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.
Fair enough, I'm not knowledgeable about casino economics. Focussing only on the gambling, however, I'm scpetical they need whales.
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.
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.
> 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
> 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.
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.
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.
> 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 ?
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.
Are you able to tell us more about your operation? Size, scale, profitability etc?
Titles ending “than you thought” always, always come across as condescending nonsense.
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...
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.
> can't be 28% for the whole state, that would mean a third of the population are degenerate gamblers
Not how likelihoods work.
The link is broken for me.
Strange - how about this one? https://archive.is/8xQmF
Works thanks
Does look like I would have to get a lot more toxic thoughts before I would be able to keep up :(