
The Dark Reality of Sports Betting and Daily Fantasy Games - prostoalex
http://www.nytimes.com/interactive/2015/10/15/us/sports-betting-daily-fantasy-games-fanduel-draftkings.html?action=click&contentCollection=Middle%20East&module=MostPopularFB&version=Full&region=Marginalia&src=me&pgtype=article
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ryandrake
> “People would argue that it’s a victimless crime, and it’s not,” said
> Richard A. Brown, the Queens district attorney, who has successfully
> prosecuted several gambling rings with Mafia connections. “Those who
> participate in it often use threats and intimidation.” Profits from these
> illegal rings also fund other criminal enterprises.

Funny. Likely, the ONLY reason the Mafia and threats and intimidation and
shady deals and violence are involved is because it's illegal. Legalize the
activity, and all that goes away overnight. MGM Grand and Caesars replace
sketchy-web-site.com, and VISA and MasterCard replace paper bags full of cash.
Lots of parallels with the war on drugs here.

~~~
xlm1717
Not sure MGM Grand and Caesars would swoop in so easily to replace them, as
both have filed for bankruptcy recently.

~~~
merlincorey
Which kind of bankruptcy? I was just in Vegas and both of those properties
looked to be making money.

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n0us
I have friends who are very into this and it is something I simply cannot
understand. No one I know has ever won money in the long run, they all lose.
Usually when you ask "How much have you won?" they will tell you "Oh, about
$x" but what they mean is not how much they are up net in the long haul. They
will get on a streak and keep betting until they are up about 1000 or so, then
start losing and keep betting until they have to put more money in the
account. That doesn't count as a loss to them though, they add that 1000 to
the total. These people are both in denial to themselves and others about how
much they have lost, its like they don't understand the concept that when you
lose the money you won, you aren't "winning" at all. There are some of them
who understand that they are losing but they don't care, they say that they
bet because it makes sports more interesting, and these people seem to have
the habit in a reasonable amount of control. The other's don't seem to realize
it's never going to be "the next bet" that lets them cash out.

~~~
TillE
I made about €250 from €20 with a series of bets relating to Euro 2012, and
that's where I stopped.

The only remaining slight interest I have in betting is possible automated
"exploits". For example, some bookies will give you 1.01 odds in live betting
even when the outcome is almost certain. So with a little luck and a clever
algorithm, you could increase your money by 1% each time, making several bets
per day.

Unfortunately, they'd ban you pretty quickly. They ban anyone who wins too
much. My bwin account was locked shortly after I cashed out.

~~~
shocks
Bookies and betting exchanges will take commission too. This kind of betting
is not particularly lucrative.

Better systems involve looking for unusually high odds by comparing across
exchanges/bookies, backing/laying, waiting for them to swing back into favour,
and backing/laying to lock in a profit regardless of the outcome. You can
back/lay to minimise your losses if the odds don't swing as much as you
thought. Other systems involve backing all possible outcomes (Team X wins,
Team X loses, and draw - for example) across multiple bookies such that you
guarantee a profit.

A good way to start and dip your toes in the water is matched betting. Place
bets at bookies and LAY the same outcome at an exchange - do it right and the
net loss will be a few pennies/cents. Use this technique to syphon money out
of bookies offering free bets for new accounts. How much you make is limited,
but I made a few thousand doing this at university.

edit: Matched betting isn't useful only for free bets mind. You can use this
techinque to take advantage of some promotions too. One story that comes to
mind is a friend who matched bet on horses. The offer was that if you bet £X
for Y horse to come in 1st and the horse actually came in 2nd - you get a £X
free bet up to a limit of £350. He did four or five times that day. Two times
his horse came second. The other times, since the bet was matched, he only
made a small loss (less than £5).

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sandworm101
People get hurt whenever a vice becomes so easily done in secret. Going to the
pub to drink is one thing, drinking at home another, and ordering bulk vodka
online a third. The more private certain vices become, the easier it is to
fall into the trap. That's why I seriously dislike online gambling.

There is something to be said for the physicality of location-based betting.
It is more healthy to at least walk from your hotel room to the casino floor
than play the same games via an iPad alone in your room.

~~~
TheBiv
Do you have the same opinions for stock market investing at your house?

~~~
TomGullen
I've suffered gambling problems. Of all the times I've gambled, Casino's hurt
the least. I generally had the most fun, lost an amount I was in control of
and didn't feel too bad afterward and generally was in good company.

In a Casino, at some point you have the cold hard cash in your hands. This
makes a big difference. Secondly, there are lots of barriers in your way, for
example maximum withdrawl on debit cards, actually having to queue up for cash
for the nth time as supposed to just clicking a button, actual time to
mentally prepare (you need to get there, plan your money - it's harder to
'impulse' gamble from location x) etc etc.

Stock market by far was the most damaging, and the most exciting especially
when you get into leveraged forex plays or options. The big barrier here for
joe public though is the order of magnitude higher complexity to actually make
a gamble over an easy to understand proposition (like a horse).

For now stock market gambling is probably OK due to it's general
inaccessibility, but there is a big move into making it more accessible: so
called "Social trading" for example.

The platforms are significantly more accessible to average punters who I
believe are going to increasingly start using these services for gambling,
because these places are actually thinly disguised gambling houses. The
spreads they offer are ludicrously expensive, the promotions they offer are
aggressive (and borderline scam), and the marketing message sucks people into
a false sense of security about what activity they are actually engaging in.
This is in my opinion the big danger in the future. It's hard to lose your
house at a casino in one go, or with online poker. Plausible to lose your
house in one single bet gone wrong in Forex/Options and the social trading
platforms look pretty and friendly.

'Social trading' in my experience and opinion is pretty damn irresponsible,
and is executed pretty damn unethically. What benefit the offer society and
their users I've yet to see apart from getting a nice adrenaline fix.

~~~
sandworm101
> In a Casino, at some point you have the cold hard cash in your hands. This
> makes a big difference.

That's not what i've seen in modern US casinos. It's been a few years, but I
remember people using cards for slot machines. The image I remember most was a
man in a wheelchair with his card on a lanyard around his neck. The card was
in the slot machine. He looked physically tied to the machine, never moving
except for one finger on a button. It looked like something out of the matrix.

~~~
dsmithatx
The cards are for rewards like free rooms and meals. I used to make enough
playing positive expectation video poker to pay for my flights and as many
trips as I wanted as long as I played 8 hours a day. I got many free rooms and
meals as comps using cards with a girl I'd take with me. Sadly too many people
figured out how to play positive expectation and make money and the paytables
have changed to where it's not as easy as it was 15 years ago.

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cowpig
It's mentioned in the article that the Unlawful Internet Gambling Enforcement
Act of 2006 (UIGEA) this was tacked onto a must-pass safe port bill hours
before adjournment for 2006 elections. It doesn't go into much detail. From
wikipedia:

"... the SAFE Port Act (H.R. 4954) as passed by the House on May 4 and the
United States Senate on September 14, bore no traces of the Unlawful Internet
Gambling and Enforcement Act that was included in the SAFE Port Act signed
into law by George W. Bush on October 13, 2006. The UIGEA was added in
Conference Report 109-711 (submitted at 9:29pm on September 29, 2006), which
was passed by the House of Representatives by a vote of 409-2 and by the
Senate by unanimous consent on September 30, 2006. Due to H.RES.1064, the
reading of this conference report was waived."

The legislative branch is broken.

I was a professional poker player at the time this bill was passed, and it
caused a lot of pain for a lot of people. Players' funds were frozen (and a
lot of professional gamblers kept essentially their entire net worth online at
the time). If you want to learn more about that story, there's an excellent
documentary called "Bet, Raise, Fold (2013)". Many of my friends from that
world who were also into sports and sports betting have now moved over to
professional fantasy sports betting.

It kills me that it makes exceptions for the brands of gambling in bed with
the Republican party (NFL, horse racing), and was passed without an actual
vote. A friend of mine who works for the casino lobby told me that it would
have been included, but because American casinos were late to the game (by
2006 the industry was dominated by two companies: one started by an Israeli
group and the other by some big-name professional poker players from the USA)
they wanted those companies to get squeezed out of the American markets first,
so that they could come mop the industry up themselves (which hasn't worked
very well, beyond some state-specific cases).

My opinion on policy is that prohibition is the wrong approach, but that maybe
there should be some type of regulation to protect people with gambling
problems from ruining their lives. There absolutely needs to be regulation
about making it clear how much of your bet is being raked (the bookmaker's
vig). Many online casinos intentionally obfuscate these numbers and are able
to run absolutely insane margins based on the fact that many people don't
understand what they're paying to play.

On the other hand, I don't hear people clamoring for regulation of Day
Trading, which is exactly the same.

~~~
swang
No one's money was frozen.

If you had money on "NETELLER" or "Moneybookers" (Skrill), they forced you to
cash out and that was it. Party Poker also stopped offering play to US
citizens, but they too also sent you a check. If you were on Full Tilt or
Pokerstars, you could continue to play (assuming you weren't too shellshocked
from the news).

Agree with the rest of what you said though.

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seren
I don't get something : if this is an algorithm who determines the outcome of
a match, it is really easy to fix a match. What is preventing it ?

~~~
joosters
The fantasy sports competitions are all based upon the real-world performance
of players in actual matches. What you're thinking of is something called
virtual betting, popular (for some damn reason) in legal betting jurisdictions
where bookies offer odds on entirely computer-generated horse races, motor
races, football matches and so on.

The vague (non-existant?) boundary between fantasy sports and 'real' betting
is that fantasy sports are never directly based on one match, so you can't
directly bet on one team beating another. The competitions (i.e. betting) is
on the performance of player-selected team members across a range of teams.

It is basically betting under a different name, but because the events are
more abstract, they have succeeded for now from being categorised as betting.

~~~
seren
In traditional betting, you have an observable outcome that is external from
the bookie (let's say most of the time, unless the match is fixed). Here, if I
understand correctly, the bookies are also simulating the match or rather the
season without any external control, or third party auditing. It would be
pretty easy to tip the odds in their favor if they have too much to lose.
Either I am missing the obvious, or this is a mind boggling stupid way to bet
on something.

~~~
knowaveragejoe
When it comes to fantasy sports(and in this case, daily fantasy sports), it
sounds like you're missing something.

Using football as an example, players(gamblers) select professional players
from across all the teams playing in an upcoming set of games. As those games
are played, the players they chose score points for a variety of different
actions in the game. The person with the team with the most points at the end
of the series is 1st place, though the prizes are divided in various ways
depending on the game.

On sites like Fanduel and Draftkings, the scoring system is viewable by
anyone(look for rules & scoring in their footers) and as a result, totally
auditable. You can look up detailed records of every single action by every
single player in a game and match it with the fantasy points scores.

~~~
seren
Thanks for the detailed explanation.

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cubano
Draft Kings is simply stock market day trading redux.

Some people win, some people lose...for the life of me I can't see any
difference between the two, so either let both continue or (somehow) eliminate
them.

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nekopa
Oh well, time to burn some hard earned karma :)

I am currently teaching myself Python, going through the "Learn Python the
Hard Way" book. About half way through I wanted to work on a real project, to
get a feel for the limitations of the language, find the best resources etc.

I decided to make a football (soccer to my fellow Americans :) betting
analyzer. It came to me after seeing a comment on HN from one user whose side
income comes from a site he runs giving betting tips. After visiting his site,
I read one of his betting strategies and decided it was something that could
easily be automated with a Python script. Also, because I hate football with a
passion, I saw it as something which would force me to use the data, strategy,
analysis and empirical results instead of my "intuition"

Wow, what a rabbit hole I dived into. As a learning experience, I have to say
it has been very enlightening. I've learned about:

-the awesomeness of iPython for "code brainstorming"

-the messiness and unreliability of web scraping. $DIETY bless try: except

-the absolute horror of dealing with unicode and names like D'Angelo in csv files.

-the joy of getting to experiment with Big Data! (19 million football matches in 1 year!)

-the deeper joy of bug hunting (hint: variable in the wrong part of an additive loop and 100K matches turn into 19 million)

-the ins and outs of various data structures.

-the pain of dumping MySQL for postgresql (only because I was trying -get this- to get postgres running under vagrant and accessing it via a Windows based graphic frontend)

And that is just the programming side.

On the motivational side, I though it would be a good idea to "dog-food" my
software. So I started to wager real cash on the predictions my system was
throwing up. Dog-food and throw up are a quite acceptable description of
results to date. (BTW, for anyone worrying, I had a gambling problem as a teen
which I licked, and I have kept to my original $100 bank to use, which is now
down to about $20, was up to $150 at one point, but as another commenter said,
a lot of gamblers only seem to remember the wins they have, not the re-buy-
ins. Part of my system involves bankroll management, which includes cash-flow,
PnL and other measures.)

But as this is HN I do have a startup idea!!!

I have already bought the domain betopian.com. I reached out the the CTO of
quantopian.com as I want to make something similar. (He was gracious enough to
reply, thanks Jean!) The reason for this is that as part of my research into
betting strategies, I found a common theme: nobody backtests their strategies.
In fact, quite a few times I have seen people berated for wanting to backtest
because... reasons. Some of these reasons seem quite reasonable - eg you need
domain knowledge not just data.

For me though, it seems the biggest reason for not backtesting is that the
multitude of "strategies" fail, and testing would show that. But a lot of
betting strategies rely on a "feel" for the bet. If it fails, "Oh, unlucky" if
it wins "Solid strategy dude!!" I would like to create a place where people
would have to prove that their strategy is just that - a thought out, long
term plan of attack on how to bet on a sport.

Because I think that is what drives a gambling addiction - losses are just
plain bad luck and wins are solid logical thinking.

Secondly, as I have seen through my 'experiment' gambling isn't just luck. If
it was, we wouldn't expect to see gambling companies being so profitable. When
you find the sure winners, you find you can't bet on them. The bookies spend
money on their own form of "betopian" I think. Or basically raw math talent
who really understand probability theory.

So I dream (and I have nowhere near the technical ability to make it happen -
yet) of betopian.com being a site where gamblers can have their dreams safely
dashed, and maybe open their eyes to the reality of the betting world. It's
stacked against you in ways you cannot imagine.

I'd be interested in your thoughts on this idea.

[edit: formatting]

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olegious
Just tax it and regulate it, enough with the puritan witch hunts.

~~~
sandworm101
But taxation can itself become addiction. When a government earns enough from
gambling it becomes a necessity. Rather than dissuade, the government starts
promoting the vice (ie state lottos). Some say this has happened with smoking,
that countries like Canada and the UK now take in more through taxing cigs
than they spend on treating smoke-related disease. That's the danger of vice.

~~~
joosters
But many states that ban gambling already have lotteries, so the two aren't as
clearly linked as you think. Plus, stating the governments 'promote the vice'
is a big stretch, governments don't promote the lotteries, the companies that
run them do.

As for taxation on cigarettes, why should all the money go to treating
smokers? It's fantastic that there is extra cash to go to other causes. You
cite the UK government but you'd be hard-pressed to find evidence that they
are promoting smoking, indeed the laws on smoking advertising keep getting
tougher and tougher.

I suspect that you've just got an axe to grind against governments in general.

~~~
sandworm101
I think you missed my point. If the purpose of increased taxation on vices
like cigarettes is to dissuade people from a particular activity, that goal is
missed once the taxation become a profitable venture. The government becomes
reliant on the vice and risks switching into a promotional mode.

Raising money to treat smokers is all well and good, but I'd rather see fewer
people smoking. If a government becomes reliant to the tax revenue it risks
becoming as addicted to cigarette use as the people it was once trying to stop
smoking. Such traps are what separates vice from other pleasurable activities.

~~~
joosters
But I haven't seen (and you haven't shown) any real evidence of governments
promoting these vices. I do get your point, there's clearly a conflict of
interest here, and I too would prefer people to stop smoking rather than
countries making money from it.

I reckon that actually the only real limiting factors involved are that if
government taxes something like cigarettes too much, then the black market
steps in and more people buy untaxed products, cutting the tax revenues. In
fact I suspect that's already happening in some countries (black market
cigarettes are big in the UK, for instance. There are occasional busts of
lorries packed full of untold millions of them, and anecdotally, most people
seem to know of someone who sells them).

Perhaps (speculation time) this actually keeps governments from even
considering promoting vices like smoking? The current balance of taxes and
government controls on advertising vs the black market means that there's
marginal benefits to increasing demand, and current taxations are 'optimal' ?

~~~
sandworm101
Really? I cannot turn on the TV or radio without hearing an ad for government-
owned gambling.

Just look at this: [http://www.bclc.com/](http://www.bclc.com/) And here is
their twitter feed: [https://twitter.com/bclc](https://twitter.com/bclc)

That's the British Columbia Lottery corporation, the crown-owned business with
a monopoly on gambling in my province. They buy ads, sell tickets, license
betting venues, and even run their own online casino (playnow.com). BC is not
unique among states/provinces in this regard. How can one not describe this as
governments promoting gambling?

~~~
joosters
It's a company who has the license to run a lottery. Of course they advertise!
Now in this case, the company is owned by the crown, but would you expect any
different if it was owned by non-government money? I'm still not sure why you
think that the government is acting differently here.

