You offered a great alternative - to do something. He chose to do something he knew -a kiddie casino- instead of something he didn't - hiking, etc. That's fine. When given a choice, most people do what is familiar.
This suggests you need to make things like hiking something familiar to him so that he'll know the fun of those options. That's hard to do from a distance, but not impossible.
Here's what I'm learning about teaching a child from afar/teaching other people's kids/teaching frugality and other "weird" things/being an example. Take what applies; discard what doesn't.
1. Children are never too young to learn. Even
in utero they have the capacity to remember sounds, which helps them acclimate once they are out.
Even if they don't understand everything you're saying right now about mustachianistic ideals, you are building a foundation. Children catch on to rules quickly and stick with them if they are exposed to them regularly.
2. Even things that are weird or odd to other people can be a norm for your nephews and nieces. Frugality - as with anything else- is a question of constant exposure to the idea of it.
Example 1: My nephews' parents do TV and movie-related things for fun all the time. I don't like TV and don't have one. So, when my nephews were younger, I used to think they needed to go to the movies or they would be bored. It hated it, but I did it. So every time they came over, that's what they'd ask to do. I had set that routine.
My parents reminded me that children do not need to go to the cinema at all. I observed that at the grandparent's house, they didn't ask to go to the movies; they'd just run around, read, create their own games. Now, when they come over, I dedicate a space for their books and toys. We go to the park, we enjoy the house and doing things together, like making dinner, talking and playing with their toys or playing outside. Not having a TV and not going to the movies doesn't bother them at my home.
Example 2: When I was a kid, it was a family norm to be overweight. Most of my relatives would make excuses about metabolism and genetics. However, I had an uncle who was thin and healthy, so I grew up knowing that I had options. He never railed against the plump adults, he never took a stance on skinny vs. fat (as far as I know), he just
was trim. I admired him and took that example, even though we never spoke of it.
3. Even if you live far away, you can still be a consistent example by communicating regularly. It helps if you are in their lives regularly so that they can see how you live, how you gather food, how you shop (or not), how you garden. They'll make the comparisons between what you do and what their parents do. Great life lessons come up at the spur of the moment, so be there for as many moments as you can.
But since you seem to live far away, you can still communicate. Discover what they like and teach them from that. For instance, if they enjoy strawberries, tell them about the strawberry seeds they'll plant when they come to visit you.
Example: As a kid, I visited my grandparents' farm maybe a couple times per year. We'd make the occasional phone calls and write letters now and then. My grandmother would always send a card on my birthday (she still does). All of this reminded me of their farm and the conversations that would naturally evolve there. Many of those conversations would be about what we on this forum would call mustachian-ism.
4. Tell stories of frugality (and other virtues). Talk about what you or other members of the family did/do that was/is frugal. It's especially memorable to kids if you can find examples from when a relative was their age. But the point is, you're developing a relationship with them and that relationship includes narratives of mustachianism.
Example: My grandfather always talked about building his own house, raising his 10 kids on a small budget, how to farm, etc. Those stories had a profound effect on my adult life choices.
It also helps that my mother (his daughter) speaks in good terms about my grandparents. Which brings me to another point.
5. Always be respectful of the parents and try not to contradict them explicitly. You seem to be doing well on this. A key to a great relationship with the kids is a respectful relationship with the parents. Just remember that if you are ever not respectful, the kids might not take heed to what you say because you'll be seen as attacking their heroes. You are there to supplement, not overhaul. [I have to remind myself of this a lot, so I guess I'm giving myself advice.]
Example: One of my great uncles is far from great. He thinks everyone else is stupid, so he stole an inheritance from his 11 brothers and sisters. My grandfather and siblings knew what was going on the entire time and had no interest in stopping it. They are all in the mustachian Position of Strength and are not upset at all.
Still, I view this as disrespecting my grandfather - the very man who supported the great uncle through college. As you can imagine, from a very young age I have viewed all communications from the great uncle as suspect. He might say something clever and life-changing for all I know (I doubt it; the man's a crook.), but I'll never know because I don't think it's worth the time to separate the wheat from chaff with him. I'm polite, but that's it.
I'm not saying my way of handling my great uncle is the best way, nor am I impugning your integrity and saying you'll do something criminal because you disagree with how your sister lives. I'm using this story as an extreme cautionary tale against not appearing to be against the little ones' parents (or grandparents) or anyone else they like or are around all the time; you can totally cancel out any good thing you're saying.
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You're doing a good job. It's great that you want to cultivate a relationship with your niece and nephew.
I guess another way to live by example might be to marry and have kids of your own so your nephew and niece will have little mustachian cousins to infiltrate their home and help them rethink their parents' model of finances. [I'm only half joking.]
Even if the little tykes don't grow up to become frugal, they will know the option is available by interacting with you. That alone is worth the time to invest in their lives.
