Gambling is the wagering of money or something of value (referred to as “the stakes”) on an event with an uncertain outcome, with the primary intent of winning money or material goods. Sound like being an auctioneer? For many, it does.
For instance, an auctioneer named Emily meets with Frank and Wanda Horton to discuss their upcoming move to a retirement center. Most of their furniture, tools and household items will be sold at auction.
Emily quotes a 20% commission and $2,500 in expenses for advertising, setup, cleanup, and day-of-auction staffing. Frank and Wanda sign Emily’s contract and her work begins the next day inventorying and photographing their personal property.
At this moment, Emily is (essentially) gambling that the auction will produce sufficient proceeds to cover her expenses, plus reward her with a meaningful commission and lastly satisfy (or exceed) Frank and Wanda’s expectations.
If the auction is a “home run” then all is well and Emily’s bet paid off for her, Frank and Wanda. If the auction is poorly attended, prices are low and/or Frank/Wanda’s expectations are not met, then Emily lost this bet.
I think it’s fair to say that experienced auctioneers tend to place better bets than inexperienced auctioneers. In other words, it’s a game that auctioneers can become good at …
Another related question that is often asked is: “Is buying at auction a form of gambling?” For many, it is — as we discussed in 2012: https://mikebrandlyauctioneer.wordpress.com/2012/01/09/is-buying-at-auction-considered-gambling/.
For that matter, earlier we talked about Frank and Wanda — who also took a chance (gambled) on Emily’s honesty and proficiency. It could be that this auctioneer here, these auction sellers and many of these auction buyers were all gambling.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.