[JackFr]

Not (necessarily) true.

Expected value is not the only thing to consider. Higher moments matter.

Insurance typically has negative expected value but it’s rational to buy it (in conjunction with owning the insured object) to reduce one’s variance.

Gambling will increase the variance of one’s portfolio at the cost of expected value, which can be rational depending on one’s situation.

[notahacker]

An awful lot of casino gambling involves series of small stakes bets on low payout options which don't even meaningfully increase upside portfolio variance over time after the house edge has been taken out. Might still be rational from a utilitarian perspective if one really, really enjoys card games of course, but not from a portfolio allocation perspective.

Apart from weird edge cases where an actor needs to double their money overnight to return to solvency in order to have a chance of benefiting from an income stream in future, there aren't many cases where it makes sense from a portfolio allocation basis given the existence of non-negative expectation bets in other markets with a wide range of possible variances. The insurance and investment management industries are built on the principle that economic rationality works in exactly the opposite way to gambling: that inherent value exists in reducing risk.

[wpietri]

Exactly. Thank you.