Conferences on the Virtues
By Fr. Bruno Cocuzzi, ocd
Number 63
Contracts of Chance
Games and Contests, Wagering, and Lotteries
Game
and Contests
In the ordinary
sense of the words, these are pleasant and enjoyable activities designed for
purposes of recreation, that is, to help us overcome fatigue and stress of body
and mind, and to restore enthusiasm and full vigor to our physical and
spiritual faculties.
In the
juridical sense, these words signify a contract, by means of which the players
mutually agree that a certain reward or prize shall be conferred upon the
winner.
According to my
textbook, there are games or contests of Chance, and games or contests of
Skill. Then there are some games and
contests that contain elements of both Chance and Skill, as for example, in a
Bridge Tournament. There, as you all
know, the cards that are dealt to the players are governed by Chance, and how
these cards are played is governed by the Skill of the contestants. Of course, such games and contests can be
played for no other motive than recreation, as noted above, in which case they
are not contracts, but mere games.
It was a surprise
for me to learn from my textbook that contracts of chance and skill can be the
occasions of sin for the participants.
The author states:
…if
a player’s or contestant’s principle motive for playing the game or entering
the contest is to win the prize, or if he longs for the prize too greedily,
then his participation in it is inordinate and immoderate. These easily generate a vain hope and an
unruly appetite for the prize because the hope and the desire are not founded
upon a reasonable, proportionate effort on his part.
In such
circumstances there are the occasions of other sins as well, namely, (I’m
quoting the author): prodigality [a
spendthrift is guilty of the sin of prodigality], laziness, drunken-ness,
quarreling and other sins against charity and piety [due reverence for our
fellow human beings].
In view of
that, in order that a Game or a Contest for an agreed upon prize may be a just
Contract, free of any taint of injustice, certain things are required:
1. (In
those situations where the participants contribute money to the prize [to the
pot]), the players and contestants must be capable of disposing of the
money, or other things of value, that they contribute to make up the
prize.
That
is because the outcome of the game is to transfer to the winner ownership
of the things of value that constitute the prize.
Thus,
anyone who does not have perfect dominion over what he contributes,
cannot, in justice, be a participant.
Perfect dominion means that they are excluded who do not have both legal
ownership and beneficial ownership, as in the case of a Trustee or an
Administrator.
Also
excluded are those who are in debt, that is, who do not have enough money on
hand to pay all their creditors. The
latter have proportionate just claims to all the funds the debtor is in
possession of, over and above what he must apply to satisfy the immediate,
daily, reasonable and necessary needs of himself and his dependents.
For
members of Religious Orders and Congregations to participate in Games and
Contests of Chance and Skill, therefore, they need the permission of their
lawful superiors.
2. It
is necessary that the game or contest be freely and willingly
entered into. This is necessary for the
validity of the Contract, since mutual consent is of the essence of every
contract. Should a player be induced to
become a participant through fraud, deceit or fear, he may rightfully claim
restitution, that is, that his losses be refunded by those who wrongfully
induced him.
Interestingly,
if the person forced into participating against his will were to win, he would
not be obliged to make restitution on the grounds that he was not guilty
of wrongdoing.
3. The game or contest must be played strictly
according to the rules. That is,
cheating is
forbidden.
Nevertheless
(my author goes on to say), certain tricky strategies are permitted. These would be to pretend one has a
lousy hand or a very good one, so as to make the other players bolder or more
timid respectively. Neither would it be
wrong to look at the cards of an opponent, who through negligence is
unknowingly showing them, nor to omit telling an opponent that his hand is
showing.
3. The
participants are to be of the same general level of skill at the game or
contest being played. In other words,
each of them should have an equal hope or chance of being the winner. In some contests or games, as you know
(golf, bowling, etc.), equality is brought about by means of handicaps,
so that the players of lesser skill would then also have a reasonable hope or
expectation of winning the prize.
The
author of the textbook concludes this segment on Games and Contests by
observing that in most countries, the Civil law does not legislate at all
concerning these kinds of Contracts.
Wagering
(Betting, Gambling)
As you know,
these are mutually agreed upon contracts of chance whereby two or more people
put up money in favor of a particular, specified and hoped for outcome of an
event (usually a sporting event) yet to take place. Whoever has guessed correctly wins the money put up by the losing
bettors.
In and of
itself, wagering is licit and just ONLY when ALL the bettors have an equal
chance of winning or losing. There
is always danger, however, that someone may be inordinate and immoderate
in the practice of wagering. It can
even become addictive, as, again, you all know.
Wagering is
immoderate and inordinate when an excessively large amount of money is
risked, or when it causes someone to neglect his duties as a wage earner. Again, as you know, one sign that a person
has become addicted to wagering is the fact that he gambles away money
needed to pay bills and to supply what is necessary to support himself and his
family.
Provided the
event which occasions the wagering is not in itself illicit or sinful, certain
conditions must be satisfied so that the contract may be free of any hint of
injustice:
1. All
the wagerers must have the same adequate understanding of what it is they are
betting upon. Otherwise there is no
true, mutual consent.
2. All
must be equally uncertain as to the outcome of the event. It is for this reason that drugging
of racehorses is outlawed, and why athletes are forbidden to take steroids.
3. That
the amount wagered (and won) be proportionate to the odds.
It
seems to me that there are several reasons why Civil governments legislate
concerning wagering. One is that it is
so much in our blood collectively speaking, that the practice must be
somehow protected from being taken over by organized crime.
Another
is that civil governments customarily tax all kinds of transfers of money from
one person or entity to another. There
is so much money changing hands as a result of gambling, that governments can’t
resist claiming a share of it.
Although,
as we said above, Catholic Moral Theology acknowledges that gambling (wagering)
can be good and licit, one Saintly Moral Theologian, Saint Antonine, had this
to say about it.
Money
won through gambling is filthy lucre (lucrum turpe). It serves no useful purpose.
Rather, it results in emptiness and prodigality.
Lotteries
A Lottery is
something we are all familiar with, since almost all of the States of the Union
sponsor a Lottery, and some States offer a host of other related games of
Chance as well.
My textbook
defines it as: a Contract of chance
by means of which, for a certain price, a participant acquires the right to be
among those who could possibly be the winner of one only prize, or one
of the winners of several prizes of varying value, should Chance (luck)
so determine.
Again, in
Catholic Moral Theology, a Lottery is not of itself illicit, as was said of
Contracts of Games, Contests and Wagering.
Like the other
two kinds of Contracts of chance, also, Lotteries can be the occasion of
abuses, with the result that in many regions they are prohibited by Law, or a
least loosely regulated.
That they also
may be free of all taint of injustice, therefore, certain conditions must be
satisfied:
1. That
in the drawing for the winner(s) every taint of fraud and deceit must be
scrupulously avoided. That is to say, everyone
participating must have an equal chance of winning, (proportionate, of course
to the number of tickets purchased) and the entire advertised prize or prizes
must be faithfully awarded as to number and value.
2. That
the rules and regulations governing the drawing (Lottery) be clearly and
publicly made known to every prospective participant.
3. That
there be an equitable proportion between the price charged to participants and
the hope (chance) of winning. Thus the
larger the number of the participants, the lower should be the cost of each
ticket, due consideration given, of course, to the value of the Prize or
Prizes.
According
to the author of my textbook, the sponsors of the Lottery, that is,
those who reap the benefits thereof should not make a profit that exceeds the
profit made from an equal amount of work when expended in conducting a lawful
business.
There
is however, an exception: a greater
margin of profit is permissible when it is known to all the participants
that the profits will benefit a charitable endeavor, or will benefit the State
or nation that sponsors it. In this
situation, the Lottery is nothing more than the occasion and the vehicle of
giving a charitable donation or contributing to the common good of the society.
We
go on now to consider the 3rd and final question in the section on
Contracts of Chance, which is:
Speculation
in the Stock Market
The Stock
Market, according to my textbook, is a kind of Bazaar or market place
where goods themselves are not sold, but only titles or evidence of titles to
goods (things of value) are sold.
Furthermore, he
says there are two kinds of Stock Market:
the pecuniary and the commercial. The first has to do with the sale of
ownership shares in Corporations, or of shares in loan repayment obligations
(bonds) or Corporations or government entities. The second has to do with the sale of futures, that is, of
future, yet to be gathered harvests of things such as coffee, sugar, wheat and
other grains, and their derivatives.
Surely all of you, as laity, know more about these things than I
do. One thing I do know, however, is
that the values of the shares traded on the Stock Market varies from
day to day.
In any event,
the contracts, which my textbook calls speculations, are something very special. From the way he describes them, they refer
to the sale of ownership shares chiefly, and in such a manner that they really
are forms of gambling.
Apparently
there are buyers who agree with Brokerage houses to purchase a specified number
of shares (usually in very large blocks) at the current value, and then to sell
them back at a later, not too distant date, again for the value current on the
day they are re-traded. Because the
number of shares sold and bought back in this way is very large, it is evident
that the monetary loss and corresponding gain to the contracting parties can be
considerable, since values can increase or diminish considerably within a
relatively short space of time.
Apparently,
too, there are variations on this gambling theme.
Sometimes the
players do not really buy and sell the shares, but just make a bet that
the value of a stated number of shares of a certain Corporation will have risen
or fallen after a certain length of time.
On the specified day the loser pays to the winner the difference in the
values on both the beginning and ending day of the stated interval.
Sometimes,
shares are not sold, but the Brokerage house sells Options to buy so many
shares by a certain date, during which time the Brokerage house must hold
that number in reserve. Then, depending
upon the performance of the shares on the market, the option may or may
not be exercised. Although the holder
has paid for the option, and would have lost that money if he did not buy,
likewise the Brokerage house might have lost money for not being able to sell
those shares at a profit during the interval that the Options were in effect.
Moral
Principles Governing Trading on the Stock Market
As far as the Contracts
of Speculation are concerned, the rules and conditions given for Games and
Contests, Wagering and Lotteries are applicable generally. In particular:
1. Speculating
on the Stock market is not wrong in and of itself. It becomes wrong only in virtue of some unjust practice
associated with it in specific instances.
2. Those
unjust practices would be the use of fraud, deceit, fear, etc., for the purpose
of raising and lowering the cost of the shares, resulting in personal benefit
to one, and corresponding loss to another.
3. Indirectly
it could be wrong for one to speculate, as for example, were one to overburden
himself with contractual obligations, and thus risk hurting himself and others
by not being able to comply.
Thus we
complete the section on Contracts of Chance.
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