A Push To End the Online Gambling Ban

Hugh Pickens writes "Representative Barney Frank of Massachusetts has introduced legislation that would roll back a ban on Internet gambling enacted when Republicans led Congress. The legislation would allow the Treasury Department to license and regulate online gambling companies that serve American customers. Frank's bill has roughly two dozen co-sponsors and the backing of the The Poker Players Alliance, with over a million members. But opponents are mobilizing to defeat the bill including social conservatives and professional and amateur sports organizations, which say more gambling opportunities could threaten the integrity of their competition. 'Illegal offshore Internet gambling sites are a criminal enterprise, and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age,' says Representative Spencer Bachus, Republican of Alabama and the ranking member on the House Financial Services Committee. Another powerful roadblock could be the Senate majority leader, Harry Reid, Democrat of Nevada. 'Gaming is an important industry to the state, and anything that affects it will be reviewed carefully,' says Reid's spokesman."

Comments

Think of the children?

[ub3r n3u7r4l1st]

Not that I know of.

I have seen people pay for skyrocketing college tuition with winnings from online poker.

Re:Think of the children?

[ShadowRangerRIT]

And how many people failed to attend college because they, or their parents, gambled away the college fund? I'm not saying gambling should be illegal, I just think it's silly to argue for gambling the perspective of the winners (and only the winners).

Re:Think of the children?

[omeomi]

allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age

Even if they did--for some odd reason--forget to make internet gambling specifically illegal for minors, what kid has a line of credit that's sufficient enough that they can gamble online for long enough to create an addiction?

Illegal offshore Internet gambling sites are a criminal enterprise

Gotta love arguments against legalizing things that are based entirely on the fact that they are currently illegal... Then again, I live in a state where gambling is legal, so long as you're on a body of water (no matter how small), so it's not like any of this has ever made much sense...

Re:Think of the children?

[nog_lorp]

Agreed. This bill is not going to "allow illegal offshore Internet gambling sites to operate unfettered", it is going to legalize regulated internet gambling.

Re:Think of the children?

[fullmetal55]

exactly, might as well ban the sale of playing cards too. I know many many kids who's introduction to gambling was playing poker with their buddies for pennies...

Re:Think of the children?

[alvinrod]

Of course you wouldn't see all of the people who lost all of the money with which they could have paid tuition because they're no longer in college and out of site. It's similar to how Congress critters like to talk about taking millions of tax dollars to spend on some pet project which will create jobs or infrastructure. Of course they fail to see the jobs or infrastructure which will not be created due to the collection of those taxes or the fact that they cannot be appropriated towards some other project.

Assuming that in the best case scenario the online casino collects no fees for using their service and takes no percentage of the pot from a tournament, but is solely run through advertising revenue, then the game is zero sum for all of the players as a whole. No one player can win any more than the collective losses of all other players. Sure there are the winners who get to pay off their tuition, loans, etc. but there're also the losers who just lost their rent money, child support payment, etc.

Re:Think of the children?

[Obfuscant]

it is going to legalize regulated internet gambling.

As someone who remembers the phrase "the internet sees censorship as damage and routes around it", I have to ask, exactly what IS "regulated internet gambling", how does one tell it apart from "unregulated", and exactly how do you stop the "unregulated" from taking place?

Re:Think of the children?

[Jurily]

I know many many kids who's introduction to gambling was playing poker with their buddies for pennies...

I'm like that too. Except I never moved on from the pennies, I realize that in official settings the odds are heavily stacked against me, and do not view gambling as a source of income.

I also have a limit on my losses, and once I hit that, there's nothing short of a gun to my daughter's head that will make me play that night again.

Re:Think of the children?

[Zerth]

Regulated gambling pays taxes to the regulating government, unregulated gambling pays it to some other government(where it is considered "regulated") or not at all.

Unless they can figure out a way to region-code gambling and keep all the money, they'd rather make it ineffectually illegal.

I'd rather have legal gambling and keep some of the money, than illegal gambling and have some island in the Pacific get everything, but apparently politics has little to do with rationality.

Re:Think of the children?

[CodeBuster]

And how many people failed to attend college because they, or their parents, gambled away the college fund?

That is an argument which is sometimes made by the anti-gambling people, but really how many specific cases have their been where parents gambled away junior's college money? It seems to be a popular cautionary story that happens rarely in practice (i.e. a variation of the "think of the children" fallacy). This type of logical fallacy has a long and colorful history in our legislature, and it is easier to appeal to emotion rather than logic (i.e. "if you are against me then you are against the children, how can you be against the children?"), but that doesn't make the tactic right. The more that we use emotional arguments in our national policy the greater the damage that we do to our constitution and the values that our nation was founded upon.

I'm not saying gambling should be illegal, I just think it's silly to argue for gambling the perspective of the winners

Fair enough, but did you know that the US is presently in violation of the WTO treaties on trade with our present gambling laws? The treaties say that you can either ban all gambling or allow it, but that if you allow it then you must allow foreign competition (i.e. offshore internet gambling). In fact, a small caribbean nation (Antigua) actually won a WTO action against the United States on this very point and the United States is currently racking up fines and damages payable to Antigua for violating the treaty. What makes the whole thing doubly interesting is that Antigua has requested an unusual remedy, namely the privilege of ignoring US copyrights on movies, music, software, and other creative products produced in the United States.

Re:Think of the children?

[CodeBuster]

so it's not like any of this has ever made much sense...

Politics and logic are like oil and water, they don't mix well in practice.

Re:Think of the children?

[Alarindris]

I realize that in official settings the odds are heavily stacked against me, and do not view gambling as a source of income.

Only if you are talking about slot machines, roulette, blackjack, and the poker knock-off games. There are no odds stacked against you in poker or betting on sports games.

Re:Think of the children?

[nametaken]

I know if I'm playing at the Venetian or in some asshole's basement. Not to say there aren't scams, but it's largely the same with online gambling.

In online gambling I think most of us would actively seek out the legit joints to play.

I mean, not that I would know anything about it. :)

Re:Think of the children?

[cdrguru]

Yes, but it requires far less skill to press the button on a slot machine than to play poker intelligently.

This is why the slot machines are crowded and the poker room has 15 people in it.

Re:Think of the children?

[Tuoqui]

That is an argument which is sometimes made by the anti-gambling people, but really how many specific cases have their been where parents gambled away junior's college money?

Until Junior goes to college that money is still the parent's money. Being (presumably) responsible adults they can do with it what they wish.

Re:Think of the children?

[Tuoqui]

I live in a state where gambling is legal, so long as you're on a body of water (no matter how small)

Sounds like a good excuse to build a moat.

Re:Think of the children?

[Krneki]

This has nothing to with whatever gambling should be allowed or not. It's about tax, if you play online you don't pay any tax to the US, as it should since you are playing in a foreign country.
It was always ok to gamble but as long as you are paying the taxes. I'm not sure about US, but in my country gambling taxes can go up to 40%.

When you gamble you lose money, but when you gamble inside your country you are losing even more due to high taxes. At the end of the day the 'gov takes most of your money.

Re:Think of the children?

[radio4fan]

Illegal offshore Internet gambling sites are a criminal enterprise

And of course, they probably aren't criminal enterprises.

I can legally run an online casino in my country (Spain). I can legally take money from clients in the US. You might be breaking the law by playing poker in my online casino, but that doesn't make my casino a criminal enterprise.

Re:Think of the children?

[Embrionic]

And how many people failed to attend college because they, or their parents, gambled away the college fund? I'm not saying gambling should be illegal, I just think it's silly to argue for gambling the perspective of the winners (and only the winners).

"And how many people failed to attend college because they, or their parents, gambled away the college fund?"

On the stock market, probably quite a bit. Oh wait, we're not supposed to refer to that as gambling.

How many people failed to attend college because:

1. Parent spent all the money on alcohol
2. Parent decided to purchase a house they could not afford
3. Parent spent all they money on luxury items they can no longer afford with the economic downturn

Ok, so let's just ban everything to protect the children! The only thing silly (IMHO) is to allow the government to tell consenting adults how they can and cannot spend their own money. They are simply treating us like the children they claim they want to protect.

Re:Think of the children?

[TheNatealator]

And how many people failed to attend college because they, or their parents, gambled away the college fund?

That is an argument which is sometimes made by the anti-gambling people, but really how many specific cases have their been where parents gambled away junior's college money? It seems to be a popular cautionary story that happens rarely in practice (i.e. a variation of the "think of the children" fallacy). This type of logical fallacy has a long and colorful history in our legislature, and it is easier to appeal to emotion rather than logic (i.e. "if you are against me then you are against the children, how can you be against the children?"), but that doesn't make the tactic right. The more that we use emotional arguments in our national policy the greater the damage that we do to our constitution and the values that our nation was founded upon.

So, you respond to a call to emotions by saying "It's not that big of a problem" without providing _any_ data? Yes, he said almost literally, "Think of the children", but there is no statistical evidence on either side. I imagine there isn't much data on this, because gambling establishments wouldn't tout "We've ruined X people" (bad for business) and the causes behind someone's downfall are usually more complicated.

If we did have some statistics, though, then maybe we would see that ShadowRangerRIT is not simply pulling our heartstrings, but pointing out a serious issue: the negative effect that gambling has on children of gamblers.

Of course, a counter argument could be along the lines of "alcohol is legal but we have alcoholics" (but not "that's an appeal to emotion, but here's _no_ facts to back my claim up")

Returning to ShadowRanger's point, there are more losers than winners in gambling. In house games, the odds are stacked in favor of the house (so they can stay in business). Otherwise, money goes straight from one player to another. It's a zero-sum game, unless the losers go to the bank to get more money. So, when we think of gambling, we associate it with winning lots of money (as the casinos want us to think) but with some proportion of winners and losers, as it really is.

Wanna Bet?

[shma]

50 bucks says the bill fails.

Re:Wanna Bet?

[CodeBuster]

In fact there are websites in Britain where you can do just that, put out custom bets (i.e. Bin Laden, captured or killed by MM/DD/YYYY) and get other users to take you up on them. You can bet on just about anything were the outcome can be determined as long as you can find someone willing to take the opposite side.

Re:Wanna Bet?

[shma]

Yeah, most of us in North America are familiar with prediction markets like Intrade. Those aren't considered gambling sites, since what you are actually doing is trading a contract that pays out if the event happens. I can illustrate the difference between this and a bet with an example.

Say I buy 1000 contracts of "Bin Laden to be captured by end of May 2009" for 5 cents each. Each contract pays out 100 cents if he is captured. Now say tomorrow the BBC reports that the US has engaged Al-Quaeda in a region in Pakistan where Bin Laden is thought to be hiding. Some people interpret that as a sign that the US is close to capturing Bin Laden and they start buying the same contracts. The price goes up to 25 cents per contract. I can then sell my contracts for a 200 dollar profit. I can do this whether or not they actually find him in the end (although I'll be kicking myself if they find him and I sold at 25 cents). On the other hand, if I make a bet of 50 dollars at 20:1 odds that they find Osama by the end of May 2009, and they don't, then I lose that money.

Re:Wanna Bet?

[Arthur Grumbine]

One to One odds?! Madness!! If I'm gonna be a part of turning my beloved /. into a "criminal enterprise" you'd have to give me at least 5 to 1 on that. That bill is as dead-in-the-water as a casino boat off the coast of Somalia...

Re:Wanna Bet?

[porges]

That's certainly an accurate description of InTrade, but you still haven't explained why you don't consider it gambling. Is it because of the secondary market, or because the thing you're betting on isn't totally random? In your example, the contract you bought is equivalent to betting OBL would be found, or almost-found, and when you sold it you were betting that he wouldn't be.

Re:Wanna Bet?

[shma]

That's certainly an accurate description of InTrade, but you still haven't explained why you don't consider it gambling. Is it because of the secondary market, or because the thing you're betting on isn't totally random?

It's because the contract's price is not random at all, but determined by market demand for the contract. In a lot of ways, these Intrade contracts function the same way as stock options. There is a risk you take that the price will go down, but risk and randomness are not the same thing. In this instance, the difference is that you can research the subject of the contract to make a determination as to whether it is fairly valued.

It's true that some people consider investing money in anything with non-negligible risk of loss to be gambling, but I'm not one of them. If you pressed me, I would say that you are only gambling if you play a game with a negative expected value (for example, all casino games), or a game where the odds are so low that, even with a positive expected value, you would have an almost 0% chance of winning within your lifetime (for example, lotteries).

Re:Wanna Bet?

[millwall]

as long as you can find someone willing to take the opposite side.

To quote a friend with a Ph.D in statistics - "Gambling is for the mathematically challenged".

Re:Wanna Bet?

[Richard_at_work]

Sod websites, most physical bookmakers in the UK will take a generic bet and give you odds themselves. Betting in the UK is not limited to chance or sports, you an literally place a bet on almost anything.

Re:Wanna Bet?

[johnsonav]

On the other hand, if I make a bet of 50 dollars at 20:1 odds that they find Osama by the end of May 2009, and they don't, then I lose that money.

With standard fixed-odds betting, you can set up an equivalent pay-out schedule to the prediction market contracts. You can lock in a profit from a favorable change in the odds, just as you can by selling a contract which has increased in value from when you bought it.

Take your example: If you bet $50 at 19:1 (equivalent to buying a contract for $0.05), if Osama is captured, you'll end up with $1000 total. Now, if the odds for that bet shorten to 3:1 (equivalent to a contract worth $0.25), because of some news which makes his capture seem more likely, you can place a bet of $750, at those odds, that he will not be captured.

That way, if Osama is captured, you end up with $1,000 from the 19:1 bet, and lose $750 from the 3:1 bet; leaving you with $250 total. If he's not captured, you lose the $50 from the 19:1 bet, but have a total of $1,000 from the 3:1 bet; leaving you with $250 (after the additional $750 (which was never at risk) is paid back). You can easily lock in the same profits as with the contract.

So really, there's no fundamental difference between the two, when it comes to how you can profit from fluctuations in the day-to-day perceived likelihood of Osama's capture.

Re:Wanna Bet?

[shma]

So really, there's no fundamental difference between the two, when it comes to how you can profit from fluctuations in the day-to-day perceived likelihood of Osama's capture

Yes, that's right, although there are fundamental differences between betting and Intrade in other aspects. See my reply to porges.

Re:Wanna Bet?

[johnsonav]

Yes, that's right, although there are fundamental differences between betting and Intrade in other aspects. See my reply to porges.

From your reply to porges:

It's because the contract's price is not random at all, but determined by market demand for the contract.

So are the odds which a bookmaker offers. Both the price of a contract and the odds on a bet are determined by supply/demand pressures from the traders/gamblers. If the contract price isn't "random", than neither are the odds. Odds are as much set by the market as the price of a prediction market contract.

In this instance, the difference is that you can research the subject of the contract to make a determination as to whether it is fairly valued.

You can do the exact same thing with a bookmaker's odds. That's what handicapping is. The job of a handicapper, looking for opportunities where the market has over- or under-estimated the odds of a particular event happening, is almost identical to a stock analyst, who looks for stocks which the market has mis-valued.

If you pressed me, I would say that you are only gambling if you play a game with a negative expected value (for example, all casino games), or a game where the odds are so low that, even with a positive expected value, you would have an almost 0% chance of winning within your lifetime (for example, lotteries).

Well, there's the problem: Most people consider betting on a horse race (which can have a positive expected value, like poker or betting on the capture of Osama, if the bettor has better insight or information than the market in general) to be gambling, while considering the purchase of stocks to be investing.

The real difference between investing and gambling is that an investment is considered to have some value apart from its speculative value. A share of stock is partial ownership of a corporation; gold--or any other physical commodity--is useful in industry regardless of its market price; and real-estate can be used for any type of development. Even though the market for any of these investments is made up, to a greater or lesser degree, of speculators who have no interest in owning the actual asset being traded, there is something of value being traded.

Contrast that with gambling. If you and I make a bet between ourselves about an upcoming event, there is no actual use for anything involved with our bet. An investor is speculating on the future price of an underlying asset; there is no such asset in our bet. Nothing changes hands except for money.

I think that definition is a lot closer to the intuitive distinction between gambling and investing. But, by that definition, both prediction markets and bookmakers are engaged in gambling. I think the only distinction between the two lies in the more flexible and efficient structure of a prediction market. Fundamentally, though, they are the same thing.

Re:Wanna Bet?

[shma]

Sorry, I just managed to read your post today.

So are the odds which a bookmaker offers [determined by market forces]. Both the price of a contract and the odds on a bet are determined by supply/demand pressures from the traders/gamblers.

You are mostly correct, but there is a difference between the odds a bookmaker sets and the price of a commodity on an open market. The bookmaker, if he wants to make a profit, sets the odds at slightly worse than fair value (fair value being what an open market would set them at). In a pure market, if you bought and sold short on a stock at the same price, you would end up even at the end of the day no matter what happened. If you went to a bookie and bet the same amount of money on every outcome, you would still lose money. The safest market 'bet' gives you 0 EV, while the safest bookie bet gives you negative EV.

Odds are as much set by the market as the price of a prediction market contract.

In the case of a bookie's odds, yes. I was mainly talking about odds for most casino games, which are fixed by the laws of probability and the profit margin the casino wishes to see.

The real difference between investing and gambling is that an investment is considered to have some value apart from its speculative value. A share of stock is partial ownership of a corporation; gold--or any other physical commodity--is useful in industry regardless of its market price; and real-estate can be used for any type of development

That's a fair definition, but I wonder in which bin you would put something like stock options. Stock options are a contract that allow the buyer to buy stock at a particular price. While the stock may have non-speculative value, the option does not. Yet options are traded on a market as well, and are generally considered investments (if risky ones). Wouldn't your definition put options in the gambling category?

I also have to point out that under your definition, a game with, say, a 70% chance of you winning 1$ and a 30% chance of you losing 1$ could be considered gambling. This makes little sense to me intuitively, since the chances of you losing money drop exponentially the longer you play, and thus do not fit the traditional notion of gambling.

Re:Wanna Bet?

[johnsonav]

The bookmaker, if he wants to make a profit, sets the odds at slightly worse than fair value (fair value being what an open market would set them at).

Of course that's true. But, the same principle is true of a stock or prediction market as well: the bid/ask spread. If I were to simultaneously buy and sell a share of stock, I would end up losing money, because I would have bought the stock for the ask price, and sold for the bid price (that's in addition to any commissions the broker charges).

The safest market 'bet' gives you 0 EV, while the safest bookie bet gives you negative EV.

Well, that's not true. Let's say a bookie is offering 20:1 odds that an event will happen (it doesn't matter what that event is, or even what the actual odds of that event happening are). I place a bet of $1 on that event happening, which would pay out $20 if it does. And, I place a bet of $20 on that event not happening, which would pay $1. If the event happens, I win $20 from the first bet, but lose $20 on the second. If it doesn't happen, I win $1 from the second bet, but lose $1 on the first. There's no way I can lose, or win money. The EV for that portfolio of bets is 0.

In the case of a bookie's odds, yes. I was mainly talking about odds for most casino games, which are fixed by the laws of probability and the profit margin the casino wishes to see.

Then, in that case, the house always sets the odds in its favor. But a casino isn't comparable to a prediction market at all, unless you're talking about the casino's sports book, or any other type of parimutuel wagering.

That's a fair definition, but I wonder in which bin you would put something like stock options.

A stock option is simply a contract between two parties. It's an asset which has some "intrinsic" value. The ability to purchase or sell a stock for a guaranteed price has real, measurable value: the difference between the spot price of the stock and the option's strike price. The speculation in stock options is only over how much that guarantee is worth. So, options aren't gambling.

I also have to point out that under your definition, a game with, say, a 70% chance of you winning 1$ and a 30% chance of you losing 1$ could be considered gambling. This makes little sense to me intuitively, since the chances of you losing money drop exponentially the longer you play, and thus do not fit the traditional notion of gambling.

Yes, of course that's gambling. There's nothing changing hands except for money. Just because it is a good bet, doesn't make it any less of a bet.

Re:Wanna Bet?

[shma]

The safest market 'bet' gives you 0 EV, while the safest bookie bet gives you negative EV.

Well, that's not true...

It's my understanding that when you go to a bookie, you get different odds on each outcome, so you do not have the ability to bet for A and against A at the same odds. If the payout for A is 20:1, then the payout for 'not A' is set below 1:20 specifically so that you are not able to break even if you bet on both. For instance, one of the sets of odds being offered for the Stanley cup final has Pittsburgh to win at 1.4:1 but Detroit to win at 1:1.6, even though they are mutually exclusive and the only two options. You cannot bet 'against Pittsburgh' at 1:1.4, only for Detroit at 1:1.6. If you bet 1 dollar on PIT and 1.6 on DET, you will have negative EV, since you can only break even if DET wins, but will lose 20 cents if PIT wins.

A stock option is simply a contract between two parties. It's an asset which has some "intrinsic" value. The ability to purchase or sell a stock for a guaranteed price has real, measurable value: the difference between the spot price of the stock and the option's strike price.

But when that value isn't negative, the cost of the contract is more than that difference. Look at the ask for these call options. They are all set so that the cost of the buying the options is higher than your intrinsic value. Yet people still buy them because it is not the intrinsic value which drives the options market, but the speculative value, exactly as in the prediction market. The most dramatic case of this is when the spot price is below the strike price. Here there is NO intrinsic value other than its speculative value, yet those options are still traded as well. That would most definitely fit your definition of gambling.

Yes, of course that's gambling. There's nothing changing hands except for money. Just because it is a good bet, doesn't make it any less of a bet.

And yet it is far, far safer than putting your money in any investment, which clashes with the intuitive understanding that gambling is somehow riskier than investing.

Re:Wanna Bet?

[johnsonav]

It's my understanding that when you go to a bookie, you get different odds on each outcome, so you do not have the ability to bet for A and against A at the same odds.

Ah so, ah so... It seems I don't know as much about sports betting as I thought I did. That makes more sense, otherwise a bookie wouldn't really make any money. I think I had confused the procedure for odds betting, with that for betting with a line (where you basically pay the bookie a fixed vig off the top).

But, I think this only strengthens the similarity to the stock or prediction market. This disparity in the odds is exactly the same as the bid/ask spread in a market. Just as you cannot simultaneously bet for and against a particular outcome and come out even, you cannot simultaneously buy and sell a prediction market contract (or stock) and expect to be even. The mechanism may be different, but the result is the same.

They are all set so that the cost of the buying the options is higher than your intrinsic value.

They are all priced higher than their intrinsic value right now. I don't understand the difference you see between buying a share of stock which you believe the market has undervalued, and buying an undervalued option contract.

My main point is that, when investing, an actual thing (albeit an electronic "thing", in the case of options) changes hands. An option contract is the option to buy or sell a share of stock at a predefined price; money changes hands, along with the stock (potentially). There's nothing that is exchanged with a prediction market contract other than money.

Yet people still buy them because it is not the intrinsic value which drives the options market, but the speculative value, exactly as in the prediction market.

Not quite. The options market is driven by speculation on the future value of the underlying asset; in the prediction market, there is no underlying asset. It's just money changing hands. So, the options market doesn't fit my definition of gambling.

And yet it is far, far safer than putting your money in any investment, which clashes with the intuitive understanding that gambling is somehow riskier than investing.

I think the reason that a bet, like the one you described, doesn't fit into peoples' intuitive understanding of gambling, is because no one would ever offer a bet with that kind of pay-out. Anyone who did, wouldn't be doing so for long, as they would soon end up broke. Gambling is seen as necessarily risky, because risky bets are the kind most commonly offered.

A platypus doesn't fit into many peoples' "intuitive understanding" of a mammal, but that doesn't make it any less of one. It, and mammals like it, are simply uncommon. But, they're more common than bets like the one you describe.

Re:Wanna Bet?

[shma]

This disparity in the odds is exactly the same as the bid/ask spread in a market.

There is a difference though, in that the bid/ask spread can be negligibly low compared to the stock price, while the bookmaker will make sure that the odds he gives allow him a certain minimum profit.

think the reason that a bet, like the one you described, doesn't fit into peoples' intuitive understanding of gambling, is because no one would ever offer a bet with that kind of pay-out. Anyone who did, wouldn't be doing so for long, as they would soon end up broke.

You do actually see odds like that in poker cash games when a good player gets his money in before all the last cards come down against someone on a draw. But I get what you're saying. My problem is that the label gambling generally carries a negative moral connotation, which most certainly shouldn't be applied to a game where you make money in the long run (that goes double for people who say that the stock market is just gambling). What I was trying to do way up there was limit the definition of gambling so that games which any rational person would play would not be included. But I understand that, even in this case, it is nothing more than a wager.

My main point is that, when investing, an actual thing (albeit an electronic "thing", in the case of options) changes hands. An option contract is the option to buy or sell a share of stock at a predefined price; money changes hands, along with the stock (potentially). There's nothing that is exchanged with a prediction market contract other than money.

Here's where I have to disagree. The difference with trading options is that you can trade them without exchanging the underlying asset. The options market allows you to buy and sell the contracts before the expiration date, so it is possible to make or lose money off of options without ever owning any assets. That's a big departure from trading stock, real-estate or commodities, where you have ownership or partial ownership of a tangible asset. Option markets are no different, in my view, than a prediction market, where you are also buying and selling contracts which offer a payout only after the expiry date. Yes, in the end, the payout is settled in the same way as a bet, but what happens after the expiry date is somewhat irrelevant because by that point the contract market is closed. Let me illustrate this more directly: At Intrade, you can create a contract where the closing price of the contract is a function of the outcome of the event. So let's create the following contract:

These contract are based on the closing price of Citigroup stock, C, on June 19th, 2009. If the stock price is at 4 dollars or lower, the contract pays out zero. Otherwise, the contract pays out (X/10 - .4), where X is the closing price of C on June 19th. These contracts may only be purchased in groups of 10.

Now, up until June 19th, this market should function identically to that for these options. In both cases, the price of the contract is determined by the performance of a real asset (Citigroup stock), and in both cases people are only trading contracts, and not anything tangible, while the market is open. The only difference is that, when the market closes on June 19th, people left holding the options will get stock which they can sell for cash, while people holding the Intrade contracts will get their cash directly. And as for the people who had already made their profits in the respective markets and do not hold any contracts, there is NO difference between them. They have made their money solely by trading contracts whose price is determined by a stock, while never trading the stock itself. Now you can say that these people are all gamblers, or all investors, but I find it hard to argue that the ones who traded options contracts (but not stock) are investors, while the ones who traded prediction contracts (but not stock) are gamblers.

Re:Wanna Bet?

[johnsonav]

There is a difference though, in that the bid/ask spread can be negligibly low compared to the stock price, while the bookmaker will make sure that the odds he gives allow him a certain minimum profit.

I think that has more to do with the structure and size of the betting market vs. the stock market, than it does with the nature of the instrument itself. If the betting market was as active, liquid, and large as the stock market, competition between bookmakers would bring the vig down to levels comparable to the bid/ask spread in the stock market.

To illustrate this, take a look at the spread on a low-volume, low-market cap stock, compared to a high-volume, high-market cap one. There are some stocks (at some times) which make a bookie's 10% vig look like a bargain. It's all dependent upon the trading activity of the stock. I would imagine that you'd find that the large Vegas sports books collect a smaller vig than your neighborhood bookie for exactly the same reason.

My problem is that the label gambling generally carries a negative moral connotation, which most certainly shouldn't be applied to a game where you make money in the long run (that goes double for people who say that the stock market is just gambling).

I certainly agree that the type of gambling you're talking about should not have a negative moral connotation.

But, if you look closely at the situation, every bet has someone on the other side. If you know the odds are stacked so heavily in your favor, aren't you really taking advantage of the other guy's ignorance? In fact, some people may consider taking advantage of another human being in such a fashion more morally reprehensible than simply making a -EV bet.

Not that I actually feel that way. I think a sucker deserves to lose his money. But, it's an interesting perspective which muddies the entire moral issue.

What I was trying to do way up there was limit the definition of gambling so that games which any rational person would play would not be included.

That's kind of my point: What rational person would take the other side of your bet? So, your game requires at least one irrational person to participate. That would make your hypothetical game gambling, by your definition.

Now you can say that these people are all gamblers, or all investors, but I find it hard to argue that the ones who traded options contracts (but not stock) are investors, while the ones who traded prediction contracts (but not stock) are gamblers.

I reluctantly agree. It seems that my own "intuitive understanding" of what separates gambling from investing was faulty, though not quite for the reasons you state. I can't really draw a distinction between gambling and investing at all.

Here's what changed my mind: life insurance. A life insurer goes to great lengths to make sure that, on average, it collects more in premiums than it pays out in benefits. That's how it makes a profit. So, it's a -EV activity for the insured, and by your definition, would qualify as gambling. And, nothing changes hands but money, so it's gambling by my definition. But, I don't think life insurance is gambling. My definition must be wrong, or there really is no distinction between gambling and "legitimate" economic activity.

Really, options are simply a form of insurance. There are two kinds of people in the options market: hedgers, and speculators. Hedgers are looking for protection from risk, like a person buying life insurance, and are willing to accept a -EV to get it. A speculator is looking to accept the EV from the hedger, just like an insurance company, in exchange for bearing the speculative risk which the hedger did not want. If life insurance is gambling, then so is the options market.

Now, as to the actual stock market, the same principle applies. A person who owns a stock is bearing some amount of risk as long as he holds that stock (assuming

So...

[XPeter]

We'll be seeing alot of these http://www.freesoftwaremagazine.com/files/www.freesoftwaremagazine.com/nodes/3027/c20081015_broken_monitor.jpg when people start to lose in blackjack?

Re:So...

[larry bagina]

more like his newest boytoy is a gambling industry loobyist. Just like his last one was a Fannie Mae exec.

Re:So...

[harryandthehenderson]

Except it's been the gambling industry in the US who has been lobbying the most for making online gambling illegal not the other way around.

welcome to the age of the internet

[circletimessquare]

if you don't allow it, it just moves offshore and continues uninterrupted, resulting in nothing but your own businesses not getting a share of the pie

Re:welcome to the age of the internet

[ShadowRangerRIT]

Actually, that's not what happened. The previous bill made it illegal for credit card companies to send payments to online gambling sites, so no, it didn't move offshore. The WTO actually ruled it was an illegal when we tried to ban the payments to offshore online gambling parlors, but to my knowledge, we just ignored them.

Re:welcome to the age of the internet

[Tony Hoyle]

What happened was the gambling sites just ignored the US - in fact here in the UK they make so much money they're sponsoring TV programmes and can afford primetime advertising. It's a huge industry ready and waiting to move in.

Of course the US has killed its own online gambling industry stone dead, so it'll all be foreigners making the money, but... isn't that what the politicians wanted? Oh, it wasn't? Um...

Re:welcome to the age of the internet

[Anonymous Coward]

Actually, that is what happened. I'm a European playing online poker legally on a number of online sites. Immediately following the ban just about all the US players disappeared; within a few weeks the stronger players started trickling back (I guess these were the ones making money regularly, so they had an incentive to find a way around).

Now these sites are back to at least the level of US players they had before the ban, so I imagine the methods of circumvention have filtered down.

Re:welcome to the age of the internet

[mattack2]

In the US, the gambling sites are *effectively* sponsoring TV shows too. They're just using .net sites, rather than the .com sites. The .net sites all have free games, and presumably they're expecting people to mistakenly go to the .com site instead and find out about the pay games.

I believe the .net vs .com distinction for gambling sites originally came about because of players wearing logos for the various online sites on TV shows. One show (probably 2003 or 2004 WSOP) required them to show only .net sites.

This story=Interesting gamble.

[vawarayer]

All in.

Captain Oxymoron to the Rescue!

[Tackhead]

" 'Illegal offshore Internet gambling sites are a criminal enterprise, and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age," says Representative Spencer Bachus, Republican of Alabama and the ranking member on the House Financial Services Committee.

Wow, the doublethink boggles the mind.

If the gambling ban is repealed, these sites would immediately cease to be "criminal enterprises", and become legal offshore Internet gambling sites.

If the gambling ban is repealed and these sites chose to operate "unfettered within the United States", they'd then become legal, American gambling sites.

The whole fracking point, Rep. Bachus, is to eliminate these "offshore criminal enterprises". By making it legal, you can bring them onshore, where they can be taxed and regulated, just like state lotteries and privately-owned casinos.

Speaking of privately-owned casinos, at least Sen. Reid of Nevada has a "legitimate" reason to be a roadblock: He just doesn't want to see Vegas have any competition.

The dumb part about Reid's objection is that the legalization of online poker would bring a lot of new players into the game. Some of 'em might even end up enjoying it so much they end up going to Vegas to play the game in meatspace. Quit acting like the RIAA of gaming, buddy, and you just might make a few more bucks.

Re:Captain Oxymoron to the Rescue!

[oodaloop]

The point is that many, or most by some estimates, of the online gambling sites are run my organized crime networks in off-shore tax havens. They help launder money and create new money that is then funneled to other enterprises, like buying stolen goods, weapons, drugs, etc. I'm all about freedom on the internet, but cracking down on organized crime is a good thing IMHO.

Re:Captain Oxymoron to the Rescue!

[alvinrod]

What reason would these alleged criminal enterprises have for coming into the fold if all it brings is additional regulatory red tape and taxation for their business? The fact that they're offshore makes them somewhat difficult for the US to touch and as far as I know there really hasn't been much in the way of legal action brought against these websites.

Even if the gambling ban is repealed, why should these websites submit to some authority when it's clear from their current position that they obviously don't need to do so. Wouldn't it be more profitable to remain some kind of 'criminal enterprise' that the government can't do anything about, given that if they could you'd already be out of business?

Re:Captain Oxymoron to the Rescue!

[Mattazuma]

I think Reid will end up backing the bill. The big casino companies would love to buy Party Poker and the other big poker sites if they are legalized. They already have their own online gambling sites overseas.

Re:Captain Oxymoron to the Rescue!

[Tony Hoyle]

Not really. Online gambling is legal just about everywhere except the US. It's also taxed and regulated - no incentive for organised crime to get involved as it's a huge very profitable industry.

You can launder money in Vegas too.. or, much easier, just have an insider in a bank.

Re:Captain Oxymoron to the Rescue!

[stephanruby]

If the gambling ban is repealed, these sites would immediately cease to be "criminal enterprises", and become legal offshore Internet gambling sites.

No. There is also the current problem of off-shore casinos reneging on paying their largest winners. To make off-shore gambling more legit, we would need to make those enterprise bonded (or insured) with actual assets in the US that could be taken away and given to the winners in case of breach of contract.

And while we're at it, we'd probably also need some kind of auditing process, to make sure there is no other type of in-house cheating designed to cheat customers out of their winnings (that being said, don't ask me how to do that last part, that's not my field).

Re:Captain Oxymoron to the Rescue!

[CodeBuster]

By making it legal, you can bring them onshore, where they can be taxed and regulated, just like state lotteries and privately-owned casinos.

Actually, you wouldn't need to bring them onshore to do that. Gambling can be taxed under WTO rules as long as onshore and offshore gambling are taxed equally. In fact, the US is currently under WTO sanctions because our gambling laws are at odds with our treaty obligations with regard to gambling.

Speaking of privately-owned casinos, at least Sen. Reid of Nevada has a "legitimate" reason to be a roadblock: He just doesn't want to see Vegas have any competition.

Pure cynicism if ever there was such a thing; its hard to be more blatantly biased than that.

The dumb part about Reid's objection is that the legalization of online poker would bring a lot of new players into the game. Some of 'em might even end up enjoying it so much they end up going to Vegas to play the game in meatspace.

It is not the role of government to ban activities which people might enjoy too much, even to their own detriment. The lives of individuals belong to those individuals and it is not the damn business of the State to tell two people that they cannot gamble, have sex in a peculiar way, smoke, drink etc. It was supposed to be a free country people and that means freedom to make the "wrong" choices (or choices that some might judge to be wrong) as long as such choices do not infringe upon the abilities of others to make their own free choices (i.e. no violence or coercion). I really dislike people who try to run or control the lives of other free thinking and independent adults because they represent the tyranny that our founding fathers and generations of our soldiers shed blood to escape from.

Re:Captain Oxymoron to the Rescue!

[oodaloop]

It's also taxed and regulated

Which is why most of them are registered in tax-free offshore financial centers. They're owned by anonymous International Business Companies with bearer shares. Most of these places have few laws regarding these kind of things and respond kindly to cash incentives. Some regulation.

no incentive for organised crime to get involved as it's a huge very profitable industry.

That's precisely why organized crime gets involved, Einstein. Money for nothing and your chicks for free.

Re:Captain Oxymoron to the Rescue!

[Hott of the World]

Money. Lots and lots of money. More so, than what they can aquire in their current state.

It reminds me of the World of Warcraft localization in China. Blizzard had to change a large portion of its content and put a timer on time spent playing it for the Chinese government to ok it. Blizzard changed its Chinese version, satisfied the government, and raked in a huge segment of players willing to fork over money.

I'm sure any amount of "regulation and taxation" would be outpaced by the huge revenue from the millions of new people looking to gamble online.

Re:Captain Oxymoron to the Rescue!

[nametaken]

If that's really the case, my guess is that they've run the odds of that happening. I hear they have a few people who know how to do that, 'round them parts. ;)

Re:Captain Oxymoron to the Rescue!

[cdrguru]

Why? I am all in favor of offshore casinos not being held to any higher standards than your ordinary Ebay seller. Mostly, I want to operate a online casino with slots and roulette. Just as soon as it is legal to do so and not get hassled by credit card companies.

I figure this should be worth millions and anyone with half a brain can see that. Look, Las Vegas pays out aroun 98% on slots and they are raking in the dough. I figure you pay out at 80% and make a big deal out of each and every winner. Send them lots of really nice email congratulating them with some pretty graphics that they just have to share with their friends.

The key here is that it needs to be well outside of US jurisdiction, taxes and regulations. That would just spoil it. But when credit card companies can legally transfer money for online gaming once again the floodgates can open and I want to be somewhere in that first group. First with a casino, first to make millions, and first to quietly retire when the heat comes back on.

Of course this has a lifespan of maybe nine months. Maybe. When enough Average Joes lose their entire credit limit on a couple of cards. How many people are that stupid? Well, did you ever play Keno? See how many lottery tickets get sold? The answer is plenty of people are that stupid and quite a few smart folks are going to get rich off this.

The secret is not to be the last one holding the bag, because all those losers are going to want blood. Last guy in the game is going to get to testify in some hearings.

Re:Captain Oxymoron to the Rescue!

[stonewallred]

I agree, but when the USA first started the bullshit with morality and banning of alcohol, we set off on the road to hell. Add in the great state nanny government and there you go. Smoking is bad, gambling is bad, sex is bad, drinking is bad, marijuana is bad and the list grows, and each addition brings its own little cheering section, happy they got to impose their fucking "correct" stance upon a segment of America. I have reached the point where I hope the government starts banning more shit, like cars, meat, milk, eggs and every fucking thing that the ones who pushed for bans and control of the vices I enjoy, like to do, eat and have. Freedom is just an idea that died in America.

Re:Captain Oxymoron to the Rescue!

[Joe Mucchiello]

Las Vegas pays only 98% (I've heard 95% but the number is fixed) because they have to by law. That's the whole point of gambling being REGULATED. You would still be violating the law if your payouts were 80%. And in order to be regulated you would have to submit to costly audits of both your books and your code. This bill will not let you put roulette and slot machines on the web from your basement. But good luck trying it.

So...

[Anonymous Coward]

Barney Frank was offered a large campaign contribution by gambling interests.

Nevada

[Ohio Calvinist]

I don't think Nevada has a lot to worry about in the realm of online gaming. Brick-and-mortar casinos offer a lot that online gaming can never provide. Casino gambling may be the cornerstone of the Nevada economy, but it has diversified to the point that other gaming enterprises do not appear to directly compete, in the form of fine dining, entertainment, and all that Vegas has to offer.

For instance, if you've ever driven North on I-15 on a friday afternoon out of California, people go to Vegas in droves despite that California has easily accessible Indian gaming with all of the same games/slots (except for Sports betting) that Vegas casinos do.

The Internet might take a small portion of the market for gaming, but the lion's share save up their "gambling budget" and take a trip to Vegas or a local casino/resort for the experience of all the non-gaming activities and gamble in an environment that makes it fun even when you're losing.

Now, if the internet could comp you free beers in the comfort of your home, Mr. Reid can start to worry.

Re:Nevada

[julesh]

I don't think Nevada has a lot to worry about in the realm of online gaming. Brick-and-mortar casinos offer a lot that online gaming can never provide.

Not to mention that a lot of those casinos have extremely well-recognised brands that could help them to set up competing internet gambling sites. Nevada could well become the center of Internet gambling, as well as brick-and-mortar, and therefore stands to _gain_ from this proposal.

Vice laws.

[Hatta]

How about we also end the drug and prostitution ban? Just saying.

Re:Vice laws.

[shma]

Yeah, we'll sponsor our own vice bill!
With blackjack!
And hookers!

Re:Vice laws.

[modecx]

How about we also end the drug and prostitution ban? Just saying.

Fine by me, so long as the machine gun bans are also lifted.

Re:Vice laws.

[Hatta]

I was a little hasty. To be fair to Barney Frank, he did introduce a bill that would have legalized small amounts of marijuana at the federal level. Of course, that got nowhere.

Re:Vice laws.

[iamhigh]

I really want to hear your reason for linking those two together. I can't wait to tear it apart.

Re:Vice laws.

[Tony Hoyle]

he did introduce a bill that would have legalized small amounts of marijuana at the federal level

Wait.. so only the feds would be allowed to smoke weed?

That'll help recruitment...

Re:Vice laws.

[Hatta]

I would take that deal. Freedom is freedom.

Re:Vice laws.

[nametaken]

Yeah, we'll sponsor our own vice bill!
With blackjack!
And hookers!

Your ideas are intriguing to me and I wish to subscribe to your newsletter.

Re:Vice laws.

[couchslug]

"How about we also end the drug and prostitution ban? Just saying."

But they work so well and don't produce any collateral social damage!

50/50

[owlnation]

I'm torn. Part of me detests censorship and state interference, my belief is that people can make up their own minds as to what's harmful.

On the other hand, since the US Gambling ban the whole World has seen a dramatic reduction in the most obnoxious flashing gif adverts since punch the monkey.

Do I hate censorship or annoying flashing ads more...? Honestly I really don't know...

Re:50/50

[alvinrod]

I realize that you're being facetious, but you can get rid of the obnoxious flashing ads through a simple browser add-on, wouldn't it be better to get rid of the censorship?

Re:50/50

[CodeBuster]

Get AdBlock instead and legalize online gambling. There is no need to compromise your freedoms just to avoid having to punch the monkey.

Re:50/50

[mingdamirthless]

Adblock should make your decision much easier.

Here's an easy solution

[Paul Carver]

I've got a simple way to deal with online gambling without banning it. Just put in place limits on the financial liability. If it's really "think of the children" then just make it like contracts. A minor can enter into a contract but the contract isn't enforceable, so who in their right mind would bother?

If the law makes it clear that an online casino can't collect from a minor then there's no motivation for them to try to get a minor hooked so the whole "think of the children" argument falls apart.

As for people over 18, screw 'em. If they want to dig their own grave then let them lie in it. I wish the government would get out of the business of protecting people from their own stupidity. It's a losing battle.

Re:Here's an easy solution

[Sporkinum]

Sounds like a good idea. I was pretty fed up with how gambling came to Iowa, but since the Genie is out of the bottle, I say equal opportunity. Why not allow the stupid tax to hit everyone. Just make sure gambling losses are non tax deductable, and that they tax the bejesus out of the online casinos.

Re:Here's an easy solution

[anaphora]

The best way to keep children from accessing online gaming Web sites is to strictly require that all operators employ the best is class age-verification software. This can only be done through a licensing approval process and regulation. The UIGEA does not use the best way to prevent underage gambling and protect children.

Re:Here's an easy solution

[alvinrod]

This would work up until someone gets the bright idea of letting their sixteen year old kid play online poker. If the kid wins, the father and son collect the winnings. If the kid loses, then obviously they can't lose because the person playing wasn't an adult. Illegal as hell, but who can really prove things one way or the other?

Here's my own wonderful idea: why not provide a free site where minors can gamble with money that isn't real. Instead they can hone their skills and use their funny money points towards some kind of booby prize. Of course what we don't tell them is that the site is really designed to monitor the amount of time spent playing and their behavior so we can tag the ones that are clearly addicted to gambling and get them the help that they need before they fuck up their own lives or drag anyone else along with them. Compulsive and obsessive gambling is every bit as serious of an illness as alcoholism and this would be a good way to identify the people who are susceptible to this behavior before it causes any real damage.

Of course, one could argue that we're just making our own monsters at that point. But this is precisely the reason why the government is most likely show a certain amount of keenness towards the idea.

Re:Here's an easy solution

[InMSWeAntitrust]

"If they want to dig their own grave then let them lie in it."

If we are to consider gambling as an addiction, are you also a proponent of allowing other kinds of addicts to go untreated? I agree, the less the government actually governs the better, but I think to offer some sort of program that's state-funded could help the system perpetuate itself less. Plus the funds can come from the casinos, making the addicts pay for their own treatment, creating no more stress for the government than is needed.

And I find it self-centered that you do not care for the financial security of your fellow man, while that fellow man may clean your streets, make your food, run your hospital. If only it were so easy.

Re:Here's an easy solution

[Paul Carver]

If we are to consider gambling as an addiction, are you also a proponent of allowing other kinds of addicts to go untreated?

Untreated? No. Un-"illegalized" yes. I can't think of any case where I'd approve of passing a law against an addiction. Laws against certain behaviours of addicts, yes, but not because the actions are performed by addicts. Murder, burglary, auto theft, bank robbery, all sorts of things should be illegal regardless of whether they are done because you're a pot head, a heroin fiend, a sociopath or an asshole.

Re:Here's an easy solution

[stonewallred]

It is a basic principle of not wanting to control another human being. Not self-centeredness. Being that I desire the freedom to do as I choose, then the same freedom is offered by me towards other people. And that includes good choices, bad choices or even stupid choices they may make. Who am I to deny another human being of their pain and possible learning experiences?

It could pass

[clarkkent09]

If you ask me it is outrageous that we have given our government the power to even be discussing whether people should be allowed to make a choice to gamble, online or not. It is simply not any of the government's business what I do with my money as long as I am not hurting anybody else.

But that aside (a big issue to put aside, but anyway) I wouldn't be so sure that the bill won't pass. As we see all over the country, state governments have been steadily allowing more and more gambling purely as a way to increase the tax revenue in difficult times, so the trend is towards more gambling, not less. The way they see it is not as an issue of rights through. What they see is all this money going out to overseas companies without the US government being given a chance to keep a share for itself, which in their mind is the real crime here.

Re:It could pass

[Jophiel04]

The current law on the books doesn't make the act illegal. The law makes it illegal for financial institutions to transfer money to/from internet gambling sites.

Strictly speaking, this is fully within Congress' rights to regulate interstate commerce which is explicitly granted by the Constitution.

Your assertion about it never being the government's business about what you do with your money, doesn't pass a common sense test. Two obvious examples, drug money, and unlicensed gun sales.

Social outrage works a bit better when you have a decent thing to stand on.

Re:It could pass

[clarkkent09]

The current law on the books doesn't make the act illegal. The law makes it illegal for financial institutions to transfer money to/from internet gambling sites.

The mechanism they used to ban it doesn't matter, the end result is the same. What's the point of making in illegal to transfer money specifically to gambling sites if not to prohibit online gambling.

Strictly speaking, this is fully within Congress' rights to regulate interstate commerce which is explicitly granted by the Constitution.

Read your constitution. Just because something is interstate doesn't automatically give congress unlimited authority over it. When prohibition was enacted, they understood this and had to pass a constitutional amendment before they could prohibit alcohol sales. I would love to see a constitutional justification for prohibition of online gambling but not offline gambling. Where is the distinction?

Your assertion about it never being the government's business about what you do with your money, doesn't pass a common sense test. Two obvious examples, drug money, and unlicensed gun sales

Criminalizing spending money on drugs is wrong too. Buying a gun from an unlicensed seller is not a federal crime. In many states it is not illegal either. There is an argument to be made for registering guns but it's a different issue.

Re:It could pass

[stonewallred]

You assume that the poster believes unlicensed gun sales and /or drug sales are bad things. I for one believe the government has no business in which or how many guns I buy, nor any business telling me what chemicals I can ingest for my personal use. Of course I err on the side of freedom, not control, personal responsibility, not abdicating it to the government as you seem to suggest is the proper thing.

So...illegal things are criminal?

[KevlarTheSleepinator]

"Illegal offshore Internet gambling sites are a criminal enterprise"

AKA: Illegal (things) are a criminal (thing).

No kidding! If it becomes legal, then it's no longer a criminal enterprise now is it? He needs to give a better reason why it should remain illegal than just because it's illegal now.

Re:So...illegal things are criminal?

[b laurienti]

It's currently not an illegal enterprise, as running the online casino is legal in their physical location.

Holy Shit!

[Mix Master Nixon]

Harry Reid is going to review something carefully! I wondered what it would take, as countless violations of the US Constitution, the Geneva Convention, and human decency weren't sufficient. Now I know: you have to threaten a microscopic portion of Las Vegas's profits.

Re:Holy Shit!

[synaptic]

hahahaha, ain't that the truth.

Is it legal to deposit and play online poker?

[anaphora]

The PPA's position says YES. 4. Is playing poker legal in the United States? Generally, playing poker in a social setting in one's home is legal in most, but not all, states. Some states permit playing social games of poker in taverns and bars, while very few states allow commercial poker games. Increasingly, however, government officials have undertaken "crackdowns" on the playing of poker in traditional settings, including at charity events. These stories are detailed in the News section of this Web site. The Internet poses separate issues. There is currently no federal law that prohibits anyone from playing poker online. The Unlawful Internet Gambling Enforcement Act of 2006, does not change any federal gambling and does not make it illegal for people to play on the Internet (Note: some states do have laws, like Washington St. which have criminal penalties for online).

Reasons to support poker players

[anaphora]

Poker is a game of skill
Playing around a kitchen table or in cyberspace, the same talents and skills required to win at poker hold true. Observing betting patterns and watching when players fold are just as critical when playing poker over the Internet as when playing in person.

In addition, since poker is not a "house game" like blackjack and others, the game requires players to compete against other players. This characteristic is true whether someone is playing online or offline.

Poker is a game with a predominance of skill. Like chess, poker is a "thinking man's" game which relies on mathematics, psychology and money management.

Billions of tax revenue is being lost.
According to an economic analysis, 3.3 billion in federal tax revenue and addition 1 billion in state tax revenue could be raised if the federal government were to regulate Internet poker.

Poker is a source of charity.
In 2006, millions of dollars were raisedfor local and national charities through poker tournaments. One event in D.C. featuring 15 Members of Congress raised more than $288,000 to fight cancer.

Poker is one of the great American pastimes.
The game has been enjoyed by presidents, generals, Supreme Court Justices, Members of Congress and average Americans for more than 150 years.

Playing Poker Online Is Simply an American Tradition Evolving into the 21st Century
Americans have played poker throughout history. Playing poker on the Internet is simply an example of an American tradition evolving into the 21st century. It is unfathomable that poker, an American pastime and game of true skill, should be banned for the millions who enjoy playing responsibly.

75 percent of Americans oppose banning online poker.

According to national polling, a vast majority of Americans oppose federal efforts to ban online poker. Online Poker can be safe and regulated.

Appropriate federal regulation can ensure that minors are kept out of sites, services are provided to problem gamblers and the proper taxes are collected. The current system does nothing to protect children, problem gamblers and it is allowing billions in tax revenue to go overseas.

Online Poker vs. Online Horse Racing Betting?
If Congress allows me to bet on horses and state lotteries online, why can't I play a skill game like poker with other consenting adults?

Prohibitions don't work.
The UIGEA effectively bans online poker in the U.S. and drives those players underground. Meanwhile, poker continues to grow in popularity nationwide.

Re:Reasons to support poker players

[nitroamos]

I agree with your points, and I think that online poker should be legal. I'd even go a step further in saying that I'm not worried about children becoming addicted, since they're already addicted to everything else (sugar, WoW, TV, etc). Addictions are a concern because by definition they represent an opportunity cost to the rest of their lives. Poker puts that cost in direct monetary terms, whereby I think people could potentially learn their lesson early, when they're more accepting of correction. Furthermore, poker is educational in that you can learn to beat your competition using math, a lesson I wish more people were receptive to. It's no different than any other kind of game which has a buy-in for competitions.

On the other hand, for the very reason poker doesn't bother me, other kinds of gambling do concern me on a moral level. For almost every game where you're playing against the house, you're guaranteed to lose. These types of games are typically rigged so that your losing margins are small, but on average, you're paying a lot of money to push that button or pull that lever. By telling people "today you might get lucky", these games teach people to unlearn any math they've learned, and to ignore any wisdom someone might tell them. That is, these games train people to be careless.

And that is immoral.

Re:Reasons to support poker players

[dugeen]

If poker really was a game of skill, people would be happy to play it for matchsticks - merely for the thrill of exercising their skill.

Re:poker is NOT gambling

[ShadowRangerRIT]

I'd argue there are four factors involved in poker (once you master the core rules):

1. Skill with probability
2. Skill with reading people
3. Skill at hiding your own tells
4. Luck

Given that #2 and #3 are substantially less useful in online poker, it's closer to gambling that it is to a "game of skill," particularly for the vast majority of the population with less than stellar probability skills (see the entire population of people playing the lottery).

Again, I'm not saying people shouldn't be allowed to gamble, just that it's a tad silly to argue it from the perspective of the winners.

This decision is ruled entirely by reason!

[quantax]

'Illegal offshore Internet gambling sites are a criminal enterprise, and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age,' says Representative Spencer Bachus, Republican of Alabama and the ranking member on the House Financial Services Committee.

And that is why online horse betting is totally OK.

Stock Market

[ub3r n3u7r4l1st]

The point I am making is, why don't they ban the stock market as well? It is gambling, and a lot of people went bankrupt with that. There are some cases where college students borrow money and 'invest' in stocks recently. You can probably guess what happened to those people.

Re:Stock Market

[maxume]

The stock market isn't necessarily zero sum (things like dividends inject new monies). So a portfolio heavy in dividend paying stocks with healthy balance sheets doesn't in any way resemble any actual game. Many people do choose to be less conservative than that.

Illegal offshore Internet gambling sites...

[swanzilla]

...seem pretty tame compared to the monkey knife fights, men/cow marriages, and re-broadcasting of Major League Baseball with implied oral consent

Excuse me, Mr. Bachus...

[thousandinone]

...and I mean this with the utmost respect, mind you. "Illegal offshore gambling?" What the FUCK are you talking about?

I wasn't aware that gambling sites that operate outside of the United States fell under the US' legal jurisdiction. Is there any kind of law, convention, or agreement (maybe from the UN?) that supports this?

Because otherwise, I see this as an argument FOR legalizing gambling- if there are sites outside of US jurisdiction where it is available, then criminalizing it just cuts off potential tax revenue when the gamblers take their business elsewhere.

Re:Excuse me, Mr. Bachus...

[dugeen]

Unfortunately, up to now the US government has taken the view that offshore gambling sites do fall under its jurisdiction, if they offer services to US citizens. Executives from more than one gambling company have been dragged off to US jails after incautiously visiting the country - even though their activities were entirely legal in the countries they're based in.

Re:Excuse me, Mr. Bachus...

[blackest_k]

Illegal offshore gambling is illegal for americans to participate in, not illegal for the rest of the world (that allows it). heck some of these gambling sites are listed on stock exchanges outside the usa.

Personally I can't understand why people are willing to give money away for some virtual cards. For there to be a winner there has to be a number of losers and even the winners are losers most of the time. If you have enough money to throw it away why not choose something positive to do with it? Maybe you could pay for a well giving some kid the chance to grow to adult hood instead of dying of dysentery.

Gambling rule no 1 the odds are always stacked against you. knowing rule one why are you willing to play?

Meanwhile, in related news ...

[PPH]

...crude oil futures are trading at $62.70/bbl.

Who needs your penny ante poker games when I can drop some real cash on the biggest numbers racket around.

Proposal to Alleviate Heavy Traffic on I-15

[srobert]

I've been thinking about all that heavy bumper to bumper traffic on I-15 every weekend. I have a proposal that will alleviate the heavy traffic, reduce air pollution and consumption of fossil fuels. Additionally, it would provide a badly needed economic boost to southern Nevada and California (which have both been hit badly by the recession). It would be an effective use for some of the Federal stimulus money and would help both areas benefit from foreign tourism, thus reducing the national trade deficit. The idea: Build a high speed rail from Las Vegas to Disneyland. :-) No seriously.

Go slow and regulate heavily at first

[davidwr]

How about this: Allow online gambling but only from state-licensed betting parlors that met certain requirements. States, and where required by state law, localities would have to opt in.

States could, if they chose, let people declare their own home a betting parlor provided it met certain requirements, such as the ability to verify its location electronically, the ability to verify that only those legally permitted to gamble were gambling, that all gamblers were provided with information on gambling addiction, that all winnings were reported to taxing authorities, if people other than household residents were gambling that local business zoning laws were met, etc. etc. etc.

Those taking bets would have to be based in the United States, be based in a location where running a gambling operation of its type e.g. casino or sports betting was legal, be required to verify that the client location was a betting parlor, and verify that the person placing the bet was authorized by the management of the betting parlor.

This will be expensive, and most people will find it more convenient to drive to the nearest "betting cafe" than to do the paperwork and pay the fees needed to make their home into a legal online casino client.

If this kind of "enabling legislation" were in force, localities could experiment with allowing online gambling by their residents, and over time a consensus would emerge if this was a good thing or not.

Personal disclaimer: I would just assume not have online gambling, but if you are going to have it, go slow about it.

This is about poker, and hypocrisy

[MattW]

A major proponent of this bill is the "Poker Players Alliance" (http://pokerplayersalliance.org/). They've been lobbying for several years now; they formed around the time Bill First put the UIGEA into a port security bill using a procedural move.

I think the majority of people who are passionate about seeing this bill pass are poker enthusiasts who just want to be able to play poker online as a hobby. I don't give a damn if they legalize online slot machines or keno, and I think it's generally ridiculous to utilize such things. At least in Vegas, you get free drinks while wasting your money. But poker is a game of skill in the long run.

The UIGEA was ethically bankrupt:

* It carved out exceptions, such as betting on horses
* 43 States have State Lotteries, aka, the "Tax On People Who Are Bad At Math". These are games which, like typical casino games, are inherently "unbeatable". They are pure chance, and stacked very heavily against the player.

At this point, millions of people are still playing poker online, but they don't enjoy any sort of regulatory protection, and the United States does not enjoy any tax revenue from it; although the UIGEA burdens our banks with a significant cost of compliance by trying to force them to screen out transactions intended to move money to the online poker houses.

As far as Harry Reid goes, I think online poker has been a net benefit to Vegas; huge numbers of players visit for the World Series of Poker each year, as well as a bunch of lesser events. And those numbers have dwindled since the UIGEA passed in 2006.

Re:This is about poker, and hypocrisy

[cdrguru]

I want to set up my own roulette and slot machine "casino" online. I figure I can pay out 80% of the take and keep lots of people happy.

Just as soon as it is legal to have online gaming in the US. Why wouldn't it be legal for me to have my own casino like that?

Re:This is about poker, and hypocrisy

[stonewallred]

Lotteries are a tax on those bad at math, and an excellent bet for those who have a spare dollar. I personally buy a lottery ticket every Wednesday and Saturday. I march into the store, plunk down my dollar and get my number, conveniently generated by the computer. Do I expect to win? Hell no. Do I win? Hell no, not in the long run so far. But I piss away more than two dollars a week on sodas, chips gum etc etc, and I figure that it is not going to send me into bankruptcy to buy two tickets a week.And the upside is, that if I ever do win, I will be rich, lol.

Re:This is about poker, and hypocrisy

[synaptic]

If so, then you'd be doing yourself a favor by betting the patterns that are most likely to appear. Go download the number histories and do some nCk calculations to see the expected vs actual outcomes on odd/even combinations, distribution of the numbers, etc.. Yeah, you probably won't win but you'll considerably increase your chances by playing the numbers that come up more often.

Skip the top-loaded powerball or mega millions, go for the state lotto or five number games and do the calculations on returns. It's pretty ugly when you do the math but if you're going to play anyway, why not play to win?

Re:This is about poker, and hypocrisy

[synaptic]

Because you'll be doing monte carlo simulations to hit that 80% house take when you don't need to go through all of that. You would be cheating.

Generate really good pseudorandom numbers and let the rules of the game and probabilities do the rest. Besides, you'll get caught eventually by people who record every single game and do the math.

Re:This is about poker, and hypocrisy

[vslashg]

Go download the number histories and do some nCk calculations to see the expected vs actual outcomes on odd/even combinations, distribution of the numbers, etc.. Yeah, you probably won't win but you'll considerably increase your chances by playing the numbers that come up more often.

What this approach fails to consider is that there are two competing forces in games of chance. As you have noticed, there are "streaks", that is, certain numbers, patterns, distributions, etc. can get "hot". So yes, one approach you can take is to pick hot numbers. What you haven't noticed is that numbers and patterns can also become "due"; a number that hasn't shown up in a long time builds up potential, and must eventually show up again so that the law of large numbers will be maintained.

It is only by carefully considering the fragile balance between hot numbers and due numbers that a skilled lottery player can tilt the odds more in his favor, for example, by noticing that a large streak of even numbers is due.

(Yes, I'm making fun of you.)

Re:This is about poker, and hypocrisy

[Red Flayer]

43 States have State Lotteries, aka, the "Tax On People Who Are Bad At Math".

It always raises my hackles when I read that phrase. Lotteries are NOT a tax on those who are bad at math; they are a tax on the differential utility of $1 and $1 * 10^X dollars.

The utility most lottery players assign to $1 is close to zero. This utility value is less than their (odds of winning) * (utility of potential earnings), so playing the lotto is a good mathematical bet.

The stupidity factor does have an impact, though -- most people overestimate their probability of winning.

Also note that there is additional utility assigned by most people to their lottery tickets. They get some enjoyment out of playing the lotto. For some, that enjoyment alone is worth $1... the chance of winning is just a nice benefit. Workplace lottery pools are often like this. For me, it's an easy $1 to spend in order to have something to talk about, to help build the team, etc.

Re:poker is NOT gambling

[gvaness]

Given that #2 and #3 are substantially less useful in online poker, it's closer to gambling that it is to a "game of skill," particularly for the vast majority of the population with less than stellar probability skills (see the entire population of people playing the lottery).

I disagree. With online poker you can play mutiple tables and don't take nearly as long dealing and handling chips. This makes the number of hands played sky rocket, evening out the effects luck will have on your game. Luck really only effects short term results anyway, make the same decision enough times in the same spot, and your results should converge on expected.

Re:poker is NOT NOT gambling

[Anonymous Coward]

Poker is not a pure game of skill. It is a gambling game that requires skill as well.

The random ordering of the cards obviously has a major impact on the outcome of a single game. In the long run the average outcome can be significantly affected by the players' relative skills, but the variance of results still grows (i.e. in reality you do not get to divide your winnings or losses by the number of times you played and so your undivided result does not converge to the average). A good player who gets dealt a few miserable hands they can't do much with is not guaranteed, nor more likely, to subsequently receive a run of good hands to "make-up" their average to their "theoretical performance level".

If you think poker is a pure game of skill, why don't you allow the deck to be completely "fixed" by the dealer? After all, if the random distribution of cards doesn't affect the result, why do you need it to be truly random? You may as well say that horse-race betting is a game of skill as make that claim of poker because careful analysis of the history of the horse and the condition of the track can give you information on who is going to win.

The multiple rounds and concept of "bluffing" in poker makes it harder (but not impossible) to mathematically analyze (and virtually impossible to do so mentally during a game). As it is not really possible to work out the optimal move mentally, the quality of a player's approximate heuristics (built up by experience) is an important factor to consider. The gap between a novice player who has not had enough experience to build up heuristics and an expert who has developed heuristics covering most situations is large enough that it may seem that skill is the only significant input, but at its base poker is still gambling.

Wrong

[Mr2001]

Given that #2 and #3 are substantially less useful in online poker, it's closer to gambling that it is to a "game of skill," particularly for the vast majority of the population with less than stellar probability skills (see the entire population of people playing the lottery).

Incorrect. You're presuming that all four factors are equally important. But in reality, especially at low-stakes games, skill with probability (#1) is far more important than any of the others.

Poker is a game of situational tactics and strategy. Luck is a factor because you don't know which cards are going to come next, but on the whole it's still a game of skill, because skill is what lets you recognize good bets and stay away from bad bets.

Overall, luck is no more important to poker than it is to investing in stocks or selling insurance. You never know exactly what the outcome will be in any particular case, but you have a damn good idea of how likely each outcome is, and you can plan for that in the long run.

Re:Wrong

[Mr2001]

What if all of the players of a game have the same skill at probability?

Then the other factors become more important.

"Skill with reading people" exists in online poker. Contrary to popular belief, "reading" isn't only (or even mostly) about recognizing facial expressions or body language to figure out whether someone has a strong hand. It's also about recognizing patterns of action: a raise means a lot more coming from someone who's folded his last 10 hands than from someone who raises 50% of the time, for instance.

"Skill at hiding your own tells", therefore, also exists in online poker. But it's not about maintaining a poker face, it's about being unpredictable. Or even better, being just predictable enough to give your opponents a false impression that you can use to your advantage. If you're the guy who's folded the last 10 hands, you might conclude that it's time to raise even with a bad hand, because your opponents will believe you have a good hand based on your past behavior.

Now, what if all the players at the table have exactly the same skill level in all these areas? In that case, luck is the only thing separating the players, and it's time to find a different table, because no one can expect to come out ahead.

Re:Wrong

[spottedkangaroo]

Investing in stocks is a game of luck unless you have the resources of buffet or lynch. It's a random walk and no amount of studying of historical data is going to predict the future. Remember when world comm was a sure thing and nothing could ever unseat the car companies?

Re:Wrong

[AnAdventurer]

Double wrong. Your argument seems to be that things that are similar are nearly the same. While factually true that "overall, luck is no more important to poker than it is to investing in stocks or selling insurance" due to variables at hand.

The shorter the game or run, the high an impact any instance of luck will have.

As in the less varibales you have (poker has far few varibales then the stock market) the grater an impact luck will have one a single move, hand or stock purchase

Re:Wrong

[Mr2001]

The shorter the game or run, the high an impact any instance of luck will have.

Certainly. But time in this respect is measured in events, not minutes: you'll see 30+ hands in an hour of playing poker, but it might take days for an investor to make 30 trades.

As in the less varibales you have (poker has far few varibales then the stock market) the grater an impact luck will have one a single move, hand or stock purchase

It's not that simple.

First, I'm not sure you can assume that a game of poker has far fewer variables than the stock market. It has fewer players, but it isn't "luck" when your outcome is affected by other players' choices. The source of luck in poker is the shuffled deck; the source of luck in stock trading is current events.

Second, the generalization you're making doesn't hold up; you can't judge a game simply by the number of variables in play.

Imagine a game where your payoff is determined by rolling a six-sided die and adding 1000 to the result: there's only one variable (and it's luck!), but luck can still only affect the outcome by less than one percent.

Now imagine a game where your payoff is determined by rolling a six-sided die, multiplying by one million, and then adding the current day, hour, minute, and second: now there are five variables, but now the outcome is almost completely dominated by luck.

Re:Wrong

[OrangeCatholic]

And by "resources" you mean what? How about trying to pick the winners - is that so hard?

Here's an easy one: GM + Hummer + $4.25/gallon = SELL.

Or how about this one: CitiBank + $1/share + Federal Bailout = BUY. Hell, if Citi goes up to $2, you make 100% return. And you know what? It did.

State?

[Weezul]

Isn't gambling a state matter currently? Why not let the states handle it?

Re:State?

[anaphora]

Certain states, Kentucky comes to mind, have taken it into their own hands. http://www.pokerplayerpress.com/online-poker-ban.html

Re:State?

[tepples]

Isn't gambling a state matter currently? Why not let the states handle it?

Because you can't be sure that a particular user isn't accessing an online gambling site from out of state through a closed proxy. Out-of-state users fall under federal jurisdiction per the commerce clause of the Constitution.

Re:State?

[Anonymous Coward]

Considering this is a matter about commerce between the US and other nations, no it's not a state matter.

Re:State?

[Weezul]

I can't tell how the ban works from your link, but the most effective law might be "It is a felony to attempt to collect a gambling debt within the state of Kentucky. It is a misdemeanor to pay a gamboling debt while physically within the state of Kentucky."

If you can't collect, and Kentucky residence are dissuaded from paying, then you better block the Kentucky residence from your site.

What were they before... ?

[Capitalist1]

Before they were illegal, they weren't criminal enterprises. If you repeal the law that bans them, they will no longer be criminal enterprises.

So, they're illegal because they're criminal because they're illegal.

Re:poker is NOT gambling

[bnenning]

Given that #2 and #3 are substantially less useful in online poker

Physical tells are unavailable, but they're overrated anyway. Identifying the betting patterns of your opponents (and making your own patterns not obvious) is more valuable and works just as well online.

Re:poker is NOT gambling

[samwhite_y]

This common fallacy comes up again. Poker is not just an estimation of probabilities. Poker is a raw and pure example of a very complicated multi-way "game theory" problem. Such problems are far from NP-complete (not computable in polynomial time relative to number of inputs on a computer) and much more interesting than they might first appear. Nobel prizes in economics have been given for insight into such problems. There is a book called "Mathematics of Poker" (those interested can do a Google search) which uses Poker to introduce game theory. Please read that before trivializing the theory that underlies poker.

A good poker player models his or her opponents and then creates optimized exploiting strategies -- strategies which are far more sophisticated than you might first imagine (once you have started giving up chances to raise up pots with strong hands in order to catch bluffs you have started down the first step of this long road). This optimization takes into account that your opponents are trying to exploit you and how well you believe you have misled them. The skills to master this are not too different from the skills required by a chess grandmaster (the analogy is not exact -- poker is more like a large look up into a vast reservoir of experience than a deep computational think, but an expert can beat up an non expert very quickly -- even a non expert who knows all the odds).

I think of the children, just not the ones you do

[TiggertheMad]

And how many people failed to attend college because they, or their parents, gambled away the college fund?

But think of all the casino owner's children that got to go to college as a result.

Re:poker is NOT gambling

[Jurily]

(see the entire population of people playing the lottery)

I don't play the lottery to win. I play so I won't have to tear my hair out if the first week I stop my numbers would win big.

The .net versions of online gambling sites

[tepples]

Here's my own wonderful idea: why not provide a free site where minors can gamble with money that isn't real. Instead they can hone their skills and use their funny money points towards some kind of booby prize.

I believe that site is called PartyPoker.net.

Harry Reid

[Oldyeller89]

While he may be an obstacle, I don't think so. Not only does online gaming (especially poker) increase interest in gambling, but I have recently heard that Harrah's is making a bid to set up an online Casino. This is tax revenue in Nevada's pocket. I hope this can pass and poker players don't have to jump through some absurd hoops to play online.

Re:poker is NOT gambling

[nametaken]

Absolutely right.

And if it were a game of luck we wouldn't see the same people winning consistently over the course of years. Those players are good at the game.

I want the ban ended!

[cdrguru]

If I can set up my own "casino" online, then I am all for it. If it is restricted to some type of licensed (and heavily taxed) entities as gaming is now, I am not interested at all.

The potential for legal "private" gaming sites is enourmous, especially if these are allowed to operate without oversight. Even if there are reporting requirements, as long as they aren't too onerous, it would be a great thing to get into.

Allowing Harrah's to run an online site is pointless. Running it the same way Indian Gaming is conducted is equally silly. Opening it up to anyone clever enough to have a web site means everyone can be rich, almost overnight.

You do understand that if you have more than a couple of brain cells to rub together that this would be only slightly more corrupt than a chain letter? That it would be something for imbecile suckers to lose money at while offering the "early adopters" a chance to get rich quick. Of course it will be shut down, restricted and taxed heavily just as soon as (a) some select folks get rich and (b) lots of Average Joes lose enough money to cry about it.

Re:poker is NOT gambling

[Toonol]

Skill influences the odds, but it's RELATIVE skill. A great player competing against five other great players has the same chance of winning as a terrible player competing against five terrible players.

Since _EVERYBODY_, slashdotters included, overrates their own skill, I think the smart money for most people should go into a different investment.

Re:poker is NOT gambling

[cdrguru]

Let's get something straight. Online gaming is going to mean slots, blackjack, roulette, craps and the like.

Go into any Indian casino or visit Las Vegas. Where are all the people? In the poker room? Nope, they are at the slot machines. Maybe 1% of the number on slots are playing blackjack. And out oif a casino full of people there are 10 playing poker. Do you believe this is lost on anyone running an "online casino?"

Should the credit card floodgates open, you will see sites offering slots, blackjack, roulette and craps.

Re:poker is NOT gambling

[BrotherBeal]

Disregard that - I suck cocks.

thanks for the plagiarism

[Anonymous Coward]

Thanks for going to all that trouble html-formatting this pdf file instead of just linking to it. Golly gee your karma must be soaring!

Re:poker is NOT gambling

[tsotha]

This is mostly wrong. As someone who played twenty hours of poker or so every week for a decade, I can tell you none of the points on your list have much effect on your long-term winnings.

1. Nearly everyone picks up enough knowledge of the odds early on. "Is the pot big enough to call this straight draw" kind of things. And most of the close calls probability-wise don't have much effect because they're just that - close calls. If you read the books they tell you things like "In this situation you should call if your opponent is likely to bluff 30% of time." While mathematically true, it's worthless information because you can't peg someone on an exact percentage like that unless it's always or never, particularly if it's someone you've never faced before. What's really going through your head is "this guy bluffs more than most people, so I'll call him more than I would call someone I don't know." You might have a slight advantage if you can calculate exact pot odds, but most pot-odds calculations make assumptions about later-round betting patterns, and in any event that tiny advantage is going to be swamped by the drop.
2. Tells don't make you much because most people don't have reliable tells. Everyone thinks "hey, a really good player will be like that guy in Rounders, knowing what everyone is thinking by the way they hold their cookie." In reality you don't play individual people often enough to pick up on subtle tells, and people with obvious tells don't last long. The one tell I've found to be pretty reliable is when someone checks his hole cards on a single-suit flop, meaning he has an off-suit hand with an ace (or King, maybe) of the right color but he doesn't remember if it's the right suit. Or he might just remember he has an ace. It's reliable enough to make a tiny bit of extra money over time, but not a whole lot. Sometimes he makes his draw, and you'll run across people who do it when they flop the nut flush in order to keep you in the hand.
3. Hiding your own tells is about doing the same thing the same way every hand. It's not difficult at all and isn't going to separate you from the average player. Just resist peeking at those hole cards if you don't remember which ace you had.
4. This is the funny one. Over the long term luck will not make you a winner or a loser in poker, or even affect your rate much. There are enough samples that the laws of probability are an iron-clad bitch. If you're good enough to beat the game you will. If you're not, you won't. Luck may have a large effect your total this session, or this week, or even, if you're running really badly, this year. But the odds will assert themselves, eventually.

Assuming you're not a complete idiot, there are three qualities that separate the winners from the losers:

1. Discipline. Lots of people play poorly even when they know better. This usually manifests as too much calling, because winning hands is fun, and you can't win if you fold. You have to be able to force yourself to play your top game even if you get burned over and over by runner-runner obscenities.
2. Game selection. You don't make money in poker by playing pros, even pros who are a little bit worse than you. You make most of your winnings from people with some kind of tragic poker flaw, people who are capable of losing a lot of money and not getting better. Every serious online player has a buddy list of those kinds of people. Where I live in Northern California there are a couple places you can play for middling stakes. Good players will come in, scan the tables, and immediately leave for another card room if they don't see a good game.
3. Being able to quickly peg your opponents as a certain "type". This is the most important poker skill. The faster you can answer the question "is this the kind of guy who would put in a second bet on a flush draw?", and adjust your play as a result, the better off you are. Poker players try desperately to avoid being a "type", but it's very, very difficult to avoid.

None of the items on my winners list have nothing to do with actually being there in person.

Re:Bad Idea

[stonewallred]

Maybe your mom should have took responsibility for her actions. It is not my problem that she is an addict. By your line of reasoning, we should outlaw cars because some people like to drive fast and wreck and kill people. Or outlaw food, because some people are fat pigs who eat too much and become obese. Your mom's problem is not my problem and her problem should not prevent me from enjoying an activity that I can do responsibly. Plus I find your idea that protecting people from their own stupidity is the government's responsibility to be obtuse, retarded and an affront to my principles of self-reliance and personal responsibility. I don't need your mother's failings to be the base line for how I live my life. She ain't that important.

Re:poker is NOT gambling

[YrWrstNtmr]

With online poker...

...you have zero idea about the composition of the 'deck' and how the cards are dealt. You also have zero idea exactly whom you are playing against, and if/how they are communicating and cooperating.

Game of skill? yeah...you against the program and its operators. Not against the other 'players' or the cards.

Re:poker is NOT gambling

[cayenne8]

"Just resist peeking at those hole cards if you don't remember which ace you had."

Or, I suppose you could check your hole cards on EVERY hand...that would take care of the problem too.

:)

Re:poker is NOT gambling

[residieu]

Whether it's gambling or not, it's still a zero sum game. For every dollar that someone wins, someone else loses a dollar. So if people are paying for their kid's college through poker, either they're skimming sizeable amounts of money off a large group of losers. Or there's one really big loser who just blew their kids whole college fund.

Re:Bad Idea

[shog9]

Maybe his mom did take responsibility for her actions. He didn't really comment on that aspect, and his mom isn't here to clarify. Maybe his mom does nothing but blame herself and her own weakness, all day, every day, as the end of her life rushes towards her. Maybe his dear old mother's compulsive self-degradation is at the root of what makes Mr. Coward so hostile towards gambling...

So what?

We authorize our Gov't to go after countless other scams. Roofers who don't finish roofs, shady charities, Nigerians who aren't actually deposed princes with nebulous bank accounts... Why should gambling be the one scam that gets a free pass?

Is it because they tell you it's a scam up-front? 'Cause, they don't... Oh, they provide you with as much information as the law requires, plentiful disclaimers, etc. etc... But the hook is the same as any other scam, Get Rich Quick - and that's the one in big flashing lights.

Yes, most of us are savvy enough to recognize the trap. Most of us will see a pit in the road before we fall into it as well... But the blind ones won't, not 'till it's too late. You can blame them for daring to walk when they should be staying home, waiting for death's merciful touch... or you can ask why we let someone dig a hole in the middle of the road without sturdy rails in place to prevent the destruction of our weaker brethren passing through.

Don't hate the sin

[GargamelSpaceman]

Hate the sinner. Seriously. It's their problem.

Re:poker is NOT gambling

[afabbro]

A good analysis, but it's quite different in online play.

1. Skill with probability: This is virtually automated. Nearly all players use assistants (generally with the OK of the various sites). I'm referring to simple assistants that calculate pot odds, etc. When you watch the World Series of Poker, you see the little percentages displayed for you...this is the same thing. At any rate, while you still have to interpret them, 90% of the work is done for you.

2. Skill with reading people and 3. hiding your own tells: Gone. There are some people who say that you can get some reads based on how someone plays...i.e., if they always play immediately but sometimes they think about it for 5-10 seconds. The problem is that you don't know what's going on - is it just lag? did they dash over to the fridge for a beer? There really is no way to read.

4. Luck: Same as always.

However, I'd add something about competing against technology. That is a whole other front you don't have in face-to-face play. Specifically, scenarios like:

• I've got three accounts and you're the only one at the table who isn't me.
• I'm sitting with a friend on two laptops and we're logged into the same game and comparing notes.
• I'm using any of a zillion profilers. They automatically watch every game I participate in and take flawless notes. A week from now when you join a game I'm in, I can click on your name and see every hand I've ever watched you play. Oh, and by the way, I often observe hundreds of games at once.
• Or perhaps I'm using a poker database, which is usually not cool with the sites but they can't really stop it. Not only are my notes taken, but they're centrally warehoused and exchanged with all other players, so even if we've never played against each other, now I have a record of virtually every hand of online poker you've played, all sliced and diced with stats.
• And of course, who knows if the site is truly legit (the big ones are, but there could always be some rogue admin), or if someone has found a flaw in their protocol, etc.

Etcetera. The tech side of it is surprisingly large.

BTW, I say "I" in the above examples, but I don't play anymore. There was a huge ocean of fish who came in after the first WSOP ("hey, I can be Chris Moneymaker!") but they faded out and now it's the same mechanical players playing six hands at once, grinding out the quarter tables for a few bucks a day...blah.

Gambling is bad

[jandersen]

- but much as I would like to see it not exist at all, the fact is that it does, and there are people who genuinely like it. It is never a good idea to try to will something like that away by passing a law; we simply have to learn to live with it in a sensible way, which fortunately is possible.

But living sensibly with things like drugs, gambling and other things society doesn't feel comfortable with means educating people about these things, preferably from an early age. Criminalising a common activity creates the worst possible situation; it excludes people from talking openly about it, sharing experiences etc, and it takes away any real authority when you want to teach your children how to handle it.

I personally never gamble - to me it is dull as well as a stupid way of wasting money - but I do smoke cannabis occasionally, which makes me a dangerous criminal; however, it also makes me able to teach my children why they shouldn't smoke themselves silly because of the way it interferes with your ability to achieve your ambitions. And you know what? I hold down a responsible job and have for decades, and my children are doing very well for themselves too. I imagine the same is true for people who enjoy gambling.

Re:poker is NOT gambling

[tsotha]

None of the items on my winners list have nothing to do with actually being there in person.

Sigh. That was brilliant. Should read "None of the items on my winners list have anything to do with actually being there in person."

Senator Frist's Cashout

[synaptic]

The bill that banned online gambling was spearheaded by Senator Frist (R-TN) who retired from politics immediately afterwards.

I wrote him a letter and he wrote me back with the same tired slogan that online gambling "frays the fabric of families".

Well, I don't know about that, but if that's true so does brick and mortar gambling and state-sponsored gambling/lotteries and he didn't seem to care about that. Nice payday for him, I guess, with a perpetual government pension to boot.

I should have become a politician.

Re:Yeah but...

[Mr2001]

the casino's will still kick you out for counting cards.

You must be thinking of blackjack.

Isn't poker a problem that's been solved anyway (like chess)?

No. Chess is a game of complete information; poker is a game of incomplete information. Any strategy has to involve some element of speculation about what other players are going to do. That's an art, not a science.

Re:poker is NOT gambling

[synaptic]

Listen up, this guy knows what he's talking about.

There is a lot of collusion going on and the poker sites don't have much incentive to detect and stop it.

You guys can talk about probabilities and how meaningless tells may be, but when you see guys raising all-in with junk and winning consistently, it's not because they're lucky or donks whose day will come but because they often have shills communicating their down cards.

Smart Regulation

[bhima]

I really do care that people gamble or, for the poker fanatics, engage in a game of 'skill'. What I do care about is that companies do not engage in fraud. A trip into a casino can be a education of skillful and scientific application / implementation of fraud (or depending on the way you look at life, perhaps directly against the local legal line).

I recall several reports over the years of blatantly illegal activities on the part of these online operations which only came to light due to disgruntled employees, cheated customers, or hacker activists. Surely we can not rely on such random occurrences to provide equal protection of the law.

So... given a online corporation strategically located in the most liberal jurisdictions: who is providing legislation, oversight, and arbitration? And how do you pay for such things?

unfortunately I'm forced to care about you

[r00t]

If you go broke or endanger your health (note: either can lead to the other) then I'm forced to pay for the resulting mess.

When an ambulance hauls your unconcious body into a hospital and you get treated, your failure to pay the bill causes rates to rise for me.

When you default on your loans, interest rates rise for me.

When you turn to crime to pay for your habits, you may mug or burglarize me.

When you fail to pay your share of taxes, a greater burden falls on me.

Re:poker is NOT gambling

[Imsdal]

I can't believe we are still seeing this crap posted so regularly. Online poker has been available for a rather long time now. For instance, PokerStars just celebrated dealing their 25th billion hand. Thus, there are fantastically large data sets of hand histories and many, many people going through these data sets.

Guess what they find? That the dealing is random, that some people are consistent winners and, because of the rake, most people are losers.

Has it ever happened that people have colluded at the tables? I have no proof that it has happened, but I am willing to bet my life that it has happened some times. Of course it has. The thing is, most of these colluders are not skilled enough to make money out of it. Playing good poker is difficult. Successfully colluding is actually no less difficult. If you are bright enough to do that, you can win alone, just as easily.

Think of it this way: assume that you are a winning player. Would it be to your advantage to play five out of ten hands on one ten-handed table, or to play one hand on five different tables? If you think the former is better you are completely incorrect.

Re:Yeah but...

[Imsdal]

No. Chess is a game of complete information; poker is a game of incomplete information. Any strategy has to involve some element of speculation about what other players are going to do. That's an art, not a science.

This is not correct. It is almost certain that there is a poker strategy that is unexploitable, and which does not take opponent information into account. This is simple game theory.

That said, we are very very far from having such a strategy available. And, more importantly, while such a strategy can't be exploited, it doesn't extract the maximum amount of money from the opponent(s). In fact, unless the opposition is completely crappy, it may not even beat the rake. So in real life, taking opponent action into account will be needed.

Re:poker is NOT gambling

[LordSnooty]

And of course, who knows if the site is truly legit (the big ones are, but there could always be some rogue admin), or if someone has found a flaw in their protocol, etc.

This would still seem unlikely, no site that I'm aware of will send opps' hole cards to your client until the hand is over. And in the case of Pstars, they use ssh for client comms so hopefully that's pretty unbreakable...

All the poker scams I've heard of are of the social engineering ilk. A rogue admin who can see all hole cards via a superuser account (which cannot play) passes all details to a friend who is in the game. Or someone tricks a high-roller into sharing his password, or giving away security questions for email access, or even monitors his wireless. But no holes in the clients. The tech side generally is pretty solid.

Gambling Exploits the Poor

[tjstork]

All gambling does is exploit some people's need for immediate gratification to cash in.

You might blow $100 in a good drunk at a posh bar in one night, but you could blow that in minutes, if not seconds, at a casino.

You don't ban gambling because you are against somebody gambling, when they may not be able to help it. You ban gambling because there's some jackass at the other end just taking in money for doing nothing. That the government wants to be that jackass is just criminal.

Re:Gambling Exploits the Poor

[Imsdal]

You ban gambling because there's some jackass at the other end just taking in money for doing nothing.

Not true. They provide entertainment. It may not be entertainment to you, but you are of course free to refrain from participating. By your logic, we should outlaw opera. After all, I hate opera, so why allow it?

Re:Bad Idea

[Hyler]

An overseas gambling institution doesn't have a reason to handle problem gamblers, those just mean more money flowing in.

A provision in a regulated environment could be that they (regulated licensed gambling sites) would have to provide handling of that issue.

As we have in Sweden. To play poker on the state-run site (Svenska Spel), you have to enter limits on how much you can lose and how many hours you can play - per day, week and month. Lowering the limits is in effect immediately, raising the limits has a wait period. If you hit those limits, you're blocked from play. Of course you can enter that you may play 24 h/day and lose one million crowns. You can also voluntarily block yourself from playing - weeks, months or indefinitely. You can also block yourself from playing at the four state-run brick&mortar casinos (who are not allowed to promote themselves much, no comps, kickbacks or free drinks). No other online gambling institution is allowed to operate from Swedish soil, but they can operate on Swedish soil, although there has been murmurings of doing something similar to UIGEA. Yeah, that worked flawlessly, dontcherthink?

Re:Yeah but...

[xouumalperxe]

You rarely, if ever, play poker against the house. Casinos make money from poker by collecting a rake.

Re:poker is NOT gambling

[afabbro]

This would still seem unlikely, no site that I'm aware of will send opps' hole cards to your client until the hand is over. And in the case of Pstars, they use ssh for client comms so hopefully that's pretty unbreakable...

You're likely right. Here's an example of what I was referring to. The story is sketchy on specifics (it's MSNBC), but it appears he had or was inside help.

Anyway, my overall point was that cheating by technical means is another dimension, though it occurs to me now that it's a dimension in face-to-face play, too ;-)

Re:poker is NOT gambling

[Red Flayer]

Would it be to your advantage to play five out of ten hands on one ten-handed table, or to play one hand on five different tables? If you think the former is better you are completely incorrect.

Why would that be incorrect?

The only reason it'd be better to play 5 hands on different tables is that it could be done concurrently (thus averaging higher returns as a function of time).

Removing the time constraint (since you did not mention it), a good poker player would be better off playing the the 5 hands (of 10) at a single table, since each hand played represents an opportunity to gain information about your opponents. If you only play small-stakes poker, then the value of that information is low. But once you begin playing big stakes poker, it's that information that gives you the slight edge to come out a winner in the end -- the value of that information is pretty high.

So, it's not completely incorrect. It's incorrect for a certain style of playing, at certain money levels, against certain competition.

I played small-stakes poker for years online as a hobby/supplemental income, averaging about $80/hr (maximum 6 tables at a time). Now that I have kids, I play infrequently -- but at bigger stakes tables, and I average around $95/hr. The main reason for the switch is the amazing number of bots that play at the lower-stakes tables. I just don't find it as much fun to play against bots, even though once you figure them out, you can abuse them handily (though good ones leave the table after you abuse them 2 or 3 times :)).

Re:Bad Idea

[gujo-odori]

And I see that the law against online gambling did a lot to stop your mother from gambling away yours parents' savings. Since you say "parents" I'll assume that your father is still living. Why did he do nothing to protect that money if your mother is a gambling addict?

Seriously, I'm sorry about your mom and her problems, but for most of us, gambling is not a problem. It's something we do for entertainment. For me, playing poker for a few hours is more fun than going to a movie, and cheaper. For my wife, it's more fun than going to a movie, and it's profitable.

Your argument against gambling is completely specious and driven purely by emotion, not logic. Your argument can be used against practically anything.

"Let's ban alcohol. It's not a problem for most people, but some people mess up their lives with it, so no one should be allowed to have it."
"Let's ban drugs. It's not a problem for most people, but some people mess up their lives with them, so no one should be allowed to have it."
"Let's ban porn. It's not a problem for most people, but some people mess up their lives with it, so no one should be allowed to have it."
"Let's ban prostitution. It's not a problem for most people, but some people mess up their lives with it, so no one should be allowed to have it."
"Let's ban cars. It's not a problem for most people, but some people mess up their lives with it, so no one should be allowed to have them."
"Let's ban food. It's not a problem for most people, but some people mess up their lives with it, so no one should be allowed to have it."
"Let's ban sex. It's not a problem for most people, but some people mess up their lives with it, so no one should be allowed to have it."

That doesn't sound very sensible, does it?

Note that there are some countries that ban a number of those things. Would you really want to live in one of them? Probably not, but on the off chance that your answer is yes, if you convert to Islam, Saudi Arabia or Iran might take you in. You never know.

Re:poker is NOT gambling

[jacks0n]

You are mistaken regarding points 2 and 3 being significantly less useful online.

Even live, what a winning player does most of the time is correlate patterns of game actions with cards. I don't mean mathematically, though of course we do that too. I mean real 'reads'. Looking for twitches, blinks, and Oreo cookies is mostly silly movie stuff for rapt consumption by amateurs. The betting patterns are the real story. When the story makes sense, we believe. When the story doesn't make sense, we raise. Likewise, what you call 'hiding your tells' mostly is really only the ability to tell a consistent and believable story.

The truth is, most losing players lack patience, the willingness to learn very basic odds and let them override their guts, the ability to listen carefully and honestly to the story their opponent is telling them, and the ability to tell a consistent and believable story themselves. If they can't regulate themselves enough to do these relatively easy things, what on Earth would make them capable of the close study that making use of behavioral tells requires?

Re:Yeah but...

[Mr2001]

It is almost certain that there is a poker strategy that is unexploitable, and which does not take opponent information into account [...] while such a strategy can't be exploited, it doesn't extract the maximum amount of money from the opponent(s) [...] it may not even beat the rake. So in real life, taking opponent action into account will be needed.

So, uh, what's your point again? Who cares about an unexploitable strategy for losing? Do you consider the game "solved" because you can ignore your opponents' behavior, follow a strict set of rules, and slowly pour your chips down the rake hole? That is missing the point of poker.

Re:poker is NOT gambling

[OrangeCatholic]

>but I can't play poker online in my underwear?

After reading all these testimonials, I'm starting to come around to the idea that on-line poker is an improved version of the real thing. Online poker reduces the game to pure heuristics - no more sunglasses and wide-brimmed hats. Makes a lot of sense.

You still have to treat your opponents as intelligent - just not necessarily human or even having a face.

Re:poker is NOT gambling

[OrangeCatholic]

I play online games other than poker. You guys remind me of ourselves in some ways.

For example, playing 3v1 ("I've got three accounts and you're the only one at the table who isn't me") is a common problem in online gaming, yet a seemingly novel one in the poker world. Who hasn't played against 3 bots, or 3 allied humans, or 1 human and 2 bots?

Likewise, ("I'm sitting with a friend...and comparing notes") is something I participated in, with a house intercom, back in 1996 (namely: Command & Conquer). I never did it again, because we steamrolled the competition with our real-time tactical updates. I've played thousands of games since then, and never itched to be on the phone with a teammate. That's because even after they invented Skype, it just seemed like verbal chat - ANYTHING not explicitly declared - was rigging the odds.

Meanwhile, in the Poker world, two players getting on the phone to collaborate is considered innovative.

I guess the charm of Poker is in dicking over your opponent. After you play online games for awhile, however, you start to realize what is fair and not.

Re:poker is NOT gambling

[XO]

So, there's dozens of pro online players that have made millions playing, and the vast majority of losers are losers because of the rake? WHAT?!

Warrrrrrgarrblll

Re:poker is NOT gambling

[Imsdal]

So, there's dozens of pro online players that have made millions playing, and the vast majority of losers are losers because of the rake? WHAT?!

No, that is a complete misrepresentation of what I wrote. The skill and results of all players is essentially normally distributed, but the rake shifts everyone quite a bit to the left. So there is a fairly large set of players who are losers overall but who would be winners playing in a rake free environment. (Ceterus paribus, which a rake free environment wouldn't be.)

This does not mean that "the vast majority of losers are losers because of the rake". But it does mean that a sizeable minority of losers are losers because of rake. Some site a few years ago said that ~5% of players were serious winners, ~10% were "casual winners" and the rest essentially losers. And stats reveal the reasonable normal distribution of results. This means that roughly 1 player in 3 is a loser because of rake. (In reality less because of rakeback and promotions.)

But just like stock returns, this curve has fairly large kurtosis and skewness. Some people are compulsive gamblers with no skills and no self control, and they are obviously *huge* donors.

Pays for college

[anaphora]

I know ten university students, like myself, who make a living playing online poker. Admittedly, it primarily "exploits" people with $50 who want to play poker from their home. It's a strategy game first and a luck game next, and your support for the PPA and pro-poker legislation makes it easier for us to transfer this money into the US, primarily for savings and investment at our age, and pay taxes on it. It's a completely ridiculous thing to legislate, and that's why I'm confident the World Series of Poker and its marketing buddies at ESPN, et al, with your support, can continue to bring the booming poker industry back home to the world capital of gambling, the USA.