What is the Difference Between Probability and Speculation?
Gambling as a sport is by far the most famous form of gambling that people engage in today. Gambling is essentially the wagering of something of worth on an unknown event with the intention of winning something else with the same uncertainty. For example, if you are playing a game of basketball and the official weigh-in weights are revealed, then you can bet that you will hit a three pointer. Gambling therefore requires three components for it to exist: risk, consideration, and the payoff. The first component refers to how much risk would the player be exposed to if he or she bets on a certain game. The second component is more related to the game you are playing, but can also pertain to the game you are betting on (i.e. baseball games have significantly more variables than basketball games).
The third component, which is the payout, refers to how well the house edges make off their bets. If the chances of hitting a three pointer are slim to none, then the casino game is not worth your time or effort. On the flipside, if the odds are very high for hitting a three pointer, then the house edge makes off its bets pretty well. Gambling, like anything, can take your down with or your up, but it all boils down to determining the proper balance between risk and reward.
The uncertainty associated with gambling can also come from the uncertain outcome of the game. Whether you are gambling on horse races or basketball, there is still a chance that you will come out ahead because there is an outside chance that you will not hit your target. Speculation involves the act of projecting the possible outcomes of events without the knowledge of all the facts. As long as you are not gambling with your real money, then you are taking part in speculation, but since most people do end up gambling with their money, it is important to know what you are actually getting yourself into.