Legislators: Vote NO on legalizing internet poker

busted flush

Coalition Against Gambling in New York, the New York State Council of Churches and the national organization Stop Predatory Gambling  say to New York State legislators “Vote NO” on S5302 and “NO”  on A 9049A  .

The two bills to legalize certain internet-based poker games (Omaha Hold ’em and Texas Hold ‘em)  look the same.  Both use the same deceptive role-of-skill argument to say the two games are not gambling, thus evading the prohibition against gambling in the State Constitution.

A thought experiment: five robots are programmed at exactly the same very high skill level to play Texas Hold ‘em.  Each has ample cash.  They are gambling.  Pure chance will rule.  In the first hand, one bot will take all.   After  thousands  of  hands,  however, each will still have  about as much as the others.  This is in  game theory a “fair game.”

Now downgrade the skill levels of four ‘bots so that one scarcely knows the relative values of different hands, while the other three are each in its own stratum of skill between beginner and tournament champion.  After many hands the bottom ‘bot will have been cleaned  out.  After  hundreds  of hands,  the supreme robot will have pocketed much more than the others.  After  thousands  it will have cleaned them out,  too.

In the second scenario disparities in skill skewed the distribution of winnings,  but in both the robots are gambling,   playing the same game by the same rules as in the first scenario.

The only way to consistently make money in poker is to play with people you outclass who don’t know how much better you are.  Gambling in “games” whose outcomes are not  (like slot machines or roulette)  due to pure chance sets the stage for money to flow to  the more skilled from  the less skilled.  This is the stage for hustle and fleecing.

Besides the prevarication that i-poker is not gambling,  the twin bills share a set of supposed safeguards that look good on paper.  Nothing is said about stringency or enforcement.

If internet poker is not gambling, why would licenses be granted only to racinos or class III casinos?

Could the  paradoxical restriction be to avoid opposition to the bill from the bricks and mortar gambling sector?

S5302  and A9049A  are pushed by companies wanting  to make money from New Yorkers  and  to sustain the  sharks who target New York i-poker players.  The  two bills are to sell high-cost hustling licenses that will hurt  New Yorkers.

Permission to reproduce the above in whole or in part is hereby given by the author.  Please cite the permalink above. Illustration by the author.

Daily Fantasy Sports Is Internet Gambling and Illegal

220px-TheprocessionofthetrojanhorseintroybygiovannidomenicotiepoloOn Nov 10 2015  NYS Attorney General Eric Schneiderman  announced that his had issued  a cease and desist order to  Fan Duel and Draft Kings, the two largest operator of Daily Fantasy Sports.  He gave them five days to voluntarily close, which they did not do. The November 10 order  got  much  notice in the NY papers, with an editorial in the NY Times essentially supporting it,  though talking about “strict regulation.”   The Daily News had a 2-page news article      and an  editorial saying that the AG is correct, plus  an op-ed. The news article had a sidebar by the writer of this post..  The Post had a front page article, though their editorial took issue with  the AG’s action.

The Times article on Nov 11 provoked a flood of comments, most angry at the decision.    Dissenters generally used one or more  of four basic  arguments (1) skill is involved; so, it’s not gambling  (2) the NYS lottery holds a much higher proportion  of users’  losses  than do DFS operators,  yet the AG does not try to enjoin it  (3)  no one is being hurt by participation (4) the AG wants to get money for the state by imposing regulation.

My comments on these comments:

“Skill”  certainly determines success, but relatively  few participants have that skill,  It lets them  exploit the vast majority.  As the AG memo below says, this is still gambling.  Take a few minutes to watch TV satirist John Oliver on this.  A recent lawsuit in Alabama gives a another useful perspective on gambling.

The NYS Lottery is an abomination,  but it is technically legal with enough seniority in that status that even I can’t fault the AG for not now going after every aspect of it.  The floridly illegal aspects, like hybrid table games with physical dice,  I do wish he would challenge.

Full-blown cases of gambling addiction already spawned by DFS are not numerous, are still largely hearsay to my ears. It is still early.  Yet  the exploitation of  “fish”  (less expert participants) by “sharks”  with their computer routines is no less predatory than the behavior of a casino or a state lottery.  It’s just that in DFS there are two types of predator,  not one.  Besides the operator there are the sharks. The ad blitz of the last few months is meant to recruit  millions of fish by deceptive advertising.

To the fourth argument   I would reply that  the AG has not proposed to regulate DFS.  He has said they are illegal and should stop operating in NYS.  Devising regulations to legalize is not his job.  His motivation is to protect New York’s people from being exploited by illegal gambling and to enforce existing regulations.  It is up to  the legislature to regulate.

Daily Fantasy Sports herniated through a loophole in the 2006 Unlawful Internet Gambling Enforcement Act and should be surgically reduced.  It is  a strong bridge to two activities that are at this time illegal in New York State and in most jurisdictions in this country: internet gambling not on sports, such as i-poker or internet casino “games” and betting on sports.  The bridge could reach  further,  to the gambling entrepreneurs’ promised land of legalized internet betting on sports.  DFS should not be “regulated.”  It should stay illegal.

Below is a forwarded message from the AG to the public and press,  a strong summary.

If you read this post, please send a comment to the AG to counter the pickets and telephone chains of complaint his office has been dealing with from DFS partisans.

Click here for a link to the AG’s office

Below is a press release from the AG dated November 17.  On Nov 19 Mr.  Schneiderman had an op-ed in the Daily News that complements the press release.  Either is a great source for writing a letter to the editor of a paper near to you.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
November 17, 2015

New York City Press Office / 212-416-8060
Albany Press Office / 518-776-2427
nyag.pressoffice@ag.ny.gov
Twitter: AGSchneiderman

A.G. SCHNEIDERMAN SEEKS PRELIMINARY INJUNCTION AGAINST FANDUEL AND DRAFTKINGS

NEW YORK—Attorney General Eric Schneiderman filed an enforcement action this morning in New York State Supreme Court in the County of New York, seeking a preliminary injunction against DraftKings and FanDuel.  The Attorney General’s suit details alleged violations of law by DraftKings and FanDuel.

The Attorney General’s memorandum of law and complaint against DraftKings can be found here and here. A copy of the memorandum of law and complaint against FanDuel can be found here and here.

The following are excerpts of the memorandum of law filed by the Office of the Attorney General:

  • The New York State Constitution has prohibited bookmaking and other forms of sports gambling since 1894. Under New York law, a wager constitutes gambling when it depends on either a (1) “future contingent event not under [the bettor’s] control or influence” or (2) “contest of chance.” So-called Daily Fantasy Sports (“DFS”) wagers fit squarely in both these definitions, though by meeting just one of the two definitions DFS would be considered gambling.  DFS is nothing more than a rebranding of sports betting. It is plainly illegal.
  • Yet FanDuel and DraftKings insist that DFS is not gambling because it involves skill. But this argument fails for two clear reasons. First, this view overlooks the explicit prohibition against wagering on future contingent events, a statutory test that requires no judgment of the relative importance of skill and chance—they are irrelevant to the question. Second, the key factor establishing a game of skill is not the presence of skill, but the absence of a material element of chance. Here, chance plays just as much of a role (if not more) than it does in games like poker and blackjack. A few good players in a poker tournament may rise to the top based on their skill; but the game is still gambling.  So is DFS.
  • FanDuel and DraftKings’ current denials about DFS constituting gambling are belied by how the sites depicted themselves in the past and how they portray themselves behind closed doors.  FanDuel’s DFS contests were designed by a veteran of the legal online betting industry in the United Kingdom, Nigel Eccles.  The company admitted to an early investor that its target market is male sports fans who “cannot gamble online legally.”
  • DraftKings depicts itself to investors in a similar fashion. For example, in one investor presentation, DraftKings pitched itself to a prospective investor by noting the “Global opportunity for online betting,” pointing to the massive revenue of the “global online poker market,” and making direct comparisons throughout the presentation to poker and sports wagering.
  • The CEO of DraftKings previously spoke openly about DraftKings as a gambling company.  He called DFS a “mash[-]up between poker and fantasy sports,” suggested that DraftKings operates in the “gambling space,” and  described its revenue model as “identical to a casino.”
  • The rejection of the gambling label by the DFS sites is particularly hard to square with the overt strategy of recruiting gamblers. For FanDuel, this has meant hiring a former top executive from Full Tilt, the online poker company, and affiliating with gambling industry stalwarts like “Vegas Insider” and BetVega, a sports betting and handicapping website. For DraftKings, this has meant aligning itself closely and negotiating sponsorships with other gambling ventures, like the World Series of Poker and the Belmont Stakes.
  • DraftKings has also embedded gambling keywords into the programming code for its website. Some of these keywords include “‘fantasy golf betting,’’ “weekly fantasy basketball betting,” ‘‘weekly fantasy hockey betting,” “weekly fantasy football betting,” “weekly fantasy college football betting,” “weekly fantasy college basketball betting,” “Fantasy College Football Betting,” “daily fantasy basketball betting,” and “Fantasy College Basketball Betting.” This increases the likelihood that search engines, like Google, will send users looking for gambling straight to the DraftKings site.
  • FanDuel’s advertisements commonly showcase testimonials from ostensibly ordinary DFS players (g.,“Zack from Fairfield, California”), and play up the ease of playing and of winning huge cash prizes…The reality is that like poker, blackjack, and horseracing, a small percentage of professional gamblers use research, software, and large bankrolls to extract a disproportionate share of DFS jackpots. With poker and DFS, professional players, known as “sharks,” profit at the expense of casual players, known as “minnows.” The numbers show that the vast majority of players are net losers, losing far more money playing on the sites than they win. DraftKings data show that 89.3% of DFS players had an overall negative return on investment across 2013 and 2014.
  • While irresponsibly denying their status as gambling companies, the DFS Sites pose precisely the same risks to New York residents that New York’s anti-gambling laws were intended to avoid. Experts in gambling addiction and other compulsive behaviors have identified DFS as a serious and growing threat to people at risk for, or already struggling with, gambling-related illnesses.
  • Jeffrey L. Derevensky, Director of the International Centre for Youth Gambling Problems and High-Risk Behavior at McGill University, notes that, among other things, false or misleading representations of the skill involved in DFS “can lead players to a preoccupation with DFS, chasing of losses, and developing symptoms and behaviors associated with a gambling disorder.”

The illustration reproduces  a painting by Tiepolo with a timeless theme.  The opinions expressed in this post, aside from the quote by the AG’s office, are entirely those of the editor, Stephen Q. Shafer and do not necessarily reflect those of any or all other members of Coalition Against Gambling in New York.  Permission to reproduce in full or in part is hereby granted on condition that the permalink above is cited.

 

 

Bad add

Peering over the Edge Flickr CC

Peering over the Edge
Flickr CC

 

The message below was sent by e-mail on the morning of Jan 5, 2015 to Bradley Fischer, Esq.,  Director of Policy, Development and External Affairs, NYS Gaming Commission.

 

 

 

Coalition Against Gambling in New York (CAGNY) urges the Gaming Commission not to heed the Governor’s request to have its Facilities Location Board amend its recommendations announced Dec 17 and open the door to a second casino site in Region 5.

CAGNY believes that a casino cannot net for any region or sub-region the “benefits” touted by the interests that got “Proposition 1” passed in 2013. We believe that none of the three sites recommended on Dec. 17 will if built be anything but a detriment to the people in its locality and to the state. Thus we see no good reason for a second license in Region 5 or any other region. For that matter, we see no good reason for any license anywhere.

Please convey this message as soon as possible to the Chairman and members of the Gaming Commission.

With best wishes for a healthy 2015 for all,

Stephen Q. Shafer, M.D.. M.A., M.P.H..                                                                  Chairperson, Coalition Against Gambling in New York                                                         cell phone 917 453 7371                                                                                                        e-mail sqs1@columbia.edu or shpcount@earthlink.net

Permission is hereby granted to quote the above in full or in part at long as the permalink above is cited.

 

 

Invest in Recovery

 

Dusk on the Neversink 8745715895_222d9cfde0_mNeversink

Dusk on the Neversink
8745715895_222d9cfde0_mNeversink

 

 

 

 

 

 

Dave Colavito, at a CAGNY press conference in Albany on 4 June  2013,  presented this outline of a just scheme that would save NYS more than the hidden quantifiable socio-economic costs generated by legalized gambling each year.

  • The first step in helping local economies: Don’t make them worse.  Yet the Gov.’s plan will do just that, because it ignores the financial cost of gambling disorders.
  • Socioeconomic costs of gambling in NYS are now estimated at $3.7 billion annually
    • Exceeds revenues from all Atlantic City casinos in 2012
    • 381,000 Problem and 172,500 Pathological gambler costs burden all NYers
    • Gov.’s plan will produce more people (and costs) with gambling disorders.
    • FISCALLY RESPONSIBLE ALTERNATIVE: NYS INVESTS in RECOVERY, not CASINOS
      • Stop Denying the Problem
      • State share of tribal casino proceeds isn’t restricted for education
        • § Dedicate $600 million escrow & future proceeds: Recovery, Prevention
  • Fund Professional Training, Staffing, and Siting to Address the Need
  • Fund Aggressive Marketing Campaign: Promote Addiction Prevention & Recovery

SOCIAL Implications

 Gov. Cuomo Claims NYS is the Progressive Capital of the Nation

 FIVE CONSIDERATIONS:

 1. NYers afflicted with a disorder (Problem & Pathological gamblers) classified by the American Psychiatric Association exhibit measurably different brain function than the general population.

2. Predatory Gambling incites  those differences in brain function  

3. Symptoms of those afflicted worsen uncontrollably when re-exposed to Predatory Gambling   

4.Vendors of Predatory Gambling derive  50% of their revenue from  these afflicted persons and from those who trust(ed)  them and lost their resources too.

5. NYS actively promotes predatory gambling via Lottery including video lottery terminals and electronic table games; Gov. Cuomo now wants to increase that promotion with added full-blown casinos.

New Yorkers could almost zero out the hidden costs of gambling if the State invested to guide all problem gamblers (and their families and friends) to become again the people they  were before the first bet.  This would save money and save lives, not take away money and take away lives.

The opinions expressed in this post are those of the author, Dave Colavito, and do not necessarily represent the opinion of any or all other members of CAGNY.  Permission is granted to reproduce and distribute in whole or in part as long as the above permalink is cited.

Assets for Sale

Peering over the Edge Flickr CC

Peering over the Edge
Flickr CC

Governor Cuomo  spoke in his press conference on May 9, 2013 (at  minute 46:16)   about setting tax rates on the new casinos he wants to see and the competition he expects among bidders.  He continued  “I think we have an asset to sell.”

He did not say what the asset is. It must be something big casino companies want. 

Greek yogurt production capability?

Deep shale natural gas?

Apple production capability?

Olympic-quality winter sports settings?

Maple sugar production capability?

Nanotechnology infrastructure?

 None of the above.

What else could that asset be other than a population to be trawled for customers?    New York’s people are on the block.

Casinos depend for half their “gross gaming revenue” on the small minority of their customers who are pathological or problem gamblers.*  These categories make up a very small fraction (about 4%) of the adult population.  To reward owners richly,  the casinos must maintain this small sector AND  replace each person in it as he or she recovers, dies, goes to prison, gets deathly ill or moves out of range.  The asset that’s really up for grabs, the mother lode, is current and future pathological and problem gamblers

Yet this is not all that’s for sale.   Each of these gambling addicts or problem gamblers has hidden assets that can be tapped through him or her.  Those are the fiscal and emotional resources of many non-gamblers who enable the addiction while the gambler betrays their love or trust .

The casino companies don’t just buy the opportunity to capture or create compulsive gamblers,  They buy a network of pipelines through each one of those afflicted gamblers to drain six, eight or a dozen other people.   Lesieur* put the number at  seventeen.

This is the asset for sale.  What are we bid?

 Grinols, Earl L. and  J.D. Omorow.  J Law and Commerce (1996-97) 16: 49-87

Lesieur, Henry   The Chase, 1976

The above text was distributed by hand to the offices of all legislators on June 4 and read at a press conference held by CAGNY that morning in the legislative office building.  It does not necessarily represent  the opinion of all CAGNY members.  Permission is granted by the author, Stephen Q. Shafer, to reproduce in whole or in part as long as the permalink above is cited.

Is This An Acceptable Way to Govern?

 

new-york-hi

 

 

 

Editor’s note: This short essay by Joel Rose, Founder and Chairperson of CAGNY, was  distributed to members of the press in Albany May 29, 2012 and to legislators visited  by CAGNY members May 29-30.  It  reviews the  abuse of due process by which the legislature has handled certain bills related to gambling.  The March 14,  2012 vote for “first passage”  is a case in point. 

In his state of the state message this year, Governor Cuomo noted that “It’s time we confronted reality. It’s not a question of whether we should have gaming in New York — the fact is we already do.” He went on to urge a constitutional amendment so that “we can do gaming right,” whatever that means. Notice that gambling promoters always use the term gaming rather than gambling to try to create the impression that they are promoting something innocuous.

So the merits of the pro-gambling case come down to this: We’ve already used every trick in the book to get around the law in order to have gambling in this state. So now, let’s just take the gloves off and remove any remaining restrictions on casino gambling.

We note that New York been so successful in finding ways to allow gambling that according to its own study, New York already leads the nation in annual revenue from gambling. But no amount of gambling will ever be enough. If casinos are allowed, the argument will then turn to sports betting and Internet gambling.

Governor Cuomo and Speaker Silver have already let it be known that they do not want any casinos in Manhattan. They just want access to the revenue to be derived by putting them everywhere else in the state. If this activity would be beneficial for upstate, why not enjoy its benefits everywhere in the state?

So the Legislature, performing what passes for due diligence in this state, passed this amendment in the middle of the night. There were no hearings, so opponents were never able to testify. In fact, there was no debate. Article III, Section 14 of the Constitution specifies that every bill be held for final passage for three legislative days so that legislators may have time to read it and understand its ramifications, unless the Governor issues a “message of necessity,” indicating the reasons why it is necessary to waive the three-day requirement. Of course, governors routinely issue such messages, and legislatures routinely meekly accept them. And that was done in this case.

Now here we have a bill which could be passed anytime during this legislative session, with final passage not possible before January 2013. How could it possibly have been “necessary” to vote on it right away?

The final indignity to good legislative process: in the Senate, the Democrats, angered by the extreme gerrymandering of the majority redistricting plan, walked out, all except for four “independent” Democrats who generally vote with the Republicans, and were absent for all the votes taken that night. Thus, this important vote on casino gambling was taken with only 36 of the 60 Senators present.

So our question to our fellow citizens, and particularly to our legislators, is this: Is this an acceptable way to govern?

The opinions expressed in this piece are those of the author, Joel Rose, and do not necessarily represent the opinions of any or all other members of CAGNY.