Friday, October 23, 2015

And Then There Were Four (4)

The deliberations on New York's possible fourth new casino are done and the result is approval by the same gambling regulators who originally rejected a proposal from Tioga Downs to expand their racino operation into a full fledged casino. After being sent back to the table for neglecting to select a proposal from the Southern Tier of New York, the regulators put a smile on the face of Governor Andrew Cuomo and a bigger one on the face of his friend and campaign supporter, Tioga Downs owner Jeff Gural by saying yes at their October 14, 2015 meeting.

Any time a government entity is involved in a decision, politics will be involved too as I am sure was the case here. Political shenanigans or not, if the real purpose of approving casinos for different areas of New York was to boost the local economic picture then the Southern Tier / Binghamton area deserves to be noticed.

Binghamton, New York
 Tioga Downs itself it located in Nichols, New York which is a lot closer to northern Pennsylvania than it is to Binghamton. The likelihood that expansion of this raceway/racino into a full service casino will somehow raise this depressed area up is slim. The area has been depressed for quite sometime and that is mostly due to the changing identity of the area. Once a burgeoning manufacturing center, the gloves, shoes, firearms, and technology (read IBM) that once bolstered this community have moved elsewhere. A few construction jobs that are transitory at best and a few casino jobs that are mostly low-paying are not going to perform the magic that is needed here.

 If you look to our neighboring state of Connecticut, home to two of the largest Indian casinos in the world, Foxwoods and Mohegan Sun, the lessons to be learned are not bright for the surrounding communities. The per capita income graphs for CT go up slightly for most areas over the past 20 years but have since leveled out or even dropped. Having a huge casino in your neighborhood does little to change the character of a community for the best, especially economically.

 New York's grand experiment to bring real casinos to New York is hardly anything new. Before this casino expansion there were 20 casinos/racinos throughout the state (20) and now there will be four more. Only a dreamer would have high expectations that any significant changes for any community are in the offing. A bit more tax money will be raised. A few more people will get jobs, mostly low-paying ones. A few more entertainment seeking patrons will have an easier trip to have some fun. New York, nor any other state for that matter, will ever duplicate the Las Vegas experience. New Jersey tried and look what happened there.

Friday, October 9, 2015

Daily Fantasy Sports and Online Poker

This past week DraftKings and FanDuel especially, but all Daily Fantasy Sports outlets and by extension any kind of betting that takes place online, including Online Poker, were on the hot seat. By now everyone who cares about access to various kinds of gambling from an electronic devise knows the circumstances - a probably data leak - and the excuses - data might have been available but wasn’t used to win $350,000 - so I am not going to repeat them here in detail.

Actually, the facts do not matter all that much. What matters is the PERCEPTION that some wrong doing did take place or could have taken place. DraftKings’ good will stock took a dive and is still plummeting from the precipice where this newly minted billion dollar company has been sitting for several months now. FanDuels’ is not far behind.

I play DFS and I play on DraftKings. When I first started, last football season, I liked their application better than FanDuel’s, even though FanDuel was the industry leader at the time. I play what by anyone’s standards are considered chump stakes ($5 50/50 contests mostly) but I am not playing to get rich or make a killing. I play because it’s fun and true to what NFL and other major sports insiders believe, it makes me interested in sporting events and players that I otherwise would not care about. There is skill involved in making selections but there is a tremendous amount of luck involved as well. If you bet on a QB who does really well and then gets pulled for a back-up so the second string player can get some experience, that’s luck, bad luck without a whole lot of skill involved. You can consider all the angles each week if you have time and resources to do that but my guess is if you are doing that you’re not in it for the fun, you’re in it for the profit.

If I get screwed out of $5 because someone cheated it’s not the end of the world. I’m not going to risk any more dollars, but it’s a pittance down the drain. If someone with inside information wins $350,000 that could have gone to the next player in line who did not have inside information, that’s highway robbery in anyone’s book and deserves to be punished like all other crimes are punished.

But the company line (I just received a “personal” email this morning from DraftKings execs Jason Robins, Matt Kalish, and Paul Liberman, co-founders of DraftKings - See the email as published on fox9) is that nothing untoward happened and they were already working on ways to self-regulate and bring in third-party auditors. Unfortunately that’s too little too late.

My own take is that nonsense like this has been going on from the start and if it’s not DK’s employees playing on FD or vice versa with inside information, it most certainly is one site’s employees in the know handing info off to friends and relatives playing on another site who will not come up on anyone's radar unless someone is looking really hard. Trust me, now they are going to look hard, really hard.

So, what does all this chicanery have to do with online poker? Not much directly but a whole lot indirectly. According to Rick Muny, VP of Player Relations for the Poker Players Alliance, “. . . there is the obvious risk of online poker getting pulled into legislative attempts to limit or even ban DFS.” Rich's Latest PPA Weekly Update says it all

A few week's ago Jennifer Newell, a well-respected poker writer and key commentator on the unfortunate events in and around St. Louis over the last year, wrote about the unholy connection between DFS and poker so prominent on nearly all poker blogs, poker sites, and poker events. Her chickens are coming home to roost! Jennifer's article, posted on Robbie Strazynski's cardplayerlifestyle site, is a good, prophetic read. Entire Article Here!

The public and politicians especially are not very discerning. Any sort of gambling online, skill based or not, that comes under scrutiny brings all kinds of online gambling under scrutiny. The poker lobby will suffer a setback and it’s not even their fault. Thank the guys who have been plastering advertisements all over every poker tournament and just about every sporting event on TV or elsewhere since last summer. Messing up like this makes it difficult for everyone.

I think we are all in for a roller-coaster ride with no signs of getting off anytime soon. Should there be outside control and regulation of DFS? Yes, there absolutely should be just like there should be outside control and regulation on all legal online poker sites. If we are happy to settle for investing our money and time in unregulated online poker sites with no guarantee that they are free of collusion, free of cheating and that there is no chance of NOT getting our money back when we want it, then we will be happy dealing with DraftKings and FanDuel in a future without independent regulation and/or government oversight. I don’t know about you, but that’s not me!

Friday, October 2, 2015

Greed – Biting the Hand That Feeds You

A lot has been written and said about the recent woes of the gambling industry – fewer people gambling, less money being generated by games of chance, changing demographics, etc. Some of the commentary has merit but the facts are that the gaming industry is making more money in the USA and around the world than it ever has. Most of the trepidation among casino execs comes from their insecurity about being able to attract young audiences or what are referred to as Millennials. Those fears are justified.

In the past week I read two articles, one lengthy, comprehensive, and prophetic by Motley Fool’s Jeff Hwang, and another in my local newspaper by Matt Spillane. In my mind, both articles touch on the issue of greed.

Hwang, a well-known writer and personality in the poker world, makes a case for how best to address the “Millennial Problem.” See Entire Article Here . . . His premise is that most of the solutions extant in the business do not address the core issue that “. . . the gaming industry as a whole is giving less and less action, while millennials in general are more perceptive to nickel-and-diming.” In Hwang’s opinion what the casino execs fail to realize is that Millennials are not the idiots they perceive them to be but are savvy, experienced, potential customers who see through the hype and will not fully participate until the casinos give them the value they know does not now exist on the casino floor.

 Hwang’s analysis includes charts and graphs that show clearly what many of us sense in our gut when we walk into a casino – the value that we used to get and, for us older players, were used to getting, has slowly been eroded in favor of higher house advantages. From the almost complete dismantling of 3:2 payoffs on blackjacks to the precipitous increase of low value table games, a reasonably intelligent gambler can no longer hope to reduce the house’s odds to a manageable level.

The inexperienced moderate income player no longer has a place in a casino. The very lowest stakes table games in the vast majority of establishments require a minimum bet of $10 at off-peak times. Most evenings and definitely weekends it may be difficult to find any table even at that rate. The norm has become $15 blackjack tables and many $25 tables. 

Expecting novice gamblers to risk those stakes to “experience” the game is short-sighted and has been keeping new players away.

Even slot machines, the perennial refuge of the small time gambler, have surreptitiously increased stakes to the point of fleecing customers. Courageous slot players in the old days would risk a $3 maximum per pull on a dollar machine in return for an advertised 98% pay back. Sometimes you won and sometimes you’d lose but you never felt like you were being robbed. These days a “penny” slot player needs to risk far more than a dollar per spin to activate the jackpot and nickel machines requiring more than a hundred units per spin can eat through a small bankroll in no time. To add insult to injury, the payback on these low denomination machines is often in the mid 80% area.

All of these innovations that tend to increase the stakes that gamblers play at also tend to decrease the numbers of players that are playing. That’s simple economics. But greed is in play here and the mentality is to get as much as you can into the casino coffers as fast as you can. Slowly, the casino experience is losing its former aura of entertainment in favor of a “get it while you can” attitude on the part of the corporations.

And don’t think that your local lottery vendor is giving you a better deal, which brings me to the second article I mentioned. It’s really only a small piece in the local newspaper but the gist of it is simply that one of the nationally available lotteries, Powerball, will soon be INCREASING the odds of winning the jackpot. That’s right! I said “INCREASING,” not decreasing. 

The disclaimer in the article says that smaller prizes will be easier to win but who do you know that plays the lottery to win a “smaller” prize. The only reason anyone plays is a chance at the jackpot – that life-changing hundreds of millions of dollars!

So, even as lottery players in New York have decreased since 2013, the wisdom here is that making it harder to win will attract more players. I don’t think so. If you though that 175,223,510 to 1 odds were bad, what do you think 292,201,338 to 1 will be? Really bad. Really, really bad!

In a quest to make more money, more money for investors no matter what anyone tells you about where the profits go, those who control our country’s gambling interests are biting the hands that feed them. The greedier they get the fewer people will participate, especially younger, smarter, more discerning players like Millennials. And a few of us older ones will be a lot more careful about where we plunk down our retirement benefits.

Wake up!