The Future Of Online Gaming (The "Investing" Kind)

By Big Tent Democrat, Section Other Politics
Posted on Thu Apr 21, 2011 at 10:50:00 AM EST
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Nate Silver writes a nice article on the online poker issue. As a sports investor, two parts were particularly interesting to me:

Some of the potential replacements for Full Tilt Poker and Poker Stars, such as Bodog.com, flout the law much more flagrantly by offering sports betting.

Many states have taken the ludicrous position that poker is not a game of chance, but sports betting is only a game of chancre. Ridiculous. The other part that is interesting to me is this:

Large casino companies, like Caesars and MGM, which were once lukewarm on online poker, were behind the push for legislation [;egalizing online poker] last year, and are increasingly of the view that promoting some forms of gambling at the expense of other, highly similar forms is not a good long-run strategy. “Nevada people have talked about it,” Mr. Frank said. “They’re aware its just not a good idea for them to be aligned with people who think gambling is the work of the devil.”

I wonder how much of this DOJ action was merely an attempt to clear the field so that the big gaming corporations can step in. It would not surprise me if they pushed for legalizing all forms of gambllng. Remember the Nevada interests were the ones who have fought the hardest against allowing gambling anywhere but in that state. They seemed to see the gambling exclusivity as key to its tourism business. Now of course casino gambling can be found all over the country.

But sports betting is an untapped business. For all the money that is made on casino games, nationwide legalized sports betting would absolutely dwarf it. Just on the NFL alone (I actually do not invest much on NFL games myself), these established companies could grow their revenues exponentially in my view.

I wonder if this could be a crystallizing moment for the gaming interests, finally realizing what the Internet can do for them.

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The Future Of Online Gaming (The "Investing" Kind) | 38 comments (38 topical)

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Bingo! (5.00 / 1) (#2)
by Robot Porter on Thu Apr 21, 2011 at 09:46:05 AM EST

I wonder how much of this DOJ action was merely an attempt to clear the field so that the big gaming corporations can step in.

Indeed... (5.00 / 1) (#5)
by kdog on Thu Apr 21, 2011 at 10:50:15 AM EST

and the higher rakes, vigs, and lackluster customer service that go with the big boys taking over.

Great...what happened to health insurance, banking, and every other sector where the business model is to buy out the competition and screw the customer out of every possible cent without remorse is going to happen to online gaming and poker.

On the brightside, the underground poker scene might start picking up again...but on the double downside, I'm sure the NYPD is already pre-planning to heist said underground poker rooms.


: Before the mountain casinos opened (none / 0) (#29)
by jimakaPPJ on Thu Apr 21, 2011 at 03:22:47 PM EST

Denver had several "private" games that had been around a while.
Guess what?? When the casinos opened they were closed down.

ditto the "Bingo" (none / 0) (#17)
by sj on Thu Apr 21, 2011 at 12:36:59 PM EST

"Invest!" (5.00 / 2) (#3)
by andgarden on Thu Apr 21, 2011 at 10:42:47 AM EST

I think many people will freak out if they realize that they're no better equipped to "invest" in NASDAQ than they are in a hand of blackjack. Incidentally, this is why so many people are intuitively resistant to Social Security privatization.

And yes, I think that's truer than a lot of "experts" like to admit.

that does seem ridiculous (none / 0) (#1)
by ruffian on Thu Apr 21, 2011 at 09:42:17 AM EST

I always have seen sports betting as at least as much a skill game as poker.

I agree that nationwide sports betting would be huge. And if it is internet based, it makes sense that the Nevada interests now want to be able to get in on that business. Seems like the money they would make would far exceed what they make on hotel rooms and food from people coming to Vegas strictly for the sports book and poker. I can understand them wanting to limit the 'in person' casino gambling to Nevada, but to grow the market they need to attract the folks who are not going to travel to gamble anyway.

60 minutes (none / 0) (#9)
by Makarov on Thu Apr 21, 2011 at 11:04:13 AM EST

did a segment on Billy Walters, well known in sports betting and handicapping, a few months ago:

http://www.youtube.com/watch?v=WVQDHOyi9MU

The thing that I came away from this interview with is:

Sports betting is undoubtedly gambling. Some forms of investing, derivatives in particular, are also undoubtedly gambling.

If you think about the nature of derivatives, from something as simple as the Dow Jones Index to complicated currency swaps, you'll understand they add almost nothing to the real economy. It's true some derivatives can be used by companies to hedge against real world events, but ultimately there is often insurance available that can do the same thing.


Wlaters is the very definition (none / 0) (#10)
by Big Tent Democrat on Thu Apr 21, 2011 at 11:08:17 AM EST

of an investor, imo.

There is virtually no gamble for him. His consistent returns tell the tale.

Indeed, he confesses to "manipulating the market" even.


I can't think of any form of investing that (none / 0) (#13)
by Militarytracy on Thu Apr 21, 2011 at 11:36:09 AM EST

isn't gambling


Because there is no such thing... (5.00 / 1) (#14)
by kdog on Thu Apr 21, 2011 at 11:42:04 AM EST

as an investment that isn't gambling. You're laying down "x" with the hope of a return of "x + y", but the possibility of "x - y" coming back, or nothing at all. Thats gambling in any universe.

There are just some gambles that are wiser than others.


laying down "x" (5.00 / 1) (#34)
by Edger on Thu Apr 21, 2011 at 07:20:48 PM EST

with the hope of a return of "x + y", but the possibility of "x - y" coming back, or nothing at all.

That's voting in this universe.

Can we get the Southern District of New York District Court to take a closer look at US politics and return a few indictments?


Hopefully huh kdog? (none / 0) (#15)
by Militarytracy on Thu Apr 21, 2011 at 12:08:16 PM EST

But when they change the rules for winning after you place your bet....what is a wise bet then? That is what our government has done with the stock market and if they intervene in any other markets they will have committed a grave sin again. Even if they intervene in what is going on with oil, it is being speculated on and once that affects the markets in such a way that demand decreases then the speculators lose and get a spanking and they don't do that again. When you save something in the markets though that is failing, lessons aren't learned, the markets are not true, and there is no way to place an educated bet unless you are insider trading. Which is supposed to be illegal.....but the rules have changed and it is illegal for everyone other than Goldman Sachs and anyone that they say it is legal for :)


: Exactamundo... (none / 0) (#22)
by kdog on Thu Apr 21, 2011 at 01:23:21 PM EST

they're gonna rig online poker and gaming like they've rigged the stock market...Goldman Sachs will hit on 15 with the dealer showing a 6, catch a brick and bust, and get paid off anyway.
What will be left? The unregulated underground games where, ironically enough, you will probably find things more on the level and better gaming customer service. Or you could always gamble that the QP you buy bulk at "X" will bring back "x + y" when you break it down. Both of these options mean turning criminal, though in this day and age most if not all of us already are:)

That would be... (none / 0) (#16)
by sj on Thu Apr 21, 2011 at 12:36:25 PM EST

... mortgage derivatives, if you're one of the TBTF bankers...


Investment is not gambling (none / 0) (#18)
by Abdul Abulbul Amir on Thu Apr 21, 2011 at 12:47:39 PM EST

Investment involves the purchase of a productive asset that will hopefully produce more wealth than was invested. This involves risk but not all things risky are gambling. Purchasing Apple stock to allow the company to expand back when the two Steves were operating out of a garage was both quite risky and an investment. As it turned out a very good investment. Society, not just the shareholder, is better off because of Apple's success.

Gambling involves purchasing a chance on an outcome of something that has no economic consequence. It matters not a fig to the economy or to society if the coin flip comes up heads, or comes up tails.

Investing is risky and gambling is risky, but investing is not gambling, and gambling is not investing.
.


What product is anyone purchasing on (none / 0) (#19)
by Militarytracy on Thu Apr 21, 2011 at 01:06:02 PM EST

Wall Street anymore? It is all hot air and tooth fairies and ponzis if you get lucky :) If you aren't lucky you lose your money and it doesn't make any difference to the economy one way or the other. What happens on Wall Street doesn't make much difference to our economy either. They have magically become decoupled.


Stocks and bonds (none / 0) (#24)
by Abdul Abulbul Amir on Thu Apr 21, 2011 at 01:42:42 PM EST

Stocks and bonds of many productive and valuable companies are available for purchase and for sale on "Wall Street."


Your bonds aren't worth anything (5.00 / 1) (#25)
by Militarytracy on Thu Apr 21, 2011 at 01:51:07 PM EST

if they don't raise the debt ceiling. Your bonds are worth less if they fight about raising the debt ceiling. And that is just one way your bonds can become worthless or worth less than you paid. They are make believe too, you can't eat them, they aren't clothing...they are make believe. Stocks aren't anymore tangible. It is all gambling


I think he is refering (none / 0) (#28)
by jimakaPPJ on Thu Apr 21, 2011 at 03:20:51 PM EST

to individual corp bonds, not Treasury Bills.


What are those worth Jim (none / 0) (#35)
by Militarytracy on Thu Apr 21, 2011 at 08:16:07 PM EST

and who gets them? There isn't anything preferred that could easily equate to anything of real actual worth that leaves the boardroom bound for the little people these days.


Corp bonds (none / 0) (#36)
by jimakaPPJ on Thu Apr 21, 2011 at 09:38:44 PM EST

are worth whatever they can be sold for.

Billions are held in various pension funds. That's important for those of us who don't get a government retirement check and medical plan.


: It's axiomatic (5.00 / 1) (#38)
by Harry Saxon on Fri Apr 22, 2011 at 12:52:36 AM EST

that any investment in anything outside of governmental bonds carries a certain risk.
The greater the ROI,(return on investment) the greater the risk of losing one's investment or having an underperforming asset.
For pension funds, a good example is CALPERS, they overinvested in real estate-based assets, and as the economy went south, so did the RE-based part of their portfolio.
No charge to anyone for the lesson.
:-)

What an interesting guy (none / 0) (#20)
by lilburro on Thu Apr 21, 2011 at 01:06:58 PM EST

I don't regularly watch 60 minutes so I missed that. Businessinsider has a piece on him too.

I wonder how Lara Logan is doing.


Poker (none / 0) (#4)
by Abdul Abulbul Amir on Thu Apr 21, 2011 at 10:48:14 AM EST

Poker is a game that has an element of skill as well as an element of chance. The hand you are dealt is all luck, how you play the hand is all skill.

: Every game of skill... (none / 0) (#7)
by kdog on Thu Apr 21, 2011 at 10:52:51 AM EST

has elements of luck, and every game of luck has elements of skill...even dumb luck games like roulette, there is skill in the way you wager.
Makes me wonder why we bother with the distinction at all...skill/luck at any arbitrary ratio, who cares, just cal it a game and let people who wanna play it play it. Let freedom ring.

Yet the Lottery Rolls On Nearly Unopposed (none / 0) (#6)
by ScottW714 on Thu Apr 21, 2011 at 10:52:15 AM EST

We even have massive billboards with some form of 'This Could Be You !!!" with some clown on it who won the lottery.

No 'legalized' gambling in Texas, so from Houston you take one of the zillion tourist buses or drive the good hour to the Louisiana state line, were the many casinos await to take you money.

The first time I went on a river boat casino, I was with 3 friends, and they rang a bell and announced the river boat departure in like 10 mins. I was freaking out, trying to track down everyone to get off the boat. Turns out the boats never leave the shore, but some law requires that they make the announcement. I was the only one not aware with this silly law. It was one of my first real experiences in southern nonsensical law.

My point is there isn't hardly a spot in the country that one can't gamble legally on something that requires zero skill, like a scratch-off tickets or bingo at the local church, or the stooopid raffles for charities.

Why they are making such a fuss of this non-sense is beyond riduculous. I guess we can't have private entrepreneurs offering better payout percentages. It competes with the states lame brain legalized non-skilled gambling.

The lottery is a bit of a hard one (5.00 / 1) (#8)
by andgarden on Thu Apr 21, 2011 at 11:02:56 AM EST

To be honest, I pity people who buy stacks of lottery tickets. They often seem to be poor, and poorly educated (thus, "tax on the stupid" jokes). And the lottery is about the most stupid bet you can possibly make with your money.

That said, I think it looks a lot better if you look at the lottery as entertainment. The dollar lottery ticket is hardly a back-breaking "investment," and it's hard to take any kind of exponential risk (buying more tickets is a linear process). Probably better that people fritter away their money on the lottery than three-card monte.


Well.... (none / 0) (#11)
by ScottW714 on Thu Apr 21, 2011 at 11:29:17 AM EST

I would hardly call a $20 scratch off ticket as entertainment, but I think the whole thing is silly. But there are plenty of people putting investments into tickets, trust me, when you get behind one at the go-mart it's as annoying as much as it is sad.

Think about the winners, more likely than not, it's a group of people who put their funds together, and have been for years. Rare if a lottery winner is a one time participant or someone doing it for entertainment.

I think the stigma of lottery being a poor man's form of gambling is incorrect. As mentioned above, and not matter where you go, at least here in Houston, people are buying tickets. River Oaks, where the Senior Bush's reside, and where I used to, has just as many lotto fanatics and the gentrification area I used to live as well, from folks of means, to yuppies, to vagrants, all starry eyed for the megabucks. And as least once a year, seems like someone who already won, wins again, which only leads me to believe millionaires, even lottery created millionairess are playing the lottery. For someone to win twice, they are either ultra-lucky, they are investing heavily, or a combination of the two.


Well, there are enough "winner" (none / 0) (#12)
by andgarden on Thu Apr 21, 2011 at 11:34:02 AM EST

anecdotes to have smiling happy people on the news once a month or so. But the reality is that I would be much smarter to bet that a regular player will never win big (scratch tickets are somewhat different in my mind) than to play lottery itself.


In CA, the lottery is for a good cause: (none / 0) (#21)
by oculus on Thu Apr 21, 2011 at 01:08:31 PM EST

public education. Although there seems to be minimal trickle down.


I think the evidence shows (none / 0) (#23)
by andgarden on Thu Apr 21, 2011 at 01:23:48 PM EST

that the lottery is a fairly regressive funding mechanism. But it isn't compelled.


Can't figure out what your last (none / 0) (#26)
by oculus on Thu Apr 21, 2011 at 03:04:51 PM EST

sentence means.


Nobody forces you to buy a lottery ticket (5.00 / 1) (#27)
by andgarden on Thu Apr 21, 2011 at 03:19:46 PM EST

: Agreed (none / 0) (#33)
by CoralGables on Thu Apr 21, 2011 at 04:30:09 PM EST

the lottery is effectively an optional tax.

: Nobody Forces any Form of Gambling (none / 0) (#39)
by ScottW714 on Mon Apr 25, 2011 at 10:34:28 AM EST

It's all voluntary.

I think it's the same in NY (none / 0) (#37)
by nycstray on Thu Apr 21, 2011 at 10:47:25 PM EST

the education angle that is.

at my local corner store here in CA, the lottery screen flashes how much has gone to education (also amount won in the area/county). Considering how broke the schools are, I say any lil' bit helps.


BTD (none / 0) (#30)
by jimakaPPJ on Thu Apr 21, 2011 at 03:28:59 PM EST

Many states have taken the ludicrous position that poker is not a game of chance,

I always thought that CA finally legalized holdem around 1990 because they said it was a game of skill, not like "stud-horse" (stud) poker, which was a game of chance.

Turns out that isn't true. The only card game CA designates as a game of skill is Bridge.

A shame (none / 0) (#32)
by SOS on Thu Apr 21, 2011 at 04:25:14 PM EST

this country has shifted it focus away from those who can really contribute something valuable and tangible over the long term for everyone's benefit to those who "just have money".