. If you have lines of credit at every casino you frequent, this can serve as a sort of short-term cushion. While I have lines of credit at a number of casinos, I regularly frequent casinos where this is not the case for me. So, I need a buffer.

2. Gamblers for “large” stakes need bigger cushions than gamblers for smaller stakes. I’ve had some monthly negative scores in excess of $30,000 over the past few years. I need a way to cope with these swings. Overall, I’m a winning player, but not every week or month (or even, occasionally, year).

3. Banks do not like large regular cash deposits and withdrawals from gamblers. Numerous gamblers have had banks terminate their accounts for such activity. I’m not sure why banks act this way, but they do. Perhaps they’re nervous about money laundering situations and don’t want to risk it.

4. Even if banks did allow large cash deposits and withdrawals from gamblers, banks are not always near the casinos and not always open when the money is needed. Casinos are open 24 hours. Banks aren’t. 

5. Sometimes casinos will lock up a machine for a few hours for a player. Sometimes they won’t. If a player has cash in a safety deposit box at a bank or casino near several other casinos, this can be used to fulfill cash needs for those casinos fairly quickly.

6. If I did run out of cash, I have gambling friends I can count on to lend me short-term money. I very much try to avoid this because if I borrow, I have to be willing and able to lend money to others. While most gamblers to whom I have lent money have paid me back reasonably promptly, there have been exceptions. I would rather not open this door.

7. I don’t know Sandy’s exact financial circumstances, but I suspect she is living closer to the edge than I am. She needs to make every penny count, so to speak, and to earn them while she can. So, she has developed rules of thumb that serve her well for this purpose. A good rule for most people is to keep your money working for you and don’t leave money uninvested.

While I don’t consider myself wealthy, I have enough money to comfortably gamble for considerable stakes without threatening my lifestyle or retirement status. So, I can afford to keep more cash around than many other people can. Very little of that is at home (for safety reasons). Most is spread out in safety deposit boxes in casinos I frequent.