Section 8: Gaming and Wagering Contracts

Gaming and wagering contracts (contractus aleatorii) are those in which the profit or loss agreed upon depends upon some future and uncertain event. Their peculiar feature is that one or both parties assume a risk which originates through the contract itself at a mutually agreed price. This note distinguishes gaming and wagering contracts from insurance contracts, in which the risk for one of the contracting parties exists before the agreement is made.

Generally speaking, gaming and wagering contracts are not forbidden by the moral law, provided hope of gain and risk of loss are equal, or approximately equal, on both sides, and no other law of justice or good conduct is violated. They are illicit if too large a sum is exposed to accident, or if the agreement made cannot be kept without in some way violating Christian self-love¹ or the charity due to others.

¹ See this Handbook, Vol. III, pp. 4 sqq.

The most important species of gaming and wagering contracts are the following:

1. Wagering or betting, i. e., a contract by which a prize is agreed upon for the one who correctly guesses an unascertained event, past or future. To make a bet is not sinful, provided it has a rational purpose, the matter is not sinful or an incentive to sin, both contracting parties are uncertain as to the disputed point, the object of the bet is understood by both in the same way, and the sum at stake is moderate.² If one of the parties is certain as to the disputed matter, and neglects to notify the other of the fact, he is bound in conscience to make restitution of the sum won, for the reason that the contract itself was invalid and unjust.³ But if he informed the other party that he was sure of the truth, and the other nevertheless insisted on betting, the winner would be permitted to pocket the gain, because in that case the loser would have only himself to blame.⁴

² Busembaum, Medulla Theol. Mor., l. III, tr. 5, c. 3, dub. 13: “A wager is a contract in which two persons contending about the truth or outcome of some matter promise one another something, so that it may belong to the one who has attained the truth, e. g., I wager ten imperials with you that this or that city has been besieged, captured, etc. For it to be done licitly, it is required: 1. That it concern a doubtful matter; 2. That there be equality in the thing wagered, with equal uncertainty; 3. That the outcome be doubtful for both; 4. That each understand in the same sense that concerning which they contend.” (Tournai, 1876; Vol. I, 262).

³ Antoine, Theol. Mor. Univ., tr. De Contract., P. II, c. 11, qu. 6: “If anyone, certain of the truth of a matter or of its outcome, has gained something by a wager, he is bound to restore it, even if he had warned the other of his certainty, who nevertheless wished to contend. For the latter does not wish to make a gift or to punish himself, but to wager, because he thinks that the matter is still uncertain and that he is being deceived by the other, and therefore afterward he diligently investigates the truth. But since in a wager the hope of gain is bought and sold as merchandise for the price of the risk of losing, if there is no risk of losing, nothing is bought or sold, and consequently the contract is invalid, just as the purchase of a false gem for a true one is invalid, even if the buyer had been warned that it was false but was unwilling to believe it.” (Douai, 1751; III, 617). Cfr. Sporer-Bierbaum, Theol. Moral., Vol. II, 2nd ed., n. 829.

⁴ Lehmkuhl, Theol. Mor., Vol. I, 11th ed., n. 1370: “If one of those wagering is certain of the matter, he cannot enter into a wager with the other; indeed, ordinarily it is not even sufficient that he say he is certain. But if he openly says that he is entirely certain and nevertheless the other persists in the wager, St. Alphonsus (Theol. Mor., l. IV, n. 879) admits that it is lawful to enter into a wager in the following cases: 1. If he who thought himself certain begins to doubt because of the other’s stubborn contradiction; 2. If, notwithstanding the former’s certainty, the other, although doubting his own assertion, nevertheless wishes to persist in the wager. To this may be added: 3. If it is in some way evident that there is a spontaneous intention to make a gift.”

St. Alphonsus refuses to acknowledge the permissibility of betting on the ground that the motives which alone can render it lawful, namely, recreation and entertainment, are in most cases absent, and holds that most betters are guilty of venial sin. But, as Schwane points out, there are other reasonable purposes that can be attained by betting, e. g., ending an argument or quieting disputatious persons and teaching them a lesson.⁵

⁵ St. Alphonsus, Theol. Mor., l. III, n. 868: “A wager is in itself an indifferent thing. Yet in the concrete (since in my opinion there is no indifferent action) I ordinarily judge that wagers of this kind are not excused from venial sin, because they lack a motive rendering them honorable, namely lawful recreation, such as is present in an honorable game. And St. Antoninus seems so to understand it (S. Th., P. II, tit. 1, c. 23, § 9), calling such gain base, as serving no useful purpose but vanity and prodigality.”—Cfr. P. Scavini, Theol. Mor., tr. 6, disp. 2, diss. 2, c. 2, a. 9.—J. Schwane, Die theol. Lehre über die Verträge, p. 188.

Nevertheless it remains true, in most cases, as Slater says, that though a wager that fulfils the conditions laid down by moralists is not in itself a sinful transaction, yet “a habit of gambling is easily contracted; and when such a habit has once been formed, it is very difficult to shake it off. There may be a certain amount of temporary success; the excitement and fascination which gambling has for many minds; the ease and rapidity with which large sums of money may sometimes be acquired by this means,—all lend their attraction, and combine to make what in itself, if indulged in occasionally, may be a legitimate form of recreation, a most dangerous temptation and the sure road to ruin.”⁶

⁶ Th. Slater, A Manual of Moral Theol., Vol. I, p. 558.

Moreover, betting is almost always associated with abuses. “Race-track gambling, book-making, bucket shops, are all merely cleverly disguised devices for separating the fool from his money. If it were only the fool who suffered, it would be serious enough, though perhaps salutary for the fool. But the evil radiates in all directions. This is so clearly realized that all betting on horse races is in many places forbidden by law. Elsewhere the State contents itself with declaring such contracts invalid and refusing to allow the courts to be used for the collection of any betting or gambling debts. . . . No nation avoids all gambling, but those nations are strongest and worthiest whose citizens come closest to the ideal of refraining altogether from such practices.”⁷

⁷ J. E. Ross, Christian Ethics, p. 355.

Wagering contracts generally are not enforceable in English courts of law; in the United States some courts have enforced certain wagers which were not considered to be opposed to morality or sound policy, whilst other courts have held that no wagers are recoverable.

2. A gaming contract is one in which the participants agree to give to the winner in a game, sport, or other pastime a sum of money or anything of value as a stake. It differs from a bet in that it is success which wins and not the truth.

a) As games themselves, be they of skill or of pure chance, are allowed within certain reasonable limits, for exercise or recreation, so, too, there is nothing per se immoral in gaming contracts by which money or some other valuable is staked on the result of a game, to be lost or won according to the success or failure of the participant. “These contracts are permitted by the moral law of nature,” says Busembaum, “provided proper conditions are observed, and no scandal is given, and provided, moreover, that there is no just prohibition, no wrong-doing, and no occasion of sin. The reason is that, as every man who is master of his property, can give it away absolutely, so also may he give it away under some condition, whether that condition depend on chance or industry.”⁸

⁸ Busembaum, Medulla Theol. Mor., l. III, tr. 5, c. 3, dub. 13: “A game is a contract in which players agree among themselves that what each has deposited shall fall to the victor. These contracts are lawful by the law of nature, provided the due conditions are present and no scandal or just prohibition intervenes from elsewhere, no injustice enters into it, and it is not an occasion of sin; because, just as anyone who is master of his property can give it to another absolutely, so also under some condition, whether that condition depends on chance or on skill.”

“There is nothing immoral,” says Slater, “in agreeing to hand over a sum of money if I am beaten in a game either of skill or of chance. This perfectly lawful action will, however, become unlawful if one of the parties is compelled to play against his will, or if cheating and fraud are practiced in the game, or if there is no chance of success on the part of one of the players (unless he knows this and freely consents to play in spite of it), or if the parties have not the money which they stake, or at any rate not the free disposal of it on account of its being required to pay their debts, or to support themselves and their families. Moreover, although gaming itself and under the conditions which have just been laid down, is not immoral, yet it is a dangerous pastime for many and easily leads to abuse, sin, and ruin. Especially is this the case when gambling is carried on in houses kept for the purpose, where all kinds of bad characters congregate. The keeping of such dens of iniquity is rightly punished by law.”⁹

⁹ Slater, A Manual of Moral Theol., Vol. I, p. 559.—Cfr. Gury, Comp. Theol. Mor., Vol. I, n. 885–887; n. 890–891.

In the United States gambling is considered unlawful and the contract null, yet the statutes of the different States vary considerably in matters of detail.¹⁰

¹⁰ M. Martin, S. J., in his American Notes to Slater’s Manual of Moral Theol., Vol. I, p. 559.

The owners of gambling houses, in which so many take scandal and others lose their all and are driven to desperation and often suicide, have a grievous responsibility indeed.

The civil authorities may, for weighty reasons, tolerate public gambling houses in order to prevent secret gambling and thus minimize the evil as much as possible.¹¹

¹¹ Lehmkuhl, Theol. Mor., Vol. I, 11th ed., n. 1373; Göpfert, Moraltheol., Vol. II, 6th ed., p. 203.

b) To indulge in gaming solely for pecuniary gain may easily become sinful, but, as De Lugo and Molina justly maintain, it is not sinful per se, for to strive after pecuniary gain for oneself or family is not in itself wrong, so long as it is not carried beyond certain reasonable limits. Playing at games of pure chance depends for its permissibility also on the players’ station in life and other circumstances. Women cannot decently indulge in such pastimes, and clerics are forbidden to do so if it involves scandal to others or loss of valuable time.¹²

¹² Slater, A Manual of Moral Theol., Vol. I, 558; cfr. Schwane, Die theol. Lehre über die Verträge, pp. 185 sq.; Conc. Trid., Sess. XXII, c. 1, De Ref.; Instructio Pastor. Eystettensis, 5th ed., pp. 544 sq.

c) To pay one’s gaming debts is a duty of justice if the contract was valid and licit. Hence he who wins in a legitimate game, even of pure chance, has a moral claim to the prize offered as stake. An unjust gaming contract, on the other hand, creates no obligation because it is invalid. A conscious violation of justice, e. g., lying or cheating, destroys one’s right to the prize and, if unjustly accepted, entails the duty of making restitution. If the game itself was not unjust, but merely illicit, because forbidden by law, the winner is not obliged to restore to the loser the prize he has received, unless a court of law condemns him to do so. Similarly the loser is not obliged to pay out a prize won in an illicit game, if the statutes enact, as they do in some States of the Union, that a person losing money or property at any game may recover the same by civic action.¹³ Every one is free to avail himself of a law that is enacted for the public welfare and designed to prevent illicit gambling.¹⁴

¹³ Slater, A Manual of Moral Theol., Vol. I, p. 559.

¹⁴ St. Alphonsus, Theol. Mor., l. III, n. 887 (ed. Gaudé, II, 297):—The loser, who has paid the prize, may not apply the compensatio occulta.—Ibid., n. 893; cfr. Gury, Comp. Theol. Mor., Vol. I, n. 889.

If the game itself and the underlying contract were licit, that is, not forbidden by positive law, and if the prize was duly proportioned to the means of the contracting parties, then the loser’s duty of paying the sum at issue is usually, according to the intention of the parties, a legal duty in foro conscientiae; if no such intention existed, there is at any rate a duty of fidelity, which must be complied with even where the civil law does not grant the right of suing for recovery. A duty based merely on fidelity, may, however, lose its binding force under certain conditions,—a fact which must be taken into consideration in dealing with such cases in foro conscientiae.¹⁵

¹⁵ Schwane, Die theologische Lehre über die Verträge, p. 187.

3. A lottery (loteria sive sortitio) is a scheme under which prizes are distributed by lot or chance. A valuable consideration is given for the chance of drawing a prize of greater value. The prizes are relatively few, and most of the players lose by the transaction. Per se a lottery is not unjust or contrary to the natural law, provided fraud is excluded from the casting or drawing of lots by which the event is settled, and provided further that there is a certain reasonable proportion between the sum paid for a chance and the hope of winning the prize.¹⁶ Some theo- logians hold that the profit made by the conductors of a lottery must not be larger than that yielded by any legitimate business undertaking, unless the lottery is operated for charity or for the public benefit.¹⁷ But this view is not shared by all.

¹⁶ Gury, Comp. Theol. Mor., Vol. I, n. 884: “A lottery is a contract by which several persons deposit something in common, so that they may have the right to draw by lot for the thing displayed in their midst. . . . A lottery is a licit contract, provided the required conditions are present. The reason is that a lottery can be regarded as the purchase of an uncertain thing or as a contract by which, with money, one purchases the right to draw by lot and acquire that which by lot has fallen to him. Furthermore, it is lawful to buy an uncertain thing, just as it is lawful to contract concerning the risk of some thing. . . .”

¹⁷ Ibid.: “The conditions required for a lottery to be a contract licit in itself are: 1. That there be no fraud in drawing the tickets or in paying the prize that has fallen by lot; 2. That the proprietor of the lottery not be excessive in profit nor morally gain more than if he invested his money or distributed his wares by another licit contract. Nevertheless, the profit may be greater if the lottery has been established for a good work or the public benefit.”—Cfr. Lehmkuhl, I, n. 1369; J. E. Ross, Christian Ethics, p. 357.

Playing the lottery is a fascinating occupation and tends to promote love of gambling with all its injurious consequences. Hence Father Cathrein says: “Though lotteries are not illicit per se, that is, so long as no fraud is perpetrated in selling the tickets and drawing the lots, they readily lend themselves to abuse, and only too often a simple and greedy public is led to buy chances beyond its means. Therefore lotteries should be limited as much as possible, especially if they serve no other purpose than private profit.”¹⁸

¹⁸ V. Cathrein, S. J., Moralphilosophie, Vol. II, 5th ed., p. 386.

But even if held for legitimate and charitable purposes, lotteries are of doubtful propriety. Many may participate therein without indulging in the gambling passion and without harboring hopes of easy profit, intending the money they pay for chances merely as an alms; but by promoting the lottery they render themselves co-responsible for the seduction of foolish and covetous persons and abet superstition.¹⁹

¹⁹ F. X. Linsenmann, Lehrbuch der Moraltheologie, p. 587.

Though governments have at times resorted to this scheme for raising money, lotteries are now pretty generally condemned as a form of gambling and are prohibited by law in Great Britain and the United States.²⁰

²⁰ Slater, A Manual of Moral Theol., Vol. I, pp. 558.—In the U. S. the lottery has been from the earliest settlement of the country a familiar means of raising funds which could not have been secured so easily, if at all. In the eighteenth century they were extraordinarily popular. Legislatures authorized lotteries for every species of public improvement, for the building of churches and colleges, for the repair of losses to individuals by fire and otherwise. Faneuil Hall (Boston), for instance, was rebuilt by lottery after the fire of 1761. The Continental Congress tried to raise money by lottery in 1777. The movement for the suppression of lotteries dates from 1833. The last lottery supported by government encouragement was the Louisiana State Lottery, which was crushed by an act of Congress in 1890, forbidding it the use of the mails. The company removed to Honduras, where it is still in existence, and from where it sells thousands of tickets every month in the United States. (Cfr. Cyclopedia Americana, Vol. IX, s. v. “Lottery”).

We Americans sometimes pride ourselves on the fact that we have abolished lotteries, regulated horse racing, and reduced various other forms of gambling to reasonable bounds; but as Fr. Ross justly observes,²¹ “this pride is hardly justified while at the same time the most important form of gambling—speculation on the exchanges—flourishes so luxuriantly and with so few regulations,” and, we may add, while our national game of baseball is made the means of wide-spread gambling all over the country.

²¹ Ross, Christian Ethics, p. 357.

READINGS.—St. Thomas, Summa Theol., 2a, 2ae, qu. 168, art. 2–4 (J. Rickaby, Aquinas Ethicus, II, pp. 376 sqq.).—De Lugo, De Iust. et Iure, disp. 31.—Sporer-Bierbaum, Theol. Mor., Vol. II, 2nd ed., pp. 868 sqq.—St. Alphonsus, Theol. Mor., l. III, n. 869 sqq. (ed. Gaudé, II, 286 sqq.).—J. E. Pruner, Lehre vom Recht, Vol. I, pp. 475 sqq.—J. Schwane, Die theol. Lehre über die Verträge, pp. 184 sqq.—Göpfert, Moraltheologie, Vol. II, 7th ed., pp. 202 sqq.—F. X. Linsenmann, Lehrbuch der Moraltheologie, pp. 583 sqq.—T. Slater, A Manual of Moral Theology, Vol. I, pp. 557–561.—IDEM, article on “Gambling” in the Catholic Encyclopedia, Vol. VI, pp. 375 sq.—J. E. Ross, C. S. P., Christian Ethics, pp. 352 sqq.