World's Second Richest Man Shares His Wisdom - "Gambling is Bad Economics"

Warren Buffett, the world's second richest man according to Forbes Magazine with a net worth of $42.9 Billion USD and rising is well known for his financial and economic knowledge. He knows how to make money and how other people lose it.

Gambling Watch Global quotes an article in the Journal-Star of Lincoln, Nebraska in which Buffett describes how he taught his children about gambling.

When his kids were little Warren Buffett bought a slot machine, installed it at home and allowed his three children to feed their allowance, dime by dime, into it. It was one of the best $25,000 investments he made, Buffett said during a half-hour conversation about gambling that aired Saturday night on KPTM in Omaha and KOLN/KGIN in Lincoln.

Buffett, an investment billionaire who still lives part-time in Omaha, said he figured he could give the kids any kind of allowance he wanted, as long as it was in dimes, because

"I’d have it back by nightfall."

And what his children learned, Buffett said, is that

"you can pull the handle of the slot machine, because you pulled handles back then, and it might be good exercise, but it is bad economics."

In the long run, he said, "the machine always wins." Buffett acknowledged that he wagers occasionally.

"I have bet on my golf game, and it cost me money over the years."

Buffett knows that you can't win at gambling, but he goes further stating his view that gambling is "bad economics and bad public policy." Buffett is putting his money where his mouth is by not only publicly supporting proposals against gambling in his home state of Nebraska in the USA, but by also donating funds to campaigns against these proposals.

Buffett refutes arguments that gambling generates economic development:

Gambling is not economic development but a transfer of money," Buffett said in the interview. The money, he said, goes three places: taxes to the state, operating expenses and profits to the owners.

This is true for all jurisdictions worldwide, not just in the USA. The only people that profit are operators and governments - gamblers are guaranteed to lose.

I also agree with Buffett's statement that "I don’t think the state should get in the business of spreading an addiction." Governments need to take more responsible for the consequences of gambling.

Buffett is not only wealthy but wise - gambling does harm and has no economic benefits apart from profits for operators and governments. There may be an entertainment value but at what cost.

Buffett is sharing his wisdom, and we all can learn something.

GG