How Gambling Works + Types of Gambling


Whether it’s placing a bet, buying a Lotto ticket, or simply tossing a coin in the air, most people gamble at some point in their lives. Regardless of whether you’re new to gambling or simply indulge yourself from time to time, it’s important to know the ins and outs.

In this article, you’ll learn what gambling is, how it works, what types of gambling there are, and how to choose between them.

What Is Gambling?

Gambling is the process of taking part in an activity that involves the risk of losing money, as well as a chance to win more money or a prize.

The earliest evidence of gambling comes from ancient China. Tiles from around 2,300 B.C. were unearthed that appeared to have been used to play a rudimentary game of chance, believed to be a lottery-type game.

Gambling can be a lucrative pastime, but only if you know how to do it properly. In fact, according to data from the American Gaming Association, the US gambling revenue hit an industry record of $13.6 billion in the second quarter of 2021.

But it’s also a risky game. Most people play for fun, with money they can afford to lose, and only occasionally. For some, however, gambling can be a serious problem. Many people suffer from compulsive gambling which can be a difficult addiction to get over.

Gambling, or some forms of gambling, is illegal in many countries around the world. In the US, for example, individual states are left to decide whether they will allow gambling on their territory. In Nevada, the home of Las Vegas, gambling is legal but not in Utah.

In places where it is legal, it’s usually highly regulated.

DID YOU KNOW: Experts believe that regardless of whether gambling is legal or illegal, people will continue to gamble in one way or another.

How Does Gambling Work?

The outcome of the game is usually down to a chance or a combination of chance and skill.

In purely random activities, like tossing a pair of dice or playing the roulette wheel, the outcome is usually determined by chance alone.

Some games, however, like poker or betting on sports, are based both on skill and chance. Players who know the rules better than others can work to use them in their own interest. In such cases, knowledge of the game is crucial. It would be of very little use, however, for playing slot machines.

The player can either actively participate in the game itself or can be entirely excluded from it while betting on the outcome. The gambler needs to be actively involved in games like craps, card games, poker, and dice games. In fact, most of these games are rarely played without some sort of wagering.

In sports games, like football pools and horse racing, betting is not intrinsically part of the game and not necessary to the performance of the game, but gamblers can still place bets.

Of course, there is no winning formula when it comes to gambling. But gamblers can improve their chances of winning at almost any game, including different casino games.

Most of the time, getting an edge over the casino or the sportsbook can prove nearly impossible. These games are designed in a way that the gambler is always at a mathematical disadvantage so that the venue will always profit in the long run.

However, a good gambling strategy, tactics, and techniques can help reduce the edge and boost your chances of winning in any form of gambling.

An example of a good gambling strategy is setting aside a maximum bankroll for a given amount of time. Gambling tactics vary on a game-to-game basis, such as choosing the bets with the lowest house edge. On the other hand, gambling techniques are specific sets of skills, like counting cards in blackjack.

Your gambling strategy, tactics, and techniques depend not only on the type of game but also where the gambling takes place. Nowadays, players have two options: visiting a brick-and-mortar gambling center (such as a casino, a horse betting facility, or any similar establishment that hosts games of this type) and gambling online.

DID YOU KNOW: The online gaming industry has seen a significant surge in popularity in recent years, thanks to rapid technological advancement and its convenience. It shouldn’t come as a surprise that today you can even gamble on crypto. One of the most-popular crypto gambling sites is Thunderpick

Types of Gambling

In the age of the internet, gambling may be bigger than ever, but the games largely remain the same.

Gambling types are divided into two main categories:

  • chance-based gambling
  • skill-based gambling.

Chance-based gambling involves games, such as the lottery, where players can do little to influence the outcome. Theoretically, all players have equal winning odds.

In skill-based gambling, players’ tactics and techniques can help them improve their edge on the house and the rest of the players. Regardless of the skill of the player, there’s no such thing as a “sure bet.”

Gambling can be further broken into several categories:

Casino Gambling

While casinos have been around since the 17th century gambling has always been subject to controversy. Despite being illegal for most of its history, the law never truly stopped casino games from occurring.

Casinos offer different types of casino games including, domino games, slot machines, card games, dice games, and gambling devices, such as the roulette wheel. Some of these are banked games, which means the house has a stake in the outcome and bets against the players. Examples include keno, roulette, blackjack, and traditional slot machines, among others.

Gaming machines are believed to be the most popular choice among players as they are simple and fun to operate and players can get a large payout for a small wager.

Roulette is another favorite, while blackjack is the most well-known casino game out there.

So, what makes brick-and-mortar casinos stand out from the crowd in the world of gambling? In addition to having many different types of games, there’s a social aspect that only a few types of gambling games offer. There’s a reason why Las Vegas and Atlantic City are the go-to places for bachelor parties.

Online casinos have their advantages too. One of the best aspects of online casinos is that players can try games for free and learn how to gamble responsibly before taking the actual risk of losing money. They’re also convenient: you can play on your phone and there’s some leeway in regard to how to pay for your gambling.

DID YOU KNOW: The drawback with online casinos is that they’re less regulated than brick-and-mortar casinos. In online casinos, however, players have a considerable volume of options to choose from.
In gambling, the house always has an edge over the players in the long run.
Gambling games are divided into chance-based gambling and skill-based gambling.
Even if the game is skill-based, there’s always a chance that you might lose, regardless of how you play.
Online casinos are rising in popularity because of the variety of choices and convenience.
Raffles and lotteries can be used for charities and fundraising.

Sports Betting

Sports betting is a form of gambling where players place wagers on the outcome of a certain sports game. The players are never actively involved in the game they’re betting on.

The player predicts the sports results based on what the bookmaker is offering. It’s up to the player to determine whether they can make a genuine profit. They also base their bets on their knowledge of the sport in question.

The player then places their stake (gives money to the bookmaker to hold). If their prediction is correct, the player will get their money back, plus earnings. If it’s wrong, they lose the money they invested.

Bookmakers also make a profit. The best way to get an edge is to take a slow and steady approach rather than chase the highest wagers. It’s also important to stick to the sport you’re most familiar with. You can also make an extra effort to learn the trends to improve your chances of winning.

You can place a bet on any sport out there. The most popular choices are football, horse racing, tennis, and NFL. You can also bet on sports like Formula 1, chess, and even e-sports.

Sports betting is divided into 5 types of gambling:

  • Straight bets: The player bets on the winner.
  • Total line bets: The player bets on the final score of both teams.
  • Parlay bets: The player groups together two or more picks into one single bet.
  • Teaser bets: The player groups two or more bets but can tweak the points spread for a lower overall payout.
  • Head-to-head bets: The player places a bet on the results of two competitors.
DID YOU KNOW: The head-to-head bets are most popular among fans of sports like Formula 1 and NASCAR. In racing, betting on a winner is way riskier than football, so fans can choose between two races and put their money on the racer they believe would get a higher spot on the grid.


Poker is an umbrella term for a card game where players wager on which of the players has the best hand. There are many variations and most use a standard 52-card deck.

Poker is one of the types of casino games but it doesn’t necessarily need to be played at a casino.

The aim in poker is for the player to win the pot. The pot consists of the combined chips that all the players bet on during a hand. The chips represent the money the players are wagering. When the game ends, the players trade the chips for money, a process that’s also known as “cashing out.”

In poker, the players determine whether to wage a bet based on the hand they’ve been dealt. They can also bluff and hope to make a dent in the other players’ confidence to force them to give up.

The three different types of gambling in poker are: Draw poker, Stud poker, and Community poker.

Draw poker games, like Five Card Draw and Badugi, are games where players are dealt cards that are hidden from the rest of the players. Players can attempt to improve their hand by replacing some of their cards.

In Stud poker games, like Razz and Seven Card Stud, players are dealt hands containing a combination of hidden and face up cards.

Finally, in Community poker, players get a certain number of hidden cards and form their hand by combining them with some of the shared cards in the game, like in Texas Hold’em and Omaha.

Depending on the types of gambling, any number of players from two to ten can play.

DID YOU KNOW: Poker is a game of skill. You can treat it as a game of random luck by hoping to get the right card but it’s better to have knowledge of the game. Those who understand poker say that true skill lies in anticipating the next card so they can plan their next move.


Out of all the different forms of gambling, the lottery comes closest to true randomness.

Lottery is a low-odd game in terms of chance or progress because winners are selected by a random drawing. In this game, all players have an equal chance of winning or losing.

Lotteries are popular because people can pay a small amount of money to join the game and get a chance at winning a big jackpot.

State and federal governments often administer lotteries offering something that is high in demand, like the Green Card, which allows foreign nationals to legally move to the US.

In the past, these forms of gambling have come under scrutiny for being addictive. While tickets are not usually expensive, the cost can accumulate over the years.

What’s more, the chances of winning the lottery are very slim. According to Mega Millions, the winning odds of their last jackpot was one in 302.5 million.

Statistically, there is a greater likelihood that you’ll get struck by lightning than win the lottery.

While there are many tactics that people employ to try to win, such as picking lucky numbers or using the same numbers over and over again, experts believe that to improve your chances you’ll just simply have to buy more tickets.

This is one difference between betting vs gambling. Experts argue that the numbers selected are less important because the winning odds remain the same. Even if you win the lottery and play again, the chances of winning the next drawing are the same as everyone else’s.

There are many different types of lotteries, including the so-called dailies, which you can play every day, such as Pick 3 and Daily 4. These games often offer a fixed payout for the winning numbers and can be played in a variety of ways, such as Pairs, Straight (exact order), Box (Any Order), Straight/Box, and Combo.

Instant games, like keno and scratch cards, are also examples of different types of gambling games in a lottery format. Further examples are Bingo and Lottos, including the typical lottery games like SuperCash!, Lotto Plus, and The Pick.

DID YOU KNOW: Lotto games boast higher prizes. Powerball games and Mega Millions collect the biggest jackpots in the US. The largest that has been won, so far, was the $1.586 billion Powerball jackpot in 2016.


A raffle is a chance-based gambling activity.

Participants buy a ticket that has a set of numbers on it. Raffle organizers make sure that an identical ticket is printed and put in a box for the drawing. When the window for purchasing tickets ends, the participants hold the identical tickets that are stored in the box.

You might wonder, what is the gambling part in raffles?

Organizers then hold a drawing where a person randomly pulls out a ticket. The person who has the matching ticket wins.

The prize is always pre-determined. It can be monetary, a service, e.g. a vacation package, or items, like t-shirts.

Even these games are only allowed under strict gambling laws. In the US, raffles are illegal in Alabama and Utah.

DID YOU KNOW: Raffles are often used for fundraising purposes or charity. For example, laws in California require that 90% of the funds raised in raffles go to charity.

Coin Flipping

Coin flipping is the simplest gambling type and one of the oldest ways to gamble.

In coin flipping, a person tosses a coin in the air, during which time a player calls “head” or “tails.” The other party is assigned the opposite side. The human factor makes the process random in that each toss is launched at a different angle, at a different speed, height, and is caught in a different manner.

The “tosser” can allow the coin to fall on the floor or catch it and turn it on the back of the opposite hand.

Unlike the rest of the different forms of gambling, coin flipping is pretty straightforward.

The probability of landing on one side or the other is 50%, but there’s more to the process. For example, if you flip a coin 12 times and it lands on heads every time, the probability that the next toss is “heads” is still 50% theoretically, though bettors would argue that since it’s so unlikely that it ends on the same side 13 times in a row that the next toss would more likely be “tails.”

DID YOU KNOW: Coin flipping might be simple but it’s far from being out of fashion. For example, the Super Bowl coin toss is hugely popular. In the last Super Bowl, it was the Chiefs who won the coin toss but lost the game.

How to Choose the Best Type of Gambling for You

Choosing the right gambling game for you depends on a variety of factors. First, think of the type of game that you want to play. Do you prefer chance-based gambling or skill-based gambling?

With chance-based gambling, your chances of winning are slim to none. Also, you can do little to improve your winning chances. For example, in lottery games, all you can do is buy more tickets.

In skill-based gambling, like sports betting and various casino games, knowing the ins and outs of the game and what works best, can help ensure you reduce the house edge.

If you pick skill-based games, consider the betting vs gambling difference.

In betting, the stakes are already placed based on an idea of the performance of a sports event and in gambling, the wager is not based on the outcome.

Once you make that decision, opt for a game that you find enjoyable. If you’re already into sports, then sports betting might be the right fit for you. If you like card games, consider poker. If you don’t want to risk a lot of money, opt for raffles or some type of lottery.

DID YOU KNOW: If you are interested in cards, there’s a lot of information and resources available online where you can learn how to play casino card games. You can always take full advantage of the free trial that online casinos offer as well.


There are many gambling types out there, including different casino games, poker, sports betting, raffles, lottery, and even coin flipping. Gamblers can choose between chance-based and skill-based games and also base their pick on how much money they want to spend.

Nowadays, people who want to take part in such games don’t even have to go to a betting center or a casino – they can do it online from the comfort of their own homes.

Disclaimer: Enjoy gambling, but always practice gambling responsibly.


What types of gambling are illegal?

It largely depends on where you live. According to the Department of Justice, among the major types of illegal gambling are betting with bookmakers, illegal casinos, sports parlay cards, and numbers.

While each individual state has its own rules when it comes to gambling, dog-fighting and cockfighting are illegal in all states.

What’s the difference between illegal gambling and legal gambling?

The main difference is that legal gambling is strictly regulated and adheres to state and federal law. Illegal gambling is riskier for players as they don’t get any legal protection.

What are the five types of gambling?

Although there is no universally accepted classification, the five types of gambling are sports betting, casino games, poker, raffles, lottery, and coin flipping.


Alex is an IT wizz gone SEO gone fire-juggler. We’re not even joking. When he isn’t researching why one personal loan is better than the other and which piece of hardware you should buy next, he’s rollerblading or selling homes (because he does that, too, the smarty-pants).

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