Hacker News new | past | comments | ask | show | jobs | submit login
U.S. Now Says All Online Gambling Illegal, Not Just Sports Bets (bloomberg.com)
131 points by cohaagen 63 days ago | hide | past | web | favorite | 156 comments



Sheldon Adelson = Big GOP money.

"Adelson's newspaper, the Las Vegas Review-Journal, was the only major newspaper nationwide to endorse Trump.[42][43]

Adelson was also the largest donor to Trump's inaugural celebrations, with a $5 million donation to the celebrations.[44]" -- Wikipedia


This is spot on.

The "word on the street" among lawyers I knew when the UIGEA[1] was passed in 2006 (which paved the way for black Friday[2]) was that Sheldon Adelson & the Vegas Lobby had pushed hard for this.

The long-term aim, in their opinions, was to capture the online gambling market on a state-by-state basis via regulatory capture, because they had already missed the boat and were being out-competed by Pokerstars et al.

It's no surprise that the regulations in e.g. New Jersey require a "partnership" with a land-based casino.

edit: also, I should note that Vegas probably shot themselves in the foot doing this (at least short-term). Online gambling brought a surge of business to Vegas, and though the recession had a lot to do with it, the banning of online poker definitely hurt them a lot.

[1] https://en.wikipedia.org/wiki/Unlawful_Internet_Gambling_Enf...

[2] https://en.wikipedia.org/wiki/United_States_v._Scheinberg


Well it has been a felony for years in Washington state. Not really a Trump stronghold.

"For Washington State residents, all gambling on the Internet is illegal, including all types of sports betting. "

https://www.wsgc.wa.gov/about-us/frequently-asked-questions/...

edit: quote+link


Anti-gambling sentiment and related laws in US date back to the 19th century. But those laws didn't discriminate between various types of gambling, it was all illegal. Washington is one of the states that never relaxed it fully. To this day, casinos are only legal on reservations, for example.

https://statelaws.findlaw.com/washington-law/washington-gamb...

So this all is separate from the Federal Wire Act, and the even more recent discussion on how to interpret it wrt online gambling.


Making all Internet gambling in WA a felony is a relatively recent thing. Passed by progressives for their political allies the Indian Tribes. (WA doesn't even get any share of the gaming proceeds.)

I know it is separate from the Federal Wire Act, but I present it as a counter to the commenters here that seem to believe restricting online gambling is some kind of a Trump/GOP thing.

Progressive democratic party politicians are more than happy to criminalize online gambling when powerful interest groups that give them money ask for it.


Great point. The real story here is regulatory capture and willing politicians. This is what makes money in politics the enemy of every voters on both sides.


In contrast: "The Supreme Court cleared the way on Monday for states to legalize sports betting, striking down a 1992 federal law that had prohibited most states from authorizing sports betting."

https://www.cnn.com/2018/05/14/politics/sports-betting-ncaa-...


What a bizarre legal situation -- instead of banning sports betting, the federal government tried to force states to ban it. It isn't like 1992 was pre-Wickard v Filburn.


Am I understanding you right? You are not currently allowed to bet on the outcome of sporting events anywhere in the US? That's fascinating news to me


No, you are allowed. You just aren't allowed to online.

Many states now allow sports gambling, with many more on the way.


so which one is in effect?


Why not both? You can do sports betting, just not online.

Note IANAL, but there doesn't seem to be a necessary conflict.


As it may be of interest, here's the related portion of the Wire Act:

Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

18 U.S.C. § 1084(a) (codifying Pub. L. No. 87-216, § 2, 75 Stat. 491 (1961)).

From the 2011 DOJ opinion that stated that only sports bets were illegal[1]

1. https://www.justice.gov/sites/default/files/olc/opinions/201...


By my most literal interpretation of this law my inlaws can now be arrested for our march madness bracket. This seems absurd that we've let even this level of ambiguity come to pass in a country that used to pride itself on personal liberty; especially when the law was paid for by clear corporate cronyism and special interests to benefit from its passage.

Can anyone legally versed tell me why I shouldn't be this incensed?


Part (b) of the same section adds this nugget:

> (b) Nothing in this section shall be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a State or foreign country where betting on that sporting event or contest is legal into a State or foreign country in which such betting is legal.

So if it is legal in your state to you to have casual betting (which is often the case, for example New York State excludes "casual" bookmaking [1]) and it is legal in the other state to have casual betting, then there's likely no conflict with the Federal law.

[1] https://www.nysenate.gov/legislation/laws/PEN/225.00, General Definitions, 9. "Bookmaking" means advancing gambling activity by unlawfully accepting bets from members of the public as a business, rather than in a casual or personal fashion, upon the outcomes of future contingent events.


Its been illegal in Washington State since 1973

"Bracket pools, office sports pools, and fantasy sports have never been authorized as gambling activities in Washington State and are illegal."

https://www.wsgc.wa.gov/about-us/frequently-asked-questions/...


Yes, in some places, a March Madness bracket and Super Bowl squares are illegal.


Well, clearly we can not infringe upon the personal liberty of the corporate person that is paying for this law to be enacted. That would be wrong, in today's 3/5ths equality between humans and corporate persons.


In WA it was the Indian Tribes that paid progressive Democrats to make Internet gambling a felony.


A better formatted way to read it for better readability:

https://gist.github.com/jeremyaboyd/6012e7c0d80138f366064d69...


Except you potentially changed the meaning.

The question is about "on any sporting event or contest"

Is that "on any sporting event or sporting contest" or "on any sporting event or other contest"


I interpreted it this way because they don't put a comma in "bets or wagers" or in "money or credit"

I might not be correct, but lists of two don't seem to have commas in at least this US Law.


Congress could moot all of this by simply passing (or repealing existing law) a law that leaves the issues to the states in question. While online gambling poses issues when not all states adopt the same rules, just treat it like sales tax and require the vendor (and gambler) to obey the laws of the state of the gambler. Sure, there would be vendors and gamblers who don't obey this, but there are already gambling providers (bookies) and gamblers who aren't following state or federal law.


It has always perplexed me why there is a desire to deal with kind of thing at the federal level in the first place. States being able to decide these things for themselves is supposed to be what makes such a massive country stay functional.


Human hubris. If you're a federal lawmaker, and you know you make great laws, why wouldn't you want all 50 states to get the benefit of your wise decision-making?

In so far as the federal government can unilaterally expand its reach, it will tend to do so, if just because being part of the federal government makes you more likely to think things should be regulated at the federal level. The authors of the Constitution knew this, and drafted it to safeguard the rights of state governments. But "states's rights" has been a dirty word for quite some time.


More than hubris, the people paying you to write laws want to make sure they pay just one place and not 50 states.


> Congress could moot all of this by simply passing (or repealing existing law) a law that leaves the issues to the states in question.

You mean like your 9th and 10th Amendment rights from the Bill of Rights?


Does this affect video game loot boxes, then?


My question as well. Could the gamers make a case and start a class action against the developers if they go too far?


depends on how they are structured. a few companies have moved to where loot boxes guarantee to return goods of the same value as the cost. Now of course they set these values by offering similar goods on their stores for direct purchase. that being said, those values being up the developers could be depicted as misleading.

my take away is this, as long as we allow states to market lotteries then the idea that private companies should be held to differing rules is wrong. either all play on a level playing field or none play. considering the misery many state lotteries are said to bring I don't see how they can stand there smug except the fact they have the courts and police power to get away with it.


While unsavory, I feel like loot boxes are closer to a raffle than what we typically consider gambling, and to treat them as gambling would open up a serious gray area.


How in the world do you consider it a raffle? A raffle is when more than 1 person pays money ahead of time with some chance of winning a variety of prizes, and the odds are basically known depending on how many people bought the raffle tickets.

A loot box is literally "Pay $1 and see what you get!", and there are percentages behind what you can get (unknown to us). It's literally no different than buying a lottery ticket, except you always get something (maybe equivalent to the value of the lottery ticket) with a chance of getting something more valuable.

Now maybe they are adjusting lootbox percentages on the back-end so too many people don't get something unique if that's how you are trying to claim it's a raffle.. but I still don't think that makes it anywhere near the definition of a raffle.


How is a raffle not gambling out of interest?


How is insurance not gambling?


Insurance is the precise opposite of gambling; instead of concentrating reward, it distributes risk.

When you buy insurance you're not betting that something bad will happen to you, you're hedging your otherwise implicit bet that something bad _won't_ happen to you.


You're just rephrasing it. How about:

I'm betting State Farm $12 a month my apartment will burn down before I die or move out.


At the individual level, it seems a lot like gambling but insurance is not about individuals, it's about the pool.

You and a million other people give State Farm $12 so that in the event of fire or flood affecting a subset of the pool, there's enough money collected to pay out to make claimants whole.

There are no "winners" in the insurance game, only losses. If they have to pay you, you've already lost both the premiums you've already paid as well as what people or property were damaged (gambler's fallacy at work-- your entire neighborhood is smoldering and your family is dying painfully in the burn ward, but here's your insurance check, you winner!).

In your case, even if your apartment does burn down, it's not like you walk away with a windfall (unlike gambling). The adjuster is going to see to it you end up no better off than almost-exactly how you were before the fire. You don't "win" anything, and the meager payout you get can't always replace who or what you lost in the process.

Everybody involved also loses if more peoples' apartments go up in flames than there is money in reserve-- unlike with lotteries, where the payout is distributed equally amongst the claimants.


> At the individual level, it seems a lot like gambling but insurance is not about individuals, it's about the pool.

How do you think casinos and bookies work? They spread their risk by setting lines and odds and taking a vig.


Think of it this way: if your apartment burns down and you don't have insurance, you lose your apartment and everything in it. If your apartment burns down and you do have insurance, you still lose your apartment, but that loss is completely (at least in an ideal world) offset by money provided by the insurance company. Which scenario is the bigger gamble?


If I don't bet on the Patriots when I'm a Chiefs fan and the Patriots win my heart is broken. If the Patriots win and I bet on them, then my heart is still broken but that loss is offset by money provided by my bookie.

I remain unconvinced that insurance is anything but a legal gamble.


If everyone treated sports bets that way, maybe it wouldn't be considered gambling. Though I kinda doubt a subscription service offering payouts whenever your favorite sports team loses would be a very successful business, as you'd have to be a pretty hardcore fan for emotional damage due to a loss to be something so significant that you can't take the hit without monetary compensation to console you.


So gambling by insurance companies is ok, just not people. Unless it is an insurance co-op (which I think would be great), there is always entity on the other side with the concentrated risk.

It seems so many laws are about protecting people from themselves, but then we need exceptions from them for society to work at all. Like you can't legally invest in a non-listed company if you are not an accredited investor. Maybe we should make this distinction more formal and universal. Society could have an official and transparent way a person could enter the class of people who are expected to be responsible for their actions.


How is the insurance company taking a concentrated risk? My auto insurance co is betting that more people will drive safely and not make claims than the value of claims paid out. They distribute, not concentrate, their risk. They accept that there will be some people who have claims larger than what they have paid in, but that risk is distributed over a large pool.


The purpose of insurance is such that individuals share the burden to cover random, life-impacting events.

From the consumer side, insurance is the purchase of a service to cover any a future debt falling under the category of the service, ie. an unforeseeable, unintentional act of damage by or to the consumer. I have no intention of burning down my house. I pay so that if it were to happen, I am not stuck paying off a house I'll never own.

From the servicer side, it is the sale of a product whereby consumers get covered for unexpected events, yet the company gets a profit for provider the service. Assuming a correct amortization, the company gets a profit.


So how is that different from hedging your bets?

Insurance is gambling. The servicer is the house and always wins (unless they screw up).

That is not to say that gambling can't serve purposes other than entertainment, because it can. That doesn't make it not gambling.


Hedging is when you act to counteract [part of] a bet. So you're right, insurance is like hedging a bet. Which makes it roughly the opposite of betting, in most uses.

(If you "hedge" so far you're unbalanced in the other direction, you're not actually hedging your bets any more. "Hedge funds" aren't really for hedging if you use them as a primary investment.)


> Which makes it roughly the opposite of betting, in most uses.

In what way is it opposite? How is more betting somehow the opposite of betting?

Let's say I bet $10 that team A will beat team B with 1:10 odds (I would win 100) and then team A does really well so at half-time I bet $10 that B will beat team A with 1:2 odds (I would win 20)

I have now hedged my bets and I will at least break even. Under your understanding, that second bet is not gambling solely because of my motivation for placing it?

Let's say that instead I make a $20 bet at halftime that B will beat team A with 1:2 odds (I would win 40). Now I come out ahead no matter the outcome. Because I "over hedged" this is gambling again?

This doesn't make sense to me.


That's complicated because you're changing your bet as the odds move, which is pretty gambly.

If you were doing both bets before the game started, at about the same time, then the second bet would effectively not be gambling. Not because of your motivation, exactly, but because it reduces the variance in how much money you'll have at the end of the game.

If you buy a matched pair of tickets so that you guarantee a $60 output, that's not gambling. Even if you come out ahead no matter what. (who was dumb enough to sell that to you?)

Let's say you had a bet on team A forced upon you, because of where you live or something. At that point buying a matching bet on team B is an anti-gambling behavior that removes variance from the system. It's the equivalent of insurance.

If you then keep buying team B, then you're gambling in the other direction. If you buy so much insurance that you make a profit on losing items, you're gambling. But that's not how insurance normally works. It normally pays out less then what you lose, because of deductibles and the time wasted.


I don't get how your argument about time relates. You don't acquire the risk of injury, death or property damage at the same time you purchase insurance. In both cases under discussion, there is existing risk that is mitigated by betting.

> If you were doing both bets before the game started, at about the same time, then the second bet would effectively not be gambling. Not because of your motivation, exactly, but because it reduces the variance in how much money you'll have at the end of the game.

I would agree that if you could make both bets simultaneously that would not be gambling, but I don't see how that is relevant

In my example, both of the second bets reduce the variance in how much money you could gain or lose. 90,-10 after the second bet becomes 80,0 or 70,10

> Let's say you had a bet on team A forced upon you, because of where you live or something. At that point buying a matching bet on team B is an anti-gambling behavior that removes variance from the system. It's the equivalent of insurance.

Why does the source of the risk matter? You have said that gambling is based not on intention, but on effect on outcome variance. Why would the second bet in your example be any different from the second bet in mine?

Let's go with a more real world example. Let's say you have a shop near a stadium in the UK and you place bets so that you win money on outcomes that are likely to lead to vandalism or looting. My understanding of your position is that this is not gambling unless the shopkeeper miss-estimates his risk and bets so much that he gets vandalized and still comes out ahead.

In my view, the distinction between gambling and insurance is purely marketing and public relations.

I might buy a case that insurance companies don't gamble the same way that some bookies don't gamble, because they have the information they need to safely hedge their bets with certainty as they are made.

In my view, consumers generally have much less information about the risks they are hedging, that means they can't have the certainty required for buying insurance to not be gambling


> Why would the second bet in your example be any different from the second bet in mine?

If you're conditionally making the second bet based on outside factors, then you might not actually be implementing a strategy of reduced variance. (And if you were making that bet unconditionally then why did you wait until midgame?) It's tricky. I'd rather deal with simpler upfront scenarios.

> Let's go with a more real world example. Let's say you have a shop near a stadium in the UK and you place bets so that you win money on outcomes that are likely to lead to vandalism or looting. My understanding of your position is that this is not gambling unless the shopkeeper miss-estimates his risk and bets so much that he gets vandalized and still comes out ahead.

That could possibly work. If the looting is basically guaranteed, the bet acts to reduce variance. But looting tends to be pretty random, so under real life circumstances it probably wouldn't work out that way.

The laws aren't set up for such tiny corner cases, of course.

> I might buy a case that insurance companies don't gamble the same way that some bookies don't gamble, because they have the information they need to safely hedge their bets with certainty as they are made.

> In my view, consumers generally have much less information about the risks they are hedging, that means they can't have the certainty required for buying insurance to not be gambling

The information is needed to figure out a fair price for the insurance. If you don't have enough info you might overpay, but overpaying isn't gambling. If you turn a 10% risk of a $10k loss into a guaranteed $2.5k payment then you got ripped off but you didn't gamble. Your variance is still dropped to zero.


> If you're conditionally making the second bet based on outside factors, then you might not actually be implementing a strategy of reduced variance.

This doesn't make sense to me. What are "outside" factors and why do they matter? When you place the second bet, you have risk that you are reducing. Whether that risk has changed since you placed your first bet has no effect on whether your second bet reduces your risk or not.

> I'd rather deal with simpler upfront scenarios.

I'm sure you would, but you have failed to explain the relevance of upfront scenarios to our discussion.

> If you don't have enough info you might overpay, but overpaying isn't gambling.

You have still failed to explain WHY you think reducing risk by placing a bet that you will be injured is not gambling but placing other bets that reduce risk are.


Can we please not argue about when the bets happen? It's irrelevant to my main point. Pretend I didn't mention it.

As long as the only things involved are the "team A wins" reward and the "team B wins" reward, any bet you make that brings them closer together is not gambling.

> You have still failed to explain WHY you think reducing risk by placing a bet that you will be injured is not gambling but placing other bets that reduce risk are.

They're both not gambling. (Logistically. Legality is another issue.)


> So how is that different from hedging your bets?

Correct me if I’m wrong, but I think the difference is, no one is betting that you actually do have an unforeseen incident, so there is no bet to hedge against.


> I think the difference is, no one is betting that you actually do have an unforeseen incident,

You are. When you buy insurance, you are betting that you will have an unforeseen incident and will utilize your insurance.

The fact that you are doing so to offset some financial risk doesn't change the fact that you are gambling.

I don't see why source of a risk matters here. I believe the position I am arguing against is that that motivation of hedging against risk makes gambling-like behavior not gambling.

As far as I can tell your position is:

Gambling-like behavior is not gambling if it is done to offset non-gambling related risk.


> You are. When you buy insurance, you are betting that you will have an unforeseen incident and will utilize your insurance.

Almost, but I don't feel like this is 100% accurate, because neither involved party wants an unforeseen incident to occur - the 'win' situation, if you could call it that, is the same for both parties. I can sort of see the argument that you are betting you "won't win", but I can't see it as gambling behavior:

> I don't see why source of a risk matters here.

Gambling implies taking a risk for possible gain, no? To me, part of the difference is that the risk/chance involved (life) is not intrinsic to the transaction - it is more or less known what your returns will be, and under what conditions. Contrast this to, say, a slot machine, where the 'win' conditions are owned by the house and unbeknownst to you. There is no situation where you can know you will be paid out for any given parameters.

What about flight insurance? Is that a gamble because no one knows if you'll make your flight? Are you betting that you won't make your flight because you purchased it, or are you paying for a conditional service?

(mostly not serious) aside: if what you posit is true, is the peace of mind one gains from having insurance akin to gambling addiction?


> To me, part of the difference is that the risk/chance involved (life) is not intrinsic to the transaction - it is more or less known what your returns will be, and under what conditions.

It is? I'm pretty sure health care pricing is far more opaque than slot machine payout amounts (the opaqueness of payout rates varies by state).

You have increased the downside of not having large hospital bills. You are taking on risk, but the idea is that the small risk reduces the variance in your outcomes. See the other reply thread where I am trying to understand why reducing variance in one situation is gambling but doing it in another is not.

> if what you posit is true, is the peace of mind one gains from having insurance akin to gambling addiction?

I would say akin, but obviously not the same. In both cases you have made wager that you can be usually pretty certain has a negative expected value and the motivation for this wager is to acquire a positive/pleasant state of mind.


If you weren't betting that you would have an unforeseen incident (rephrased as: if you were betting you wouldn't have an unforeseen incident), why would you pay anything?

Paying $X is saying "I bet something will happen to me, so I need this service so I don't get screwed over." Otherwise, why buy pay anything at all?


Insurance is good. Gambling is bad. How could they be the same thing?


Of course it is.

Especially when it's taken out by people who don't even own the asset being insured. For people that do, it's ideally like taking an opposing bet to the bet that you've implicitly taken by owning something that has the possibility of failure.

I guess the line is that if you're on both sides of the bet, it's not gambling.

Selling insurance is definitely gambling, but it's subject to the law of large numbers like everything else - at some point, all of the risk is ironed out by the number of things you insure. At that point, it's a government concession.


At some point, hedging becomes gambling but of course, it's a grey line.


All of the speculation here hinges on the legal definitions of terms like "money", "credit", "bet", and "wager", which we're using as lay terms here, but which probably have well-defined contours honed by precedent.


Horse racing (parimutuel wagering) is specifically allowed in some states, such as Florida. In those states, it's legal to bet online on any horse race around the world. Twinspires (the company that owns Churchill Downs) lets you bet online, for example: https://www.twinspires.com/


In case anyone is wondering, interstate wagering on horse races is specifically allowed in federal law by the Interstate Horseracing Act of 1978, so it's not affected by this reinterpretation of the Wire Act.


It's always funny (and often sad) to see the bills that have been passed exempting random industries and companies from violating laws like this.


What does this say about prediction markets? I wouldn't implicitly consider them gambling, just as the financial markets are not precisely gambling.


It's splitting hairs IMHO. Lots of things we find acceptable are basically gambling like the stock/bond/futures markets, insurance, and prediction markets.

Maybe a better answer is why we ban gambling at all. There are people who have a problem with it, but maybe a better solution is to get them help to break the cycle instead of banning it in some cases but not others.


Or any self-destructive behavior for that matter...

I think the problem is we don't know the exact point when a pleasure becomes a problem. Or, how to effectively help people even if we did know when they crossed a line.

Society will pay a price somewhere. It's just right now, we seem more willing to curtail our freedom in that area than we are to help those who make mistakes.


I live in Australia, which has very relaxed gambling laws. I can walk into most pubs/bars in my city and find poker machines for example, as well as a sports/horse betting facility.

There are huge social consequences to gambling. If you look at an entire society you have some people that will have problems with it and some people that won't. You may fall into the "won't" pile but surely society benefits if we prevent a large number of our members from falling prey to addiction.


I live in the USA, which has very relaxed alcohol laws. I can walk into most pubs/bars in my city and find people getting extremely drunk for example, as well as a retail liquor facilities.

There are huge social consequences to drinking. If you look at an entire society you have some people that will have problems with it and some people that won't. You may fall into the "won't" pile but surely society benefits if we prevent a large number of our members from falling prey to addiction.


Not sure if pro or anti


We have anti-drunkenness laws in the US to deal with people who drink to much.

AFAIK, no such laws exist with respect to gambling.


That's not entirely true, most international gaming businesses follow strict anti-gambling-addiction regulations like using self exclusion databases, implementing daily limits, and doing pre-emptive problem gambling detection.

Allowing problem gamblers to blow all their money hurts the whole industry because then they go broke and don't have any more money to gamble with. The industry has started to recognize that in the last 5-10 years and many measures have started to be implemented to catch problem gamblers and restrict them before they lose all their money.


Um... not really. Anyone that wants to get drunk and stay drunk buys a large thing of vodka for a cheap price and goes home. Buy 2 on saturday if your state doesn't sell on Sunday. If you restrict it much more than that there is an easy black market.

Most of the laws don't really deal with people that drink too much. Bars might need to stop serving if someone is inebriated enough. There might be public intox laws, which occasionally get folks arrested for walking home instead of driving. Drunk driving laws, because it is bad And sometimes there are limits to hours and things.

None of these things deter anyone determined and I'm guessing more than one of them catch more folks that don't have a big problem than the ones that do.


> surely society benefits if we prevent a large number of our members from falling prey to addiction.

how does society benefit from prohibiting people from doing things that only hurt themselves?


But many people are part of a family or a group of people in some way, and gambling, alcohol, drugs “that only hurt themselves” tend to also hurt other people.

If we are going to be liberal, we also need to ensure society as a whole isn’t damaged in the process. War on drugs, as an example, have more or less destroyed other countries. Legalised drugs are probably better, but could be taxed and those with problems should be treated as they have a sickness. Gambling could be state run and be handled the same way.


A retired fireman pissing his life savings away into a slot machine hurts me, because now I have to either support him, or deal with him sleeping between the dumpsters, in my building's back alley.

Slot machines are a hack that exploits human psychology, to the loss of everyone, and the benefit of... Casino owners.

I understand that people want to gamble. I also think that it should be aggressively discouraged.


> A retired fireman pissing his life savings away into a slot machine hurts me, because now I have to either support him, or deal with him sleeping between the dumpsters, in my building's back alley.

how about instead of trying to protect him from his own mistakes like a child, you just let go of the need to take care of people who willfully mess their lives up?

> I understand that people want to gamble. I also think that it should be aggressively discouraged.

nothing wrong with having an opinion. I'm just asking you to use your words instead of appealing to state power.


"Are there no prisons? No workhouses? Let them go there!"

"But many would rather die than go there!"

"If they would rather die, then let them get on with it! And decrease the surplus population!"

> how about instead of trying to protect him from his own mistakes like a child, you just let go of the need to take care of people who willfully mess their lives up?

Because a civilized, compassionate society takes care of all its members, no matter how broken they are.

And because, furthermore, various studies have shown it to be cheaper to address problems like this before they get that bad than it is to let someone fall through the cracks. At that point, they're likely to be a cost to society in different ways, whether it's due to crime or just the trouble of cleaning up after them.

"State power" isn't a swear word. It's a highly effective solution to a great many societal problems, when exercised sensibly.


It doesn't only hurt themselves. They are tax paying citizens and the government has an interest in their welfare. They may have dependents. Now Timmy can't go to college because Dad blew their savings. They get a divorce, now mom and dad are depressed and Timmy enters a life of crime (or, less hyperbolic; doesn't make as much taxable revenue as he could have otherwise.)

There are all sorts of laws which protect people from themselves, this is nothing new. See; seatbelt laws for an obvious and simple example.


Seatbelt laws aren't just about protecting yourself. Someone who is not wearing a seatbelt is a threat to others in a crash. For example, a person on the rear seat can actually kill the person in the front seat by blunt skull trauma (hitting the skull from behind with their forehead). And people in the front seats can become projectiles, going through the windshield and hitting people outside.

As far as the general notion that government has an overriding interest in people's welfare - that same logic would trivially justify abortion bans, forced marriage and labor, and all kinds of other nasty stuff.


>that same logic would trivially justify abortion bans, forced marriage and labor, and all kinds of other nasty stuff.

Only if you left no room for nuance and see every issue as completely black and white. Life doesn't work that way. It's ridiculous to compare seat belt laws (which we already have!) to forced marriage and labor (which we do not.)


> There are all sorts of laws which protect people from themselves, this is nothing new. See; seatbelt laws for an obvious and simple example.

and they are all a grotesque overextension of state power. although seatbelt laws are actually not a good example; they protect people outside your vehicle as well.

I guess we just have different values. I don't want to be a revenue center for the state to optimize.


>and they are all a grotesque overextension of state power

Well, that's certainly a valid viewpoint, but secondary (and primary) seat belt laws have saved a staggering number of lives. You're correct that it's perhaps not the best example as the driver and occupants can turn into projectiles and harm others, but the vast majority of deaths and injuries come to those not wearing a seat belt[1].

>I don't want to be a revenue center for the state to optimize

It's not about being a 'profit center' for a host of corrupt politicians. We can debate what tax money should be spent on, or the rate at which they are levied, but I imagine we would both agree that taxes themselves are necessary for the maintenance of a healthy society. Your life is better when those around you are healthy and productive. None of us exist in a vacuum.

[1]: https://web.stanford.edu/~leinav/pubs/RESTAT2003.pdf


How do seatbealts protect people outside the vehicle?


see int_9h's post. in the event of a crash, unrestrained passengers can hit other people in the car or go through the windshield.


Not only does it hurt far more people than yourself, but a lot of behaviours defined as "only hurting yourself" have negative consequences for everyone.

Take drug use, for example. Some people want legalisation under the pretence that it only hurts yourself. Someone sitting at home smoking ice has a risk that they are going to leave their home and participate in behaviour that puts other innocent people in danger, such as driving a vehicle while high.

If a large number of people in an area become problem gamblers then it will lead to issues that affect everyone in the area, not just the gamblers. Who shoulders the cost of this?


The problem is when they have dependents. As a society we have decided that it is a bridge too far to make people pass a test before they can procreate/own pets/etc... so we have to make sure that most of them will be able to maintain their responsibility via lots of bans and regulations.


if dependents are the issue, why not only make it illegal for people who claim dependents on their tax return? or better yet, just make it illegal to neglect your dependents.

I don't have any dependents myself. why do you care if I spend all my money?


The tax thing doesn't make any sense at all so I'll ignore it.

Making it illegal to neglect your dependents is already codified into law in a couple of places, like alimony, but a general purpose law runs into the problem of defining neglect and enforcing it. It's the sort of thing that is a total mess in the courts with an endless parade of he-said she-said cases.


what do you mean by this? those people are a part of society too..


They require permission of US CFTC.

https://www.predictit.org/support/faq

Why is there an $850 limit to how much I can buy on any one contract?

PredictIt operates under no-action relief from the Division of Market Oversight of the Commodity Futures Trading Commission. An $850 limit on investment by an individual participant in any contract is a condition of this relief.


Here's the updated opinion [1] referenced but not linked to in the article. They link to the old 2011 opinion [2] that said that only sports betting was covered.

[1] https://www.justice.gov/olc/file/1121531/download

[2] https://www.justice.gov/sites/default/files/olc/opinions/201...


This is unbelievably beneficial to newcomers to the sports betting industry.

This position will be reversed in a couple of years, and one can be perfectly poised to take advantage of it.

Now would be a good time to start development on a sports betting app.


I've been thinking of running a periodic contest in my MMO game. The one who can camp out for at least a minimum time span, the furthest out in space will win a prize. (Space, in the as-yet unimplemented design, would get deadlier by the square of distance from home base at coordinate 0,0) Prize entrants have to pay something like $1 and completely eschew non-cosmetic in-game purchases.

How would the law distinguish something like that from "a game of chance?"


Why would it?


The game is designed to be mostly about the skill and resourcefulness of the players.


Which game?


This doesn't apply to any game yet, and may never. I would like to build it into my game. ARK at least used to have some sort of contest with large cash prizes, but I don't know the details.


Is the Justice Department still opened during the shutdown?


The best "rule of law" that money can buy.


On one side, I'm not liking this ruling as it's a weird reversal on freedoms.

On the other side, gambling acts as a one-way function on money, allowing laundering. So reducing the ability for laundering is a good thing.

Finally, gambling can easily destroy family finances so it's good policy to curb it on those grounds as well - requiring the gambler to visit an establishment means potentially less nets-eggs being broken to feed a habit.


> A coalition backed by billionaire casino executive Sheldon Adelson lobbied the Justice Department

Crony capitalism 101


The best democracy money can buy.


Yeah, it is crazy to me how blatant Adelson is allowed to be and still be effective, operate legally.

I don't care what side of the aisle you're on, if you don't see this as textbook corruption, you're on the take, period.

This isn't even a conspiracy theory, this is just obvious fact. Adelson paid for this with his billions, in an effort to stamp out a business concern.


I see this as a bad thing, but I've still been able to place sports bets in the US online for years, and I logged into ACR today and played an hour of NL holdem, and my computer wasn't seized by the FBI.

No one has yet described the actual consequences of this, and as far as I can tell, there haven't been any.


Those offshore sites are scams. The scam is they take your money but if you ever win big you will never see it payed out (deposited in a real bank account belonging to you). You will then become one that post on forums on how you can't get your money out, until they finally close shop and run once enough people have been scammed.


I've been using these sites for years with zero issue...

And plenty of these sites aren't offshore at all, like bovada.

You act like gambling itself isn't a "scam" -- no need to be illegitimate when what you're doing is as insanely profitable as gambling...


That's already illegal regardless.


is ignition no longer to be accessed in the US?


untrue. many of these sites have been active for nearly a decade and operate with crypto currencies just fine.


Do it in Washington State and it is a class C Felony.


Except for stocks, bonds, options, futures, and forex. Wall St is the only authorized online gambling establishment.


Also online, state-sponsored lotteries. I'd consider lotteries (in general, not just online) more significant in terms of taking wealth away from people who can least afford it, and for no inherent legitimate purpose. (Lotteries fund education, but there are better ways to do that.)


> Lotteries fund education

Even that is debatable. In just about every state, when they added a lottery "that funds eduction", they reduced the state contribution to the education budget by exactly the amount that was being added by the lottery. So while technically yes it goes to education, in reality it does not.


and almost all promises of governmental "revenues tied to expenses" work this way as well.


Lotteries are reverse solidarity: a lot of people pay to make 1 person rich.

Lotteries are my prime example when I want to highlight that humans don't act rationally


A possible explanation for why one would participate in a lottery:

What if $5 per week for the rest of their life doesn't impact an individual's standard of living, but $10 million would drastically improve it?

Does it then make (more) sense to participate?


Not in a strictly expected value sense, no. It's never going to be a rational choice from an financial point of view (i.e. there is always something else you can do with the $5 with better expected returns).

But if you get some other value out of it you place at least $5/wk utility on, sure. Maybe you get more utility out if it than a movie a month, or whatever.


I'll buy the occasional $10 scratcher, and then wait like a week to scratch it all off. The $10 is worth getting to ponder what I'll do with my massive windfall for that week!

Already maxing my ROTH and 401K so I figure it's like $80 a year well spent to entertain the phantasy.


That depends on the probabilities involved. If you send me $5/week, I might decide to give you $10 million one day. I don't have $10 million and I don't think I would want to give it away if I got that kind of money, but it could happen. Are you interested? Do you think anyone would be?


If you were regulated like a state lottery, people would be interested - they already are.

I don't think most people even consider the odds when playing the lottery.


The odds still matter. If no one ever won my lottery, I think people would eventually stop playing.


Lotteries are rational for the same reason that insurance is rational.

Insurance on the face of it is irrational -- insurance companies make money, therefore buying insurance is paying a premium above what the expected reimbursement is over the lifetime of the insurance. It's a reverse lottery; the expected outlays exceed the expected returns.

What you pay the premium for in insurance is to reduce downside variance.

What you pay the premium for in a lottery is to increase the upside variance.


yes i agree with these sentiments but the statistics involved are vastly different. The probability of a life-altering event is a lot greater than winning a lottery.


Reverse solidarity is not a problem. Its that lotteries are economically inefficient: what the 1 person gets is less than the sum of the parts, that is truly destructive.

OTOH, people pay for the dream of winning the lottery, which has some value, adicts withstanding.


I believe state-sponsored lotteries may be impacted, because they started selling across state lines since 2011. This would no longer be allowed.


While there is some amount of speculation, it represents a small portion of the entire financial space. If you sincerely hold this view, you should take a closer look at the purpose of financial instruments and markets.


I do not believe this counters the OP's point. While the core purpose of financial markets may be beneficial vehicles like hedging and price discovery, the fact that the pragmatic outcome of the law is to leave wall street as one of the only outlets for "legalized betting" cannot be ignored.

There is a sister post that in trying to argue against this only seems to support the point. "a house that always wins"; as has been echoed on HN ad infinitum, _don't stock pick_, (Edit; child is correct, this is more about day trading, but the broader advice probably still holds to some extent) because if you do, you're the dumb money handing it over to the HFT firms. So even if the intent is not for wallstreet to be a gambling house, if it looks like a duck and quacks like a duck and benefits from regulatory capture like a duck...


Gambling in the prediction market for the time-value-adjusted expected profits of a company is allowed due to the historical fact that stock markets used to be the way to raise capital for companies. I have only seen Tesla do this in the last 30 years (I'm sure there are others, but it is rare for a list company to actually sell stock to raise capital for building things). We should allow gambling in other prediction markets for things we would like to know about. Say the average surface temperature on Earth in 2100.


For those who believe in efficient markets, or markets that are rigged by hyper-intelligent people against the average investor, I'd like to call their attention to a bit of history recalled by Matt Levine in his column today:

"Google announced that it was buying a private company called Nest, for instance, and the entirely unrelated stock of Nestor Inc. (ticker: NEST) was up 1,900 percent"


To be precise. I do not in any way believe in perfectly intelligent or omniscient markets. I do believe that large professional financial entities have mastered short-term trading to force things such as margin calls and other behaviors that an individual such as myself has no real tools against. This is what I mean when I say "the house wins" not that the market is in any way always correct. I assert that in any situation where an individual could make a bet, they are inherently competing in an uphill information-and-tool-asymmetry battle against far better equipped entities.

This explanation should be very familiar to those who have frequented groups like bogleheads that drink the indexing koolaid. (I admittedly do, as one could probably tell from the above)


I wonder if someone could use this phenomenon to get away with insider trading...


> _don't stock pick_, because if you do, you're the dumb money handing it over to the HFT firms.

I think you mean _don't day trade_. HFT is a tax on changing your bets. If you pick a stock and stick with it for years, it's negligible.

It still might be good advice not to stock pick, but I don't think HFT is the reason.


Agreed. Like saying financial institutions gamble on lending money to customers.

I think the correct contrast would be legalized state lotteries.


Except those things actually fuel the economy and reward entrepreneurs vs enriching a "house" that contributes very little.


An underlying stock market is useful because it allows companies to raise capital to take risk. But many of those trading tools are just vehicles for speculative trading.

When I buy options contracts as a trader, I'm speculating the price will go up or down. I'm not adding anything productive to the economy. For me to win, another trader must lose.


You're sending price signals. The market needs active traders not just investors to function properly.


Sure, capitalists will always say "I'm providing liquidity", and I'm fine with that, there is some value in that.

But I'm still gambling on an outcome in a zero sum game. What is the purpose of anti-gambling laws? To protect the common man? But the state is okay with you losing everything on stocks? The point is its an unjust hypocrisy.


How is a Wall Street firm taking fees any different from a casino taking a rake?


If you're going to define that as gambling then e.g. buying a house with the intent to flip it on the market is also gambling.


Of course it is.


You can't go to the bank at a casino and say you want to sell your "investment" at the roulette table. Stocks is all about spreading/avoiding risk.


Wonder if you can use that to create a legal gambling product or something. Like a game of roulette powered by the delta of volatility index.


is literally anything with a risk-reward tradeoff gambling?


No.

Gambling is a useful analogy but what is missing is that a person creating a business or buying a house, fixing it up, and flipping it are taking a risk on /profit/ but fully intend on creating real value whether they end up losing money or not.

That's quite a bit different than laying a bunch of money on red at a roulette table. The only value created -- the fun of the gamble itself -- is completely intangible and immediately destroyed.

Of course, there's a spectrum there, too. How much value is created by the efficient allocation of capital in our markets? Lots, it can be easily argued. Well, what about the marginal micro-transactional allocation in HFT? Well, maybe not so much.


Does this include loot boxes?


> A coalition backed by billionaire casino executive Sheldon Adelson lobbied the Justice Department in 2017 to reconsider its 2011 decision that cleared the way for states to allow online gambling.

Adelson was a major financial supporter of Trump and the GOP in 2016 vis-à-vis the Future 45 Super PAC. His wife was recently awarded the Presidential Medal of Freedom. This decision was bought and paid for.


Just like countless "regulations" in the past. The 2008 financial crisis was rampant with this stuff. The number of small banks dwindled significantly under new laws while the "big 5" old banks flourished.

The "too big to fail" era left the US with fewer choices in the marketplace, thanks to the political elite and their revolving door connection with big industry.

Crony capitalism is just as bad as authoritarian socialism, but at least the latter feigns helping the regular person, instead of lining the pockets of the elite while claiming "free markets".

The papers should be lashing out against this type of stuff. But I guess none of the left-leaning major papers want to seem soft on 'regulation'.


All political decisions are bought and paid for, even progressive ones.


While true, I trust a union to be lobbying in favor of workers far more than I trust Walmart.


what about that predict it website that allows you to bet on politics? Is politics a sport?


University of Wellington (New Zealand) 'PredictIt', like the University of Iowa 'Iowa Electronic Markets', operates with the specific permission of the US federal regulatory agency (CFTC) that would otherwise regulate their tradable contracts. See for example:

https://www.cftc.gov/PressRoom/PressReleases/pr7047-14


> to operate a not-for-profit market for event contracts, and to offer event contracts to U.S. persons, without registration as a designated contract market, foreign board of trade, or swap execution facility, and without registration of its operators.

My understanding is that they don't need to register as an exchange because of this. That doesn't necessarily absolve them of being a form of gambling, does it?


You would have to ask a lawyer! I presume the adequately-funded academic research projects have, and are comfortable their contract-trading won't be prosecuted as "bets or wagers" under the Wire Act.


It says "All online gambling".


Regulatory capture at its best. Gambling is allowed only for the government and their favorite casinos.

> A coalition backed by billionaire casino executive Sheldon Adelson lobbied the Justice Department in 2017 to reconsider its 2011 decision that cleared the way for states to allow online gambling.

California made $7 billion from their lottery last year alone. But you can't run one!




Applications are open for YC Summer 2019

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: