The concept of debt peonage (a.k.a., debt bondage or pawn slavery) is one that has largely disappeared from Americans' conceptual vocabulary in recent years, but it's time for a revival with changes in American society. Now we've got features like the proliferation of college loans that can't be discharged in bankruptcy. (Here's a brief Wikipedia page about how widespread debt peonage has been in human history.)
When I was a kid, poor Mexicans were often referred to as "peons," because debt peonage was a major feature of Mexican history, such as during the Porfirio Diaz era in the four decades leading up to the Mexican Revolution of 1910-1920. But that term was declared racist. So, the most vivid reminder of the concept of debt peonage disappeared from American thought.
In Francis Fukuyama's new book The Origins of Political Order, which I've reviewed for the upcoming issue of The American Conservative, he talks about the "Law of Latifundia," or the tendency of the rich to get richer and poor to get poorer.
It's basically a form of Gambler's Ruin. Casino gambling would not be a good idea for you or me even if the casino's games weren't rigged so the casinos tend to win (e.g., there are a couple of zeros on the roulette wheel). The problem is that the casino has more money than you or I do, and it's playing more games at once. Hence, even if the games paid back on average 100% of what you bet, you are more likely to have a ruinous streak of bad luck than the casino is and have to quit while you are behind or borrow at ruinous rates to keep playing.
Here's a 2003 article that illustrates how this works, which has implications for the increasing casinoization of American life in general:
ATLANTIC CITY, NJ—A beaming Donald Brant, general manager of Bally's Atlantic City, reported that the casino had "an unbelievable night" Monday, cleaning up at the blackjack table, on the slot machines, and elsewhere.
"Man, we were on fire all night," Brant said. "It seemed like every time a casino patron pulled that slots lever, it came up a loser. Whenever somebody told the blackjack dealer to hit on 12, they drew a 10. We could do no wrong."
By the end of the night, the casino walked away a major winner, up $515,274.
"I had a sense that we were doing pretty well," Brant said. "So I checked around with the pit bosses, and it turned out that nearly all the dealers and croupiers were way, way ahead. It was amazing. A night like that only comes along five, six times a week, tops."
While most players are content to focus on one or two games, the casino participated in every available coin-operated machine and table game, including roulette, blackjack, craps, Spanish 21, pai gow, baccarat, and Let It Ride.
"We've got a system," Brant said. "Our strategy is to bet against all the customers who come in here. Then we spread our bets around to each and every table and machine in the casino and keep at it for the long haul. We were down about $200 at one of the roulette tables, but were up on everything else, so we came out pretty much ahead. Actually, more than half a million ahead."
Bally's even fared well at the slot machines, an area that traditionally yields the lowest rate of success.
"You know how they say your worst odds are on the slots?" Brant said. "Well, we made over $33,000 in slots last night. Can you believe it? We were unstoppable."
Brant attributed his casino's impressive showing to a combination of luck and old-fashioned horse sense.
"We try not to play stupid," Brant said. "We never gamble more than we can afford to lose. And we try to never lose our heads. We leave that to the customers. We set aside a certain amount to gamble—that's our kitty—and if we double our money, we only play with our winnings after that. Right now, the kitty stands at around $176,500,000."
Bally's is in the midst of an impressive winning streak, coming out ahead an astonishing 6,753 nights in a row. -- The Onion