Anti-Gambling Legislation Successful!
- posted by Jim Leitzel @ 11:07 PM

Um, well, except the legislation is not passed as an explicit anti-gambling measure. Nevertheless, public smoking bans are reliable in decreasing gambling (as long as those bans apply to on-site gambling venues). [Smoking bans put quite a crimp into bingo, too.] The most recent evidence comes from Down Unda (a curiously north-centric term), in New South Wales: "The ban on indoor smoking is ripping tens of millions from the pub and club industry, and poker machine turnover fell almost 20 per cent in hotels last month."

Of course, declines in gambling are always over-determined. Sure, there's the smoking ban, but there are also high petrol prices, wetter-than-usual-weather (which reinforces the smoking ban in that fewer bettors are desirous of stepping outside for a cigarette), internet-based competition, and (according to the linked article), high interest rates. This is the first time I have run across the claim that high interest rates deter gambling, but there does seem to be a certain logic to it.

Labels: Australia, gambling, poker, smoking ban

 
"Poker is a Skill"
- posted by Jim Leitzel @ 10:41 PM

That's the title of an article by Michael A. Dedonno and Douglas K. Detterman in the current issue of Gaming Law Review (which appears, unusually, I believe, to be freely available on the web). The title is also the conclusion of the article -- a conclusion derived from two experiments involving computer-based Texas Hold-em. Two groups of (college student) subjects played hundreds (200 in the first and 720 in the second experiment) of poker hands. One of the groups, after many hands, was provided some instruction about good poker strategy. (In the second experiment, there were two rounds of instruction.) The subjects who received the instruction outperformed those who continued to play untutored. (It seems that the key to improving your play, at least if you are among the uninitiated, is to fold immediately most of the time, generally playing only when your starting cards are strong: "Most poker professionals recommend playing 15% of hands dealt [p. 36]." Sounds a bit dull to me.)

This result is not surprising (although I am not sure that students who receive my economic instruction outperform controls). The potential import of the study comes from the fact that the legality of poker in many jurisdictions rests upon a determination of whether poker is primarily a game of chance or a game of skill. The authors note that in a casino, about 25 hands of poker are dealt in an hour. Their second experiment, with 720 hands, is "equivalent to about 30 hours of casino play [p. 36]." The point is that it takes a rather large number of hands to firmly establish the superior performance of more skilled play. [Here's a paper (10 page pdf) by academic economists providing evidence that skill matters even among highly skilled poker players.]

Vice Squad took an unanticipated and hence unannounced one week blogging break, which coincided with some of finals' week and spring break. Apologies to the loyal Vice Squad reader.

Labels: gambling, poker

 
Pushing Poker Skills
- posted by Jim Leitzel @ 9:55 PM

In part because many anti-gambling laws refer to "games of chance," devotees of poker often try to convince the world that theirs is a game of skill. (Though I favor legal gambling, I am not sure I am convinced of this claim as a legal argument.) At any rate, poker surely involves decisionmaking under uncertainty, and it might even be an effective vehicle for teaching such skills or for acquiring them in a form that can translate into other domains. For instance, the idea that often the best thing to do is to exit a hand early, that sunk costs are sunk, and that playing hunches as opposed to probabilities is not a surefire way to riches, all could come in useful in a broad array of situations -- and then there is the whole problem of what appears to me to be widespread misunderstanding of probabilistic reasoning.

Recently a Harvard law professor of some renown has been instrumental in establishing the Global Poker Strategic Thinking Society. You can watch the first meeting of the Harvard Law School chapter here. The editor of Reason magazine is as pro legal vice as is Vice Squad (probably even more so), but he is dismayed that the bid for poker legality is couched in its status as a game of skill, that somehow the argument has to be made with respect to poker's virtues.

Meanwhile, a famous poker player, Annie Duke, has joined the board of the Decision Education Foundation. Who could be better? After all, "The mission of the Decision Education Foundation is to improve the lives of young people by teaching them how to make better decisions." Poker is awash in favorable publicity, it seems -- well, except for that embarrassing cheating scandal at a Costa Rica-based internet poker site.

Labels: gambling, internet, poker

 
Swedish Internet Poker
- posted by Jim Leitzel @ 10:40 PM

While the US does what it can to keep its citizens from gambling on the internet, other nations have taken a different approach. In March, 2006, Sweden's state-owned lottery, sports betting, and casino company, Svenska Spel, opened an internet poker facility, available only to Swedish adults. The story of its founding and first year or so of operation is recounted in an article in the April 2007 Gaming Law Review.

To help realize its goal of promoting responsible gaming, the Swedish internet poker game makes generous use of partial and full self-exclusion options. From Svenska Spel's English-language webpage comes this description:

To minimize the risks for gaming addiction each poker player at svenskaspel.se has to set individual limits per session, per day, per week, per month as well as maximum duration of the day, week or month. Furthermore the player may exclude himself.

That is, the imposition of limits is not voluntary: if you want to gamble at the Swedish poker site, you must specify a series of time and value betting limits. You can set them as high as you like, but you must set them, and you cannot raise the ceilings before the end of a waiting period. (Alteration rules are asymmetric: you can lower your gambling limits at any time.) The site itself enforces an overall limit on the size of a bet in a single poker hand, but it is huge by most people's standards, over $10,000.

The article in the Gaming Law Review also discusses another Vice Squad obsession, the possibility that Swedish laws providing legal gambling monopolies (besides Svenska Spel, there is another one for horse racing) might conflict with European Union requirements. For a while it looked as if the Swedish government was going to end the gambling monopolies, but the situation is currently in flux.

Labels: EU, free trade, gambling, internet, poker, self-exclusion, Sweden

 
Gambling and Skill
- posted by Jim Leitzel @ 12:24 AM

Day trading on the stock market looks a lot like internet gambling, yet day trading is legal in the US, while internet gambling is in a sort of legal limbo in many states (though the Justice Department thinks that most manifestations of internet gambling are illegal everywhere in the US). Insurance markets also share features with gambling, as do some fantasy sports leagues. Whether or not an activity is deemed to constitute gambling has a profound effect on the regulations that apply to it, or on whether it is legal at all.

Many legal rules that pertain to gambling refer to the role of "chance." For this reason, those who like to think that their gaming is legal frequently go to great pains to point out that theirs is primarily a game of skill, not chance, more like chess than roulette. (Poker players are particularly drawn to this type of argument -- but not universally.) The horse racing simulation that Vice Squad talked about several days ago hosts an FAQ page with four entries; here are the first two, which almost have a protest-too-much air, no?:

Definition of a skill-based game.
A skill-based game is defined as a game where skill predominates over chance in the produced results.

Why we are not a gambling site.
Gambling is generally defined by states as an activity containing the following elements: (1) award of a prize, (2) basis of chance, (3) consideration. If any of these three elements is missing then the activity is not considered gambling. Since this game is skill-based the basis of chance has been eliminated.

Anyway, the reason I am droning on about this issue today is that I received an e-note from a Friend of Vice Squad referring me to this short "news" item about a federal lawsuit claiming that a contest sponsored by the television show "Deal or No Deal" constitutes illegal gambling. The contest is free to play over the web, apparently, but a text message entry costs 99 cents. It does sound as if the text message version meets the three criteria for gambling listed above -- but I am not sure I would have made a federal case out of it. (Nor does it suggest that the plaintiffs will prevail.)

Every now and then I mention that I am not a lawyer and under no circumstances should you rely upon anything on Vice Squad as constituting legal advice or opinion; in fact, you shouldn't rely upon it more generally.

Labels: gambling, litigation, poker

 
Legal Developments Around Poker
- posted by Jim Leitzel @ 8:28 PM

Those small stakes poker tournaments popular in some restaurants will now be legal in Minnesota. Maybe Colorado ought to think about a similar law.

Meanwhile, the owners of the most-popular online poker website intend to take their company public. They thought they might achieve a valuation of $10 billion, but the possibility that the US government will hound them is scaring off fund managers. The company has more than 1000 employees, most of them in India and Gibraltar. In another example of vice complementarities, the original start-up money came from one of the owners' earnings from online pornography.

Labels: complementarities, gambling, internet, poker, pornography

 
Publicity Isn't Always a Good Thing
- posted by Jim Leitzel @ 7:03 PM

In April Vice Squad noted a detailed New York Post report on popular poker clubs in New York City. The publicity turned out to be a mixed blessing: two of the largest (presumably) clubs were raided late last week. The patrons had to give their names and (again, presumably) their chips to the police, but they were not arrested, as they had broken no laws. Employees and operators were less fortunate, however, as this article from the New York Daily News relates:

Vice cops raided the gambling parlor at 200 W. 72nd St. around 11 p.m [last Thursday night]. At almost the exact moment, more cops executed a search warrant at the Play Station at 6 W. 14th St., police said.

Cops seized about $100,000, along with a small amount of marijuana, and arrested 39 dealers, runners and managers. The clubs were owned by many of the same people, police said.

The suspects were charged with promoting gambling and possession of gambling devices, misdemeanors punishable by up to a year in jail.

Labels: gambling, poker, policing

 
Another Excellent Piece of Vice Law Enforcement
- posted by Jim Leitzel @ 10:28 PM

Anyone who has been paying attention these past few years knows that the US is in the middle of a poker boom. (Vice Squad is of mixed minds about the whole phenomenon.) Bars and restaurants in many cities and states have begun hosting poker nights -- for instance, in the Philly area. These games have to be careful about how they charge for entrance and award prizes, lest they run afoul of anti-gambling laws; the precise boundaries of legality might be hard to discern. So what should a law enforcer do when he or she learns that a local restaurant is openly hosting poker nights? One possibility would be to chat with the owner, learn precisely what is taking place, and warn the owner to alter any features of the game that might violate the law. But where's the fun in that? Isn't it better to send in lots of officers with guns drawn and laser sights lighting up the heads of the 24 putative poker players you arrest?

The police chief of Palmer Lake, Colorado defended the choice of the guns-drawn approach, citing tradition. But sometimes drawn guns go off. Would it still be such a good idea if one of the alleged gamblers had been shot, or perhaps died of a heart attack?

Labels: gambling, poker, policing

 
Inside NYC's Poker Dens -- A NY Post View
- posted by Jim Leitzel @ 10:35 PM

There's a good deal of descriptive material in this New York Post Online article about poker dens in New York City. The clubs are, shall we say, quasi-legal, but recognizing their vulnerability, many of them do their best to avoid attracting undue attention:

But all these livelihoods hang by a legal thread. "It is illegal for anyone to profit from gambling," said an NYPD spokeswoman. "These houses are illegal, and we are always investigating them."

Knowing the law, the clubs try to dodge prosecution by running as private, members-only clubs. They make money by charging "table fees" — averaging $3 per player every half-hour — rather than "raking the pot " — taking 10 to 15 percent off the top of each pot, a more obvious violation of the law.

"Generally speaking, illegal gambling is the house taking a percentage of the pot," said Barbara Thompson, spokeswoman for Manhattan District Attorney Robert Morgenthau.

Club owners rely on this gray area to stay open. And they say they run clean clubs to keep police attention at a minimum. "We don't serve alcohol, and you have to be over 21 and a member to play," said the manager of the second-largest club. "We think of it as a sober environment where people can compete and socialize. If I see I guy 'on tilt' and he runs down to the ATM, when he comes back up, I stop him from getting in and say, 'You know, tomorrow's another day.' "

Labels: gambling, New York, poker

 
Why Gambling is Vicious
- posted by Jim Leitzel @ 1:45 PM

Over at Crescat, Waddling Thunder describes his visit to an illegal poker den, and his observations of the influence on his friends' behavior of the addictive qualities of gambling. Waddling Thunder and Vice Squad agree that poker should be legal, though perhaps regulated; as in many vice areas, I find it hard to be entirely comfortable even with the 'optimal' regulatory scheme towards gambling.

Labels: Crescat, poker

 
Teens and Poker
- posted by Jim Leitzel @ 9:08 PM

One day Vice Squad tries to put things in perspective, and the next thing you know, a front page article in today's New York Times (I guess it was a slow news day?) does the same thing. The general message of the article is that parents and educators should be alert to signs of problem gambling, but not be worried about poker games per se. Indeed, such games might even be welcome, via standard "harm reduction"-style arguments:

For almost all parents, the calculus of teenage poker begins with the alternatives. What's worse, they say, kids playing for a few dollars with friends at someone's house, with parents around? Or in cars, drinking on a golf course, or tempted by drugs? For most, it's an easy decision.

The enormous liberalisation of gambling in the US in the past 40 years has somehow happened without major destruction, as the article notes:

...the country is in the midst of a revolution in its view of gambling - now a $70 billion annual business, excluding Internet gambling - from casinos to lotteries to sports betting to poker on television, and that the young are part of that shift.

People can make different moral calculations about how good or bad this is. But Ken Winters, of the department of psychiatry at the University of Minnesota, said that despite real risks of addictive gambling, so far the spread of legalized gambling has not sent the country hurtling toward perdition and probably won't send its youth there either.

The availability of pornography has likewise undergone a major shift, and the Republic soldiers on. This might be useful to keep in mind when we hear warnings of the destruction that would be wreaked by a liberalisation of our marijuana laws.

Labels: addiction, gambling, harm reduction, poker, teens

 
Nonprofits Profiting From Poker
- posted by Jim Leitzel @ 9:09 PM

Hoping to raise some money for a good cause? A gambling-themed event might be your path to riches! But not just any gambling theme: bingo probably won't pack them in, and even those glitzy Vegas nights are beginning to look a bit staid. Texas Hold'em, now that is where the action is, at least according to this article at lowellsun.com (Massachusetts). Here's an excerpt:

The United Way of Merrimack Valley sponsored its first poker fund-raiser in August, and raised $31,000, John Licciardi, vice president of the United Way capital campaign, plays poker and has watched the game grow through television and the Internet.

"It was a backyard game because no one was doing it," he said. "Now everyone's doing it."

The United Way is organizing a two-day blitz Oct. 29 and 30 in Haverhill. It hopes for at least 270 players, which, at $125 per head, for a $33,750 profit.

Fund raisers say there are other advantages to poker. Licciardi said poker requires less planning than other events. Brian Teahan of Billerica, floor manager at the New England FUNdraising tournaments in Nashua, said his tournaments are growing and supporting numerous charities, such as Nashua Symphony, Pastoral Care Center, and Nashua Center for the Multiply Handicapped.

The online article includes a picture of Greg "The Fossilman" Raymer, identified as the winner of the World Series of Poker. (I thought I had heard something lately about Massachusetts and some business about a World Series...) I mention the photo because I was intrigued by this tidbit of information: "Raymer is known as 'Fossilman' because he holds his cards down by placing fossils on them." Or maybe he's just really, really old.

Labels: gambling, poker

 
The Benefits of Poker for Kids
- posted by Jim Leitzel @ 4:13 PM

I have been worried about the poker craze that seems to be engulfing the youth of America. Still am, when the stakes get high or when the games become large and too organized (though this latter concern grows from the legal regime governing gambling and not from the poker per se). But vices like gambling (and drugs, and alcohol, and pornography...) have benefits, too, as economists should be the first to remember. So it was nice to have my memory jogged by a letter to the editor in Thursday's Chicago Tribune. It's from a mom who notes that "Life is about moderation". Here's an excerpt:

I am the mother of a son who started to play poker the summer before his senior year. Until that time he had very few friends and a very limited social life, and then a phone call came asking him to fill in on a poker game. He was reluctant, but both my husband and I urged him to try it. Suddenly he had a social life. He and his friends went out to dinner and movies on Friday; Saturdays were reserved for poker. Generally they played a tournament with a $10 buy-in. The games usually started at 6:30 and went to about midnight. I don't know what kind of entertainment these boys could find for $10 that would take up an entire evening. Some Saturday nights my house had 20 boys playing poker. There was never any smoking, drinking or problem with behavior.

Labels: gambling, harm reduction, poker, teens

 
A Big Mac, Fries, and I'll Raise You...
- posted by Jim Leitzel @ 6:34 PM

Have you ever heard of NeoPets? I certainly hadn't, but they are virtual pets that you have to tend to one way or another, I suppose, sort of like those Tamaguchi things from a few years back. And they apparently aren't entirely virtual, either; here's a description from the Amazon page of one particular NeoPet, a Mynci:

NeoPets are the latest in the virtual pet craze based on the characters from the immensely popular Internet site, neopets.com. Just like the Internet, these 4-inch high "pets" come alive at the sound of your voice and they respond to the tone of your voice with sounds, movements and lights. There are over thirty different sounds including laughs and giggles for each figure. Myncis are lovable thrill seekers who enjoy exploring tall trees and visiting other hard to reach places. A Mynci has cheeks that light-up and a head that nods when it turns from right to left. Oh, and it can also wiggle its ears... Colors May Vary.

So when I wasn't paying attention, NeoPets apparently took the US by storm. But why mention NeoPets on a vice policy blog? Is it because of their addictive qualities? Er, no. In Australia, it seems, McDonalds has been offering a NeoPet with their Happy Meals. Oh, so this is a story about childhood obesity. Er, no. It turns out that one way to keep the little rascals in good health is to win at some gambling-style games when you go to the NeoPets website. Lose, and your pet will have to turn to virtual charity for sustenance. Is the lesson here that to be a good pet owner, you should be a skilled gambler? Fortunately, the site offers instruction on how to play poker.

Some parents are a bit peeved, according to this story from an Australian television station. Here's a sample:

...the Neopets website advertised on McDonald's packaging and website has left parents such as Michelle Stiebel far from happy.

Among the activities the site offers are virtual pokies, roulette games, and card games where one of the cute characters teaches children the rules of poker and blackjack.

As Michelle's son Harley explains, you need to gamble to raise points to feed your virtual Neopets. He says if you don't gamble up enough points to feed your pet, it goes to the "orphanage". Players who don't win enough points gambling to buy food actually have to send their Neopets to a "virtual soup kitchen".

Labels: Australia, gambling, internet, poker, teens

 
Vice Policy Commentary You Shouldn't Miss
- posted by Jim Leitzel @ 8:12 PM

(1) Drug WarRant explains what bad laws are, and how one should behave in their presence. Shades of Thoreau, who in Civil Disobedience asked "Unjust laws exist; shall we be content to obey them, or shall we endeavor to amend them, and obey them until we have succeeded, or shall we transgress them at once?" His answer was that if the injustice of the law "is of such a nature that it requires you to be the agent of injustice to another, then, I say, break the law." But earlier in the same essay, Thoreau also noted the habit of subservience to the state:

The mass of men serve the state thus, not as men mainly, but as machines, with their bodies. They are the standing army, and the militia, jailers, constables, posse comitatus, etc. In most cases there is no free exercise whatever of the judgment or of the moral sense; but they put themselves on a level with wood and earth and stones; and wooden men can perhaps be manufactured that will serve the purpose as well. Such command no more respect than men of straw or a lump of dirt. They have the same sort of worth only as horses and dogs. Yet such as these even are commonly esteemed good citizens. Others, as most legislators, politicians, lawyers, ministers, and office-holders, serve the state chiefly with their heads; and, as they rarely make any moral distinctions, they are as likely to serve the devil, without intending it, as God. A very few, as heroes, patriots, martyrs, reformers in the great sense, and men, serve the state with their consciences also, and so necessarily resist it for the most part; and they are commonly treated as enemies by it [footnote omitted].

(2) OK, got carried away on that bad law theme. Last One Speaks updates the ongoing horrors at a "drug rehabilitation" center in Yekaterinburg, Russia. I didn't know it was still operating; if it is, they have been at this sadism for at least three years now. It's a private group, and ostensibly the "patients" have consented to the torture. [Incidentally, Yekaterinburg, known as Sverdlovsk during the Soviet period, is where Boris Yeltsin lived prior to his move to Moscow. It is also known for being the place where the last czar and his family were murdered. (The last czar, that is, not counting, well, the later ones.)]

(3) Last One Speaks also brings us word about the poker craze among our nation's youth. I have been suggesting blogging as a poker alternative, with few takers.

(4) We have not yet mentioned the tragic death of a quadriplegic while in custody in Washington, DC; he had been convicted of marijuana possession. He was given a ten-day jail sentence, but he only ended up serving half of it. He needed a ventilator while sleeping, it seems, but he wasn't provided one. D'Alliance has been particularly assiduous in keeping us informed as the details concerning the inmate's death emerge.

Labels: Drug WarRant, drugs, marijuana, poker, Russia, sentencing, teens, treatment

 
The Baffling Poker Craze
- posted by Jim Leitzel @ 4:23 PM

Washingtonpost.com (via MSNBC) has a great article on the amazing increase in poker playing, both the in-person and online varieties. (Shouldn't these poker aficionados all be blogging instead?) Here's an excerpt from the section devoted to online poker:

In a recent 24-hour period, about $124 million was wagered in more than 100 online poker rooms, according to PokerPulse.com, a Canadian company that tracks the industry.

At peak playing times, the largest site, www.partypoker.com, has had more than 50,000 people playing at more than 5,000 tables.

Dennis Boyko, who runs PokerPulse, said that last month online sites were pulling in $3.2 million a day through "rakes," which are small portions of every hand played, depending on how much is being bet.

That number is up from $300,000 per day in January 2003.

Labels: gambling, internet, poker

 
Poker in the Olympics
- posted by Jim Leitzel @ 9:28 PM

When I drove past a demonstration supporting poker in the Olympics I thought that it might be tongue-in-cheek. Well, for the long-run, there are some folks who apparently are serious. But a web-based poker site has put up a webpage supporting poker for this summer's games in Athens -- and this one is just for grins, it seems, and maybe to stir up some business for the gambling site. Here's their "news story" on the willingness of poker players to submit to drug testing.

Labels: gambling, poker

 
Poker in the Olympics?
- posted by Jim Leitzel @ 4:26 PM

Today marks the start of the grand opening celebration for Chicago's Millennium Park, so named because construction has taken 1000 years and the total cost has been 1000 times greater than the original estimates. Went by the Park earlier today and there was a small but lively demonstration taking place. I thought that it was a labor dispute at first -- just a bit south of the Park is a hotel that has been the scene of a strike and picketing for more than a year now -- but upon closer inspection it turned out that the demonstration was in support of making poker an Olympic sport. I thought that perhaps it was tongue-in-cheek but it appears that the demonstrators were not bluffing: there has been a movement afoot in this direction for awhile now. Here's one poker blogger who isn't having any of it.

As for Blogger the blog service, I am despairing. They have "upgraded" their interface again. The problem for moi is that I use Mozilla, and the new interface is not working with Mozilla (buttons for hyperlinks, etc., are non-existent.) Perhaps if blogging became an Olympic sport we would not be subjected to such sudden shifts in rules or technology.

Labels: gambling, poker, solipsism

 
American Youth and Poker
- posted by Jim Leitzel @ 6:21 PM

Hmmm, I see my recent plea to my co-bloggers didn't really pan out. So...

Just read an article in the May 2004 edition of Washington Monthly about "Why the Internet generation loves to play poker," as the sub-title has it. The answer, in short: "Strategy-oriented, individualistic, and embedded in a nice masculine mythology, poker is the perfect game for the revenge-of-the-nerds generation looking to square their intelligence with their inner maleness."

I have been trying to think about various ways that the Internet influences vice control. One way is by providing a low-cost means to avoid some social forms of regulation that are built-in to bricks-and-mortar vice. On the Internet, you do not have to deal with a sales clerk when you purchase pornography, nor do you have to worry about running into your boss. But the Washington Monthly article mentioned another twist on this theme: "For many would-be players, the fear of looking like confused novices in front of a room full of old hands used to keep them from the tables. Now, the online poker rooms provide a convenient place to learn and refine the game at home with no one watching." And one other Internet-based gambling innovation: poker blogs (like here and here)!

Labels: internet, poker, teens

 
Two Quick Gambling Stories
- posted by Jim Leitzel @ 2:34 PM

(1) "A man scheduled to be sentenced [in New Jersey] for masterminding an illegal million-dollar investment scheme went to Las Vegas instead to play poker." He claimed he hoped to win money playing poker to make restitution to those he scammed out of $1.8 million.

(2) Bingo game raided in Utah. Utah and Hawaii do not allow any forms of gambling.

Labels: bingo, gambling, Las Vegas, poker