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Comment by pavel_lishin | Hacker News Reader

> The difference between the D.F.S. high roller and the blackjack whale, of course, is that the whale is trying to take millions from a multinational casino corporation and not from the honeymooners from Fresno who are betting away at the $5 tables.

I don't understand this bit. What's the difference? The casino is taking money from those honeymooners; and it's paying it out to the whale. The whale negotiates rules that are different than those that apply to the honeymooners. How is this different than the DFS whales?

Is the only difference that FanDuel/DraftKings allow players to engage in one-on-one challenges, vs. playing against the house?

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The idea here is that the casino will be more diligent in not tilting the odds too much in favor of the whale, because it's the casino's money that is going to be lost to a game tilted in the whale's favor.

The argument is that in DFS because the whale is winning "other people's money" well then it's not as bad in the company's view.

But obviously the supply of "fresh meat suckers" is a corporate resource of the company's that is being exhausted by too much whale fleecing... so they still police it to an extent, but just not as much.

Trust me, it isn't the "Casino's money" it is always the other players money. At its most simplest, people come into the Casino and drop money on the floor, the Casino collects it, and then randomly gives some of it to people as they exit. It preferentially (by giving a higher probability) gives money to people who have come in a lot and have dropped a lot of money on the floor. At no time is there any risk that the Casino won't keep all of its "fraction" of the dropped money.

There is always risk, a series of unfortunate events can drain a casino, the casino tries to mitigate these risks through the rules/odds.

>The idea here is that the casino will be more diligent in not tilting the odds too much in favor of the whale

Allowing scripted entries is one of the biggest examples of this and a huge differentiator between DFS and casino games like poker. You will very rarely have an absolute poker novice playing against a skilled shark. The novice will generally know they are a novice and will enter lower stake games. The shark's time is money and they will only enter games with high enough stakes to merit playing. This is completely different for DFS when scripting is allowed. The sharks can play an almost unlimited number of games against any opponent. If it is completely automated, there is no reason why the shark can't challenge the complete novice who is only willing to bet $5.

DFS sites do have novice games and ones with limited entries per account, however. You can choose to enter these.

It's not paying it out to the whale. It's also beating the whale. They won't adjust the rules to where the whale has an edge, generally.

Generally, but not always. An article in The Atlantic a few years back explained how one whale took a trio of casinos for $15M:

Johnson did not miss the math. For example, at the Trop, he was willing to play with a 20 percent discount after his losses hit $500,000, but only if the casino structured the rules of the game to shave away some of the house advantage. Johnson could calculate exactly how much of an advantage he would gain with each small adjustment in the rules of play. He won’t say what all the adjustments were in the final e-mailed agreement with the Trop, but they included playing with a hand-shuffled six-deck shoe; the right to split and double down on up to four hands at once; and a “soft 17” (the player can draw another card on a hand totaling six plus an ace, counting the ace as either a one or an 11, while the dealer must stand, counting the ace as an 11). When Johnson and the Trop finally agreed, he had whittled the house edge down to one-fourth of 1 percent, by his figuring. In effect, he was playing a 50-50 game against the house, and with the discount, he was risking only 80 cents of every dollar he played. He had to pony up $1 million of his own money to start, but, as he would say later: “You’d never lose the million. If you got to [$500,000 in losses], you would stop and take your 20 percent discount. You’d owe them only $400,000.”

http://www.theatlantic.com/magazine/archive/2012/04/the-man-...

Right, it happens when a pit boss or marketing department makes an error. It's not something they do on purpose. There are lots of stories of people flying in from around the world because some casino was dumb enough to pay double odds on 00 on roulette or something.

This could also be done on purpose occasionally as a money losing promo in order to bring in new long-term customers. Casinos have insane LTCV so it might make sense sometimes. In this scenario it would be the classic groupon problem where you get taken advantage of by 'deal hounds'

Regardless of the semantics, I think you're missing the point of what he's saying. His overall argument is that DFS is more similar to casino blackjack than it is different.

Blackjack you will lose the longer you play. It's math. A top DFS player can consistently play profitably.

Poker is a better analogy then. You don't play against the house's money there, just the other fella's. DFS, from the article, is best played profitably by whales if there is bumhunting of the newbies. Not only, but the best way to generate cash and minimize the time to do so is to play newbies. DFS is not strictly predatory, but if you are not playing as a predator in the big sites, you are going to loose all your money.

This is gambling. Not strictly defined as such, but if it looks like a duck, walks like a duck, and quacks like a duck, guess what?

How is it gambling? The same guys with the skills consistently win? Elements of luck, sure, but the fact that the predators exist in the game demonstrates that it isn't gambling.

There are professional bettors who make money on horse racing (eg: Alan Woods). They look at historical odds of horses, jockeys, weather conditions, track conditions etc and like these 'predators' on DFS use models to predict probabilities of runners winning. When the estimated probability of the horse winning exceeds the estimated final public probability by the track take, they bet, and bet big. Lots of data, lots of modelling, algorithmic, lots of domain knowledge, and fully automated. No need to scrape websites, totes will supply the latest odds take their bets programmatically.

Do you consider betting on horse racing as gambling? To be honest, for the professionals placing bets in this way, I don't (keep in mind it's very very easy to incorrectly place yourself in this category, and you will lose). But the vast majority of people betting on DFS do not, and can not, take this approach. For them, horse racing and DFS are very much gambling.

Not if you tip the odds in your favor by counting cards. Not illegal by any means, but you have to make sure you're covert enough about it that you don't get kicked out by the casino.

That's very incorrect. The reason it's different is that the honeymooners from Fresno lose (or win) based on the house playing blackjack with a known set of parameters. If the honeymooners play perfect blackjack (which is a game of chance, not a game of skill), the expected outcomes can be calculated.

If the whale negotiates the odds in his own games, he's changing the expected outcomes in his games versus the house, but he's not altering the odds for the honeymooners.

He might win physical dollars that were lost by the honeymooners, but because both players are playing the house, it's meaningless 'whose' money he's winning. He's taking money from the Casino's profit margin, really. They're gambling that he'll still lose more than he wins, and the slimmer margins will be made up in volume.

DFS is a skill game both in player selection, AND in skirting the rules, AND in getting the 'house' to tilt odds in your favor -- which directly tilt the odds even further away from the other players.

You're misunderstanding. I'm not taking a stance on whether this is an accurate analogy or not. I'm just stating that the OP is misinterpreting the author's thesis by nitpicking a small point the author make's out of its context. Reread the article, then look at the point OP is making in the full context.

"Whales" are rich guys who are addicted to gambling and lose a ton of money at the casino. Casinos love whales and will try to track them with rewards cards and lure them into their casino with huge upfront losses (free shows, food, drinks, entertainment, airfare) because they know they'll make it up when the whale starts to gamble. Once a whale starts to bend the rules at a struggling casino too much to win money on average, he stops being a whale and starts being a huge liability.

The only people who win money (on average) at casinos are "professionals" who play games against other players rather than strictly against the house - poker being the prime example. Many poker pros will hang out at "amateur" tables and pose as suckers to draw in less experienced players, then hustle them.

So ultimately the casino does not redistribute money to the whale - it reaps money indiscriminately due to its "house edge" on every game and slot machine.

Here's a breakdown of the house edge and std deviation for a bunch of different games [1]. Craps and blackjack have the smallest house edge due to historical rules of how the games are played, whereas games such as slot machines have a high house edge as the casino can tailor the software that determines the payout. For example, slot machines in Nevada are only legally required to pay back 75% to players on average while the rest goes to the house - a true gamble for suckers. [2]

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The article implies that DFS is different because FanDuel and DraftKings are unable to implement strict rules that collect from players indiscriminate of size.

D.F.S. high rollers similarly come with demands, and because there’s no powerful regulatory body involved, DraftKings and FanDuel have been mostly free to set the parameters of play, which, as it turns out, is near anarchy, especially for the D.F.S. elite.

This gives experienced players an advantage over new players that (very arguably) isn't true of poker because the players adhere to a stricter, more heavily regulated set of rules and have more of a choice of competition between hundreds of casinos vs. 2 sports betting websites.

It's definitely a tenuous argument though. At the end of the day, it's gambling, just like the stock market is gambling. Unless you have insider info, you're at the whim of the market and the traders with high powered hardware/software and connections.

[1] http://gaming.unlv.edu/casinomath.html

[2] https://en.wikipedia.org/wiki/Slot_machine#Payout_percentage

For example, slot machines in Nevada are only legally required to pay back 75% to players on average

The most important word in Vegas is that last one...average.

As long as all the machines in the house average 75% in payout, the house is in compliance.

What it means for the average player is that the low-denomination slots (nickel, quarter) can pay significantly less than 75%, and by setting a few high-denomination slots ($1/$5/$100) above 75%, everything comes out clean.

So it's an even worse situation if you play the cheap slots.

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