I sent the following information off to Randi (A practicing therapist) to make sure I had not overstated the psychological community's stance on any of these points. That isn't to say that doctors advice is by any means the final word, as new information is the rule in science, not the exception. Therefore, one should only take this as "current thinking". As an additional step, I had a recovering pathological gambler read it as well, to make sure my statements were as accurate as possible. I did not get back a line by line evaluations from them, but the general sentiment was, "Completely agree, and well said". That was in fact a quote.
First: Please note that cognitive distortions are not by themselves considered insanities. They are considered components in the formation and maintenance of certain psychiatric conditions. It is possible to have mild to moderate cognitive distortion without qualifying as “crazy”. Severe cognitive distortion is reserved for things that would qualify you for treatment. Most of what I'm discussing here is considered “mild” by itself, if no other factors are present.
Why Gamblers Redefine “Winning”.
I think it might be useful to start out by stating the dictionary definition of 'winning' which is the one I use.
1.Noun: Money won, esp. by gambling
2.Adjective: Gaining, resulting in, or relating to victory in a contest or competition
I looked up 'winning' in several dictionaries. In none of them did I find any reference to a time limit or statute of limitations on previous results. If we stick to the dictionary definition, you must be ahead overall to claim that you are winning. It's fairly clear that some/most people don't use the word correctly and claim small temporary refunds of their lifetime losses as 'winning'. They use 'winning' to denote a loss reduction. If this were a mere error in nomenclature, one could almost forgive it. The problem is that not only do people use the word incorrectly, (here I'm using “incorrectly” only to mean “departure from dictionary definition”) they perceive it incorrectly as well, with potentially dire results.
Don't obsess on the word's usage. Even if we accept that the dictionary definition is wrong, because it does not account for colloquial use, it is the meaning behind the word that is the issue. If you handed me $2,000 and I handed you back $1,000, you would not immediately turn to a friend and proudly exclaim a $1,000 win. Neither would you claim a win if the same transaction occurred over days or weeks. The reason the loss (not win) here is clear is we don't declare the transaction terminated until it has been completed. In gambling, such as video poker, we add imaginary lines of demarcation that give the illusion of completion, even though the transaction is ongoing. Casinos take deliberate advantage of this weakness, which is why almost every machine now has a nice little window that tells you how much you have 'won' irrespective of your coin in.
It's the new math: -100 coins + 35 coins = a 35 coin 'win'
This particular cognitive distortion, where gamblers redefine a reduction of losses as 'winning', has been found to be one of the greatest risk factors in the development of gambling problems, present in nearly 100% of all pathological gamblers screened. Its prevalence is unclear in the general populace. People with the severe form of this distortion will claim any jackpot hit as a win, irrespective of losses. They will change machines and, even if down thousands of dollars during a single trip to the casino overall, focus only on the machines where they had positive results. A key ingredient here may be reduced reactivity to negative stimuli and over-stimulation to reward. (Side Note: This trait has been frequently found in criminal behavior, where felons risked years of incarceration for trivial rewards. Current research is pointing to a strong genetic component ~recent issue of Science).
Let's be clear on this: If you told a psychologist that you were winning a thousand dollars this week, and they followed up your statement by asking you your lifetime results, and you then answered that you were behind overall, they would write this down on your chart and possibly send you for a full psych evaluation. This doesn't rise to the level of insanity, but it is considered a serious risk factor for pathological gambling and is a sign of cognitive distortion (mild, if no other factors are present). If you have this particular issue, it will likely not be possible for you to understand the concept. You'll have to settle for understanding that it is considered a problem by the medical community. They would not care why you gamble, they'd mark your chart and move on.
This distortion appears to be mostly confined to gambling involving independent random events which occur over time, if they do not inherently provide the person experiencing them a method to accurately evaluate their total results at a glance. For instance, in the stock market the distortion largely disappears. I have never personally heard a trader claim a sale, regardless of the size, as a win, if they sold the stock for less than they bought it for. Certainly, they might end the day with $100,000 more in cash than they started with after a sale, but if the stock cost them $100,001, they do not claim it as 'winning'. Stock Traders don't even tend to claim winning in the market at all, unless they are ahead overall for their life. Of course a quick glance at their portfolios is all that is required to snap them back to reality, even if they wanted to experience this particular distortion. The stock market is a form of gambling; the difference is that it is one with built in forced record keeping.
People that hock or sell their jewelry do not claim the infusion of money as 'winning' unless they get more for it than they bought it for. A reclaiming of monies previously spent or lost, is never seen as winning, except in casinos. No football team would claim to be winning after a touchdown if they were still behind in total score. In almost all other walks of life, except for gambling, to be winning, one must actually be winning (ahead), and this is usually irrespective of time frame. Even if a stock trader had held onto stock for 50 years, they would not claim a win if they sold it for less, half a century later. Reference to results over arbitrary time spans (such as “today”), that discount the past, only seem to rear their ugly head in gambling.
One cognitive distortion that appears to effect both casino goers and stock traders alike is illusory control: The overestimation of the effect that one's voluntary actions have over random events. This leads to causation errors where one believes something they did, rather than random chance, influenced the outcome. It is a highly self-reinforcing belief as it is never possible to go back in time and test the road not taken. It's too broad a subject to cover here. I recommend a book called The Drunkard's Walk.
By this point, for those readers who have any cognitive distortion, their justification engines are in full swing and the “but I only gamble for fun” argument is ringing in their heads. It should be obvious to all but the most distorted that whether you gamble for fun or professionally, this only effects your motivation and intent. The thoughts in your head do not have the power to alter the physical reality of what happens to you in a casino. Your thoughts and intent do have the power to alter your perception of that reality, which is why recreational gamblers can experience results identical to the results of a professional gambler but mentally record them differently. It is a completely subconscious process, and no one who does it is aware that they are doing it. In fact, if one becomes aware of it, the distortion mostly disappears.
Here is the process:
If one gambles for “fun” their brains overemphasize momentary upswings in random fluctuations, dismiss or discard negative trends, and parse continuous results into disparate segments that allow the mind to classify parts of a downward slope as “winning”. Cognitive dissonance (unwillingness of the human mind to admit fault) drives this happy spin process, and the more negative the experience, the more committed the human mind becomes to “enjoy” it, creating fabricated justifications left and right to convince itself it is having “fun”. It is not clear yet how much of the “fun” of gambling comes from this cycle: negative experience > denial > justification. It is only clear that it is a major component in why people derive enjoyment from the activity. Another reinforcing component is the random variable reward schedule, which has been found to be the best at ingraining animal and human behavior alike. Except here the “reward” isn't even really a net positive reward. Imagine Pavlov's experiments if the animals had to gamble what food they already had to get more, with eventual starvation as the result. Because the time span is expanded, the effect becomes almost imperceptible. A net negative penalty is seen as a positive reward because of the slow variable reward schedule.
No one can argue that gamblers don't have “fun”. The issue is the source of that fun. If winning is fun, then their brains become highly motivated to morph anything, even a loss reduction, into “winning”. The result is distorted thinking > motivational conditioning.
Finished in part 2