The fact that ESPN itself has a sports betting app tells you all you need to know about the perversion of sports now that gambling is blessed by the government.
I think I can live with the legalization of sports betting if there are strong restrictions against marketing and advertising. If you want to ruin your life that's your decision, and you can always just take the same amount of money and bet it on the stock market. But the way that advertising has its tentacles in our culture now... it's bad.
It has a terrible potential to corrupt sport. When you can bet a lot of money on how long a college players plays, or how many points they get in a particular game, what's to stop them from having a relative make a bet and they just fake a cramp?
The stock market is heavily regulated. I don't think you should ban sports betting, because like many vices it's easier to control if it is legal. According to Nate Silver, the more you let people make bets on obscure things the more opportunity their is for participants to cheat. So you should probably restrict betting to things no one participant can control (like the score). You also should try to make it difficult for a person to lose too much. You can't stop it, but you could probably make it harder. In the stock market there is a "qualified investor" that is allowed to take much bigger risks. You could make rules to punish betting sites that accept too many bets from destitute addicts. It wouldn't be perfect, but you can have liquor laws without having prohibition.
>It has a terrible potential to corrupt sport. When you can bet a lot of money on how long a college players plays, or how many points they get in a particular game, what's to stop them from having a relative make a bet and they just fake a cramp?
Or get assaulted or murdered, internet death pool style? All kinds of really fucked up incentives are created by these legalized betting apps.
I wonder how many people out there would take an assault charge to win a bet. Since there’s a market you could even get investors. Get $10million together, bet
it with high odds, take 25% cut, spend 10 years in jail, live out the rest of
your life in comfort.
Is any of that illegal besides the assault itself?
Very much so. Even planning it, without carrying it out, would be subject to criminal conspiracy charges. Recruiting people to the scheme (even the investors) would be soliciting a crime. It's illegal to interfere in the outcome of the game once the bet is placed. Finally, once it was proven you rigged it, you'd probably be forced to return the winnings anyway.
I'm sure an actual attorney could come up with even more reasons this is illegal.
Oddly enough, several professional sports gamblers were aware of a NBA referee manipulating game from their data analysis, well before the NBA became aware of it.
That was probably 10+ years ago and I suspect data analysis by the leagues is much stronger now. Still an insane line that needs to be walked between the leagues getting revenue from the sportsbooks and gambling not impacting that play.
NBA bans Jontay Porter after gambling probe shows he shared information, bet on games.
“Porter took himself out of that game after less than three minutes, claiming illness, none of his stats meeting the totals set in the parlay. The $80,000 bet was frozen and not paid out, the league said, and the NBA started an investigation not long afterward.”
I'm surprised that people seem to just now realize that sports betting is a bad idea. As you said, the worst aspect is the large amount of marketing and advertising these platforms receive; I wouldn't care if they weren't pushed so heavily.
Before it was legal, most people's experiences with sports betting were small wagers between friends. Maybe a few large bets that they'll still talk about to this day. Gambling with friends or even just coworkers comes with natural limits: the size of one's bets is limited by others' aversions to risk, compulsive gambling is easily spotted, and the players' winnings/losings are zero sum.
Yes, there were illegal bookies before legalization, and they had all the problems of legalized gambling plus more. But the law-abiding (or at least casually law-breaking) majority of voters didn't think increasing the prevalence of sports gambling would hurt. Not too mention all the revenue promises (more benefits, cuts to other taxes). It's no surprise legalization was politically popular.
Yeah, making a small "fun" bet on a game is a way to make it more interesting. I've done it a few times and it really does. I'm talking maybe $20 though, I am far too frugal to put any real money at risk on a bet. I don't go to casinos for the same reason, I'd play a few hands or put maybe $20 into a slot machine and then I'd really start thinking about how I'm flushing my money down the toilet and I'd stop having fun.
My mother in law loves it, she will go to the casino and come home up $1,000 or down $1,000 and it's all just entertainment to her. She loses probably a steady 5% on average, which is exactly what the casinos want.
no... if she's losing a steady 5% of $1000 bucks, she's paying 50 dollars to the casino. That's not enough for the casinos... her room costs more.
The casinos want her to spending a lot more money. That's the really big problem of gambling... most people can do it in a relatively healthy way. But problem gamblers make the house most of their money. The house is strongly encouraged to find the problem gamblers and focus on keeping them.
I lived in Australia for quite a while. It's a terrible example of what can happen. There was recently a very good BBC article on it and the connection between sports, gambling, and marketing: https://www.bbc.com/news/articles/cx2yg3k82y0o
Similar to many other toxic things, once the genie is out of the bottle and the government gets used to the revenue it generates, there is a large disincentive to tackling the problem.
This. There’s plenty of things in society that are similarly bad, legal, but have restrictions on how you can sell them. There’s nothing inherently different about sports betting than options trading on a brokerage platform. But only one of them is advertised in every commercial break during a sports event.
People have known for years - that’s the really terrifying part. Heck, when I was in business school I wrote a paper on the dangers of sports betting. There were many resources available then…and heck, Gmail invites were a rare commodity when I was in school.
Edit - I just found a printed copy of the paper - I wrote it so long ago that the term 'sociopathic compulsive consumer' was being used. At the time, I found a lot of evidence of casinos using terms like 'instant gratification' in their marketing commmunications. This is over two decades ago. Heck, the actual paper is on a 3.5 inch floppy.
I was briefly involved with a major sports & esports betting company. It was way grosser than I ever imagined, and they had multiple astroturf campaigns working on legalizing betting in more places.
Took me from a generally laissez-faire attitude about gambling, to being entirely on board with simply outlawing at least that sector of it. So very nasty.
(Incidentally, this did answer a question for me: “how did esports get so big so fast, financially?”. Never made much sense to me. The money’s in gambling, and it’s a fucking lot of money. Lightbulb went on and I felt dumb for not realizing it sooner)
I'm completely with you, my friend. I was in business school when I studied betting. All the stereotypes of business students are true - I could have suggested putting thalidomide into lollipops and nobody would have batted an eye.
Despite that, my class had a serious problem with legalized gambling. One of the most free market absolutists I have ever met even concluded that gambling should just be outlawed. He was (and I believe still is) completely in favour of all drugs being legalized, but legalized gambling bothered him in a way that legalized crack cocaine never could have. What pushed him over was how they fund legalization campaigns with all these promises for help for addicts - they'll usually even offer to put a portion of total book into rehabilitation. And then as soon as it is legalized, they will specifically target people who could become addicted.
It’s where a ton of the money in the overall sector comes from, and why a lot of the viewers are watching. There’s a large audience that wants anything to gamble on, and gaming’s very convenient for streaming and stats-collection and such, plus it has frequent matches. There are sponsorships and all that, but I doubt those would be as big as they are without the gambling, either (the audience would decline significantly). Lots of the tournaments are funded wholly or in part by gambling.
Gambling is the only way for some of us to make Sportsball interesting, and attempt to fit in with the absurdist normie culture in which we live.
Realistically, there's nothing particularly interesting about the Dallas Frackers versus the Washington Rentseekers. But if you have money on the outcome, watching a game (with a sufficient supply of alcohol) is actually bearable.
Edit: I'm explaining a real, actual reason for the value of sports betting for some people, but it seems that the Sportsball enthusiasts don't like desecration of their Holy Church. I apologize.
If you loathe sports that much why are you forcing yourself to watch them? "Fitting into absurdist normie culture" is ludicrous. Are you not capable of making friends without drunkenly feigning interest in their hobbies?
Short answer: No, I'm not. People are generally extremely intolerant of others who deviate slightly from the norm. Having friends is a fun fantasy, though.
Why do you bother even watching it at this point? I think I watched exactly one soccer game in last 5 years (it was a final of something big, can't remember now), there are a lot of other interesting activities in life.
> I'm explaining a real, actual reason for the value of sports betting for some people, but it seems that the Sportsball enthusiasts don't like desecration of their Holy Church. I apologize.
I'm far from an expert in the issue, but I think that most people that support the legalization of prostitution don't support the legalization of human trafficking.
That's a really bad example because prostitution by itself is victimless crime. In fact, it's perfectly legal when money doesn't change hands! With gambling you have a winner and a loser, so all the other issues end up downstream necessarily whereas human trafficking (and other issues with sex work) is an enabling tool for criminals running prostitution operations.
i think in both cases regulation is the key. for gambling there could be max $ per bet/month/year and for SW more testing and background checks to blacklist bad actors
The challenge is defining gambling, no? I agree with you, it's easy to determine all of the nasty gambling now. But by the time you know it's gambling as in addiction versus gambling as in a flawed but interesting part of a game, it's too late.
It's worse than bad, I have seen betting ads and placement in content that regular advertisers would not touch with a 10 feet pole, e.g. in pirated broadcasts
Most gamblers are casuals. I spend $5-10 a week during football and usually am down like $10 at the end of the year. It provides a lot of entertainment, sucks that some people can’t control themselves but I shouldn’t be punished for that.
Agree that heavily regulating and perhaps banning advertising needs to be done.
> Most gamblers are casuals. I spend $5-10 a week during football and usually am down like $10 at the end of the year
An annual cap of $500 on bets per social security number seems reasonable. At the very least, 10% of state's median income (a whopping $4,222 nationally [1]).
> a proportion of income would work better, because $500 would be a lot for some people
Sure, if a state is willing to enforce that added complexity. I'd still have a hard cap to remove plausible deniability. Otherwise every trailer-park resident will be a millionaire while FanDuel et al do a Facebook-can't-tell-if-I'm-12-or-52 shrug.
Agreed. I've never been into sports and never watched more than a few minutes of any game. But for a few years I was in a small stakes weekly football pool and it made weekends really fun. Suddenly, I wanted to know if the Rams or the Dolphins won, and by how much. I was tracking the pool leader boards. I ended up being ahead about $20. That pool ended, and I never joined another one. But it was a mildly fun time.
1) I, a person who gambles neither casually nor as part of an addiction, will pay for gambling addicts; or
2) You will be punished in the form of your degeneracy becoming illegal.
I’m not sure why you should be the one to get the free pass here.
"perversion of sports" is a particularly American viewpoint, I think! The latent streak of puritanism, maybe. Yet, somehow, the NCAA (which is wage theft on a truly industrial scale) is morally okay. It's weird.
(The intersection with US ad culture – for existence, drug ads on TV – is maybe also unique.)
Sport has, as a business, always been random number generation for gambling purposes. Some, like horseracing, have basically no other point. Gambling is going to happen, and like weed, it's probably better that it's regulated and taxed than entirely underground. There's no more gambling content now than there was fantasy football content before, and fantasy football was gambling too.
If we're looking for a perversion of sports, though, how about the NCAA's industrial-scale wage theft? US professional sports should have junior systems which pay the players like the rest of the world...
The main problem is that addiction kind of goes around people's interests and their better judgement.
Normally I agree, we don't need to be making 'moral' decisions for people. If they want to do something 'sinful' - like gambling - have at it.
But the people who promote gambling have lots of money. And gambling is basically smoking. So, it gets hairy. They can lie, they can cheat, and they can manipulate people's minds, tricking them into doing something bad for them. And then the addiction does the rest.
Absolutely addiction does; so we're going to ban alcohol (and weed), and then maybe move onto video games and books and and and and?
Prohibition has generally been a lot less effective than regulation. The problem in the US, in my view, is much more the utterly-gutted effectiveness of the regulatory state than it is the existence of legal gambling.
If alcohol and tobacco were discovered tomorrow, they'd probably end up schedule 1, and rightly so. If cannabis was discovered tomorrow, it would probably be unscheduled, and rightly so.
We literally have a system of tiers of addiction versus potential value for addictive substances. A slippery slope argument is pretty silly when we literally already created a staircase.
Who says we need to keep going? That's not a hypothetical question - who says? Why would we do that?
I agree regulation is good, but prohibition is a type of regulation. There're also levels of prohibition - you don't need to prohibit all of it, maybe just the most obviously harmful.
Like you can ban online gambling but keep casinos if you want. I don't know, I don't have the analysis on which is worse.
There's an ugliest painting in most galleries, but that doesn't mean we ban them. If the worst legal hobby is beneficial, why would anyone want to ban it? At some point before that, a threshold will be reached where people feel that the harms of a ban outweigh the harms of the practice. I really don't see how this slope is slippery.
Fine, but then the US has spent a terrifying amount of my money on sports and I want it all back if the point of their sophisticated pro-social spending (which strangely has to include private ventures getting handouts) is actually to extract wealth from the poor and the weak.
22% of revenue, not employees, colleges don't accept employer liability. This settlement should be rejected as unconscionable.
Public universities (and private universities which actually care about education!) would be well advised to get out of the business of running professional sports teams, I think.
> Yet, somehow, the NCAA (which is wage theft on a truly industrial scale) is morally okay. It's weird.
Outside of top men's basketball and football programs, there is no real wage theft occurring. These minor sports are avocations for student athletes, and not businesses for the universities.
It's non-zero value, but we can't say it's the market-clearing price for their services. And anecdotally the quality of that education is compromised.
Student-athletes in the serious football and basketball programs spend a lot of their time at practice. During the season, travel to away games eats up much of their free time. They're "encouraged" to take only easy courses. There are reports of grading corruption so their GPA is high enough to remain eligible to play.
Being compensated in kind with housing, food, and education (not to mention significant "grants" from boosters clubs and brand deals) is not the same as wage theft and it is verbal slight of hand to suggest otherwise.
If the players aren't employed by their teams, provided with healthcare and pensions and all the rest, then it absolutely is. The NCAA (for revenue sports) is a scam and everyone involved with any of it is morally bankrupt.
>If the players aren't employed by their teams, provided with healthcare and pensions and all the rest, then it absolutely is.
Why? They are being paid, fed, housed, and educated in exchange for playing sports at nearly the highest level. Where is the injustice? They live lives of opulence and leisure that kings of previous ages could not even dream of.
Outside of Stamford and the Ivies, I'd wager that most players, especially in football, are taking easy classes (and in some cases having tests taken for them) and even then, things are quite easy for them. They aren't taking physics, economics, etc.. that actually prepare students for the real world. There's not enough time for that.
I saw it for myself at a big D1 football program. You think at a school like Texas or Alabama, a school that worships football above all else, would let their athletes be preoccupied with school? Come on now.
Elite football and basketball athletes at major programs are tiny, tiny minority of all student athletes in this country. I went to a decent regional state school (DII at the time) and I had advanced economics and math classes with a number of athletes, including football players. It's just not correct to generalize from the programs that are NFL feeder programs.
College athletes get healthcare. They have team doctors and trainers, and for general healthcare if they aren't covered by their parents' insurance they will have insurance through the school (required) which will be paid out of their athletic scholarship. I don't know of any major university that would permit a residential student to not have health insurance coverage.
Funnily enough... considering how healthcare in the US is tied to employment, then professional athletes of any age should be covered for it by their employer.
People who do pro sports are constantly pushing their bodies to the very limit of what they can do. With those constraints, accidents and overruns are much more likely to cause extended damage.
That only applies to scholarship athletes. Walk-ons get no such benefits. They're working for free while their school is pulling in $60+ million a year in TV money to watch them play and the head coach is making 7 figures
> Sport has, as a business, always been random number generation for gambling purposes
I personally don't care about the business of sports. Most sports were just ways for children to get exercise and everything that came after it was a perversion. Fat men sitting on couches watching other grown men throw a football around isn't much better than those same men gambling on it.
The article appears to break gamblers into 3 groups.
1) casual players
2) problem players
3) professional gamblers.
so basically casual players gamble something like 50 bucks a year. Problem gamblers get money however they can (and although it's unstated and I have no evidence, I think this is where the actual money comes from). And finally, people that can snipe the mispriced bets, and make a lot of money.
Feels sort of submarine-ish. Casino's can't survive off casual players. They need the addicts to make payroll. The pros eat up casino margins.
I dunno. Feels like a "I run a business, but I'm not really good at it so we need laws to force the pros out". Please don't regulate me, but regulate who can play.
Interesting that it's in Bloomberg. Interesting that the casinos are so bad at laying odd they lose. I have no sympathy for anyone but the addicts. Those folks are sick and need help.
> Casino's can't survive off casual players. They need the addicts to make payroll.
The fact that the pros are simulating problem players because then the betting apps give you more leeway, e.g. by "send[ing] you bonus money" and raising your limits, paints the picture quite effectively in my book.
> Casino's can't survive off casual players. They need the addicts to make payroll
To what degree is this true? Sure, a casino with a massive spend on free alcohol and structure needs a high profit margin to return its capital. But betting apps don't have those costs.
This is backwards. Casinos offer huge cross subsidization opportunities like getting people to spend lots of money in clubs and bars or gamble on games like slots that have a huge house edge while apps have near zero cross subsidization opportunities and massive overhead. An app running at draftkings scale costs a lot to operate.
I’ve believed for a long time and continue to that the math on these businesses just doesn’t work. Eventually they won’t exist because they aren’t profitable.
>> I’ve believed for a long time and continue to that the math on these businesses just doesn’t work.
These companies and their apps feels like they're framing this as a social media app. Get together with your friends, play against each other. Its very, very much like fantasy football which generates billions in revenue every year. To me, those are the people and the money they're aiming for - not the casino betters.
I would assume this is the early stages of any market. You have a lot of companies jumping into the fray and trying to make it work. Then as time goes on, like you said, the money just won't work for them and at which point you'll see the standard consolidation where the companies who figure it out will still be there, possibly buy up some smaller companies and so on and so forth.
It will be interesting to see if companies like Draft Kings and Fan Duel can outlast some of the bigger players coming in like BetMGM and other casino backed companies. I don't think we'll be seeing "Bob's Bets" app anytime soon, which would support your idea that this is most likely a loss leader for these casino's, and what's the threshold where they will pull out?
There’s a reason MMOs let you put money in and make hoops to take it out. Otherwise I can overpay for garbage from my “associate” and he can cash out free money with very little paper trail.
Bookmakers can always lay the odds so that there’s equal money on each side. Then they’re just taking a 10% rake with zero risk. If they start getting killed by pros they’ll just move to the low risk strategy.
> Bookmakers can always lay the odds so that there’s equal money on each side
No they can't. Large ones can, but the small ones sometimes cannot because they have to match the large ones but in a smaller pool. If everyone knows which team is going to win, diehard fans of the losing team will still bet on their team - large players capture that in their odds and break even. Small players don't have the same mix of customers and so will have to take that loss because they need to compete with the large ones.
Of course overall the small players balance enough the 10% rake from less sure games over the years to make a lot of money but they can still lose 6 figures on some individual games. Small players are less a target for the pros (if only because they know their customer better and so won't accept the pros in the first place).
Remember the small players are often running an illegal operation. They need their reputation of paying out so that customers don't go elsewhere to even turn them in.
Also, for what it's worth, the idea that betting lines and odds are set to make "equal money on both sides" is a very simplistic and often ignorant talking point. It is quite possible if not common, especially on big games like the SB, for the books to have significant exposure to one side.
Making betting lines is a crazy complex mix of the house essentially betting on an outcome themselves, tempered by a limit to exposure/liability as well as the need to keep lines in basic accordance with other linemakers.
I wonder if street bookies make money “for someone” by somehow bringing lending in house. It would be the pair of activities that would be profitable. But they wouldn’t have to be that good at bookmaking.
They have shareholders expecting massive year-over-year revenue growth and are directly comparing themselves to the free-to-play/mobile gaming space where whales seem plentiful, so of course they are optimizing for whales long-term over sustainably building a low margin overhead product. You can see this almost directly in many of their advertising plans, Draft Kings and the others advertise just like the mobile games space. (They just have fewer places they can show their advertisements from old gambling advertisements laws.)
Being a bookie is making a market. As long as you do your maqth right, your potential for losses are capped--lots of small bets are actually less risky in this respect. Problem gamblers are a cherry on top, far from essential to any gambling enterprise, particularly not one making a two-sided market.
> We let problem gamblers gamble more, and it's not fair pros take advantage of that dark pattern
The pros are the beneficial bacteria checking how much the apps can prey on the problem gamblers.
When the "cherry on top" (problem gamblers) is responsible for half your revenue (from the Bloomberg article), then that's not just a cherry. That's half the cake.
And it's a really, really, big cake.
It's still cake! The implied assertion is gambling enterprises need problem gamblers. That if you restrict their ability to prey on problem gamblers, nobody gets to casually gamble.
I know nothing about gambling. But I know a lot about market making and the math of being a bookie. And basaed on that, I don't think the claim is true.
Well, I don’t know much about market making but as a member of Gamblers Anonymous since 1998 I’ve seen just about every kind of devastation caused by every kind of gambling. In the last few years I’ve seen a significant increase in the number of very young men coming to us. Here in Australia, the gambling industry absolutely is laser focused on targeting young men using every psychological trick in the book, including such pernicious features as “Bet With Mates (tm)” which is explicitly designed to use peer pressure to lock in and escalate those in the group who may otherwise pull out.
If we accept that almost 50% of revenue comes from 80% of gamblers (a diverse cohort) while the other almost 50% comes from 3% of gamblers (a far more uniform cohort), then of course betting companies would be absolutely defending against any change (regulation) that would impact the 3%. Furthermore they’d be remiss in their duty to their shareholders if they weren’t trying to migrate gamblers from the larger cohort to the smaller.
Intuitively I see all addictive industries the same. The Tobacco industry can, and does, make money off of the odd cigar at a house party. But ultimately, they rely on the constant addiction to have a business model.
It's cheap, and easy, to make nicotine free tobacco like devices. You could lower your cost quite a bit - pretty good for the books! But it doesn't matter, and nobody with half a brain does it.
The aqusition costs are extremly high for online betting and online casinos. If you pay 1000 usd to aquire one customer it is not profitable if they gamble 50 usd / year.
Then online casinos are a bad business and shouldn't exist, just like breweries shouldn't exist if they can't break even selling to casual drinkers and need alcoholics to make a profit, and gun manufacturers shouldn't exist if they can't break even selling to one-or-two-gun owners and need wannabe-commandos and survivalist cosplayers to make a profit.
I worked at a biotechnology company, we had thousands of clients but five of them were 80% of our revenue. In your world, should that business not exist as well?
I don't understand the princple that revenue should be uniformly distributed as a condition for existing. How would you enforce this?
And I’m assuming that the five customers actually benefitted from your company’s work? If so, then they’re not really comparable to gambling addicts, alcoholics, and gun fanatics, right?
We already (poorly) enforce (weak) laws requiring casinos not to prey on addicts.
We already (poorly) enforce (weak) laws requiring bars not to over-serve and alcoholics to get treatment sometimes.
We do almost nothing about gun addicts.
But commenting that something shouldn’t be the way it is isn’t a claim to know how to fix it.
Are those clients addicts who are ruining their lives with your product? If so, yeah you shouldn't exist, or at least you need to downsize and try to get that percentage way down.
Case by case. We already do this, this isn't a hypothetical. You can't advertise tobacco anymore and guess what, lots less people addicted and we're saving literally millions of lives in the long run.
Or, if we decide to come back to Earth, we simply make the obvious restrictions on a case by case basis via cost analysis. Then we stop when we feel like it.
For example, tobacco is now extremely restricted. That's an obvious industry that profits off of addiction. We went ahead and fixed that. The result? Millions of lives saved.
Oh, but the spooky hypothetical communism! Come on kids, light up these cigs! They make you look cool and masculine! Oh woe is the modern American for being a commie!
What if I want to grow a plant and smoke it? Who are you to take that away from me? What if your experience of life doesn't align with mine, and my cost/benefit analysis for me personally is that I gain more from smoking than I lose?
That aside, I wasn't advocating for smoking to defend capitalism, and think you appear disingenuous for suggesting that. Merely that that is the end route of just dividing everything equally. I'm willing to go out on a limb and say attempting to divide everything equally doesn't work.
Edit:
Apparently I'm arguing against someone I'm unable to reply to, go figure. Either way they appear to be now arguing for the status quo, over 18 regulated gambling, which I fail to see has anything to do with sharing equally, and for some reason they're acting like what they're advocating for is not the status quo. I think I may have stumbled into an argument with a nonsense Chinese LLM lol
That's allowed: again, reasonable and obvious restrictions.
> and my cost/benefit analysis for me personally is that I gain more from smoking than I lose?
All well and good, but that goes out the window when you sell Tobacco.
> I wasn't advocating for smoking to defend capitalism, and think you appear disingenuous for suggesting that
It's not disingenuous IMO, it's obvious. Gambling is addictive, okay so let me draw a comparison to an already existing addictive substance that we've successfully regulated. Oh, look, tobacco!
We managed to do that and not be communist. And everyone is all well and good and we're pretty much all over it. Turns out, only wins! So it can be done, was kind of my point.
> and although it's unstated and I have no evidence, I think this is where the actual money comes from
The article links to a WSJ article that says this group of problem players provides more than 50% of revenue to the betting companies despite being just 3% of all bettors.
> Of the more than 700,000 people in the SMU panel, fewer than 5% withdrew more from their betting apps than they deposited... The next 80% of bettors made up for those operators’ losses. And the 3% of bettors who lost the most accounted for almost half of net revenue
> fewer than 5% withdrew more from their betting apps than they deposited... The next 80% of bettors made up for those operators’ losses. And the 3% of bettors who lost the most accounted for almost half of net revenue
That's a deliberately misleading representation - they offset the 80 against losses rather then the 3%. In terms of net revenue the 3% are less than half net revenue - not more.
I highly, highly doubt that the share of people who consistently stay in category 1 year-over-year is more than a couple percentage points. Lots of people put $50 in to try the whole thing out, lose, then never return. Extremely few people will then return in 2025 and be like "lets do that again".
I cannot for the life of me understand why these apps can't make money off the pros, and instead need to ban them. Ignoring all the dumb promotions these apps do: Sports betting is zero sum, you're betting against the other players, not the house. The odds are set by who you're betting against. Literally, how does it not work out that the profit is just the money from the losers minus the house 30%-or-whatever cut? Is "pros" in this context people who also frequently abuse the (oftentimes wild) promotions these apps run?
But, if it did work like that, the problem is even more apparent: these apps are at best a direct wealth transfer from addicts and idiots to corporations and pros. Wait, I just described the stock market, we're talking about sports betting :)
Sports betting is zero sum, but the market is very inefficient. So you need market makers (the gambling sites) that will fill any order and that set the initial price.
The correct price is often not known for a short while, and that's when the pros bet. Immediately when the line (price) comes out, if they think the line is miss-priced, they will place large bets.
Eventually the house realizes the mispricing and they change the line, but by that point a pro might have placed a six figure bet.
So pros really are winning from the gambling sites, not from other gamblers.
Sounds like this is a self-fixing problem. Either the betting apps/sites will go broke, or they'll get really good at pricing, which will a) push the pro bettors elsewhere, b) maybe bore the problem bettors. Ok, (b) won't happen, but at least (a) should maybe happen. Problem: the betting apps/sites won't be able to hire the pro bettors to help them.
In sports betting you are betting against the house. If the sportsbook sets a bad line, you can lock it in and make money off of it.
Horse racing is what you describe, parimutuel, where the house just takes a commission. But the odds shift even after you place your bet. Very different for traditional sports betting.
Vegas is about entertainment because it brings people to the rows of slot machines. And ideally, from their perspective, traps a handful of whales from every cohort.
In games against the house, the house usually ensures that even with mathematically perfect play, that they will still have a margin (though, admittedly, it's a tighter margin than when a bachelor party is drunk and playing blackjack and hitting on 19 because "I'm feeling lucky!").
Most pros play against the other players (i.e. poker, etc.), and the rake is the rake, regardless of that - the old adage, "If you look around the table and can't figure out who the chump is, you're the chump" stands, i.e. you don't have to beat the house, you just have to beat Bob who flew in from Iowa (not intended to insult anyone or anywhere, just more exaggerate the casual player).
No, advantage betting is pretty much only against the houses, not against other players. While people who know the sport and manage to bet misplaced lines can be winning over a season, advantage betting is the only way to reliantly have a positive EV. Casinos and now sport betting apps try to prevent professionals to use this, but with the number of shit you can now bet on, and since you don't have to tie an account to your real identity yet, it is becoming very difficult to catch that, especially if you muddy the water with dumb bets.
Outside of the US where gambling on sports has been the norm for decades, the bookies tend to run square books and just earn spread + commissions. To the point where pvp exchanges have been the dominant destination for betting for 20 years or so.
These article (and others like it recently) just make me think US sports betting operations are operating on antiquated business model.
All the tech piling into US sports books is British precisely because the British markets (particularly horses, football and tennis, but really everything up to and including political markets) are so much more sophisticated and there's a killing to be made exploiting the rubes in the Wild West.
Really professional gamblers (eg Tony Bloom / Betlizard) are just hedge funds and what we're talking about in this thread is "trying to gain an execution edge".
Yes, this is only because american sports give "line bet" and "prop bets", that anybody can exploit if two apps aren't coordinated. You can do line arbitrage (middling is the easiest, but professionals use props with weird maths and specific knowledge to make a living).
If you only offer to bet on the money line, it makes it way harder for professional gamblers.
A football game in the UK for example has ~60 markets on exchange for a single game with bets on everything from the result, handicaped result (multiple lines), the number of goals, the times of the goals, scorers of goals, half-time results, yellow cards, red cards, number of corners, number of shots at goal, time of first thrown in etc.
> Simulating addictive behavior, says Peabody, is an effective way to get online sportsbooks to send you bonus money and keep your accounts open. This isn’t necessarily because operators are targeting problem bettors, he says; they’re simply looking to identify and encourage customers who are likely to spend—and lose—the most. This just happens to be a good way to find and enable addicts, too.
> Simulating addictive behavior, says Peabody, is an effective way to get dealers to send you free doses and keep your accounts open. This isn’t necessarily because drug dealers are targeting problem drug users, he says; they’re simply looking to identify and encourage customers who are likely to spend most. This just happens to be a good way to find and enable addicts, too.
Imagine justifying drug dealers with this line of reasoning
I worked at a quant sports betting trading company, on occasion it would send the employees to place annonymous few grand bets at physical shops because it's such a problem getting people to continue accepting your bets if you are any good.
And found out that the more you bet, the more percentage commission you pay to exchanges like Betfair, which is quite contraintuitive - commission goes up with volume, not down.
I also learned a few tricks of the industry - when you open an online account they look up your address on Google Maps to see what kind of place you live in.
My betfair commission was heavily discounted back in the day, but that was only on volumes of ~£50,000 a day, and a fair bit more on weekends. Nevertheless their commissions were outrageously high, but the scale of the liquidity they had available was amazing.
50k a day, was that money you were betting? Or were you managing a betting service and betfair was the underlying exchange? I know very little about that world
> it's such a problem getting people to continue accepting your bets if you are any good.
Why don't they just use those people to adjust their odds faster for everybody else ? Or do they limit the size you can bet rather than just banning you ?
> I also found out that the more you bet, the more percentage commission you pay to exchanges like Betfair, which is quite contraintuitive - commission goes up with volume, not down.
I guess they try to cream the most addicted people, seems quite intuitive to me.
> Why don't they just use those people to adjust their odds faster for everybody else ?
The logic of bookies is simple: Don't do business with people who win more than they lose.
It doesn't matter how the customer is getting an edge. A brilliant algorithm? A complex arbitrage system? Deep insight from years studying the sport? Cheating? Time travel? The bookies don't care.
The only thing that matters is, if you win more than you lose you've got some sort of edge. And if you've got any sort of edge, it's more profitable not to do business with you.
Same for casinos. That's why they kick you out if you win too much or too often. They don't need to prove you did anything wrong like cheating. If you aren't making them money you're out.
Top sports books do that already. Lesser sports books don't have enough liquidity to react in real-time. In fact a simple winning strategy is to check what odds Pinnacle gives and see if any bookie offers better odds (arbitrage betting). It will only work for 2-3 bets before you're rate-limited though.
Yeah this is the entire business model of oddsjam. They basically offer a service that compares all book odds to pinnacle and call it "plus EV betting".
Agreed -- I will continue to shout it from every perch I can: politicians who are actively working to proliferate these apps should be (at least journalistically) investigated. I would bet on this being a well-above-random signal of either a personal gambling addiction or corruption.
I know, but I think that they're overwhelmingly used for glorified gambling.
It wouldn't bother me if it was just hedge funds or big corporations or multibillionaires who played with contracts, it bothers me that regular people do it too, and the average John Doe simply doesn't have the same multi-million-dollar option pricing algorithms that Goldman Sachs does. At that point, it feels like it's big corporations leeching money away from poorer people who don't know better.
Full disclosure, I do play with options occasionally, but I have mostly stopped, and I treat it like a casino, or as you mentioned to hedge against risk.
Most of the volume of options trading is done by institutions. By price it's mostly large traders paying each other to mitigate risk. Some smaller traders are getting chewed up in the process, but they are throwing themselves into the machine.
You make it sound like options exist for large traders to profit off individuals with access to less information. That's not how options are primarily used. That is however how sports betting is primarily used.
So is alcohol - there are plenty of people who gamble responsibly and get enjoyment out of it. Taking away the entire thing rather than simply making sensible regulation and dealing with scumbag behavior by corporate bookies is throwing the baby out with the bathwater, not to mention extremely moralistic. And, in the end, prohibition never works - bookies still and always will exist.
> And, in the end, prohibition never works - bookies still and always will exist.
I don't think that's exactly true. Laws introduce varying degrees of friction for citizens to do something.
It's like entrepreneurship. If there are a bunch of laws in place making it hard to start a business, fewer people will start businesses. Some people will still create illegal businesses on the black market, but lots of law abiding citizens will just stop creating businesses because there's too much friction to bother.
That fails to acknowledge that a) the black market tends to be dramatically less safe b) it drives addicts underground where it's hard to identify and help them and c) the addicts this is meant to help will be disproportionately willing to participate in this new, much worse black market.
Bookies scale very well, a small number of them could serve whatever clientele is still interested.
It'll probably turn out similarly to drugs. Prohibition keeps your average citizen away, and makes the market much worse for anyone left in it.
Sure, but if people, for example, started to declare bankruptcy due to gambling addiction, doesn't that mean that taxpayers like you and I are effectively subsidizing these gambling institutions?
That goes beyond moralism; most people don't want to pay higher taxes. I think that it's good that we have a safety-net for people who get into impossible levels of debt, but that does mean that we have an interest in figuring out ways to minimize how often bankruptcy is actually invoked.
>In states that allow online betting, they found, the average credit score drops by almost 1% after about four years, while the likelihood of bankruptcy increases by 28%, and the amount of debt sent to collection agencies increases by 8%.
> interesting that a 28% increase in likelihood of bankruptcy doesn’t produce more than a 1% hit to the credit score
FTA: "Much to the surprise of Hollenbeck and his collaborators, falling credit scores and increasing bankruptcy filings weren’t accompanied by an uptick in credit card debt and delinquencies. Financial institutions, it appears, are sheltering themselves from the fallout of online sports betting by lowering credit limits and otherwise restricting access to credit in states where it’s legal."
TL; DR The people going broke either don't have a credit score [1] because they were too poor to be lent to.
Say I've got a building full of people. 48% are male. 35% have blue eyes, 50% are over 50, and 22% are balding.
You can start speculating on the relationship between age and hair status because they're both based on the same population: the inhabitants. Older people are more likely to be bald is a fair hypothesis.
But if you start trying to make guesses about how many bald men are in the building, you have a problem, because you're making a common bad assumption that all bald people are male, but also now you're comparing a stat about the whole population to one about 48% of the population, which you don't do.
When you're doing scientific experiments and you want to know these things, you set up the cohorts ahead of time to test your hypotheses. For instance a test group that's 100% men or 100% women. Or only people with blue eyes. That way any two correlations you're looking at are based on the exact same number of samples.
And in this case as someone else already explained, the % is relative to total bankruptcies not the entire population, and the other is about the entire population.
Sports betting has the side effect of making things surrounding sports themselves more toxic.
Betting being as pervasive as it is, and only increasing, causes more people to view and interact with sports with bets or money, and thus can react negatively toward their losing teams.
If there's a large number of angry, vocal "fans" jumping down your neck every time you lose a game or make a mistake that caused their bet to fail, there's a lot of negativity fabricated where the team or player merely played the sport as usual.
Teams are made of humans, and humans make mistakes. This is normal for any sport or activity, but when you've got a chunk of cash in the game it turns into not-normal reactions.
This also bleeds into other forms of sport, like esport, and feeds into some already-negative online communities. Games like League of Legends or DotA 2 come to mind.
I really, really dislike the way sports betting has gone and how it's corrupted everything it touches.
Couple the above with the way these companies effectively prey on betters likely to lose money, and even encourage them to bet and lose more, while at the same time stonewall those that actually know what they're doing and make money, these companies are scum and should be eradicated.
It also infects players and referees. It's harder to trust referees in a sport where you know what the big bets are, whether or not the refs are actually cheating to try to change the outcome it's hard not to feel that they might be.
Baseball alone has had some prominent sports gambling by players in its past change the record books. There's a bunch of interesting arguments for and against that maybe the records for Joe Jackson and Pete Rose should be reinstated now that sports gambling is so generally legal in so many more states than their time. There's a bunch of interesting arguments of how many of today's players might be "on the take" as much as or worse than those historic gambling scandals.
Other sports have their own histories with it. Sports are different when you are wondering if even players are betting for or against themselves.
Isn't there rules about anyone in a sport (players, managers, referees...) not being allowed to bet? I work with people who are not allowed to trade commodities because they are in a division where people who make those commodities store data that isn't yet public knowledge. The SEC knows who those people are and the list is sent to every broker to ensure they can't trade.
If sports betting isn't checking on this and cracking down there is a major problem.
As far as I know there's no central regulatory authority like the SEC. Every sport has its own Commission or Committee in charge, and many of them are profit motivated in weird conflict-of-interest ways that a government regulatory agency shouldn't be.
In college sports alone the NCAA has been (badly) wandering from scandal to scandal for decades and dealing with the repercussions in increasingly baroque individual judgements (some schools are too big/make too much money to punish; other schools seem to be punished too much as scapegoats in their place), and increasingly strange forfeits and legislation-impacted regulations (such as the NIL system [Name-Image-Likeness] reshaping a lot of what used to be illegal in college sports ten years ago into a game [lit.] changing new sluice of money). Given how much the NCAA is dealing with all those scandals and the fresh regulatory burden of NIL, sports betting is probably not even on their radar until someone with too much power at the FBI says it is and picks a scapegoat school to suffer for the rest.
It gets back to why there's so much debate that the MLB should either clean up its current act, or reverse older decisions against sports betting players. There's no right answer, and it is as much a question of how much of a regulatory body does the MLB want to be against sports betting in a year where most states have now made it legal in one form or another.
Much like many substance use disorders, I am inclined the to believe the substance is merely a self-medication technique for a deeper rooted issue.
I am curious what about the gambling makes it so addictive? I refuse to believe that people are addicted solely because of bro-science's elementary understanding dopamine. What makes people continue despite the negative consequences in their lives? Is it the hope? The hope that if they win big, then a better life awaits them or that the money will fix all their problems?
I am not sure if I have ever had a "real addiction^1," but I definitely have had psychological dependencies/self-medication strategies with things like video games and Internet usage.
I am quite an introspective person, thus the underlying reasons were never a mystery to me. I wasn't "addicted" to gaming nor the Internet because they are just fun or entertaining. Each served a different purpose in my life. Mostly through out my early childhood and into my young adult life.
With games, I felt that, in whatever virtual world I was playing in, that I was able to be more than I could in real life. I could gain competence and mastery of "skills." I felt like I was a useful; a person people that could count on. My hard work would materialize right before my very eyes. Do <insert task> and get <insert reward>. I was no longer the [undiagnosed] weird, anxious and depressed person with ADHD. In the games, I was no longer "lazy" nor a "failure." People weren't trying to "discipline" the issues out of me. Games allowed me to be something the world would never allow me to be -- myself.
The Internet was different though. I was like Ponce De Leon in search of the Fountain of Youth. I believed that there was some sort of knowledge, that once discovered, then all my problems would subside. Like some sort of metaphorical magical spell. Once I came across it, I would know it. The answers were out there, and I just needed to find them. However, much like Ponce De Leon, what I was looking for did not exist. But hey, at least I read and learned a lot. =D
There has to be something deeper to gambling addiction. If so, then what is it?
[1] I define addiction as a dependency in which one is unable to resist despite it causing real, tangible harm in one or more areas of one's life -- school, work, relationships, etc..
I don't understand what makes gambling addictive, but I do remember studies done on cats that we read about in psych 101. Cats had implants surgically implanted to their pleasure centers of the brain. A lever would trigger the implant to give them pleasure. If the lever gives pleasure everytime it's pressed, the cat would get bored of it. If the reward was random, the cat would sit there and press it all day. I think of slot machines in a similar way. I spent some time near Casino's. I heard about old people going there and wearing diapers because their greatest fear was getting up from the slot machine, and someone else sitting down at it and winning "their" prize. They thought that since it hasn't paid out for a while, it's due to pay out soon. They would play two machines side by side. Some people would have two jobs, one to pay for gambling, the other for living. It can be an addiction and can ruin lives.
Interesting. I am going to try and find that study when I get off work. Based on your summary, it kind of reminds me of the "Rat Park^1" study a bit.
I can and cannot believe people could be so addicted to gambling that they voluntarily wallow in their excrement. I used to have a family friend that worked a company that owned and operated many of those gambling machines. He said that they are basically all rigged (go figure). You know, kind of like claw machines -- it doesn't matter how well you aim. The claw's grip strength is algorithmically controlled. Thus, the claw give the illusion that one was actually close to snagging the prize.
You are correct that gambling is an addiction that can ruin lives. Well, I guess all addictions can or else such issues wouldn't be classified as addictions.
However, in the gambling addiction thread on here a few days ago. Someone cited some stat that stated that gambling addiction is the addiction with the highest rate of suicide. I did not verify that information, so take that for what it is worth, but I can believe it.
> There has to be something deeper to gambling addiction. If so, then what is it?
I believe that B.F.Skinner and his pigeons answered this question.
As a legend tells us, once upon a time Skinner's apparatus that controlled reinforcements for his pigeons got broken. But Skinner didn't noticed it and went home to sleep. In the morning when he came to his lab, he watched how a pigeon did weird things in his cage. The pigeon walked in circles, dragged one of his wings, and it was like the pigeon danced some weird dance. Skinner was very interested what is wrong with the pigeon, and it turned out that his apparatus gave random reinforcements to the pigeon all the night.
Pigeon pushed the lever, and sometimes it got something crunchy, but mostly it didn't. Naive person might think, that it would lead pigeon to get frustrated and tired from the lever, but instead the pigeon doubled down and... Let me anthropomorphize to make things easier. It was like pigeon invented all kinds of omens and rituals to make the lever work. Like "I dragged my wing last time when lever had worked, so I'll drag my wing next time...", "ohh, it didn't work, lets try again, and again, ..., Yeah! it worked again, now I was standing on one leg, it seems to be the key to success".
Skinner was very intrigued and he developed "variable ratio of reinforcements", which led him to sharpen his methods and he easily could turn a pigeon into a maniac that push lever obsessively and just can't stop. One of the key findings was that less frequent and seemingly random rewards working much better than deterministic rewards on each push of the lever. When lever "just works" pigeon gets as much rewards as it needs and then goes to sleep. But when lever works sometimes, pigeon pushes the lever more and doesn't stop when it got all it needs.
Why brains do this to animals? I don't know what psychology thinks about it, I think that there are two possible (not mutually exclusive) explanations:
1. curiosity, a drive to learn how to control the reality around you. Maybe if you spend more time with the lever, you will learn how it works? Maybe you can learn how to get higher frequency of rewards? It would be beneficial.
2. it is a mechanism to create seeking behavior. If you get reward when doing something, then your brains would better believe that doing this is an interesting pastime. If rewards are rare, then your brains need to believe that it is a very interesting pastime, or you'd get bored in no time and die from hunger.
When I was teen I often went with my father to pick mushrooms in the forest. It is a pastime which teaches you in no time at all to look everywhere for mushrooms. You can chat, but your eyes constantly searching the surroundings, your legs wander around to look behind or underneath of bushes. Now, when I'm in a forest, I habitually look for mushrooms, I feel urge to wander off the trail to check on something looking like a dead leaf: maybe it is a mushroom? This behavior is beneficial for animals and the ability to develop such a behavior is beneficial also. Gambling just exploits it.
The implication being that the apps are identifying signs of addiction in users and actively encouraging it? I shouldn't be scandalized but I must admit that I am.
My favorite grift with the sports app betting space being legalized is all the fake Indian tribes adopting the commercial software like Caesar, MGM, Draftkings, etc.
Decentralized prediction/betting markets, on public consensus ledgers (blockchains), can't exclude the best bettors. And, match bettors and clear markets with far less overhead/"vig" – resulting in fairer, market-set odds.
That leaves less room for a small clique of enterprises whose profits are driven by problem betting, and thus capable & incentivized to engage in manipulative marketing, and misleading product offerings, to find and drive the vulnerable to "extinction". (That's a term of art in gambling design, see https://alum.mit.edu/slice/play-extinction-research-reveals-....)
The regulation and licensing of privileged franchises to state-approved entities has made such entities more able to exploit compulsive gamblers than a free and open system would.
Many states have even gotten into the business themselves, with lotteries offering atrocious odds, promoted with deceptive advertising, overwhelmingly patronized by the poorer & more-innumerate.
https://archive.is/8xQmF
The fact that ESPN itself has a sports betting app tells you all you need to know about the perversion of sports now that gambling is blessed by the government.
I think I can live with the legalization of sports betting if there are strong restrictions against marketing and advertising. If you want to ruin your life that's your decision, and you can always just take the same amount of money and bet it on the stock market. But the way that advertising has its tentacles in our culture now... it's bad.
It has a terrible potential to corrupt sport. When you can bet a lot of money on how long a college players plays, or how many points they get in a particular game, what's to stop them from having a relative make a bet and they just fake a cramp?
The stock market is heavily regulated. I don't think you should ban sports betting, because like many vices it's easier to control if it is legal. According to Nate Silver, the more you let people make bets on obscure things the more opportunity their is for participants to cheat. So you should probably restrict betting to things no one participant can control (like the score). You also should try to make it difficult for a person to lose too much. You can't stop it, but you could probably make it harder. In the stock market there is a "qualified investor" that is allowed to take much bigger risks. You could make rules to punish betting sites that accept too many bets from destitute addicts. It wouldn't be perfect, but you can have liquor laws without having prohibition.
>It has a terrible potential to corrupt sport. When you can bet a lot of money on how long a college players plays, or how many points they get in a particular game, what's to stop them from having a relative make a bet and they just fake a cramp?
Or get assaulted or murdered, internet death pool style? All kinds of really fucked up incentives are created by these legalized betting apps.
I wonder how many people out there would take an assault charge to win a bet. Since there’s a market you could even get investors. Get $10million together, bet it with high odds, take 25% cut, spend 10 years in jail, live out the rest of your life in comfort.
Is any of that illegal besides the assault itself?
I'd think you'ď be VERY hard pressed to bet $10 million dollars, but I don't know that.
Very much so. Even planning it, without carrying it out, would be subject to criminal conspiracy charges. Recruiting people to the scheme (even the investors) would be soliciting a crime. It's illegal to interfere in the outcome of the game once the bet is placed. Finally, once it was proven you rigged it, you'd probably be forced to return the winnings anyway.
I'm sure an actual attorney could come up with even more reasons this is illegal.
Well darn.
Oddly enough, several professional sports gamblers were aware of a NBA referee manipulating game from their data analysis, well before the NBA became aware of it.
That was probably 10+ years ago and I suspect data analysis by the leagues is much stronger now. Still an insane line that needs to be walked between the leagues getting revenue from the sportsbooks and gambling not impacting that play.
NBA bans Jontay Porter after gambling probe shows he shared information, bet on games.
“Porter took himself out of that game after less than three minutes, claiming illness, none of his stats meeting the totals set in the parlay. The $80,000 bet was frozen and not paid out, the league said, and the NBA started an investigation not long afterward.”
https://apnews.com/article/nba-jontay-porter-banned-265ad5cb...
It seems crazy that he would risk his career over a bet considering that his regular player salary was so much higher than $80K.
That's not new, RIP Pete Rose
It gets bad enough and I’ll offer odds on who’s throwing, how long until they are busted, and how severe the consequences.
One participant can control the score in individual sports, like singles tennis or boxing (notorious for rigged matches).
> It has a terrible potential to corrupt sport
That ship sailed a looping time ago. Sports teams in the US are franchises. Like McDonalds. They exist to make profit. Lots of it.
It has nothing to do with sport.
Nothing to do with sports except for all the time and effort they put into playing games?
I'm surprised that people seem to just now realize that sports betting is a bad idea. As you said, the worst aspect is the large amount of marketing and advertising these platforms receive; I wouldn't care if they weren't pushed so heavily.
Before it was legal, most people's experiences with sports betting were small wagers between friends. Maybe a few large bets that they'll still talk about to this day. Gambling with friends or even just coworkers comes with natural limits: the size of one's bets is limited by others' aversions to risk, compulsive gambling is easily spotted, and the players' winnings/losings are zero sum.
Yes, there were illegal bookies before legalization, and they had all the problems of legalized gambling plus more. But the law-abiding (or at least casually law-breaking) majority of voters didn't think increasing the prevalence of sports gambling would hurt. Not too mention all the revenue promises (more benefits, cuts to other taxes). It's no surprise legalization was politically popular.
Yeah, making a small "fun" bet on a game is a way to make it more interesting. I've done it a few times and it really does. I'm talking maybe $20 though, I am far too frugal to put any real money at risk on a bet. I don't go to casinos for the same reason, I'd play a few hands or put maybe $20 into a slot machine and then I'd really start thinking about how I'm flushing my money down the toilet and I'd stop having fun.
My mother in law loves it, she will go to the casino and come home up $1,000 or down $1,000 and it's all just entertainment to her. She loses probably a steady 5% on average, which is exactly what the casinos want.
no... if she's losing a steady 5% of $1000 bucks, she's paying 50 dollars to the casino. That's not enough for the casinos... her room costs more. The casinos want her to spending a lot more money. That's the really big problem of gambling... most people can do it in a relatively healthy way. But problem gamblers make the house most of their money. The house is strongly encouraged to find the problem gamblers and focus on keeping them.
[dead]
I lived in Australia for quite a while. It's a terrible example of what can happen. There was recently a very good BBC article on it and the connection between sports, gambling, and marketing: https://www.bbc.com/news/articles/cx2yg3k82y0o
Similar to many other toxic things, once the genie is out of the bottle and the government gets used to the revenue it generates, there is a large disincentive to tackling the problem.
This. There’s plenty of things in society that are similarly bad, legal, but have restrictions on how you can sell them. There’s nothing inherently different about sports betting than options trading on a brokerage platform. But only one of them is advertised in every commercial break during a sports event.
Those who do not learn from history are doomed to repeat it.
Those who do learn from history learn that we never learn from history.
People have known for years - that’s the really terrifying part. Heck, when I was in business school I wrote a paper on the dangers of sports betting. There were many resources available then…and heck, Gmail invites were a rare commodity when I was in school.
Edit - I just found a printed copy of the paper - I wrote it so long ago that the term 'sociopathic compulsive consumer' was being used. At the time, I found a lot of evidence of casinos using terms like 'instant gratification' in their marketing commmunications. This is over two decades ago. Heck, the actual paper is on a 3.5 inch floppy.
I was briefly involved with a major sports & esports betting company. It was way grosser than I ever imagined, and they had multiple astroturf campaigns working on legalizing betting in more places.
Took me from a generally laissez-faire attitude about gambling, to being entirely on board with simply outlawing at least that sector of it. So very nasty.
(Incidentally, this did answer a question for me: “how did esports get so big so fast, financially?”. Never made much sense to me. The money’s in gambling, and it’s a fucking lot of money. Lightbulb went on and I felt dumb for not realizing it sooner)
I'm completely with you, my friend. I was in business school when I studied betting. All the stereotypes of business students are true - I could have suggested putting thalidomide into lollipops and nobody would have batted an eye.
Despite that, my class had a serious problem with legalized gambling. One of the most free market absolutists I have ever met even concluded that gambling should just be outlawed. He was (and I believe still is) completely in favour of all drugs being legalized, but legalized gambling bothered him in a way that legalized crack cocaine never could have. What pushed him over was how they fund legalization campaigns with all these promises for help for addicts - they'll usually even offer to put a portion of total book into rehabilitation. And then as soon as it is legalized, they will specifically target people who could become addicted.
Oh, no, are you serious? I thought esports was fun, maybe a little silly. It's the gambling? That's the big lift? Argh.
It’s where a ton of the money in the overall sector comes from, and why a lot of the viewers are watching. There’s a large audience that wants anything to gamble on, and gaming’s very convenient for streaming and stats-collection and such, plus it has frequent matches. There are sponsorships and all that, but I doubt those would be as big as they are without the gambling, either (the audience would decline significantly). Lots of the tournaments are funded wholly or in part by gambling.
Gambling is the only way for some of us to make Sportsball interesting, and attempt to fit in with the absurdist normie culture in which we live.
Realistically, there's nothing particularly interesting about the Dallas Frackers versus the Washington Rentseekers. But if you have money on the outcome, watching a game (with a sufficient supply of alcohol) is actually bearable.
Edit: I'm explaining a real, actual reason for the value of sports betting for some people, but it seems that the Sportsball enthusiasts don't like desecration of their Holy Church. I apologize.
If you loathe sports that much why are you forcing yourself to watch them? "Fitting into absurdist normie culture" is ludicrous. Are you not capable of making friends without drunkenly feigning interest in their hobbies?
Short answer: No, I'm not. People are generally extremely intolerant of others who deviate slightly from the norm. Having friends is a fun fantasy, though.
Why do you bother even watching it at this point? I think I watched exactly one soccer game in last 5 years (it was a final of something big, can't remember now), there are a lot of other interesting activities in life.
> I'm explaining a real, actual reason for the value of sports betting for some people, but it seems that the Sportsball enthusiasts don't like desecration of their Holy Church. I apologize.
Seems more like you are seething.
Now apply that same kind of thinking to legalized prostitution and human trafficking.
I'm far from an expert in the issue, but I think that most people that support the legalization of prostitution don't support the legalization of human trafficking.
Okay!
> worst aspect is the large amount of marketing and advertising these platforms receive
Virtually no one is advertising prostitution or human trafficking — certainly not to the degree that gambling is being advertised.
By extension, it seems we can agree prostitution and human trafficking are not nearly as severe a problem as gambling.
That's a really bad example because prostitution by itself is victimless crime. In fact, it's perfectly legal when money doesn't change hands! With gambling you have a winner and a loser, so all the other issues end up downstream necessarily whereas human trafficking (and other issues with sex work) is an enabling tool for criminals running prostitution operations.
i think in both cases regulation is the key. for gambling there could be max $ per bet/month/year and for SW more testing and background checks to blacklist bad actors
Similarly as Lewis Black likes to point out, we're one of only 2 countries that advertises drugs to ourselves.
Hot take: all advertising for any kind of gambling should be banned, and online gambling should be outright prohibited
The challenge is defining gambling, no? I agree with you, it's easy to determine all of the nasty gambling now. But by the time you know it's gambling as in addiction versus gambling as in a flawed but interesting part of a game, it's too late.
Funny, probably 90% of HN was pro-legalizing this…
hmm, what post did you get that impression from?
HN sides with money at every opportunity, outsources their own morality to the govt, and complains that the govt shouldn't legislate morality.
It's worse than bad, I have seen betting ads and placement in content that regular advertisers would not touch with a 10 feet pole, e.g. in pirated broadcasts
Most gamblers are casuals. I spend $5-10 a week during football and usually am down like $10 at the end of the year. It provides a lot of entertainment, sucks that some people can’t control themselves but I shouldn’t be punished for that.
Agree that heavily regulating and perhaps banning advertising needs to be done.
> Most gamblers are casuals. I spend $5-10 a week during football and usually am down like $10 at the end of the year
An annual cap of $500 on bets per social security number seems reasonable. At the very least, 10% of state's median income (a whopping $4,222 nationally [1]).
[1] https://fred.stlouisfed.org/series/MEPAINUSA646N
I think a proportion of income would work better, because $500 would be a lot for some people.
> a proportion of income would work better, because $500 would be a lot for some people
Sure, if a state is willing to enforce that added complexity. I'd still have a hard cap to remove plausible deniability. Otherwise every trailer-park resident will be a millionaire while FanDuel et al do a Facebook-can't-tell-if-I'm-12-or-52 shrug.
Agreed. I've never been into sports and never watched more than a few minutes of any game. But for a few years I was in a small stakes weekly football pool and it made weekends really fun. Suddenly, I wanted to know if the Rams or the Dolphins won, and by how much. I was tracking the pool leader boards. I ended up being ahead about $20. That pool ended, and I never joined another one. But it was a mildly fun time.
There are two possible outcomes:
1) I, a person who gambles neither casually nor as part of an addiction, will pay for gambling addicts; or 2) You will be punished in the form of your degeneracy becoming illegal.
I’m not sure why you should be the one to get the free pass here.
That argument can be made for and against anything (substance abuse comes to mind) which has consequences for society at large.
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"perversion of sports" is a particularly American viewpoint, I think! The latent streak of puritanism, maybe. Yet, somehow, the NCAA (which is wage theft on a truly industrial scale) is morally okay. It's weird.
(The intersection with US ad culture – for existence, drug ads on TV – is maybe also unique.)
Sport has, as a business, always been random number generation for gambling purposes. Some, like horseracing, have basically no other point. Gambling is going to happen, and like weed, it's probably better that it's regulated and taxed than entirely underground. There's no more gambling content now than there was fantasy football content before, and fantasy football was gambling too.
If we're looking for a perversion of sports, though, how about the NCAA's industrial-scale wage theft? US professional sports should have junior systems which pay the players like the rest of the world...
> The latent streak of puritanism, maybe
The main problem is that addiction kind of goes around people's interests and their better judgement.
Normally I agree, we don't need to be making 'moral' decisions for people. If they want to do something 'sinful' - like gambling - have at it.
But the people who promote gambling have lots of money. And gambling is basically smoking. So, it gets hairy. They can lie, they can cheat, and they can manipulate people's minds, tricking them into doing something bad for them. And then the addiction does the rest.
Absolutely addiction does; so we're going to ban alcohol (and weed), and then maybe move onto video games and books and and and and?
Prohibition has generally been a lot less effective than regulation. The problem in the US, in my view, is much more the utterly-gutted effectiveness of the regulatory state than it is the existence of legal gambling.
If alcohol and tobacco were discovered tomorrow, they'd probably end up schedule 1, and rightly so. If cannabis was discovered tomorrow, it would probably be unscheduled, and rightly so.
We literally have a system of tiers of addiction versus potential value for addictive substances. A slippery slope argument is pretty silly when we literally already created a staircase.
There's a big slippery slope here.
Who says we need to keep going? That's not a hypothetical question - who says? Why would we do that?
I agree regulation is good, but prohibition is a type of regulation. There're also levels of prohibition - you don't need to prohibit all of it, maybe just the most obviously harmful.
Like you can ban online gambling but keep casinos if you want. I don't know, I don't have the analysis on which is worse.
>Who says we need to keep going? That's not a hypothetical question - who says? Why would we do that?
Why wouldn't we? If we're legally precluding people from hobbies that could harm them, there's always going to be a worst legal one.
There's an ugliest painting in most galleries, but that doesn't mean we ban them. If the worst legal hobby is beneficial, why would anyone want to ban it? At some point before that, a threshold will be reached where people feel that the harms of a ban outweigh the harms of the practice. I really don't see how this slope is slippery.
Fine, but then the US has spent a terrifying amount of my money on sports and I want it all back if the point of their sophisticated pro-social spending (which strangely has to include private ventures getting handouts) is actually to extract wealth from the poor and the weak.
So then you must have a clear set of principles on how to regulate gambling to maintain it as a healthy activity with no degenerate pathways?
NCAA players are now being paid for what its worth
The NIL loophole? Yeah, not really, and not enforceably, and examples of teams reneging are not hard to find.
Not NIL. lawsuit in court right now is reaching a settlement to directly pay players.
https://www.npr.org/2024/05/24/nx-s1-4978680/house-ncaa-sett...
22% of revenue, not employees, colleges don't accept employer liability. This settlement should be rejected as unconscionable.
Public universities (and private universities which actually care about education!) would be well advised to get out of the business of running professional sports teams, I think.
Big universities make way too much money from sports to ever get out of the business. Not only direct revenue but also alumni and sponsor donations.
The university sector (both public and private) is a mess and this is one of the many, many ways in which that is true.
> Yet, somehow, the NCAA (which is wage theft on a truly industrial scale) is morally okay. It's weird.
Outside of top men's basketball and football programs, there is no real wage theft occurring. These minor sports are avocations for student athletes, and not businesses for the universities.
Outside of the places where money is being made, money is not being made.
Edit: but even when money is being made, the athletes don't get it.
No, but many of them are getting a free or discounted education. Is that not something of value?
It's non-zero value, but we can't say it's the market-clearing price for their services. And anecdotally the quality of that education is compromised.
Student-athletes in the serious football and basketball programs spend a lot of their time at practice. During the season, travel to away games eats up much of their free time. They're "encouraged" to take only easy courses. There are reports of grading corruption so their GPA is high enough to remain eligible to play.
I'm trying to frame the problem--not say there isn't a problem. Athletes is too broad a term. You're engaging in tautologies.
Sorry it sounded like you were saying there isn't a problem because you said
> there is no real wage theft occurring
I know you qualified it with
> Outside of top men's basketball and football programs
But that was my point. Where no one's making money, no one's making money.
Being compensated in kind with housing, food, and education (not to mention significant "grants" from boosters clubs and brand deals) is not the same as wage theft and it is verbal slight of hand to suggest otherwise.
If the players aren't employed by their teams, provided with healthcare and pensions and all the rest, then it absolutely is. The NCAA (for revenue sports) is a scam and everyone involved with any of it is morally bankrupt.
>If the players aren't employed by their teams, provided with healthcare and pensions and all the rest, then it absolutely is.
Why? They are being paid, fed, housed, and educated in exchange for playing sports at nearly the highest level. Where is the injustice? They live lives of opulence and leisure that kings of previous ages could not even dream of.
They aren't being educated.
Outside of Stamford and the Ivies, I'd wager that most players, especially in football, are taking easy classes (and in some cases having tests taken for them) and even then, things are quite easy for them. They aren't taking physics, economics, etc.. that actually prepare students for the real world. There's not enough time for that.
I saw it for myself at a big D1 football program. You think at a school like Texas or Alabama, a school that worships football above all else, would let their athletes be preoccupied with school? Come on now.
Elite football and basketball athletes at major programs are tiny, tiny minority of all student athletes in this country. I went to a decent regional state school (DII at the time) and I had advanced economics and math classes with a number of athletes, including football players. It's just not correct to generalize from the programs that are NFL feeder programs.
College athletes get healthcare. They have team doctors and trainers, and for general healthcare if they aren't covered by their parents' insurance they will have insurance through the school (required) which will be paid out of their athletic scholarship. I don't know of any major university that would permit a residential student to not have health insurance coverage.
Funnily enough... considering how healthcare in the US is tied to employment, then professional athletes of any age should be covered for it by their employer.
People who do pro sports are constantly pushing their bodies to the very limit of what they can do. With those constraints, accidents and overruns are much more likely to cause extended damage.
That only applies to scholarship athletes. Walk-ons get no such benefits. They're working for free while their school is pulling in $60+ million a year in TV money to watch them play and the head coach is making 7 figures
> Sport has, as a business, always been random number generation for gambling purposes
I personally don't care about the business of sports. Most sports were just ways for children to get exercise and everything that came after it was a perversion. Fat men sitting on couches watching other grown men throw a football around isn't much better than those same men gambling on it.
The article appears to break gamblers into 3 groups.
1) casual players
2) problem players
3) professional gamblers.
so basically casual players gamble something like 50 bucks a year. Problem gamblers get money however they can (and although it's unstated and I have no evidence, I think this is where the actual money comes from). And finally, people that can snipe the mispriced bets, and make a lot of money.
Feels sort of submarine-ish. Casino's can't survive off casual players. They need the addicts to make payroll. The pros eat up casino margins.
I dunno. Feels like a "I run a business, but I'm not really good at it so we need laws to force the pros out". Please don't regulate me, but regulate who can play.
Interesting that it's in Bloomberg. Interesting that the casinos are so bad at laying odd they lose. I have no sympathy for anyone but the addicts. Those folks are sick and need help.
> Casino's can't survive off casual players. They need the addicts to make payroll.
The fact that the pros are simulating problem players because then the betting apps give you more leeway, e.g. by "send[ing] you bonus money" and raising your limits, paints the picture quite effectively in my book.
> Casino's can't survive off casual players. They need the addicts to make payroll
To what degree is this true? Sure, a casino with a massive spend on free alcohol and structure needs a high profit margin to return its capital. But betting apps don't have those costs.
This is backwards. Casinos offer huge cross subsidization opportunities like getting people to spend lots of money in clubs and bars or gamble on games like slots that have a huge house edge while apps have near zero cross subsidization opportunities and massive overhead. An app running at draftkings scale costs a lot to operate.
I’ve believed for a long time and continue to that the math on these businesses just doesn’t work. Eventually they won’t exist because they aren’t profitable.
>> I’ve believed for a long time and continue to that the math on these businesses just doesn’t work.
These companies and their apps feels like they're framing this as a social media app. Get together with your friends, play against each other. Its very, very much like fantasy football which generates billions in revenue every year. To me, those are the people and the money they're aiming for - not the casino betters.
I would assume this is the early stages of any market. You have a lot of companies jumping into the fray and trying to make it work. Then as time goes on, like you said, the money just won't work for them and at which point you'll see the standard consolidation where the companies who figure it out will still be there, possibly buy up some smaller companies and so on and so forth.
It will be interesting to see if companies like Draft Kings and Fan Duel can outlast some of the bigger players coming in like BetMGM and other casino backed companies. I don't think we'll be seeing "Bob's Bets" app anytime soon, which would support your idea that this is most likely a loss leader for these casino's, and what's the threshold where they will pull out?
> I’ve believed for a long time and continue to that the math on these businesses just doesn’t work.
Particularly for Las Vegas, the business may not be what you think it is. Vegas is, amongst other things, a global money laundrette.
They've existed in other jurisdictions for decades and seem to be doing very well financially.
Its not a matter of belief its a matter of math.
Their net income is either positive or negative
And if you keep pulling on that thread: are casinos only profitable because they’re laundering money?
If so, they are in trouble now that they've been disrupted by crypto and NFTs.
What legal casino uses crypto or NFTs?
Other way around. Easier laundering on these.
There’s a reason MMOs let you put money in and make hoops to take it out. Otherwise I can overpay for garbage from my “associate” and he can cash out free money with very little paper trail.
DraftKings is profitable as of a few months ago.
>gamble on games like slots that have a huge house edge
This is what they're working on next: legalization of online casino-style games. They've already got seven states. Profit margins will only go up.
Bookmakers can always lay the odds so that there’s equal money on each side. Then they’re just taking a 10% rake with zero risk. If they start getting killed by pros they’ll just move to the low risk strategy.
> Bookmakers can always lay the odds so that there’s equal money on each side
No they can't. Large ones can, but the small ones sometimes cannot because they have to match the large ones but in a smaller pool. If everyone knows which team is going to win, diehard fans of the losing team will still bet on their team - large players capture that in their odds and break even. Small players don't have the same mix of customers and so will have to take that loss because they need to compete with the large ones.
Of course overall the small players balance enough the 10% rake from less sure games over the years to make a lot of money but they can still lose 6 figures on some individual games. Small players are less a target for the pros (if only because they know their customer better and so won't accept the pros in the first place).
Remember the small players are often running an illegal operation. They need their reputation of paying out so that customers don't go elsewhere to even turn them in.
Also, for what it's worth, the idea that betting lines and odds are set to make "equal money on both sides" is a very simplistic and often ignorant talking point. It is quite possible if not common, especially on big games like the SB, for the books to have significant exposure to one side.
Making betting lines is a crazy complex mix of the house essentially betting on an outcome themselves, tempered by a limit to exposure/liability as well as the need to keep lines in basic accordance with other linemakers.
It's unreal how good these guys are most times.
Forgive me… This is not an area. I have much knowledge of…
… But I thought even a small sports book could balance things properly by setting an appropriate pointspread?
my parent has described a risk for the sports book that seems too assume the simple picking of winners and losers and not a pointspread?
This is sort of an "assume a perfectly spherical gambler" type problem.
I wonder if street bookies make money “for someone” by somehow bringing lending in house. It would be the pair of activities that would be profitable. But they wouldn’t have to be that good at bookmaking.
From my perspective the last thing an amateur bookie wants is an outstanding balance either way.
Your only way of dealing with a bad debt is banning the person and letting the other amateur bookies know about it.
Fair enough, I'm not knowledgeable about casino economics. Focussing only on the gambling, however, I'm scpetical they need whales.
They have shareholders expecting massive year-over-year revenue growth and are directly comparing themselves to the free-to-play/mobile gaming space where whales seem plentiful, so of course they are optimizing for whales long-term over sustainably building a low margin overhead product. You can see this almost directly in many of their advertising plans, Draft Kings and the others advertise just like the mobile games space. (They just have fewer places they can show their advertisements from old gambling advertisements laws.)
You nailed the key point my muddy intuition (and the article) failed to express.
Pro gamblers simulate problem gamblers, so they can bet more.
I said, "Casino's can't survive off casual players. They need the addicts to make payroll"
> To what degree is this true?
I don't know the ROI. It's hyperbolic, I'll freely admit that.
But I think there is an important point. We let problem gamblers gamble more, and it's not fair pros take advantage of that dark pattern.
> don't know the ROI. It's hyperbolic, I'll freely admit that.
Being a bookie is making a market. As long as you do your maqth right, your potential for losses are capped--lots of small bets are actually less risky in this respect. Problem gamblers are a cherry on top, far from essential to any gambling enterprise, particularly not one making a two-sided market.
> We let problem gamblers gamble more, and it's not fair pros take advantage of that dark pattern
The pros are the beneficial bacteria checking how much the apps can prey on the problem gamblers.
When the "cherry on top" (problem gamblers) is responsible for half your revenue (from the Bloomberg article), then that's not just a cherry. That's half the cake. And it's a really, really, big cake.
It's still cake! The implied assertion is gambling enterprises need problem gamblers. That if you restrict their ability to prey on problem gamblers, nobody gets to casually gamble.
I know nothing about gambling. But I know a lot about market making and the math of being a bookie. And basaed on that, I don't think the claim is true.
Well, I don’t know much about market making but as a member of Gamblers Anonymous since 1998 I’ve seen just about every kind of devastation caused by every kind of gambling. In the last few years I’ve seen a significant increase in the number of very young men coming to us. Here in Australia, the gambling industry absolutely is laser focused on targeting young men using every psychological trick in the book, including such pernicious features as “Bet With Mates (tm)” which is explicitly designed to use peer pressure to lock in and escalate those in the group who may otherwise pull out.
If we accept that almost 50% of revenue comes from 80% of gamblers (a diverse cohort) while the other almost 50% comes from 3% of gamblers (a far more uniform cohort), then of course betting companies would be absolutely defending against any change (regulation) that would impact the 3%. Furthermore they’d be remiss in their duty to their shareholders if they weren’t trying to migrate gamblers from the larger cohort to the smaller.
It will just be like meth and painkillers: everyone pretends there isn't a problem for years until it gets so bad that the government has to step in.
Intuitively I see all addictive industries the same. The Tobacco industry can, and does, make money off of the odd cigar at a house party. But ultimately, they rely on the constant addiction to have a business model.
It's cheap, and easy, to make nicotine free tobacco like devices. You could lower your cost quite a bit - pretty good for the books! But it doesn't matter, and nobody with half a brain does it.
I also no nothing about gambling and a lot more about market making.
One major difference that may change the math is the tax rate. Illinois for instance just passed a 40% tax on sports betting.
The aqusition costs are extremly high for online betting and online casinos. If you pay 1000 usd to aquire one customer it is not profitable if they gamble 50 usd / year.
Then online casinos are a bad business and shouldn't exist, just like breweries shouldn't exist if they can't break even selling to casual drinkers and need alcoholics to make a profit, and gun manufacturers shouldn't exist if they can't break even selling to one-or-two-gun owners and need wannabe-commandos and survivalist cosplayers to make a profit.
I worked at a biotechnology company, we had thousands of clients but five of them were 80% of our revenue. In your world, should that business not exist as well?
I don't understand the princple that revenue should be uniformly distributed as a condition for existing. How would you enforce this?
I’m not claiming revenue must be even.
And I’m assuming that the five customers actually benefitted from your company’s work? If so, then they’re not really comparable to gambling addicts, alcoholics, and gun fanatics, right?
We already (poorly) enforce (weak) laws requiring casinos not to prey on addicts.
We already (poorly) enforce (weak) laws requiring bars not to over-serve and alcoholics to get treatment sometimes.
We do almost nothing about gun addicts.
But commenting that something shouldn’t be the way it is isn’t a claim to know how to fix it.
Are those clients addicts who are ruining their lives with your product? If so, yeah you shouldn't exist, or at least you need to downsize and try to get that percentage way down.
It depends on what you're selling.
> How would you enforce this?
Case by case. We already do this, this isn't a hypothetical. You can't advertise tobacco anymore and guess what, lots less people addicted and we're saving literally millions of lives in the long run.
I presume one would just continuously uniformly distribute everything till they arrived at communism lmao
Or, if we decide to come back to Earth, we simply make the obvious restrictions on a case by case basis via cost analysis. Then we stop when we feel like it.
For example, tobacco is now extremely restricted. That's an obvious industry that profits off of addiction. We went ahead and fixed that. The result? Millions of lives saved.
Oh, but the spooky hypothetical communism! Come on kids, light up these cigs! They make you look cool and masculine! Oh woe is the modern American for being a commie!
What if I want to grow a plant and smoke it? Who are you to take that away from me? What if your experience of life doesn't align with mine, and my cost/benefit analysis for me personally is that I gain more from smoking than I lose?
That aside, I wasn't advocating for smoking to defend capitalism, and think you appear disingenuous for suggesting that. Merely that that is the end route of just dividing everything equally. I'm willing to go out on a limb and say attempting to divide everything equally doesn't work.
Edit: Apparently I'm arguing against someone I'm unable to reply to, go figure. Either way they appear to be now arguing for the status quo, over 18 regulated gambling, which I fail to see has anything to do with sharing equally, and for some reason they're acting like what they're advocating for is not the status quo. I think I may have stumbled into an argument with a nonsense Chinese LLM lol
> What if I want to grow a plant and smoke it?
That's allowed: again, reasonable and obvious restrictions.
> and my cost/benefit analysis for me personally is that I gain more from smoking than I lose?
All well and good, but that goes out the window when you sell Tobacco.
> I wasn't advocating for smoking to defend capitalism, and think you appear disingenuous for suggesting that
It's not disingenuous IMO, it's obvious. Gambling is addictive, okay so let me draw a comparison to an already existing addictive substance that we've successfully regulated. Oh, look, tobacco!
We managed to do that and not be communist. And everyone is all well and good and we're pretty much all over it. Turns out, only wins! So it can be done, was kind of my point.
> and although it's unstated and I have no evidence, I think this is where the actual money comes from
The article links to a WSJ article that says this group of problem players provides more than 50% of revenue to the betting companies despite being just 3% of all bettors.
> Of the more than 700,000 people in the SMU panel, fewer than 5% withdrew more from their betting apps than they deposited... The next 80% of bettors made up for those operators’ losses. And the 3% of bettors who lost the most accounted for almost half of net revenue
> fewer than 5% withdrew more from their betting apps than they deposited... The next 80% of bettors made up for those operators’ losses. And the 3% of bettors who lost the most accounted for almost half of net revenue
That's a deliberately misleading representation - they offset the 80 against losses rather then the 3%. In terms of net revenue the 3% are less than half net revenue - not more.
I highly, highly doubt that the share of people who consistently stay in category 1 year-over-year is more than a couple percentage points. Lots of people put $50 in to try the whole thing out, lose, then never return. Extremely few people will then return in 2025 and be like "lets do that again".
I cannot for the life of me understand why these apps can't make money off the pros, and instead need to ban them. Ignoring all the dumb promotions these apps do: Sports betting is zero sum, you're betting against the other players, not the house. The odds are set by who you're betting against. Literally, how does it not work out that the profit is just the money from the losers minus the house 30%-or-whatever cut? Is "pros" in this context people who also frequently abuse the (oftentimes wild) promotions these apps run?
But, if it did work like that, the problem is even more apparent: these apps are at best a direct wealth transfer from addicts and idiots to corporations and pros. Wait, I just described the stock market, we're talking about sports betting :)
Sports betting is zero sum, but the market is very inefficient. So you need market makers (the gambling sites) that will fill any order and that set the initial price.
The correct price is often not known for a short while, and that's when the pros bet. Immediately when the line (price) comes out, if they think the line is miss-priced, they will place large bets.
Eventually the house realizes the mispricing and they change the line, but by that point a pro might have placed a six figure bet.
So pros really are winning from the gambling sites, not from other gamblers.
Sounds like this is a self-fixing problem. Either the betting apps/sites will go broke, or they'll get really good at pricing, which will a) push the pro bettors elsewhere, b) maybe bore the problem bettors. Ok, (b) won't happen, but at least (a) should maybe happen. Problem: the betting apps/sites won't be able to hire the pro bettors to help them.
In sports betting you are betting against the house. If the sportsbook sets a bad line, you can lock it in and make money off of it.
Horse racing is what you describe, parimutuel, where the house just takes a commission. But the odds shift even after you place your bet. Very different for traditional sports betting.
This is why Vegas is all about entertainment not just rows of slot machines.
Vegas is about entertainment because it brings people to the rows of slot machines. And ideally, from their perspective, traps a handful of whales from every cohort.
> The pros eat up casino margins.
In games against the house, the house usually ensures that even with mathematically perfect play, that they will still have a margin (though, admittedly, it's a tighter margin than when a bachelor party is drunk and playing blackjack and hitting on 19 because "I'm feeling lucky!").
Most pros play against the other players (i.e. poker, etc.), and the rake is the rake, regardless of that - the old adage, "If you look around the table and can't figure out who the chump is, you're the chump" stands, i.e. you don't have to beat the house, you just have to beat Bob who flew in from Iowa (not intended to insult anyone or anywhere, just more exaggerate the casual player).
No, advantage betting is pretty much only against the houses, not against other players. While people who know the sport and manage to bet misplaced lines can be winning over a season, advantage betting is the only way to reliantly have a positive EV. Casinos and now sport betting apps try to prevent professionals to use this, but with the number of shit you can now bet on, and since you don't have to tie an account to your real identity yet, it is becoming very difficult to catch that, especially if you muddy the water with dumb bets.
Outside of the US where gambling on sports has been the norm for decades, the bookies tend to run square books and just earn spread + commissions. To the point where pvp exchanges have been the dominant destination for betting for 20 years or so.
These article (and others like it recently) just make me think US sports betting operations are operating on antiquated business model.
All the tech piling into US sports books is British precisely because the British markets (particularly horses, football and tennis, but really everything up to and including political markets) are so much more sophisticated and there's a killing to be made exploiting the rubes in the Wild West.
Really professional gamblers (eg Tony Bloom / Betlizard) are just hedge funds and what we're talking about in this thread is "trying to gain an execution edge".
Yes, this is only because american sports give "line bet" and "prop bets", that anybody can exploit if two apps aren't coordinated. You can do line arbitrage (middling is the easiest, but professionals use props with weird maths and specific knowledge to make a living).
If you only offer to bet on the money line, it makes it way harder for professional gamblers.
A football game in the UK for example has ~60 markets on exchange for a single game with bets on everything from the result, handicaped result (multiple lines), the number of goals, the times of the goals, scorers of goals, half-time results, yellow cards, red cards, number of corners, number of shots at goal, time of first thrown in etc.
> Simulating addictive behavior, says Peabody, is an effective way to get online sportsbooks to send you bonus money and keep your accounts open. This isn’t necessarily because operators are targeting problem bettors, he says; they’re simply looking to identify and encourage customers who are likely to spend—and lose—the most. This just happens to be a good way to find and enable addicts, too.
ML run amuck
> Simulating addictive behavior, says Peabody, is an effective way to get dealers to send you free doses and keep your accounts open. This isn’t necessarily because drug dealers are targeting problem drug users, he says; they’re simply looking to identify and encourage customers who are likely to spend most. This just happens to be a good way to find and enable addicts, too.
Imagine justifying drug dealers with this line of reasoning
Throwback to that post from this weekend about “too much efficiency is always bad”…
I worked at a quant sports betting trading company, on occasion it would send the employees to place annonymous few grand bets at physical shops because it's such a problem getting people to continue accepting your bets if you are any good.
And found out that the more you bet, the more percentage commission you pay to exchanges like Betfair, which is quite contraintuitive - commission goes up with volume, not down.
I also learned a few tricks of the industry - when you open an online account they look up your address on Google Maps to see what kind of place you live in.
My betfair commission was heavily discounted back in the day, but that was only on volumes of ~£50,000 a day, and a fair bit more on weekends. Nevertheless their commissions were outrageously high, but the scale of the liquidity they had available was amazing.
50k a day, was that money you were betting? Or were you managing a betting service and betfair was the underlying exchange? I know very little about that world
> it's such a problem getting people to continue accepting your bets if you are any good.
Why don't they just use those people to adjust their odds faster for everybody else ? Or do they limit the size you can bet rather than just banning you ?
> I also found out that the more you bet, the more percentage commission you pay to exchanges like Betfair, which is quite contraintuitive - commission goes up with volume, not down.
I guess they try to cream the most addicted people, seems quite intuitive to me.
> Why don't they just use those people to adjust their odds faster for everybody else ?
The logic of bookies is simple: Don't do business with people who win more than they lose.
It doesn't matter how the customer is getting an edge. A brilliant algorithm? A complex arbitrage system? Deep insight from years studying the sport? Cheating? Time travel? The bookies don't care.
The only thing that matters is, if you win more than you lose you've got some sort of edge. And if you've got any sort of edge, it's more profitable not to do business with you.
Same for casinos. That's why they kick you out if you win too much or too often. They don't need to prove you did anything wrong like cheating. If you aren't making them money you're out.
> Why don't they just use those people to adjust their odds faster for everybody else ?
Volumes are not huge like in finance, you will lose more on the bet that you will make back in your marginally improved odds.
> I guess they try to cream the most addicted people, seems quite intuitive to me.
The professionals, not the addicted. The addicted expire quickly and they typically don't use exchanges anyway.
Top sports books do that already. Lesser sports books don't have enough liquidity to react in real-time. In fact a simple winning strategy is to check what odds Pinnacle gives and see if any bookie offers better odds (arbitrage betting). It will only work for 2-3 bets before you're rate-limited though.
Yeah this is the entire business model of oddsjam. They basically offer a service that compares all book odds to pinnacle and call it "plus EV betting".
Are you able to tell us more about your operation? Size, scale, profitability etc?
These apps should be banned. Gambling is a social ill with such a limited upside and so much harm it can't really be justified
At the very least you should have to go to a physical location like a casino, having this stuff in your pocket at all times is insane.
Agreed -- I will continue to shout it from every perch I can: politicians who are actively working to proliferate these apps should be (at least journalistically) investigated. I would bet on this being a well-above-random signal of either a personal gambling addiction or corruption.
I agree. Take stock option contract trading out with it.
Stock options have legitimate uses. Like all tools, it can be misused.
Stock options can be used as a tool to hedge against risk.
I know, but I think that they're overwhelmingly used for glorified gambling.
It wouldn't bother me if it was just hedge funds or big corporations or multibillionaires who played with contracts, it bothers me that regular people do it too, and the average John Doe simply doesn't have the same multi-million-dollar option pricing algorithms that Goldman Sachs does. At that point, it feels like it's big corporations leeching money away from poorer people who don't know better.
Full disclosure, I do play with options occasionally, but I have mostly stopped, and I treat it like a casino, or as you mentioned to hedge against risk.
Most of the volume of options trading is done by institutions. By price it's mostly large traders paying each other to mitigate risk. Some smaller traders are getting chewed up in the process, but they are throwing themselves into the machine.
You make it sound like options exist for large traders to profit off individuals with access to less information. That's not how options are primarily used. That is however how sports betting is primarily used.
So is alcohol - there are plenty of people who gamble responsibly and get enjoyment out of it. Taking away the entire thing rather than simply making sensible regulation and dealing with scumbag behavior by corporate bookies is throwing the baby out with the bathwater, not to mention extremely moralistic. And, in the end, prohibition never works - bookies still and always will exist.
> And, in the end, prohibition never works - bookies still and always will exist.
I don't think that's exactly true. Laws introduce varying degrees of friction for citizens to do something.
It's like entrepreneurship. If there are a bunch of laws in place making it hard to start a business, fewer people will start businesses. Some people will still create illegal businesses on the black market, but lots of law abiding citizens will just stop creating businesses because there's too much friction to bother.
That fails to acknowledge that a) the black market tends to be dramatically less safe b) it drives addicts underground where it's hard to identify and help them and c) the addicts this is meant to help will be disproportionately willing to participate in this new, much worse black market.
Bookies scale very well, a small number of them could serve whatever clientele is still interested.
It'll probably turn out similarly to drugs. Prohibition keeps your average citizen away, and makes the market much worse for anyone left in it.
Sure, but if people, for example, started to declare bankruptcy due to gambling addiction, doesn't that mean that taxpayers like you and I are effectively subsidizing these gambling institutions?
That goes beyond moralism; most people don't want to pay higher taxes. I think that it's good that we have a safety-net for people who get into impossible levels of debt, but that does mean that we have an interest in figuring out ways to minimize how often bankruptcy is actually invoked.
https://archive.is/20240930230439/https://www.bloomberg.com/...
The link is broken for me.
Strange - how about this one? https://archive.is/8xQmF
Works thanks
money quote [pun unintended]:
>In states that allow online betting, they found, the average credit score drops by almost 1% after about four years, while the likelihood of bankruptcy increases by 28%, and the amount of debt sent to collection agencies increases by 8%.
It’s interesting that a 28% increase in likelihood of bankruptcy doesn’t produce more than a 1% hit to the credit score.
> interesting that a 28% increase in likelihood of bankruptcy doesn’t produce more than a 1% hit to the credit score
FTA: "Much to the surprise of Hollenbeck and his collaborators, falling credit scores and increasing bankruptcy filings weren’t accompanied by an uptick in credit card debt and delinquencies. Financial institutions, it appears, are sheltering themselves from the fallout of online sports betting by lowering credit limits and otherwise restricting access to credit in states where it’s legal."
TL; DR The people going broke either don't have a credit score [1] because they were too poor to be lent to.
[1] https://www.consumerfinance.gov/about-us/newsroom/cfpb-repor...
For every 35 people filing bankruptcy before gambling, there are now 45.
It can't be 28% for the whole state, that would mean a third of the population are degenerate gamblers.
No. Say 100 / 100 000 people are degenerate gambleurs at risk of bankruptcy. +28% would mean 128 are now at risk.
First rule of statistics: don’t compare percentages unless they have the same denominator.
I didn't do that, did I ?
Say I've got a building full of people. 48% are male. 35% have blue eyes, 50% are over 50, and 22% are balding.
You can start speculating on the relationship between age and hair status because they're both based on the same population: the inhabitants. Older people are more likely to be bald is a fair hypothesis.
But if you start trying to make guesses about how many bald men are in the building, you have a problem, because you're making a common bad assumption that all bald people are male, but also now you're comparing a stat about the whole population to one about 48% of the population, which you don't do.
When you're doing scientific experiments and you want to know these things, you set up the cohorts ahead of time to test your hypotheses. For instance a test group that's 100% men or 100% women. Or only people with blue eyes. That way any two correlations you're looking at are based on the exact same number of samples.
And in this case as someone else already explained, the % is relative to total bankruptcies not the entire population, and the other is about the entire population.
It does, indirectly. The percentage of people going bankrupt is X/100, but a percentage increase in that percentage is (X/100)*(Y/100).
> can't be 28% for the whole state, that would mean a third of the population are degenerate gamblers
Not how likelihoods work.
Sports betting has the side effect of making things surrounding sports themselves more toxic.
Betting being as pervasive as it is, and only increasing, causes more people to view and interact with sports with bets or money, and thus can react negatively toward their losing teams.
If there's a large number of angry, vocal "fans" jumping down your neck every time you lose a game or make a mistake that caused their bet to fail, there's a lot of negativity fabricated where the team or player merely played the sport as usual.
Teams are made of humans, and humans make mistakes. This is normal for any sport or activity, but when you've got a chunk of cash in the game it turns into not-normal reactions.
This also bleeds into other forms of sport, like esport, and feeds into some already-negative online communities. Games like League of Legends or DotA 2 come to mind.
I really, really dislike the way sports betting has gone and how it's corrupted everything it touches.
Couple the above with the way these companies effectively prey on betters likely to lose money, and even encourage them to bet and lose more, while at the same time stonewall those that actually know what they're doing and make money, these companies are scum and should be eradicated.
It also infects players and referees. It's harder to trust referees in a sport where you know what the big bets are, whether or not the refs are actually cheating to try to change the outcome it's hard not to feel that they might be.
Baseball alone has had some prominent sports gambling by players in its past change the record books. There's a bunch of interesting arguments for and against that maybe the records for Joe Jackson and Pete Rose should be reinstated now that sports gambling is so generally legal in so many more states than their time. There's a bunch of interesting arguments of how many of today's players might be "on the take" as much as or worse than those historic gambling scandals.
Other sports have their own histories with it. Sports are different when you are wondering if even players are betting for or against themselves.
Isn't there rules about anyone in a sport (players, managers, referees...) not being allowed to bet? I work with people who are not allowed to trade commodities because they are in a division where people who make those commodities store data that isn't yet public knowledge. The SEC knows who those people are and the list is sent to every broker to ensure they can't trade.
If sports betting isn't checking on this and cracking down there is a major problem.
As far as I know there's no central regulatory authority like the SEC. Every sport has its own Commission or Committee in charge, and many of them are profit motivated in weird conflict-of-interest ways that a government regulatory agency shouldn't be.
In college sports alone the NCAA has been (badly) wandering from scandal to scandal for decades and dealing with the repercussions in increasingly baroque individual judgements (some schools are too big/make too much money to punish; other schools seem to be punished too much as scapegoats in their place), and increasingly strange forfeits and legislation-impacted regulations (such as the NIL system [Name-Image-Likeness] reshaping a lot of what used to be illegal in college sports ten years ago into a game [lit.] changing new sluice of money). Given how much the NCAA is dealing with all those scandals and the fresh regulatory burden of NIL, sports betting is probably not even on their radar until someone with too much power at the FBI says it is and picks a scapegoat school to suffer for the rest.
It gets back to why there's so much debate that the MLB should either clean up its current act, or reverse older decisions against sports betting players. There's no right answer, and it is as much a question of how much of a regulatory body does the MLB want to be against sports betting in a year where most states have now made it legal in one form or another.
Much like many substance use disorders, I am inclined the to believe the substance is merely a self-medication technique for a deeper rooted issue.
I am curious what about the gambling makes it so addictive? I refuse to believe that people are addicted solely because of bro-science's elementary understanding dopamine. What makes people continue despite the negative consequences in their lives? Is it the hope? The hope that if they win big, then a better life awaits them or that the money will fix all their problems?
I am not sure if I have ever had a "real addiction^1," but I definitely have had psychological dependencies/self-medication strategies with things like video games and Internet usage.
I am quite an introspective person, thus the underlying reasons were never a mystery to me. I wasn't "addicted" to gaming nor the Internet because they are just fun or entertaining. Each served a different purpose in my life. Mostly through out my early childhood and into my young adult life.
With games, I felt that, in whatever virtual world I was playing in, that I was able to be more than I could in real life. I could gain competence and mastery of "skills." I felt like I was a useful; a person people that could count on. My hard work would materialize right before my very eyes. Do <insert task> and get <insert reward>. I was no longer the [undiagnosed] weird, anxious and depressed person with ADHD. In the games, I was no longer "lazy" nor a "failure." People weren't trying to "discipline" the issues out of me. Games allowed me to be something the world would never allow me to be -- myself.
The Internet was different though. I was like Ponce De Leon in search of the Fountain of Youth. I believed that there was some sort of knowledge, that once discovered, then all my problems would subside. Like some sort of metaphorical magical spell. Once I came across it, I would know it. The answers were out there, and I just needed to find them. However, much like Ponce De Leon, what I was looking for did not exist. But hey, at least I read and learned a lot. =D
There has to be something deeper to gambling addiction. If so, then what is it?
[1] I define addiction as a dependency in which one is unable to resist despite it causing real, tangible harm in one or more areas of one's life -- school, work, relationships, etc..
I don't understand what makes gambling addictive, but I do remember studies done on cats that we read about in psych 101. Cats had implants surgically implanted to their pleasure centers of the brain. A lever would trigger the implant to give them pleasure. If the lever gives pleasure everytime it's pressed, the cat would get bored of it. If the reward was random, the cat would sit there and press it all day. I think of slot machines in a similar way. I spent some time near Casino's. I heard about old people going there and wearing diapers because their greatest fear was getting up from the slot machine, and someone else sitting down at it and winning "their" prize. They thought that since it hasn't paid out for a while, it's due to pay out soon. They would play two machines side by side. Some people would have two jobs, one to pay for gambling, the other for living. It can be an addiction and can ruin lives.
Interesting. I am going to try and find that study when I get off work. Based on your summary, it kind of reminds me of the "Rat Park^1" study a bit.
I can and cannot believe people could be so addicted to gambling that they voluntarily wallow in their excrement. I used to have a family friend that worked a company that owned and operated many of those gambling machines. He said that they are basically all rigged (go figure). You know, kind of like claw machines -- it doesn't matter how well you aim. The claw's grip strength is algorithmically controlled. Thus, the claw give the illusion that one was actually close to snagging the prize.
You are correct that gambling is an addiction that can ruin lives. Well, I guess all addictions can or else such issues wouldn't be classified as addictions. However, in the gambling addiction thread on here a few days ago. Someone cited some stat that stated that gambling addiction is the addiction with the highest rate of suicide. I did not verify that information, so take that for what it is worth, but I can believe it.
[1] https://www.psychiatrictimes.com/view/what-does-rat-park-tea...
> There has to be something deeper to gambling addiction. If so, then what is it?
I believe that B.F.Skinner and his pigeons answered this question.
As a legend tells us, once upon a time Skinner's apparatus that controlled reinforcements for his pigeons got broken. But Skinner didn't noticed it and went home to sleep. In the morning when he came to his lab, he watched how a pigeon did weird things in his cage. The pigeon walked in circles, dragged one of his wings, and it was like the pigeon danced some weird dance. Skinner was very interested what is wrong with the pigeon, and it turned out that his apparatus gave random reinforcements to the pigeon all the night.
Pigeon pushed the lever, and sometimes it got something crunchy, but mostly it didn't. Naive person might think, that it would lead pigeon to get frustrated and tired from the lever, but instead the pigeon doubled down and... Let me anthropomorphize to make things easier. It was like pigeon invented all kinds of omens and rituals to make the lever work. Like "I dragged my wing last time when lever had worked, so I'll drag my wing next time...", "ohh, it didn't work, lets try again, and again, ..., Yeah! it worked again, now I was standing on one leg, it seems to be the key to success".
Skinner was very intrigued and he developed "variable ratio of reinforcements", which led him to sharpen his methods and he easily could turn a pigeon into a maniac that push lever obsessively and just can't stop. One of the key findings was that less frequent and seemingly random rewards working much better than deterministic rewards on each push of the lever. When lever "just works" pigeon gets as much rewards as it needs and then goes to sleep. But when lever works sometimes, pigeon pushes the lever more and doesn't stop when it got all it needs.
Why brains do this to animals? I don't know what psychology thinks about it, I think that there are two possible (not mutually exclusive) explanations:
1. curiosity, a drive to learn how to control the reality around you. Maybe if you spend more time with the lever, you will learn how it works? Maybe you can learn how to get higher frequency of rewards? It would be beneficial.
2. it is a mechanism to create seeking behavior. If you get reward when doing something, then your brains would better believe that doing this is an interesting pastime. If rewards are rare, then your brains need to believe that it is a very interesting pastime, or you'd get bored in no time and die from hunger.
When I was teen I often went with my father to pick mushrooms in the forest. It is a pastime which teaches you in no time at all to look everywhere for mushrooms. You can chat, but your eyes constantly searching the surroundings, your legs wander around to look behind or underneath of bushes. Now, when I'm in a forest, I habitually look for mushrooms, I feel urge to wander off the trail to check on something looking like a dead leaf: maybe it is a mushroom? This behavior is beneficial for animals and the ability to develop such a behavior is beneficial also. Gambling just exploits it.
The implication being that the apps are identifying signs of addiction in users and actively encouraging it? I shouldn't be scandalized but I must admit that I am.
Related:
Legalizing sports gambling was a mistake
https://news.ycombinator.com/item?id=41659458
Does look like I would have to get a lot more toxic thoughts before I would be able to keep up :(
Related:
Should Sports Betting Be Banned?
https://news.ycombinator.com/item?id=41665630
Which one is BossmanJack?
Titles ending “than you thought” always, always come across as condescending nonsense.
One time, my boss's boss told me "Whatever you heard, it's not true". I think I burst out laughing due to the apparent paradox.
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My favorite grift with the sports app betting space being legalized is all the fake Indian tribes adopting the commercial software like Caesar, MGM, Draftkings, etc.
maybe just get a job?
Unironically, "blockchain fixes this".
Decentralized prediction/betting markets, on public consensus ledgers (blockchains), can't exclude the best bettors. And, match bettors and clear markets with far less overhead/"vig" – resulting in fairer, market-set odds.
That leaves less room for a small clique of enterprises whose profits are driven by problem betting, and thus capable & incentivized to engage in manipulative marketing, and misleading product offerings, to find and drive the vulnerable to "extinction". (That's a term of art in gambling design, see https://alum.mit.edu/slice/play-extinction-research-reveals-....)
The regulation and licensing of privileged franchises to state-approved entities has made such entities more able to exploit compulsive gamblers than a free and open system would.
Many states have even gotten into the business themselves, with lotteries offering atrocious odds, promoted with deceptive advertising, overwhelmingly patronized by the poorer & more-innumerate.
Go figure!