Gambling for a Living VS Running a Business
I didn't play poker for a living or traded betting odds for more than three years. I also quit counting cards at blackjack quicker than that. Yet this is the 7th year I am running a web business. Am I doing better as a businessman than an advantage gambler? I don't think so.
Why advantage gambling is a business
You see, playing online poker is a business. Betting on sports or becoming a blackjack card counter is also very similar to running a business. For common people, they seem like sketchy businesses, to say the least. Various horror stories have made it to the news that are connected to gambling. Most don't believe that people can make a living by gambling. And they are right. Gambling should only be treated like an expensive form of entertainment for most people.
But for professional gamblers, it's a legitimate business. Hourly rates, expenses, and managing finances are terms you will hear in advantage gambling. Much like in business, a gambler must continuously evaluate their progress, improve their skills, and adapt, so that they make more money. The better gambler you become, the bigger paycheck you collect. In the business world that translates to sales or revenue. The better you run a business, the more sales you end up with.
A company uses that money to pay employees and for stocking up. A gambler buys software or services that will help their business. But most importantly, a massive chunk of that money will be used to pay for their losses!
That's a big difference right there between business and gambling for a living. A company usually has a small portion of its inventory that will go unsold or become damaged, losing money. Meanwhile, a gambler expects many of their bets to lose money! It's impossible to make a winning bet every time, whereas every sale in business is a win.
At the same time, though, gamblers can increase their turnover in an instant. If they spot a big opportunity, they can bet twice as much, or even more. Well, for the most part, since betting operators may limit their bet sizing. And that's where problems begin showing up.
Why running a web business wins over gambling
Imagine you have a flower shop business. You realize that out of the blue, everyone is buying red roses. Since demand has increased, you feel a price hike is justifiable. But you can't sell a rose for $100 when you used to sell it for one dollar. You'll lose customers and money since the flowers will die in your fridge as people will stop buying them at your ridiculously high price.
As a gambler, though, you can place a 100-dollar bet instead of your usual wager. You just have to add a couple of zeros. But that will raise suspicions and eventually may lead the bookmaker to show you the door. Then, you have to shop around for another bookmaker to accept your business. In the end, there's a good chance you won't be able to place your bet anywhere. Not only can you no longer sell red roses, but any flower! You are, in fact, out of business.
So, you have to adapt. You need to find an edge on another sport. Also, you need to bet under a different name, since the market has banned you. Like when I couldn't play blackjack anywhere in the country when the local casino barred me. But there's a solution. Instead of going after betting operators, you decide to go after other gamblers. You do that by betting on how sports odds move or by playing poker.
The safest kind of business as a gambler
That's what I did as an advantage gambler. I went against other people. Gambling operators had no problem having me as a customer since I wasn't getting money from them. In fact, I provided liquidity to their business, which in turn attracted more customers, which again meant more commission for them.
So, everyone wins, except for recreational gamblers. They are the people who keep the wheel turning. They are the people that provide the revenue for smarter players and operators. But someone didn't get a dime from this business model. And they were pissed.
How the gambling industry shifted
Governments began regulating the gambling industry. Why? For taxes. How? No more could an operator accept customers unless they were being taxed in the customer's country. So, if I had the JimMakos Bet company based in the North Pole and wanted to do business with British gamblers, I had to pay UK tax. Otherwise, I would pay fines while the UK would block my website's IP address. The UK-based gamblers would not access my website.
This new environment created two scenarios for advantage gamblers. In the first one, they could no longer do business with their favorite operators. These operators stopped providing their services to many countries. Or they were prohibited from operating in specific countries. In my case, that would be a betting exchange. This exchange is the only place I can trade betting odds. Once again, I could no longer sell my flowers.
In the second scenario, introducing new taxes meant a devastating hit in profitability. The way this new tax was implemented, especially in poker, is so unfair that profitable poker players became breakeven or losing players overnight. The reason is that the tax is imposed daily! Going back to the flower shop analogy, the owner would pay taxes at the end of the year, depending on how much money they made. Under the new regulations, the owner would pay taxes on daily sales, no matter if they don't sell a flower in the next months! So, if you have a single day of making money in poker and 350 days of losing money, you are paying taxes on that single day! I don't know of any other industry operating under this scheme.
That was a critical turning point for me. That's when I quit gambling and began focusing on my web business. I quit being an advantage gambler and transformed into an entrepreneur.
Making money in my sleep as an entrepreneur
And after seven years of running a company smoothly, I wish I had started one right from the beginning. But it's not the fierce competition in the gambling industry or the regulations that made the business unviable, which made me quit. Becoming an entrepreneur was an eye-opening experience. Mostly because I am making money in my sleep.
That was a revelation.
Previously as an advantage gambler, I stopped generating income by the time I turned my laptop off. I had mixed emotions about that. On the one hand, sometimes I had just made more than an average worker's salary. At other times, more than what they would make in a year. On the other hand, I would not make a dime more that day unless I turned my laptop back on. Actually, I wouldn't make more money in my entire life if I could no longer sit on a computer for some unfortunate reason! That thought was very frightening.
That's when I realized I had an active income stream. An income stream that dries up the moment I stopped working. As said before, that could happen due to events that I couldn't control!
That's where running a company comes in. A web business that runs various websites 24/7. Guess what? Those websites can generate income 24/7. Like having a flower shop open for 24 hours and customers buying flowers without you even being there! You wake up and find money in your account.
Does that sound too good to be true? Well, it is! For e-commerce websites, things are a bit more complicated since you probably have to ship products and take care of customer service. But as a content-based website publisher, advertisers pay us for advertising space. That's it. As long as people are visiting the websites and clicking on ads, the sites are generating revenue. There's nothing more I need to do as a publisher, other than making sure the websites are operating properly at all times and rank high in search engines.
Who makes the most money, a gambler, or an entrepreneur?
I know what you are thinking. My web business must not come even close to my gambling profits. People believe I made most of my money in betting exchanges and poker rooms.
Well, if we compare annual profit, gambling activity is the clear winner. That's no surprise, given the enormous risk it involves. Compared to gambling, running a web business in terms of risk is like taking a walk in the park. But, let me remind you that I didn't trade or played poker for more than three years. My web business is running for seven years. With no breaks. No new regulations, no surprises. A genuinely smooth operator!
And now for the icing on the cake.
When running a business, the sky is the limit. I used to believe that was the case in betting, trading, or poker as well. As stakes were getting bigger, I couldn't see why I couldn't reach for the sky. But even if you forget the regulations, the hide and seek with bookmakers, and the stress of risking thousands of dollars, the market can only absorb a certain amount of money before it becomes efficient again. Poker stakes can go that high and recreational players rarely find themselves playing high stakes. Betting markets can accept that many bets before odds collapse. Even financial markets like the stock or foreign exchanges can struggle with big orders.
Meanwhile, a business can grow as much as you allow it to grow, and as long as stock lasts! There are 7 billion people who need something. And that's not all! How about running two websites, two businesses? How about delegating and outsourcing most of the work and building one business after another? The compounding effect in business can multiply your success! I feel it's like I'm counting cards on blackjack tables, trading on an exchange, and playing poker all at the same time! And in fact, it's like others are doing all these on my behalf! And while I'm sleeping! Oh, come on now!