There are indeed several differences between speculation and gambling, but many people don’t know what they are.

This article reveals the many differences as well as provides very interesting tips to help. 


Speculation Vs Gambling and Importance of Knowing the Difference

As the gambler sings, “You got to know when to hold ’em, know when to fold them…”

For the most part, each of us wants to have our money work for us.

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We want a good return on our investments.

The sage advice of Kenny Roger’s song holds whether you are sitting at a game of chance or sitting at one’s desk and involved in standard investments.

To earn money and have those hard-earned dollars work for an individual is only half the way to secure a financial future.

Therefore, it is important to discern what good investment strategies are.

Specifically, as it relates to obtaining a good return on one’s money, two opportunities that can be compared as possible risky ventures would be speculation and gambling.


Personal Story

I had the privilege of working with several not-for-profits for over 30 years.

Like any other business, there were always changes and new developments that caused previous decisions, as it related to services offered, to change.

Consequently, what was able to be done in previous years was no longer an option.

A lot of these changes were driven by risk management departments within these organizations.

The purpose of risk management was to not only protect the interests of the not-for-profit but in consideration of the safety of those that we served.

Specifically, as a not-for-profit, we were able to conduct hayrides for the kids during the fall months.

Unfortunately, due to an accident that resulted in a serious injury of one of the children, risk management determined that hayrides could no longer be offered.

Although unhappy with the decision, the not-for-profit, of course, adhered to the decision to prevent any further serious mishaps.

Risk management was doing his job of managing risk.

So, it is in today’s world of investing.

A variety of investment vehicles are available, and to minimize risk and limit losses, it is important to mitigate or control as much as possible these risk factors.


What Is Speculation? 

Speculation is defined as a financial opportunity in which the investor invests money but the potential outcome of the investment or the speculation is at a higher degree of uncertainty.

The basis of an individual speculating is that the anticipation worth of the investment would be more in the long run.

Therefore, a speculator invests their money for a return that is greater than their initial outlay of money.

Speculation is not for the faint of heart due to the reality that speculative options carry a greater risk of not only gaining more money but losing money on the investment risk.


What Is Gambling?

Gambling is that action that is usually taken in a casino or legal online betting site in which the gambler will place a wager on an anticipated outcome.

Gambling can be in the form of playing table games, sitting at a roulette wheel, pulling the handle of a slot machine, or betting on a variety of sports that a certain team will win.

Generally, betting on sports requires also that the spread or point differentiation in the score is covered.

Gambling is based on chance and luck.


13 Differences Between Speculation and Gambling


1. Timeframe 

There are major differences when it comes to speculating or gambling.

One of the primary differences between the two possibilities of gaining money is the timeframe involved.

With the gambler, when they place a bet, the gambling action takes place almost immediately after the wager is placed.

Consequently, with gambling, there is no significant timeframe or waiting in anticipation of the outcome.

On the other hand, a speculation effort requires time to lapse.

This is because speculation is a quasi-type of investment.

It can be compared to the planting of agricultural seeds and the process required for that seed to develop into a crop.


2. Power of the Long-Term 

With the gambler, it boils down to win or lose when the gambling action is taken.

With each spin of the roulette wheel, there is no in-between.

Either the roulette ball falls into the winning spot, or it doesn’t.

With speculation, some variables can help the speculator to find some ground between either winning or losing.

Of course, it is risky business and winning is never a 100% guarantee, however, a qualified speculator will find a way to turn their speculation, somehow, into a profit.

Whether that profit is minimal or is significant, is the varying degree of the speculator’s result.


3. Chance 

With a speculator, there is generally a process involved before the actual investment is made.

Generally, a speculator ensures that they have done their homework and a thorough investigation as to the potential results is investigated.

Although a speculator may depend upon subjective methods, generally, they are objective in their decisions.

On the other hand, with a gambler, even though they may have a system and have studied the game as to what to do and not to do, the bottom line is that it is still a game of chance.

The cards may fall in a certain way and create a streak of good luck or bad luck.

A spin of the slot machine may create a return across the pay line or not,

The bottom line for gambling is that any winnings are still firmly entrenched in the reality of winnings based on chance and luck.

Also See: Left Palm Itching Lottery SuperstitionRight Palm Itching Lottery Superstition.


4. Outcome 

In gambling, you can never predict the outcome.

For example, if one were sitting at a blackjack table and were dealt a blackjack, this would be, what one would think, a sure win.

However, if the dealer also is dealt a blackjack, then neither entity wins.

In the blackjack world, this is called a push and consequently, even an outcome of having blackjack is not a sure thing.

With a speculator, the same can be said, if a speculator anticipates something to happen, there is no guarantee.

However, if that speculation of the investment does come to fruition, then the speculation process will pay off.

In other words, the guarantees or outcomes are greater with a speculator and less with a gambler because the gambling has additional variables.


5. Purpose 

In regards to why speculators speculate and gamblers gamble is for a different variety of purposes.

For the gambler, their one sole purpose is to win money based upon the bet that they have made.

On the other hand, with a speculator, there can be multiple reasons or purposes for the speculator to conduct their activities.

For example, a speculator may choose to indulge in this action to allow for a better calculation of the future increased value of stocks or currencies.

Another reason why a speculator takes this action is to gain a profit off of their speculation with those predictions coming true and giving them a return on their money.

Another option for a speculator is to endeavor to secure or protect their long-term investments.


6. The Role of Investigating

The process leading up to whether one gambles or speculates is a note or varying point of the difference between these two types of activities.

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The gambler simply goes to their favorite casino or online legal website sits down or logs in and begins to wager after the various options are made available to them.

The process of gambling does not take any sort of investigation or research to be conducted.

They just open up their wallet and sit down and begin their gambling.

On the other hand, a speculator takes in an abundance of data and information.

Additionally, before any actions are taken, they analyze this information and take in a variety of informational data to inform their decision.

A successful speculator does not go into their decisions based on randomness and sheer emotion.


7. Legality 

Although speculation and gambling can be addictive, it is important to note that gamblers are always cautioned about the possibility of being addicted.

And often on gambling sites, a disclaimed disclaimer is placed which reminds the potential problem gambler that there is help available.

Also, there is a specific helping program known as gamblers anonymous.

That is not to say that speculators cannot run into the same type of addictive issues as it relates to speculating.

Also, there may be some legal issues associated with gambling especially if the gambler uses a non-legal site.



8. Risk 

For both the speculator and the gambler there is an element of risk.

However, the greater risk involved with gambling is more considerable because the gambler is at the mercy of the house.

The house is the casino or the entity that will pay the gambler a return on their money when the gambler successfully wins.

On the other hand, with the speculator, there is risk involved as well.

However, this risk could be further qualified as a controlled or mitigated risk.

Even if the individual lost money on their speculation attempts, they would still possess the asset that they speculated on.

Check out the following related articles if you need help with:

  • Read This to Get Help If You Have Lost Money Gambling
  • Read This If You Need Help With a Gambling Debt


9. Odds 

The odds of being successful as it relates to speculation and gambling is a factor for both processes.

However, as it relates to gambling, it would appear that the odds are always in favor of the house.

A simple look at the grandeur of the various casinos would underscore that fact in that they have the money sufficient to provide these services to their customers in grand style.

With speculation, the odds can be mitigated if the individual does his or her due diligence in researching and investigating and analyzing all sorts of data available.

Consequently, the decision to speculate is less of a risk and the odds are more in favor of the individual if they have done their research.


10. Systems 

Both actions of speculation and gambling, sometimes incorporate a system.

For example, a system in gambling can be with the way that an individual will place a bet.

Often, blackjack players follow a variety of devised blackjack systems which can include counting cards.

Despite these systems, the odds are still in favor of the house and the systems can be a fairly moot point.

With speculation, a system that is used is through the analysis of financial information.

The speculator takes into account the stock market and particular stocks that may be underpriced and then selling off their investment when the market returns to normal or above average.

Therefore, speculation is based on historical trends within the stock market and its ability to allow for the riding out of the ebbs and flows of the market’s returns.

Also See: Money Vs PowerNew Money Vs Old Money.


11. Measure of Success 

For both gambling and speculation, the purpose of indulging in these activities is the same.

That purpose is to receive money back on an “investment” action.

With gambling, receiving money back is almost instantaneous.

With a spin of the wheel or placing a bet on a winning horse, the gambler may receive a return on their money.

With speculation, it’s more similar to an investment.

The speculator anticipates receiving a profit after some time has been expended.

It falls more on the side of investing rather than gambling.


12. Emotions 

When it comes to gambling, emotions can be a critical component of the gambler’s play.

If an individual loses a bet, they often will try to “chase that money” by increasing their bet.

In these cases, often the emotions begin to rule the gambler’s actions which can result in significant losses.

On the other hand, through the process of speculation, the process is slow and steady.

The speculator knows that any returns will not come immediately.

That the process needs to be played out and the emotions can be in check.


13. Mindset 

One other critical difference between speculation and gambling is demonstrated by the mindset of those individuals that indulge in these two different acts.

For the speculator, it typically is a business transaction where the individual wishes to get a significant or modest return on their speculation.

However, with the gambler, there may be an emotional and underlying motivation for their gambling.

Specifically, some gamblers and their habit can be defined as being compulsive.

In other words, it can be an emotional and psychological issue that creates this need for an adrenaline rush and be driven by a compulsion.

Often, a compulsive gambler can devastate their financial lives and also lead to broken and ruined relationships.

Of course, this could occur with a speculator however, it doesn’t seem as pervasive as those who are characteristically defined as compulsive gamblers.

Related: Difference Between Investing and Gambling.


Speculation Versus Gambling FAQs


What Is an Example of a Speculation Deal?

If a speculator believes that a certain company’s stock is overvalued, he or she may borrow stock from a broker/dealer.

This is known as a short sale.

Then that individual or speculator will sell those shares while the price of the stock is at a high level.

Subsequently, they speculate that the stock will reduce in price, and then the speculator will buy that stock after the price has dropped.


What Are the Symptoms of a Compulsive Gambler?

Those symptoms include a preoccupation, inability to gain control, prioritizing gambling over everything else, and changes in the mood of the individual.



The reality is that most individuals wish to see a return on their money.

There are a variety of ways that an individual can hope to realize a good return on their hard work and the money that they earn.

Some of those ways can include investing in the stock market, investing in precious metals, artwork, etc.

The question is whether the individual wants to realize proven strategies of investment that are slow and steady but provide a good annual return over the long term.

It’s always best to not depend upon luck or chance but to depend on ways that minimize risk as much as possible.

Investing, speculating, or gambling?

It is important to manage risk.

Again, this company has paid $25+ million to members:

SurveyJunkie (only USA, Canada, Australia residents allowed). You can earn money sharing your thoughts. They have already paid $25+ million to their 20+ million members just for sharing their thoughts and opinions. Click here to join SurveyJunkie for FREE

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Apart from being a seasoned Personal Finance expert who has written for top publications around the world, I bring significant personal financial experience. Long story short... through bad financial choices... I found myself $100,000 plus in debt. I was able to dissolve this indebtedness and regain financial solvency. This financial turn around was accomplished through reading, studying and implementing a financial plan. My financial plan included paying down my debt through budgeting, being cognizant of where my financial resources were being spent, changing my attitude about money and understanding the binding chains of the improper use of credit. Today, and for 10 years, I have been debt free and have invested wisely to enjoy my current retirement. This is allowing me to write to help others make, save and grow money wisely!