Gambling refers to a wager or a bet in which each player agrees to risk losing some money or material possession to other players for the chance to win the money or material possessions of those same players. There is no compensation to the loser.
In this definition, there are four components that must exist for gambling to take place:
- A game of chance or skill - You need some sort of contest where the outcome is uncertain. This could be a professional sport, a game of poker or guessing if the next person to come out of the grocery store is a woman or man.
- Stakes - You need to place something at risk, either money or something else of material value.
- An agreement - This is usually called "the bet" or "the wager." Each player agrees to risk losing his possession in exchange for the opportunity to take the possessions of the others.
- A lack of fair compensation - The loser gives up everything and gains nothing. It really is "winner takes all."
- Simply living life: I've heard one make the incredible logical leap of saying that the lottery is OK because "life itself is a gamble." This confuses RISK with gambling. Not all risks involve gambling. You don't place wagers on whether or not you can cross the street. You don't bet with another that you will make it through the day. There is no agreement to take someone else's possessions in these things. This leads to a closely related argument...
- Insurance: However, there is not wager and there IS compensation. The whole purpose of insurance is to provide compensation when you "lose the bet." Even if no loss occurs, you have gained a peace of mind knowing you would have been compensated. Without getting into whether or not certain types of insurance are wise investments, the point here is that owning insurance policies is not gambling.
- Farming or owning a business: Again, you run the risk of losing money but there is no wager and there is compensation. There is no agreement to take other people's money or property without just compensation. The intent is to produce goods or services of benefit to others in exchange for monetary compensation. Both sides win. In gambling, only one side wins.
- The stock market: Stock is a means for people to become a part owner of a company. Buying stock is no more gambling thatn ownership of any other company or business. The intent is to make a profit by helping a company with capital to produce their product or service as a benefit to customers. Investers receive compensation in the form of dividends. When stock is sold, both buyer and seller agree on the price. There is no wager and no agreement to risk loss at another's expense. If the price is deemed unfair, the deal is broken. It must be admitted that it is possible to gamble or sin in the stock market but the simple act of buying/selling stock is not inherently sinful gambling.