Staking systems

Main article: betting strategy

Many betting systems have been created in an attempt to "beat the bookie" but most still accept that no system can make an unprofitable bet profitable over time. Widely-used systems include:

* Fixed stakes – a traditional system of staking the same amount on each selection.
* Fixed profits – the stakes vary based on the odds to ensure the same profit from each winning selection.
* Due-column betting – A variation on fixed profits betting in which the bettor sets a target profit and then calculates a bet size that will make this profit, adding any losses to the target.
* Kelly – the optimum level to bet to maximize your future median bank level.
* Martingale – A system based on staking enough each time to recover losses from previous bet(s) until one wins.

Other uses of the term "gambling"

Many risk-return choices are sometimes referred to colloquially as "gambling." Whether this terminology is acceptable is a matter of debate, but generally the following activities are not considered gambling:

* Emotional or physical risk-taking, where the risk-return ratio is not quantifiable (e.g., skydiving, campaigning for political office, asking someone for a date, etc.)
* Insurance is a method of shifting risk from one party to another. Insurers use actuarial methods to calculate appropriate premiums, which could be considered similar to calculating gambling odds. However, insurers can set their premiums to obtain a long term positive expected return.
* Situations where the possible return is a secondary reason for the wager/purchase (e.g., buying a raffle ticket to support a charitable cause)

Investments are also usually not considered gambling, although some investments can involve significant risk. Examples of investments include stocks, bonds and real estate. Starting a business can also be considered a form of investment. Investments are generally not considered gambling when they meet the following criteria:

* Positive expected returns (at least in the long term)
* Economic utility
* Underlying value independent of the risk being undertaken

Some speculative investment activities are particularly risky, but are still usually considered separately from gambling:

* Securities derivatives, such as options or futures, where the value of the derivative is dependent on the value of the underlying asset at a specific point in time (typically the derivative's associated expiration date)
* Foreign currency exchange (forex) transactions
* Prediction markets