What will future casinos do forthcoming betting markets in everything?

by on December 7, 2016 at 9:09 am in Current Affairs, Games, Law | Permalink

The gambling market is somewhat saturated, so how can new customers be found?

One idea: skills-based games.

In Atlantic City, the Borgata added a basketball free-throw shooting contest. Other casinos are adding skill-based games to electronic slot machines — shooting, puzzles, less slot machine ding ding ding and more Angry Birds-style competition.

Maryland does not allow such games yet, but the state’s gaming agency says it is working on the issue.

That is from Michael Rosenwald, with most of the article covering D.C.’s foray into the casino genre.

1 Bill December 7, 2016 at 9:25 am

Here’s a way to get some money and it’s not even skills based.

If the casino is owned by Trump, and you are a foreign dignitary, what you do is buy a $1 million in chips, don’t use them, and give the casino an automatic $1 million profit.

Here’s what Donald’s father did to help his son: “That let Trump use the de facto loan in whatever way he needed. “Sure enough, the Castle made its bond payment the day Fred’s lawyer bought the first batch of chips,” Kranish and Fisher wrote. The tactic also had a nice financial benefit. “Not only did he avoid default on the bonds—and the risk of losing control of Trump Castle as a result—but patrons who hold gaming chips normally are not paid interest,” wrote the Philadelphia Inquirer at the time.

New Jersey’s Casino Control Commission investigated the chip purchase the following year and said it was an illegal loan that broke the state’s rules about casinos receiving cash from approved financial sources.”

http://www.motherjones.com/politics/2016/09/trump-files-fred-trump-funneled-cash-donald-using-casino-chips

2 The Other Jim December 7, 2016 at 9:33 am

Poor Bill.

How’d you enjoy the historic 2016 US Presidential election?

3 prior_test2 December 7, 2016 at 10:45 am

Clearly, he didn’t bet everything on red.

4 Kvothe December 7, 2016 at 9:34 am

This strategy could be game theory optimal.

5 Cliff December 7, 2016 at 12:24 pm

Please don’t use this name. It’s too painful

6 Bill December 7, 2016 at 11:07 am

Other and Prior,

Yeah, Just because its been done before doesn’t mean it will be done again.

7 Thomas December 7, 2016 at 12:41 pm

The suggestion that you care about corruption is hysterical.

8 msgkings December 7, 2016 at 12:44 pm

This year both candidates were corrupt. What’s your point, Thomas?

9 Thomas December 7, 2016 at 1:53 pm

Diehard hrc supporters suddenly worry about corruption in govt while hill is the most corrupt US national pol in a century. It’s hilarious and pathetic.

PS did you hear that Trump tweeted negatively about Boeing deal? He should have pulled a Hillary and took $10m in non-profit estate planning while the contract coincidentally doubled in cost. You know, to reduce corruption and please Bill. Bahahaha

10 msgkings December 7, 2016 at 5:52 pm

Again, both candidates were corrupt. What’s your point, Thomas? Trump has a few advantages to Clinton, but being less corrupt is definitely not one of them.

11 JWatts December 7, 2016 at 6:32 pm

“but being less corrupt is definitely not one of them.”

The polls indicate otherwise.

” Voters also think very little of the candidates after the debate. More than half of those polled said Trump is racist and out of touch with average Americans and 60 percent said he is sexist. Sixty-three percent of voters said Clinton is overly secretive, 55 percent said she was corrupt and 52 percent said she was “extremely liberal.” ”

http://www.politico.com/story/2016/10/clinton-trump-debate-poll-229581

12 msgkings December 8, 2016 at 12:11 pm

LOL at thinking a poll of randoms who just voted Trump president is indicative of which of the two has deeper corruption in their business dealings.

13 Bill December 7, 2016 at 12:58 pm

Thomas,

I care about corruption. It’s not funny, although what some people imagine is.

14 Thomas December 7, 2016 at 1:48 pm

Ahahaha

15 David December 7, 2016 at 9:31 am

Applicable Planet Money episode that details the event. http://www.npr.org/sections/money/2015/04/24/402010841/the-free-throw-experiment

16 Jeff R. December 7, 2016 at 2:27 pm

The problem I see with all this is that you and your friends can go to any bar that has a pool, fooseball, air hockey, or shuffleboard table (and there are many) and gamble amongst yourselves all you want. So why do you need the casino? To put you in a gamblin’ frame of mind? Not sure I see how this is going to bring tons of people in.

17 mkt42 December 7, 2016 at 3:15 pm

By the same token (heh), we can get together with our friends and play poker amongst ourselves. And tens of millions of people do.

But many of them also go to Las Vegas or other places to play poker.

18 Jeff R. December 7, 2016 at 3:50 pm

Yeah, that’s a fair point.

19 anders December 7, 2016 at 9:52 am

“The market is somewhat saturated, so how can new customers be found?”

Quite a stretch to use the term “market” here, since the gambling product/service is illegal in most places. Even where legal, government greatly restricts/regulates gambling commerce.

A genuine market would have no difficulty expanding its customer base because it could freely innovate to meet its customers wants.

The best option for “finding” new customers is to completely legalize gambling.

Anti-Gambling laws are totally unnecessary, unethical, and hypocritical posturing by politicians. Why are state lotteries exalted boons to society, but slot machines in Manhattan are a horrible menace to the public?

20 Hadur December 7, 2016 at 10:05 am

The Washington DC lottery operates computer simulated horse races. Go to a convenience store in Washington DC, and you’ll likely see a TV monitor displaying constant computer animated horse races. You can bet on them, just like a real horse race. Of course casino gambling (and, I suspect, operating an actual horse track) remain illegal in Washington DC – the casino mentioned in the OP is just over the border in Prince George’s County, Maryland.

21 Troll me December 7, 2016 at 3:00 pm

What’s ethical about putting up machines that empty retirees’ accounts 25c at a time and provide nothing in return?

22 Troll me December 7, 2016 at 3:01 pm

A law that bans that cannot be “unethical”, although that is not the same as saying it’s necessary.

23 Hadur December 7, 2016 at 9:57 am

A sportsbook would be nice.

24 ant1900 December 7, 2016 at 10:09 am

+6.5

25 Jeff R. December 7, 2016 at 1:31 pm

You can say that again.

26 GoneWithTheWind December 7, 2016 at 10:12 am

Gamblers are like alcoholics. Not everyone is an alcoholic and not everyone will gamble. It is probably genetic but could well be made worse by social and environmental factors. But the point is I don’t think it is that easy to “make” gamblers of the kind who are willing to make casino owners mega-billionaires.

27 Mark Thorson December 7, 2016 at 11:48 am

This is why I think even-money gambling should be legal. Bars could have even-money slot machines to draw in customers, and the bar would make money off of selling drinks. Limit the bet to $1 or so, and it would be a rare statistical anomaly for a guy to lose his whole paycheck gambling.

28 Cliff December 7, 2016 at 12:26 pm

Totally depends on the payouts. Many slots have progressive jackpots and may well be +EV but you would still expect to usually lose your whole paycheck

29 Brandon Berg December 8, 2016 at 1:02 am

How can they be +EV and still profitable?

30 kevin December 7, 2016 at 12:28 pm

Problem is, like many drugs, you need a bigger and bigger quantity to achieve the same high. Sticking with dollar bets would get boring, resulting in diminishing returns.

31 Cliff December 7, 2016 at 12:29 pm

Is there some research?

32 Troll me December 7, 2016 at 3:07 pm

The fact that people having experienced gambling addiction can say something to that effect?

33 Thomas Sewell December 8, 2016 at 6:27 am

Your odds make sense, but you’re missing a key ingredient, size of bankroll.

Even with even-money gambling, there is enough of a random walk that someone can run out of their bankroll and thus have to stop completely behind, while the house will always have enough to “keep playing”, as it were.

The result is that the house still makes plenty and people still lose plenty.

Source: Empirical results discovered when trying to figure out why a small group of machines in a hotel which were supposed to return <1% actually returned much, much more. The individual bet odds and payout were accurate, but the timing of when people stopped playing meant way more than you'd think based on the odds went home losers.

34 prior_test2 December 7, 2016 at 10:49 am

Skills games are unlikely to be the future, in the same way that card counting in blackjack isn’t the future. Casinos are allowed to ban people, and anyone able to beat the casino through skill is banned when identified.

‘Ben Affleck has admitted that he’s been caught counting cards while at casinos, but he doesn’t see it as a big deal.

In his cover story for the October issue of Details magazine, the “Gone Girl” actor confirmed reports that he had been caught counting cards while playing blackjack.

“That is a true story,” Affleck said. “I took some time to learn the game and became a decent blackjack player. And once I became decent, the casinos asked me not to play blackjack.”

Affleck seems to be referring to an April incident when he was asked to leave the Hard Rock Las Vegas after he was seen counting cards at the casino’s high-rollers table. As a result, he was asked to leave the premises, and reportedly banned for life from playing blackjack at the casino.

While not illegal, counting cards is not generally tolerated by casinos.’ http://www.nydailynews.com/entertainment/gossip/ben-affleck-opens-card-counting-incident-article-1.1943324

35 Hadur December 7, 2016 at 10:57 am

Are you familiar with the American business “Dave and Busters”

36 Cliff December 7, 2016 at 12:27 pm

NJ casinos are not allowed to do that

37 kevin December 7, 2016 at 12:37 pm

Not explicitly, but reshuffling the cards between each deals does. Its akin to saying, if you don’t leave we’ll just waster your (and our) time until you do

38 A Black Man December 7, 2016 at 10:57 am

Casinos face the same kind of problem as the porn business. Once it gets legal, the state provides protection, thus making the barrier to entry much lower. When gambling was controlled by the mob, it was tough to run a card room or a bookie operation. You needed connections to the tough guys in order to have protection. The same was true of the pornography business.

Now that both are legally protected, the supply goes up faster than demand and thus the profit margins collapse. Just as you can get all the free porn you like off the internet, the future of gambling will be lots of small suppliers willing to live on small margins.

39 Milo Minderbinder December 7, 2016 at 11:41 am

But now that the casinos are legal, the state can limit competition by restricting the number of casino licenses.

In Atlantic City the process is more like a “Shall Issue CCW” state. Basically if you meet all the objective requirments you can open a casino.

But in Pennsylvania, there are only a limited number of licenses. When Philadelphia considered a second casino, nearby competitors weighed in against the issue of the license.

40 A Black Man December 7, 2016 at 12:47 pm

In theory, but not in practice. Competition between states has killed AC and it is choking off CT casinos. That and on-line gambling undermines these efforts, raising the cost of enforcement.

In the long run, the guys who will get rich from legal gambling are the people who make and sell the equipment.

41 Albigensian December 7, 2016 at 11:29 am

Casinos used to be filled mostly with table games such as blackjack, which contain an element of skill (at least in the sense that it’s possible to play badly).

BUT casinos today are mostly filled with slot machines, and practically all of these (with the obvious exception of video poker) are all chance, no skill. Thus it seems likely that most gamblers prefer games that can’t be played badly.

In general, casinos in the USA have two main groupings of customers: a small number younger people (mostly men), plus a larger number of older women (aka “bluehairs”).

The bluehairs are seldom problem gamblers as they go to the casino expecting to lose and when the funds they budgeted for the trip are gone they stop gambling. The young men are much more likely to be big losers, as they hope to actually come out ahead by winning a big jackpot. It is they, of course, who enter into the hell of doubling-down in an attempt to recover losses.

Of course, problem gamblers are very profitable to casinos, especially as, even if gamblers are gambling with stolen money, the casino can’t be made to return it to those from whom it was stolen (as would be the case with non-fungible stolen goods). And games of skill are going to have far more appeal to the young-and-foolish than to bluehairs.

Of course, in a libertarian world there would be no restrictions on gambling; indeed, gamblers presumably could use their body parts as collateral and the casino would have a right to collect. But in this world, the social costs of problem gambling tend to get socialized and in any case often fall on associated non-gamblers such as the children of gamblers and employers who lost funds thata problem-gambler employee “borrowed” in an attempt to recover losses.

One approach might be to tie any expansion of legal gambling to nudges intended to reduce social costs. For example, casinos could be forbidden from loaning money to gamblers, and ATMs could be forbidden within and near casinos. Doing this wouldn’t prevent anyone from borrowing money to gamble, but it would provide some time and space for thinking about the wisdom of doing so.

For that matter, now that most casinos have some form of “frequent gambler card,” it should be trivially easy to track how much money each gambler is losing. A (admittedly hard) nudge here would be to limit daily losses except to those who had taken a positive-option, time-limited step to identify themselves as willing to lose more than the daily limit- with, perhaps, mandatory notice to spouse and employer.

42 Thomas December 7, 2016 at 1:56 pm

Sounds a lot like anti-abortion regulations. Good suggestions.

43 John Mansfield December 7, 2016 at 12:11 pm

My impression (absorbed from growing up in Las Vegas) is that elements of skill are regulated against in casinos because they open the games to rigging. Las Vegas gaming authorities put some effort into providing a setting where tourists can lose their gambled money without having been cheated.

44 Troll me December 7, 2016 at 3:14 pm

There might even be a national interest case for not facilitating cheating of too many tourists.

45 kevin December 7, 2016 at 12:36 pm

Casinos already offer skill games–poker for example–where you play against other players. The distinction isn’t really skills, its putting your skills to use against the house vs. other players

46 regular commenter different handle December 7, 2016 at 5:30 pm

I live in Vegas and gamble professionally. Clear in this thread is the usual notion that the casinos are running some sort of scam. From my perspective, they offer a tightly regulated and surprisingly transparent entertainment product. The casino hold for each game is freely available information, and what the customer gets in return for that hold is nicely calibrated by the market.

If an old lady likes to come play the machines for a few hours each week and gets a dinner and a silly casino-branded windbreaker in the deal, why is this some sort of mugger-victim scenario?

It’s mostly a benefit to Las Vegas (and the tribes) that governments elsewhere keep pretending gaming (oh heavens, GAMBLING) is the devil.

47 prior_test2 December 7, 2016 at 11:57 pm

‘Clear in this thread is the usual notion that the casinos are running some sort of scam.’

Far from it – casinos are a business with an unswerving devotion to profit. A business which our president-elect has been involved in for decades, and the entertainment provided by his ventures in this areas has been long running.

‘and what the customer gets in return for that hold is nicely calibrated by the market’

I’m sure our president-elect knows something about that, along with the possibility that after his experiences, he may still have a desire to beat the market at its own game.

‘why is this some sort of mugger-victim scenario’

It isn’t. It is this scenario – ‘But the expansion of gaming generally is the expansion of slot machines specifically — the modern casino typically earns 70 to 80 percent of its revenue from slots, a stratospheric rise from the 1970s when slots comprised 50 percent or less. New York, the latest state to introduce gaming, doesn’t even allow table games, and Pennsylvania, now the third-largest gaming state in the country after Nevada and New Jersey, only later allowed table games in an amendment to its legislation. And increasingly, the psychological and technical systems originally built for slot machines — including reward schedules and tracking systems — have found admirers in Silicon Valley.

In the factory, Trask and I passed a ProWave cabinet, a design released by Bally in mid-2014 that features a 32-inch concave screen, like an even more curved Samsung TV. Trask claimed that putting the same exact games on curved screens increased gameplay 30-80 percent. I asked him why that was. “It looks cool; it’s incredibly clear,” he said in a tone suggesting a guess as good as any. Game designers are charged with somehow summoning the ineffable allure of electronic spectacle — developing a system that is both simple and endlessly engaging, a machine to pull and trap players into a finely tuned cycle of risk and reward that keeps them glued to the seat for hours, their pockets slowly but inevitably emptying. As we stood over the gaming cabinet, Trask told me about the floor of the MGM, home to 2,500 machines and hundreds of different games. Trask’s mission, as he saw it, was simple: “Our job is to get you to choose our game.”‘ http://www.theverge.com/2015/5/6/8544303/casino-slot-machine-gambling-addiction-psychology-mobile-games

48 JC December 8, 2016 at 4:08 am

“the Borgata added a basketball free-throw shooting contest”

This is a great idea. They could add 3-pt shooting contest too, now that three is the new dunk.

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