So I’ll start with a little bit of my background. I’m not a gambling man per se, but I like to play the odds. A good game of texas hold em can be a nice and exciting way to spend an evening. I’ve been trading equities for about ten years now, and admittedly it can feel like gambling. When there’s a big binary event: a possible merger, a Federal Reserve meeting, a make or break earnings report…it has a way of feeling like gambling. This is especially true in the options market. For any single dollar I make on a stock option, there’s someone else out there who lost that exact amount.
I’ve always justified that kind of “gambling” as an educated form of gambling. At the very least I’m staying informed, learning something about finance, and maybe (very maybe) I could make some kind of return. If I spend enough time researching and thinking about the situation at hand in any market, I’ve done more than most.
With that said, I’ve spend a little bit of time at a casino table or two. A year ago I made a
rare $14o profit in a casino. Since I was ‘up’ in my gambling career, it seeming like a good opportunity to see what all the fuss was about with online gambling. After all, it can be a long drive to get out to a casino. In a scene out of the movie “Runner Runner” a few friends gathered around me as I played with my winnings. For a brief moment, I was even up a few bucks. Then as quickly as I had made the money, it was gone.
I never went back to online gambling, but I did walk away from the experience with a lot of skepticism. I had lost my money with a near perfect hand, the odds heavily in my favor – bet the house kind of in your favor. Now I’m not saying that some algorithm cheated me out of my money. I may very well have gotten unlucky, it happens. But I do get the sense than this form of social media might be a little “too social.” It wouldn’t be hard to “run” a an online texas hold em table. You just need to get a few friends together with computers in different IP addresses and communicate over the phone. With information on 7 out of the 8 hands in a table, the group has a huge statistical advantage on the unknowing newcomer.
Even if nobody was running the table, I tend to have an inherent distrust of an algorithms ability to be truly random. While poker can be a fun social game and gambling can be an exciting way take on some risk, the internet feels like a dark and murky place to go looking for casino games to play. I think back to the scene in “Runner Runner” (couldn’t find the clip, but I put the trailer below) in which Justin Timberlake’s character loses his money to hackers on an online gambling platform. WIthout seeing the cards fall yourself, it’s hard to know exactly where your odds have come from.
I think we can agree that online gambling is particularly sketchy – and even if it is safe, it’s addictive, and costly as hell (goodbye $140). So having said that, why do we allow online gambling in some states? I decided to write this post when I was driving my car and heard an advertisement lobbying voters for online gambling. It promised new tax revenue, money for businesses, and new jobs. In large part, these claims are true. Online gambling can mean a $25-$50 million increase in tax revenue for a state. That’s no small sum. All the while that revenue goes to gaming businesses which support jobs. That $25-$50 million can mean new roads and better schools.
With that in mind, it’s important to think about where that tax revenue comes from. This isn’t just any kind of social media website. The revenue isn’t coming from advertisements. There’s no product that is exported to consumers abroad or utilized by the local community. The money comes from individuals in the community who at a click of a button can make poor and costly decision to go gambling online.