SPG Research Center
Casinos and state lotteries are the most predatory business in America and their windfall is coming at your expense.
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Are 12 Step programs successful?
There has been controversy over how successful 12 step programs are. Early proponents claimed that they were as high as 50%. Some critics have suggested they are ineffective, helping only 5% overcome an addiction. There are many 12 step programs available for various addictions: alcohol. gambling, sexual addictions, Crystal Meth addictions, etc. They are not all exactly the same, but nearly all involve invoking a higher power beyond self. Bringing God or something more powerful than self is what offends some of the critics.
Both sides of the debate are probably right because the success rate goes up the longer the person sticks with the program. Of those in their first month of AA meetings, only 26% will be there and sober at the end of the year. Of those in their fourth month 50% will be there and sober at the end of a year. AA says that a 1983 survey showed that 25% were sober after 5 years, while a 2004 survey showed that 50% were sober after 5 years in the program, suggesting that the program was becoming more effective. The average rate of sobriety for members of AA is 8 years. Gamblers Anonymous does not seem as successful. Of those who attend GA initially only 8% are still abstinent and in the program after a year. Another group, the Crystal Meth Anonymous claims that the use of casual partners and unprotected anal intercourse has dropped by two-thirds,
The results vary by group, and by how long the person stays with the program. And then there are those who stay in a program for a year or two but then remain abstinent for many years afterward. These tend to drop out of the statistics. There is no doubt that the programs help a sizable percentage of those who last a year in the programs. So the critics may be right that for those who attend an initial meeting only 5% (or a little more) last a year. For those who attend for five to ten years, 50% or more may stick with abstinence for life.
Why Sheldon Adelson Opposes DFS
Sheldon Adelson is the owner of the largest gambling empire in Las Vegas, the Sands. He is the main mover behind the $1.9 billion football stadium planned for Las Vegas and the move of the Oakland Raiders to Las Vegas. While he makes his money extracting money from casino players, he sees a difference between what he does and the exploitation of the young and the poor through DFS games. He is opposed to legalizing them and he claims that his opposition is not just based on not wanting the competition.
Nevada recently determined that DFS is gambling, did not outlaw it, but required that providers of DFS must seek a gambling license. Most DFS companies will not do that because they claim they are not providing gambling. One small vendor has applied for a license and has opened lounges in a few Vegas casinos. But, effectively DFS is banned from Nevada.
Adelson is temporarily satisfied with Nevada’s action because he believes that DFS is immoral, preying upon the poor and the young. Adelson differentiates his own predatory gambling as being upon the wealthy an middle class who go to Las Vegas to gamble and for whom the casino can refuse to serve them if they are exhibiting signs of getting too deeply engrossed in the games. The distinction between a predatory casino and a predatory DFS provider may seem vague to most of us, but to Adelson the distinction between what he regards as controlled gambling and gambling without controls on who loses and how much, is a difference between a moral business and an immoral one. This author disagrees.
Twenty-eight NFL teams have cut deals with Draft Kings or Fan Duels. Adelson says the league is involved with gambling already. The claim that DFS is not gambling is fallacious. DFS makes everyone with a cell phone a potential gambler, and a potential addict. Adelson views that as immoral because of the access to the poor and the young because the DFS sites cannot card their patrons. When asked if he would provide lounges for DFS players in his casinos as some Las Vegas casinos have done for a share of the profits, he replied, “NEVER!”
https://ca.finance.yahoo.com/news/exclusive-why-sheldon-adelson-is-against-daly-fantasy-sports Daniel Roberts, September 9, 2016.
Types of Legal Gambling and the rates of Gambling Behaviors
The June 2016 issue of the Journal of Gambling Studies carried an article about the relationship between availability of legal gambling and gambling problems. Five authors contributed to the article and the results were pretty much what you would expect. The basic issue is whether more types of legal gambling are associated with higher rates of problem gambling. The answer is yes.
Gambling exposure was defined as the sum of the number of years that all types were legal. This was significant because the number of problem gamblers increased the longer a given set of gambling types were in place. Three aspects of problem gambling increased as the available types and length of time they were available: problem gambling itself, frequent gambling and past year gambling. The study was based on data from telephone surveys conducted during 1999-2000, and 2011-2013 that used the same questions. For states with increased types and length of operation, the rates of problem gamblers increased. For the very few states that had fewer types of gambling in the second survey, the rate of frequent gamblers went down. There were a few irregularities in the data.
The closer and more ubiquitous the gambling the worse for families.
- W. Wells, et.al . “The Relationship Between the Number of Types of Legal Gambling and the Rates of Gambling Behaviors and Problems Across the U.S.States,” Journal of Gambling Studies, 2016 Jun, 32(2):379-90.
A new wave of gambling may be coming through eSports
If you are not a regular player of video games then you are probably unaware of eSports. This word represents competitive video gaming, complete with tournaments, leagues, professional level players, large prizes, teams and even cheating. There is also betting on the outcome of matches which is flirting with going mainstream and causing a surge in gambling at regulated sports books.
eSports is not to be confused with Daily Fantasy Sports which is devoted to the usual sports such as baseball, basketball, football, soccer and tennis. eSports is about video games. While online and off line tournaments have been around for at least three decades, the commercialization and professionalization growth has risen rapidly in the last decade. The most informative site for information about eSports is the Wikipedia article by that name.
There were ten tournaments in the year 2000, but that had grown to 260 in 2010. Some of the leading tournament organizers in this growth decade were World Cyber Games, Intel Extreme Masters, and Major League Gaming. The most thoroughly organized location was Korea which has two dedicated TV cable 24-hour channels. In the US DirecTV broadcast the Championship Gaming Series for two seasons in 2007 and 2008, and CBS aired video recorded portions of the 2007 World Series of Video Games from Louisville, KY.
US television networks have been slow to accept video gaming as a sport. Betting without knowledge of teams and leagues is a quick way to lose your money. As tournaments have drawn increased numbers of spectators, they now have referees to prevent cheating. The amount of money in prizes has also grown. As of this past July 4, one of the tournament sponsors, Data 2 has awarded $63 million in prize money with eleven competitors winning over a million dollars.
The growth in prizes has led to banning some players for inappropriate behavior such as verbal abuse, unfair access to information, and the use of performance enhancing drugs. Some offenses have been worse in Korea than here. Another problem has been discrimination against women, who in the earlier days were not allowed entry to tournaments. Despite all this the experts are expecting a growth spurt in spectators for telecast tournaments and a spurt in bets at legitimate sports books. The betting on eSports is expected to reach $7.4 billion this year, 12 times what is bet legally, mostly in Europe and the Orient. The methods of extracting your money seem endless and ever changing. Only you can protect yourself by staying away.
Eben Novy-Williams, “Legal Sports Books Get Ready for Billions in E-Sports Betting,” August 26, 2016. http://www.bloomberg.com/news/articles/2016-08-26/
Federal Court Blocks New Jersey Attempt to introduce Sports Betting at Casino and Tracks
New Jersey’s plan to legalize sports books at casinos and racetracks was rejected by the United States Court of Appeals, which upheld the Professional and Amateur Sports Protection Act which prohibits authorizing sports betting. Of the twelve justices hearing the case in February, ten voted to uphold the Federal law. New Jersey wanted the exemption to build up revenues at the casinos and tracks which have been hard hit by competition from gambling in other nearby states.
Nevada, the only state that has legal sports books, took in $4.2 billion last year. The estimates of illegal sports book gambling was $150 billion. As a result of this decision, a lobbying effort will begin next year for the withdrawal of the 1992 law that the judges upheld. The claim of proponents is that the illegal bets with bookies is sometimes dangerous, while the sports leagues and the NCAA argue that legalizing will lead to even more attempts to fix games to gain a gambling edge. The professional sports leagues are sending mixed messages, however, since the NBA is pushing for legal gambling on basketball games, the National Hockey League has awarded a franchise to Las Vegas, and the National Football League is considering moving the Oakland Raiders to Vegas as well. Two football owners have stakes in Fantasy Sports companies.
As we all watch the continuing expansion of gambling, we wonder just where it will end, and how seedy the institutions of government and sports in this country will become. While the percentage who gamble and approve expansion has remained stable for several years, the amount of our national wealth that is going down the drain to the gamblers continues to increase. Between our national debt and our gambling losses, it remains to be seen how long our wobbly economy can last.
Joe Drape, “Federal Court Blocks New Jersey Plan to Legalize Sports Betting,” The New York Times. August 9, 2016.
Las Vegas tightens its belt, and yours too
And you thought that just those playing the daily sports fantasy games, or the lottery’s new Keno games, or the new casinos in Massachusetts, or the casinos at the racetracks were the only ones being hurt. Not so. Las Vegas is also hurting from the ubiquitous competition in nearly every state.
Las Vegas, however, is fighting back. Someone has to pay the electric bill for all those fancy lights. Las Vegas was famous for the “comps,’ the complementary meals and hotel rooms, the free drinks and even an occasional airfare for really big spenders. But now Las Vegas is scaling back the comps. Free rooms are less frequent. Free airfares to Vegas are almost unknown. While the cost of drinks is kept low the free drinks are beginning to go the way of the dinosaurs. The ultimate insult that annoys visitors by car the most is parking fees. Twenty-four hour parking is now $10 at many casinos, which while not too high, annoys because it used to be free.
Remember the great room rates? Some places were $30 and $40 per night for some really nice rooms that had been fixed up after previous losers had trashed them. Now many hotels with a pool and a weight room are charging “resort” markups of $29 to $32 in addition to the cost of the room for the use of the amenities. A rational person might think this foolish, since the customers might take more time away from the slots and tables to get their monies worth from the “resort.”
When you finally get to the gaming floor, you get hosed again. Nobody is advertising the “loosest slots in town” anymore, as the percentage of return has moved from the low nineties to the upper eighties. At the black jack table, black jacks pay out at a 6 to 5 ratio instead of 3 to 2 in the good old days. Aces can no longer be split, and you can’t double down on anything other than a ten or an eleven. And as the evening wears on and you are more drunk the bartenders reduce the amount of booze to the mixer. It is at least harder to get drunk later in the evening.
The casinos are merely trying to maintain profitability. Isn’t that the American Way? It is almost enough to make you rethink your next visit to Vegas. The only thing that stays in Vegas these days is your money.
Michael Kaplan, “Vegas is trying to cheat you out of even more money,” New York Post, August 11, 2016.
Churchill Downs continues to proper, but not with horse racing alone
Of the 64% of Americans who gambled on something this past year, only 7% gambled on horse racing. Yet Churchill Downs enjoyed a record setting second quarter with revenues of $438.5 million, up 7% over last year. By holding expenses stable, profits rose to $69.8 million which was a 26.7% increase. The Derby reported gains of $5.2 million, just a tiny fraction of the whole profit picture.
So where does the big money come from? The big mover was Big Fish Games, Churchill’s PC and apps game division. This division reported a $20.7 million increase in revenue for the quarter, an increase nearly four times the revenue from the racetrack. Twin Spires, which is the advanced deposit wagering operation, also reported a $7.9 million increase in revenue. While the track is doing well on Derby Day, the real money comes from various forms of online gambling. Churchill also owns several race tracks and casinos around the country, but that revenue is relatively stable, but still sizable. So the secret to success for a horse track is to diversify into other forms of gambling and have your major competitor (the Stronach Group) go into bankruptcy.
Janet Patton, “Churchill Downs earnings get 27 percent boost from Big Fish Games, Kentucky Derby,” Lexington Herald-Leader, Thursday. August 4, 2016, Page 6A.
Graphic Presentation or video: does it matter?
The Franklin Circuit judge ruled that a graphic representation is as good as a video and does not affect the issue before his court which is whether the gambling is pari-mutuel. In one small concession to The Family Foundation, Judge Wingate granted the Foundation two more months for discovery on whether the machines are pari-mutuel. The defendants have been less than cooperative, hence the extension.
While the case drags through the courts, the tracks continue to make money. Kentucky Downs, near Franklin, Ellis Park in Henderson and the Red Mile/Keeneland tracks have taken in $641 million in bets since the beginning of this year. While they only keep about 10%, something over $60 million is a tidy addition to the profit line. The tracks have asked for a summary judgment that the new Encore game is pari-mutuel. Stan Cave, our lawyer, is soldiering on. Pray for him. The games are not pari-mutuel, but that does not mean the court will rule that way.
In Kentucky horse racing has outsize power and strong control of the Kentucky House. While we believe we are in the right, that does not mean we will win.
Janet Patton, “Horse graphics OK in historical racing game, judge finds,” Lexington Herald-Leader, July 31, 2016, page 3A.