Stepping into a casino is like entering an alternate reality. Glittering lights, clinking slot machines and the scent of money create an intoxicating atmosphere that makes it difficult to walk away. This is why casinos are so successful. They combine 2 aspects that people are most excited about – entertainment and money. The result is a manufactured bliss that keeps people coming back for more.
Many games have a skill component, but most are pure chance. Even the best players can only expect to break even or slightly lose, and most of those losses are made up of the sunk cost fallacy. The sunk cost fallacy is when you keep gambling after losing because “you already spent that money.” The more you lose, the more likely you are to follow your losses with bigger bets in the hopes of making up for it. This is why booze is served nonstop in casinos, to lower inhibitions and cloud judgment.
It’s a labyrinthine place, with no straight aisles leading to exits. And casinos often use lighting to manipulate the time of day, with tinted windows that block out the sun and rooms with brightly colored carpets designed to mimic the daylight outside. That way, people don’t realize that it’s really only 10 o’clock in the morning and might not be in the mood to leave yet.
Casinos have plenty of other tricks to encourage gamblers to spend more. They may offer a free buffet, or a free show or hotel room. They might give out a special card that earns them points each time they play. These points can then be redeemed for cash or other prizes. This is an example of the sunk-cost fallacy in action, and it’s why people are so easily sucked into the gambling vortex.
It’s hard to step away from a casino, even when you know that the house always wins. Nevertheless, it’s amazing that so many otherwise rational people—people who work hard for their money and make reasoned financial decisions on a daily basis—will throw hundreds or thousands of dollars away based on the roll of the dice, spin of the wheel, or draw of the cards. This is why it’s so important to educate yourself and understand the tricks that casinos use to lure you in and keep you spending. Here are 9 of the most common.