In recent years a new concept of usury in the wide sense has emerged. It is based upon the fact that in modern times the function of money has changed. In ancient times it was solely a medium or measure of exchange that could not be turned easily into capital. With the emergence of the capitalistic system, opportunities for investment increased, and money assumed the role of a factor of production. Money assumed a new value and function: it became virtually productive, and so today money does fructify. To place money, then, at the disposal of another to be employed in profitable ventures constitutes an economic service and, as such, is worth its price as any other service. This price of money constitutes modern interest, which seems to differ radically from the old contract of interest and to be more one of hire or lease. So viewed, interest, or the price of money, is determined in the same way as the price of any other service; the unjust price, or usury, is an excessive price. This is the modern concept of usury.
2137. Principles Obligatory in All Forms of Contract.—The principles of equality and honesty that are morally obligatory in sales and loans at interest are also obligatory in other forms of contract. The following are examples of equality.
(a) Gratuitous Contracts.—Obviously these contracts do not require equality in respect to recompense, since their nature is that no recompense is given for what is received. But in other ways equality must be observed. Thus, there must be mutual consent, offer on one side and acceptance on the other; there must be mutual respect, for each must honor the gratuitous promises made to the other; there must be a return of the same thing in quality and quantity as was borrowed, unless this would mean (as in _mutuum_) a loss to the borrower, etc. Moreover, the fact that all the advantage is received by one party is balanced by the fact that this party must bear the ordinary expenses and is held to special care himself, but cannot exact special care in the other party. Thus, a borrower has all the advantage from a loan, and he is obliged to use extreme care in using the lender’s property, while a depositor has all the advantage from the contract of deposit and cannot demand more than ordinary diligence of the depositary in guarding the goods left with him.
(b) Aleatory Contracts.—Aleatory contracts, or contracts of chance, are concerned with some uncertain event whose outcome depends upon luck or skill or a combination of both. The chief forms are betting, lottery and gaming (all are considered as gambling), to which must be added insurance and market speculations. All of these are indifferent in themselves and obtain their morality from circumstances. However, gambling, besides conforming to the requirements of contracts in general, must observe some special conditions to guarantee its lawfulness:
1) The outcome should be objectively uncertain and not a “sure thing” to be truly a contract of chance. While the contractants may be subjectively certain of winning, neither may so manipulate the matter as to exclude the other’s chance of winning. Should one insist upon betting against another’s assurance of a certain outcome, he is making a gift, hardly a bet.
2) Each must stake what belongs to himself and is not needed for satisfying other obligations, e.g., supporting one’s family, paying creditors, etc. Failure to observe this condition leads to many sins of theft or negligence. Should a person gamble with money belonging to another, _per se_ he has a right to the winnings under the title of industrial fruits. However, if it would be impossible for him to restore in the event of a loss, the wager is void and the winnings must be restored to the other player, since the amount bet could not be lawfully won by the other contestant.
3) A reasonable proportion should be observed between what is bet and the probable winnings, and all betting should offer a fair chance of winning. Equality is not necessary, but odds and handicaps should be offered by the favored side. However, the odds may be waived by other bettors.
4) Honesty must prevail to exclude fixing the outcome or an unlawful style of play. The conventions of each bet or game establish the norms of cheating. Thus, hidden cards, marked cards, false dice void a bet. But running a horse solely to “tighten him” or “round him into shape” without full effort to win is expected in horse racing. Winnings through cheating must be refunded.
5) The loser must pay. Since civil law forbids many forms of organized gambling, the question arises whether a wager that has been outlawed constitutes matter for a valid contract that must be fulfilled. If the law is purely penal, the contract is valid and the obligations ensue; if it is a law that binds morally, then the contract is invalid, and the loser probably need not pay, but has acted sinfully in gambling.
Although not sinful in itself, gambling is so open to serious abuse that it has been strictly regulated by civil laws which bind in conscience.