Inside Asian Gaming

December 2015 inside asian gaming 31 Gambling and the law holder is merely betting a small sum with the expectation of winning a larger sum if a certain contingent future event occurs. Systems similar to modern insurance are at least 3,500 years old. Shippers, merchants and financiers developed schemes to share the risk and spread unexpected losses caused by pirates and shipwrecks. Insurance as a separate contract first developed in Genoa in the 14th century, and was again focused on marine shipping. The long history of maritime insurance made it the least susceptible to being viewed as merely gambling in more modern times. The Great Fire of London, in 1666, appears to have led to the creation of the first fire insurance. Insurance probably would have been ignored by lawmakers if not for two developments. Owners of fire insurance policies seemed to be having a few too many fires. And operators found ways of turning insurance into pure gambling. A gambling fever swept England in the 17th and 18th century. As UNLV scholar David G. Schwartz put it, men would bet on anything: “on whose grandmother would live longer or whether a surgeon might successfully save a particular patient.” This turned what was merely a way for merchants to lessen their risks into wide- open wagering. People would take out life insurance policies on celebrities. During the Nine Years’ War of 1688 to 1697, insurers took wagers on which cities would be the targets of military action. Probability theory, on which both insurance and gambling is based, was developed in the 17th century at the behest of professional bettors. Conventional gambling and insurance came together with the creation of “lottery insurance” and “insurance offices.” Lottery tickets were extraordinarily expensive, at least £10, more than a year’s wages for most workers. So, shares in full tickets were sold for much less, similar to how full tickets for Spain’s “El Gordo,” which cost €200, are sold today in half-, quarter- and smaller slices. But hustlers figured out how to sell chances for even less. “Clients” could “ensure,” for one shilling, that a particular number would not be drawn from the state lottery wheel on a particular day. These “policies” paid £10 if the number was drawn. Looking just at the required three elements, insurance has “prize”, “chance” and “consideration”. After all, a policy holder is merely betting a small sum with the expectation of winning a larger sum if a certain contingent future event occurs. The practice spread to America. Even today, the illegal numbers racket is often called “policy.” Parliament made sporadic efforts over the years to eliminate lottery insurance. On April 4, 1792, theHouse of Commons debated The Lottery Bill, to help reimburse loyalists who had suffered during the American Revolution. The standard arguments were raised about the evils of gambling, whether the state should profit from the vices and weaknesses of its citizens, the dangers of competition from foreign lotteries, and the discussion of lotteries as a “voluntary tax.” But then one Mr Rose (probably no relation) defended the lottery by declaring “that the evils complained of formerly existed … but he had reason to think they existed no longer. They had not arisen from lotteries themselves, but from the illegal insurance offices that had been opened. Those offices were now put an end to …” What finally led to a crackdown on insurance was the unseemliness, and danger, of people buying life insurance on well-known strangers.