Pro bettors disguising themselves as gambling addicts
bloomberg.com
bloomberg.com
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.
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.
Or get assaulted or murdered, internet death pool style? All kinds of really fucked up incentives are created by these legalized betting apps.
Is any of that illegal besides the assault itself?
I'm sure an actual attorney could come up with even more reasons this is illegal.
Are you sure that the party who has solicited the crime is not the investors?
What makes it illegal to interfere in the outcome?
If hurting someone credibly increases the odds, it's not if but when will people cross the line.
https://www.statista.com/outlook/amo/online-gambling/worldwi...
There is already $97 billion USD/year. Where is the evidence for what you're saying?
Looking into it, the vast majority of incidents are the player themselves betting against their team or losing on purpose, the same of ways matches have been fixed since the dawn of betting. Paying someone is just so much easier than fighting them.
https://helpcentre.sportsbet.com.au/hc/en-us/articles/187169...
https://www.sportsbettingdime.com/guides/how-to/no-contest-b...
Can you show me any time what you're saying has happened?
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.
“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's not perfect, but the leagues don't have much of a choice. The US Supreme Court ruled that banning sports betting was unconstitutional, so until the court rolls over to new justices with new opinions on the matter in a few decades, it isn't going anywhere. It doesn't make any difference how much some fans on the Internet don't like it. Federal lawmakers can't ban it.
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.
They had one of if not the 'worst' season in the last 15 years or so and really didn't care. But a huge part of that was because the way all of the season tickets, merchandise deals, etc etc, didn't matter if the team was any good. Semi-Ironically the economics were explained by a huge fan of them; he appreciated the business savvy.
The teams are not franchises, they can not simply "buy" whatever players they want, etc.
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.
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.
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.
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.
I think what you need is to see a therapist and to rethink your position in life a bit, because it seems very misanthropic without being based on reality. I'd wager that most people don't care about sports all that much, at least anecdotally.
It's perfectly possible to find friends who aren't into "sportsball", but it takes more than paying an entry fee so you're allowed to hang.
I strongly disagree with this.
A lot of us in the furry fandom have friends who are not furry. You would not believe the number of "normal" people who have seen pictures of my fursuit and thought it was cool. Everyone in my bible study thinks furry conventions look like fun but they would never attend a convention themselves.
And if your difference is not with identity or hobbies, significant number of our group are neurodivergent and/or LGBTQ+(whatever the acronym is today).
Despite what's happening currently, US culture has gotten less uptight about these things in the last three decades. With the internet people have a lot more exposure to things they wouldn't have seen before. And I believe, more accepting as a result.
Finding a friend can be difficult, but with the internet it is not impossible.
Seems more like you are seething.
Those who do learn from history learn that we never learn from history.
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.
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)
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 a good grift unfortunately, an insane amount of money is involved in it as is usually the case with these sorts of morally bankrupt endeavors.
> 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.
I can't tell if you are promoting the stock market as a better or worse alternative to gambling?
If you meant the latter, you couldn't be further from the truth. The stock market, as a whole, represents the combined productivity of all the publicly traded firms in the country. Day to day, the stock market is unpredictably volatile. But over the long term (decades), it trends upward and by a large amount. There is no safer investment with the same kinds of returns and there is lots of research to prove it.
But short-term speculation and individual stock picking is much more akin to gambling.
There's a big difference between betting on sports (zero sum) and buying stocks (ownership in a company), even if the latter can be silly at times.
I'm not fond of it either, but I don't have a better answer that doesn't seem like it's going to lead to worse outcomes.
Agree that heavily regulating and perhaps banning advertising needs to be done.
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]).
At a minimum I do think the government should limit advertising and crack down on incentives these sites gives to keep people hooked.
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.
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.
What are the benefits to keeping gambling? Does the entertainment value offset the societal harms?
yes. Just like the entertainment value of unhealthy food outweighs the social harms it creates.
To see someone being put on the big screen to make some guess in a future inning with a plug for a bet site at a baseball game; frankly at this point just allow steroids again if you're selling out that bad.
As I understand, they basically do. HGH, TRT, and other stuff is used for quicker recovery and to slow effects of aging.
Yes. But half of HN works in the advertising industry.
(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.
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.
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.
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.
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.
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.
Worse yet, the chase for more and more football money has screwed over regional conferences, which harms the run-of-the-mill student athlete in non-revenue sports (think track, swimming, tennis, etc) who has no pro aspirations. Why the hell is Stamford, a school on the west coast, in the Atlantic Coast Conference?
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.
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.
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.
Edit: but even when money is being made, the athletes don't get it.
> 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.
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.
It's kind of like rich kids who are bad students paying for admission into elite schools. Obviously there's value, otherwise they wouldn't have their parents pay for it.
https://www.npr.org/2024/05/24/nx-s1-4978680/house-ncaa-sett...
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.
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.
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.
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.
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?
>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.
Particularly for Las Vegas, the business may not be what you think it is. Vegas is, amongst other things, a global money laundrette.
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.
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.
And in fact if these guys were good they wouldn't be banning people at all
… 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?
Your only way of dealing with a bad debt is banning the person and letting the other amateur bookies know about it.
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.
Their net income is either positive or negative
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.
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.
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.
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.
One major difference that may change the math is the tax rate. Illinois for instance just passed a 40% tax on sports betting.
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 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.
> 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.
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!
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).
These article (and others like it recently) just make me think US sports betting operations are operating on antiquated business model.
If you only offer to bet on the money line, it makes it way harder for professional gamblers.
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".
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
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 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 :)
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.
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.
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.
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.
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.
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.
Some of them ban outright and some restrict your stake. When I worked for a bookmaker we had an account that had made several hundred thousand £s from us and was limited to betting relatively small amounts. He would always bet as soon as our odds would open and then we'd adjust them.
The soft books usually kick out or limit players if they are beating smaller markets such as player props, team props, derivatives (for example, a 1Q team total, etc). A 'sharp' book such as Circa or Pinnacle might not explicitly limit an individual player, but in general they don't offer as many markets, so it's not an apples to apples comparison.
ML run amuck
Imagine justifying drug dealers with this line of reasoning
Word document metadata shows the bill's proposed text was written in circulated in a .docx file created by a lobbying firm that's paid $90k/month by the Malaysian owner of a local casino.
Not bad for 30 seconds dedicated to a first blind attempt!
Maybe just put a limit on how much you can transfer to the app each month or something? Like $500?
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.
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.
I'm not sure about B, it's pretty easy to identify an addict.
The problem I have with sports gambling is the massive commercialization and advertising. We don't tolerate it for cigarettes, and gambling addictions are much worse than cigarette addictions in terms of financial harm.
Gamblers know where to go, but the purpose of all the advertising is attract new gamblers, preferably the compulsive kind.
Another harm is what it does to the integrity of sports. There are famous cases like the 1919 White Sox and Pete Rose. The people who took part were banned for life for a reason.
exactly how it reads? can you point to any historical examples where it has?
> Are you really going to claim legalizing sports betting a few years ago DIDNT increase gambling in the US
No? Did not claim that at all?
> This doesn't strike me as a good faith comment
yours does strike me that way either; although mine definitely was in good faith.
If it was in good faith, why didn't you bother addressing the point? How was gambling prohibition "not working"?
On gambling prohibitions though - one local one I can think of is the CA gambling market. California has decided most forms of online gambling are “illegal,” (except the ones that have successfully lobbied for it), yet it is not enforced at all, only on corporate sites, which creates a massive black market that actually causes far more exposure to harm to consumers than legalization would. This isn’t a novel argument, it’s been debated for 20+ years and the results are pretty clear. I understand however people don’t seek nuance in these arguments and if your stance is “GAMBLING == BAD” I really don’t have much else to say here.
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.
Stock options can be used as a tool to hedge against risk.
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.
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.
A lot of other comments are along similar lines, talking about how bad sports betting is. I agree with all that, but what I like is that pro bettors are using the same algorithms to make bank off of these predators. Maybe it'll create an arms race between gambling apps and professional gamblers, but I still hope that enough people follow this behavior and eventually break the model that gambling apps are using.
The profit all comes from innumerate whales who often can't afford the losses.
>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%.
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...
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.
In that case I admit I got tricked by the phrasing in the article, and shouldn't have mentioned gambling, just bankruptcy risk.
Not how likelihoods work.
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.
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.
If sports betting isn't checking on this and cracking down there is a major problem.
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.
The fact that the most successful investors have the largest effect on the price is exactly what makes the market fair. A layman can login to manage their 401k, put in a market order, and know they are getting a fair price because many people, much more knowledgeable than the layman, are competing to set the price.
But either way, the same effect occurs. The sharks in the stock market profit from making good trades and in order to account for that the market makers have to quote a wider spread in the book, which effectively means the retail trader pays a larger spread. The net effect is money transfer from the retail trader to the smart trader. Would it be better for the market maker to just refuse to trade with the smart trader and then give the retail investor a better spread? Welcome to payment for order flow. Could a smart investor pretend to be a retail trader and get some good trades through Robinhood? Maybe, that's pretty analagous to what these guys are doing.
These are different mechanisms for the same thing but I'm not certain one is clearly morally superior.
Legalizing sports gambling was a mistake
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 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...
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 intro section states that gambling addiction is an addiction and not an impulse control disorder because:
"the behaviors in problem gambling and most primary substance use disorders (i.e., those not resulting from a desire to "self-medicate" for another condition such as depression) seek to activate the brain's reward mechanisms while the behaviors characterizing obsessive-compulsive disorder are prompted by overactive and misplaced signals from the brain's fear mechanisms."
The psychological mechanism paragraph states:
"Several psychological mechanisms are thought to be implicated in the development and maintenance of problem gambling. First, reward processing seems to be less sensitive with problem gamblers. Second, some individuals use problem gambling as an escape from the problems in their lives (an example of negative reinforcement). Third, personality factors such as narcissism, risk-seeking, sensation-seeking, and impulsivity play a role. Fourth, problem gamblers have several cognitive biases, including the illusion of control, unrealistic optimism, overconfidence and the gambler's fallacy (the incorrect belief that a series of random events tends to self-correct so that the absolute frequencies of each of various outcomes balance each other out). Fifth, problem gamblers represent a chronic state of a behavioral spin process, a gambling spin, as described by the criminal spin theory."
Should Sports Betting Be Banned?
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!