

The Economist: Attempts to ban online gaming are doomed to fail. - yan
http://www.economist.com/node/16539402?story_id=16539402

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codingthewheel
Here's a contrary viewpoint:

Online gaming/gambling right now exists in an almost-perfect state of
_deregulation_. This deregulation allows low-rake, low-vig games to flourish,
and is IMO only reason why it's possible for consenting adults to play these
games (online poker being the classic example) with positive expectation.

Regulation of online gambling will likely create games with 20%, 30%, and 40%
vigs, as this is what a politician means when he says "regulate and tax". Most
state lotteries currently extract around a 30-40% vig, meaning only 60-70% of
the money going into the system is paid out as winnings. Other state-mandated
games extract similarly huge percentages. Nobody complains because the money
gets funneled into "education" or "public works", but state-mandated forms of
gambling are far and away some of the most pernicious gambling instruments
ever foisted on the public.

The endgame: if online gambling is ever widely regulated, the tax burdens and
regulatory requirements imposed will be passed along to customers (who are
mostly clueless about things like "rake" and "vig" anyway) and this will
create a world in which the only available forms of real-money gaming on the
net will be ones in which adults stare drooling at the screen, pressing pretty
colored buttons in the futile hope that they can somehow "beat" a game which
is now mathematically unbeatable.

I support the call for regulation. But anybody who thinks politicians like
Barney Frank are going to protect _low-rake_ , _low-vig_ online gambling of
any sort are likely going to be disappointed. Preserving a low rake _isn't
even on the menu_.

~~~
fexl
Also, the author of that article only considers two options:

1\. Banning the activity.

2\. Controlling the activity.

I prefer the third option.

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hugh3
Headline would be less confusing if it said "gambling". I thought: "Who the
hell is trying to ban online gaming?"

~~~
timwiseman
I agree fully. I find the fact that gambling is referred to as gaming. But,
for better or worse, that is a common term for it and it has been since before
video games or the internet existed.

[edit: spelling]

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Alex63
Interesting opinion. I wish I could believe that on-line gambling would be
legalized in the US, but when you see what has happened with seat-belt and
helmet laws (neither of which has any contributory effect to the harm of
others), you have to believe that there is an accepted viewpoint within the US
body politic that the state should act to protect individuals from the
consequences of their own actions (current interest in forced mortgage
adjustments is another example). Couple that with a powerful industry lobby,
and I don't have much hope of any change in the legal status of on-line gaming
in the near future.

~~~
shasta
> neither of which has any contributory effect to the harm of others

Unless you count the insurance company or taxpayer that has to support the
trauma victim

~~~
mseebach
The insurance company can demand that you use helmets and seatbelt, and try to
recoup their expenses from you if you don't. I'm not saying that's a perfect
solution, but rationalizing limitations on freedom in terms of avoiding a
public expense is a very slippery slope towards totalitarianism.

In particular, privacy comes to mind. Respecting privacy denies law
enforcement access to tools that might aid in the quick investigating of
crimes. Why should your need for privacy be allowed to harm the taxpayer that
has to support expensive investigations?

~~~
shasta
Well, the insurance company hopefully doesn't demand that you use a helmet but
rather asks whether you want coverage that applies when you're not wearing a
helmet, and it costs more.

And freedom is a slippery slope to anarchy. Slippery slopes are best addressed
with some reasonable theory that explains where the line is - where cost
exceeds benefit. Ideally government would attempt to decide what our core
values are - how we weigh privacy vs. freedom vs. equality vs. security vs.
fairness - and then try to evaluate policies based on how they fare in these
dimensions.

~~~
mseebach
> but rather asks whether you want coverage that applies when you're not
> wearing a helmet, and it costs more.

That's the same. If they ask you, you can say no, in which case they'll demand
you ride with a helmet, lest be uncovered.

> with some reasonable theory that explains where the line is

I'm arguing that the _particular_ argument of "you can't do that, it might
cost the taxpayers money" is over the line. I'm for stuff like consumer
protection, standards in advertising, anti-trust and a slew of other statist,
communist oppressing regiments. I'm not in favour of spending the polices
resources on giving you a ticket if you decide to ride your bike along the
beach on a beautiful summers evening and want to feel the wind in your hair.

~~~
Alex63
I think it's fair to question burdening taxpayers with the consequences of
one's risk-taking behaviour, but I think there are ways to deal with that. For
example, search-and-rescue efforts are often expensive, and taxpayers bear
much of the cost. Some jurisdictions require backpackers and others who might
end up needing those services to pay for permits, some of the cost of which
goes to support search-and-rescue services. One can argue that that means
careful backpackers end up picking up the tab for imprudent backpackers, but I
think that's preferable to asking _all_ taxpayers to pay the cost.

------
hristov
You can always tell when someone is being paid by some gambling interest or
another because they use the word "gaming" instead of "gambling."

~~~
gte910h
I thought people call it gaming because some people try to argue poker and
other games of chance which have a skill component aren't gambling.

~~~
wake_up_sticky
Poker is a game of skill which has a chance component.

~~~
codingthewheel
In the long run, the amount of luck in poker approaches zero.

~~~
gte910h
Not really in the modern poker universe with a house rake or seat fee.

There is tons of luck involved in poker games, including what types of bad and
mediocre opponents sit down, what the comp policies are, and what your health
is like (stamina is a huge part of poker, partially because it pays so god
damned poorly).

These uncertainties do not go away in human lifespans.

~~~
codingthewheel
Ah, but you're talking about short-term luck ("I sat down at a table full of
sharks", "I sat down and was too tired to play my best"). On any given day,
you can win or lose, and the best player in the world can't guarantee a win
_across a short period of time_. That's the strong gravity of short-term luck
in poker.

But sit down and play 5 or 10 million hands online (that's under a decade of
regular play, well within a human lifespan), or even considerably less than
that, and luck becomes a rounding error. Mathematically. Incontrovertibly.
Your long-term results in poker will reflect your skill level _closely_. And
of course the rake plays a part as well, by turning poker into a negative-sum
game instead of a zero-sum game, and dragging everybody's results slightly
south of where they would have been otherwise.

But rake or no rake, there's very little "luck" in poker at depths of millions
of hands, as you get in today's online games.

And even in the live game, where hand throughput is lower, luck is a small
enough factor over the years that the same skilled players win consistently,
and you can only win consistently by learning those skills.

~~~
gte910h
>Mathematically. Incontrovertibly.

Incorrect. In a game with no house, this may be true, but in a a game raking,
it depends a lot on what sort of players sit down against you.

So if you want to put 'table selection' under skill, yes, I'll grant your
point, but without judicious picking and choosing in that, poker can very much
be a losing game just like most other casino games.

Look at the O8 games in Tunica for instance. Dead dead and deader because no
one except people on oxygen tanks ever plays them.

It takes a _lot_ of confluence of factors to beat the house drain on games
(I'm talking in person games, not online games; online games are "merely"
illegal, but otherwise you'll likely be fine in the longterm).

------
nrk
For those of you who wish to support online poker, or would like to get the
latest information on how federal and state law affects your playing poker
online, <http://theppa.org/> is a great resource.

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adamilardi
With the government bleeding red it would be a good way to raise some tax
revenue. I listened to a hearing with Annie Duke in front of congress. They
all agreed the current laws didn't make sense. Somebody has to take charge and
get them changed. The basic idea was now the states can decide if gambling is
legal but online gambling is a federal issue essentially overriding the
states. Unless they can find a way to block all gambling traffic from state x.

~~~
anigbrowl
I've never understood why there are so many legal restrictions on gambling in
the US. Where I come from (Ireland/UK) there are lots of betting shops -
mostly catering to sports betting, but you can walk in and ask for odds on
anything, such as the outcome of a forthcoming election or whatever. Casinos
are no big deal (though they cater mainly to the better-off) and most pubs or
other social spots have a slot machine or two.

Of course, some people are compulsive gamblers and experience problems as a
result. On the other hand my local 7-11 (24 hour convenience store) attracts
gambling addicts too, one guy shows up there once a month and hangs out all
night playing a quick lottery and smoking two packs of cigarettes. For a while
I thought prohibition policy existed because the state wants a monopoly on
lottery revenue, but state lotteries seem to be just as profitable in Europe
as they are here despite the much lower payouts. The rates of gambling
addiction don't seem much different.

I have virtually no interest in the pursuit other than buying a lottery ticket
on a whim maybe once a year, but it's similar enough to video gaming that I
can see how people get hooked on it - probably something akin to a dopamine
deficiency. Prohibition seems pointless and wasteful; better to deal with
reality and divert a percentage of the revenue to mitigation services.

~~~
gte910h
European lotteries actually tend to have much higher percentages of money
paid, but much lower payouts. They're "less of a bad deal" from an odds
perspective than American lotteries.

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gte910h
I don't know, from what I've heard (from people who play online), the new
banking regulations make it significantly harder to pay poker sites money to
play.

~~~
dminor
Only by credit/debit card. The regulations exclude checks, so most sites have
an 'echeck' option.

~~~
gte910h
I believe there were quite recent new regulations which stop all bank payments
from US banks...my bank sent me a letter (although I'd never paid one of the
sites) about this, at which point I asked the player.

Am I mistaken about what happened?

~~~
dminor
If your bank is aware that a payment is going to an illegal gambling site,
they are required to block it. However, the regulations don't require them to
scrutinize checks since it's just not practical.

Merchants who accept credit/debit cards must code the transaction for whatever
their industry is, so those in the gambling industry are easy to block and
banks are required to do so.

------
livejake
What are the odds on failure?

