Balancing risk at work and at play
It is in the nature of work and workers that what we do in our professional lives informs what we do in our leisure time. Manual workers might tend towards physical pursuits – sports not least – while academics, in sharp contrast, might tend more towards intellectual recreations, reading, solving puzzles and so on.
This sweeping generalization is meant here as a merely illustrative point of departure. There are plenty of academics who are avid football fans, just as there are labourers and tradesmen aplenty who will read Proust or tackle the Times crossword of an evening. This introduction is offered as a scene-setter rather than a point for debate in and of itself.
The more specific point at issue is the balancing of risk in leisure pursuits that is the staple of the insurance industry. In particular, the gambling industries operate on a rationale that is more closely aligned with that of the insurance industry than we might comfortably care to allow for.
Common to both is a fundamental recognition of the mathematical probability of a particular eventuality occurring. Within the insurance industry this is a massively complex underwriting task, based as it is bound to be on as broad a spread of historical and contextual data as may be collated at any one point in time.
In similar vein, although the extent of risk and the consideration of variables is considerably less for bookmakers, casino operators and the like, their business nonetheless depends on a precise calculation of the likelihood – or otherwise – of a particular event coming to pass.
To continue the stereotypical vein, it would be unusual for an underwriter to spend his or her time playing roulette, since the odds are so categorically stacked in favour of the house. The balance of risk to reward is simply not sustainable from the player’s side of the table.
There are, of course, activities which typically fall into the category of gambling that are far better balanced in terms of what they have to offer. Poker, for example, has been formally recognised as a ‘mind sport’ in which the chance element of the distribution of the cards is seen as secondary to players’ calculative and competitive expertise. Chance is still part of the equation, but it is less of one than it is at the roulette table. And most importantly of all it is one that can be calculated for over an extended timeframe. This is why professional gamblers aren’t really gamblers at all.
Something similar might be said of the growing trend for financial spread betting which is offered as the means for players/investors to capitalise on their market knowledge and insight. Depending on the extent of that insight the risk involved will be variable. Inevitably, it is only hindsight that offers 20-20 certainty, but the potential to mitigate risk remains a live issue.
Some of that risk can be ameliorated by trading with a reputable and responsibly consumer-focussed supplier. For example, when trading at Tradefair, which is owned by Betfair, pioneers of the betting exchange and now one of the largest online gaming operators in the UK, clients are given access to a wealth of live market data and analytics designed to provide as much market information as it is realistically possible to achieve. At the same time, client funds are ring-fenced as part of their FSA accreditation.
As American journalist Ambrose Bierce noted in the 19th Century, “The gambling known as business looks with austere disfavour upon the business known as gambling”. It is an observation that still holds good in the 21st Century. And there seems little risk of it going out of date any time soon. The two are still closer in character than we might care to admit.