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.

See no gambling, hear no gambling, speak no gambling, think no gambling: A 10473

Epic Showdowns 23451208866_cc0bc9a8e0Comments on A 10473 New York State Assembly  “Relates to the registration and regulation of interactive fantasy sports contests”

Introduced by Mr. Pretlow May 27 2016

S 6793A was brought out  in the Senate by Mr Bonacic on May 24.  It is not a “same as” version but not very different.  Comments in the body of this post concern the Assembly version. Do not write to a Senator about the Assembly version.  See the appendix when  writing a Senator.  A letter can be done that can go to either chamber.

 Epic Showdowns

Coalition Against  Gambling in New York  (CAGNY), an all volunteer nonprofit  organization, urges every member of the NY State legislature to vote against the  bill if it comes to the  floor in his or her chamber and to vote no on any larger  omnibus bill into which A 10473  or S 6793A may have been  inserted late in the session.  Seven  really good reasons:

We will return to each of these in more detail below

  1. Assumes that entering contests in fantasy sports is not gambling,  attempting an end run around the NYS constitutional prohibition on gambling.  It  is gambling and internet gambling to boot.  Only a few states allow internet gambling though all but two now allow certain forms of gambling such as casinos, card rooms or state lotteries.
  1. Considers certain video games to be “sports events” and  players to be “athletes.”    The bill would allow entry (that is betting)  in a myriad of  “Interactive Fantasy Sports Contests.”  IFSC provide a vastly  greater platform  of events around the world than the stick and ball sports to which fantasy “sports” “contests” of  the big operators in the USA have previously been confined.  It would allow Daily Fantasy eSports (DFeS) without ever mentioning that term.
  1. Consumer protection has no watchdog,  Everything is based on self-report by “registrants” [operators]  to the Gaming Commission or by “authorized players” (bettors) to registrants.
  2. The drive to be “regulated” comes from companies that expect to profit from “regulation.”  They want to create a market.   Lobbying and outright corruption go hand in hand with such forces.  Draft Kings was getting ready last September to launch its own DFeS.
  3. Revenue to the state from licensing fees and from a 15% tax on what operators hold after paying out winnings would not be even enough to cover the cost of  “regulation.”  This is explicit in the justification section of the bill memo (see below),
  4. Legalizing internet gambling in NYS would not increase tourism, would not promote “economic development,”  would not provide “support  for education”  or “property tax relief.”   The proposed legislation is a concession to special interest groups who want to resume hustling New Yorkers.
  5. Expansion of gambling, particularly to the internet, worsens social injustice.
  1. Gambling or not?

This  dishonest bill  ignores the opinion of the NYS AG, shared by other states’ AGs and other parties  (football player Joe Namath, radio host Mike Francesca) that Daily Fantasy Sports as practiced by DraftKings and FanDuel is gambling.  It  does not even acknowledge  a controversy in NYS or in any state.  The bill avoids the issue by (a) limiting use of words that remind anyone of gambling and (b) implying that the AG’s complaint about DK and FD was related only to insider trading allegations. To illustrate (a), a text analysis:

  • Term or word                         number times used in text of bill

 

“gambling”                                          0

“gaming”                                             once   § 1401   ¶ 3

“internet”                                            0

“skill”                                                  0

“betting” or “bet”                                0

“wager”                                               0

“online”                                               once   § 1401   ¶ 8

“esports”  or e-sports or eSports         0

 

(b)   Watch the subtlety (deviousness) of the justification in the  bill memo, which opens by saying that the AG’s office began in October to investigate “into whether employees of the two biggest daily fantasy sports companies, DraftKings and FanDuel, were able to gain an unfair financial advantage in daily fantasy football contests by exploiting access to non-public data” and continues   “On November 10, the Attorney General’s office issued a notice to DraftKings and FanDuel demanding that they stop accepting wagers in New York.”  It never gives the reason for the demand, namely that the AG considered the operations of DK and FD to be forms of gambling, which with certain exceptions is illegal in New York State.  The justification  pretends that the AG’s objection was to charges of  insider trading.  The AG’s main  motivation,  however,  was not insider trading nor false advertising.  It is given in the office’s memorandum   below (italics added).

“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. 

  1. “Daily Fantasy Sports” becomes  “Interactive  Fantasy Sports Contests”

Since video game competitions are a booming activity around the world,  the bill would allow betting (or in DFS terms, paying to enter a contest) on a vastly greater platform  of events around the world than the stick and ball sports to which fantasy “sports” “contests” of  the big operators in the USA have been confined.  The bill is dishonest.  It uses  empty harmless-sounding terms (“interactive,”  “contests”) to hide a huge intended expansion of opportunities to “play” on the internet.  The most outrageous terminology calls video game players  “athletes”  so that competition in video games can be called a sports event.

http://www.legalsportsreport.com/4037/daily-fantasy-esports-market-overview/  Chris Grove on DFeS and the potential for growth September 18 2015.  Quoting below

“Daily fantasy eSports (DFeS) is essentially identical to the mainstream DFS product. The competition structure, lobby, promotions, and other core elements are more or less interchangeable.  The difference is that DFS players build rosters from athletes in stick-and-ball sports, while DFeS players build rosters from  athletes in eSports like Dota 2 and League of Legends.”

http://www.legalsportsreport.com/4025/draftkings-fantasy-esports/  Dustin Gowker posted Sept 18  2015 on the announcement that DK was preparing to launch its own DFes site.

http://edition.cnn.com/2016/05/29/sport/esports-revolution-revenue-audience-growth/   posted May 29  by a CNN writer describes the potential for growth.  League of Legends is a game that DK  had  its eyes on last September for  its  DFeS offering.  A quote from this is below.

“The eSports industry has been experiencing  double digit growth for several years and according to the research group Newzoo, it boasts a global community of 148 million enthusiasts. That number is projected to hit 215 million by 2019. Just one game — “League of Legends” — drew an audience of 36 million for its World Championship last year, that’s more viewers than the NBA Finals.”

  1. Consumer “ Protection”

The bill looks very consumer-protective, addressing many of the criticisms made of DK and FD, seemingly correcting those weaknesses.  For example,  it requires  that the mean and median net winnings of all players be made public and that “highly experienced players” be labelled as such.  It requires that payments be made to authorized players on time.

Loopholes abound.  Here are some

If someone becomes highly experienced in the future but was not on the registration date,  what mechanism ensures he will be labelled?  Who checks for omissions? Who checks for aliases?

Can college students on e-sports scholarships be picked for an IFSC team, or is their “sport”  a “collegiate sport” and therefore not eligible? Click here for more on athletic scholarships.

Persons under age eighteen are not supposed to be authorized. §1404 (b) (iii) says each registrant shall take all appropriate steps to confirm that  an individual opening an account is not a minor.

There is no definition of “appropriate.”  Is this an elaborate investigation  like New Jersey’s “Know Your Customer?”  Nothing is said.

Regulation, apparently on the honor system,  is based on self-report, of  registrants to “the commission”  [ the Gaming Commission without the  word Gaming] or of  “authorized players” to registrants.

The proposed  plan for voluntary self-exclusion has no supervision and no time frame.  Someone could self-exclude from one site,  then join another  tomorrow.  §1404 (d) reads enable authorized players to exclude themselves from contests  and take  reasonable  steps  to prevent such players from entering a contest  from which they have excluded themselves;

What are “reasonable” steps?  The  Upstate New York Gaming Economic Development Act of 2013 spells out more detail on self-exclusion than “reasonable steps.”

The use of scripts is prohibited.  (Section 1401 para 7)  Without these computerized routines for composing teams, sharks and minnows would be on nearly equal footing.  This would move things toward a truly fair game, closer to what seasonal fantasy sports were and are.   “Highly experienced players” (AKA sharks)  will not approve.  The use of scripts is hard to prove  though easy to suspect.   Scripts  will still be used sub rosa.  The proposed legislation says nothing about penalties.

4. Who is behind the insertion  of  eSports into  “regulation” of DFS?   The drive to  “regulate” comes from companies that expect to profit from “regulation.”  They want to create a  market much bigger than current DFS.   Lobbying and outright corruption go hand in hand with such forces.  Draft Kings was getting ready last September to launch its own Daily Fantasy eSPort (DFeS) with the video game League of Legends.

In Illinois last week  a similar bill was tabled by its sponsor for the current session because of allegations of proposed vote-buying by a FanDuel lobbyist whose hapless explanation (“corporate social responsibility goals”)  is here .

5. Revenue to New York State

Assuming “the commission” has the staff  to add regulating IFSC to its other duties, who is going to pay for the effort?    The Justification section of the bill Memo addresses the question.

“By registering and taxing interactive fantasy sports contests, this bill will also bring about a new and abundant source of revenue for New York State. Such funds will help [emphasis added] pay for the cost of regulation.”

How abundant will the funds be if they will not even cover the cost of regulation?  It they don’t, what source will?  This writer suspects that if this legislation passes not very much will be spent on enforcing regulations, and that some or most of the revenue will go  into the General Fund.  Realizing income to state coffers  by stinting on regulation of gambling is hardly a new concept but, sad-to-say, appeals to budget-makers.

Admitting  that legalizing internet gambling in New York State will not  pay for “regulating” internet gambling in New York State shows  that the  drive to legalize internet gambling in New York State is not to help all New Yorkers.  It is to help internet gambling special interests.

6. Tourism, “economic development” “support for education” “property tax relief”  CAGNY has long said that “benefits” such as the above to localities, regions or states are illusory,  really net losses when hidden costs are accounted for.  This opinion, I  admit, was was not shared by a number of  lawmakers who voted for “second passage” of the “casino amendment” in 2013 while saying “I don’t personally support casino expansion.”

Legislators who  previously voted to expand gambling in New York State because they believed the benefits to their constituents outweighed the costs can  vote their consciences against this  Interactive Fantasy Sports Contest legislation.   It  does not even pretend to offer any such economic benefits to the people of NY State.  Nor does it enjoy popular support.  A recent Siena poll showed 45% of respondents oppose legalization of Daily Fantasy Sports,  37% want it, 17% undecided.

Passage of this legislation is a handout from all New Yorkers  to corporate special interests that can’t even pretend their plans will improve the quality of our lives.

6. Social injustice Government-sanctioned predatory gambling wreaks hardship and suffering  not just on gamblers but on  their families, friends, relative, employers, employees, clients and more.  It contributes to social injustice.  The  60+ posts on this site pile up the evidence.

Permission is hereby given by the author, Stephen Q. Shafer  MD MPH,   to reproduce this text in whole or part as long as the permalink above is cited. The photo image is from flickerCC  title “Epic Showdowns” 95205711@NO2/23451208866.

Since publication on June 1 this post has been slightly revised.

Appendices

From § 1401 ¶ 8   The term  “Interactive fantasy sports contest” makes its debut in proposed legislation

18    8. “Interactive fantasy sports contest” or “contest”  shall  mean  any

19  online fantasy or simulation sports game or contest offered by an opera-

20  tor  or  registrant  in  which an authorized player manages a fantasy or

21  simulation sports team composed of athletes from an amateur  or  profes-

22  sional sports organization and which meets the following conditions:

23    (a)  the  value of any prizes and awards offered to authorized players

24  shall be established and made known to such players in  advance  of  the

25  contest, and such value shall not be determined by the number of author-

26  ized players or the amount of any entry fees paid by such players;

27    (b)  no  winning outcome shall be based on the score, point spread, or

28  performance of a single sports team, or any combination of such teams;

29    (c) no winning outcome shall be based solely on any single performance

30  of an individual athlete in a single sport or athletic event; and

31    (d) no game or contest shall be based on a prohibited sports event.

Comparing the Senate Version to the Assembly version:  The Senate version is not as sanitized as the Assembly version.  The word “gambling” is allowed, as is “gaming.”   “Internet” appears   The Senate version recaps and swallows whole  tortuous arguments by counsel for FD and DK that skill is material, making the process not gambling.  No mention  that the Attorney General has ever said a word about DFS.   The  Assembly version avoids all discussion of controversy as to whether DFS is gambling.

The Senate version offers  another gambit by DK and FD,  that since seasonal fantasy sports were carved out from the  UIGEA of 2006, Daily Fantasy Sports ( a later development) have been too.  This to me is like saying that cars with engines should be allowed into a soapbox derby as long as they have four wheels.

The Senate version  is even more vague than the Assembly’s on what sorts of “interactive fantasy sports contests:  would be allowed.  Neither version mentions eSports (video gaming).

The Assembly version prohibits high school sports; the Senate’s does not.

Senate: 15% tax on gross revenue from New York players  Assembly 15% on gross revenue, residence not mentioned.

Senate version even looser than Assembly on what “compulsive participants” might do to remove themselves.  Assembly calls them “compulsive players.”

Senate version more specific about how to keep minors out.

Both versions are vapid and vague about how to prevent use of scripts.  Neither prescribes punishment.

Both versions share a unilateral assumption that Daily Fantasy Sports is not gambling,  though they get there by different paths. The Senate version parrots Mssrs Mastro and Boies, counsel for two of the big companies.  The Assembly version is a thick  whitewash.  They are asking the legislature to make an end run  around the prohibition against gambling in the state constitution. Both versions provide paper-kitten protection against being hustled and fleeced. Neither version offers any benefit, credible or not, to the vast majority of New Yorkers.  Casino expansion and Lottery expansion have been sold to New Yorker by mirages. Promoters of “Interactive Fantasy Sports Contests”  (hitherto called internet sports betting)  don’t  offer mirages to the general population.   Could it be that  campaign contributions are  a better deal ? This legislation is for special interests.

Archives about the AG’s case against FanDuel and DraftKings

http://www.nytimes.com/2015/11/11/sports/football/draftkings-fanduel-new-york-attorney-general-tells-fantasy-sites-to-stop-taking-bets-in-new-york.html?_r=1   NY Times November 11,  the day after AG announced the cease and desist letter

http://www.nydailynews.com/sports/football/fanduel-draftkings-assure-users-remain-open-article-1.2431300   NY Daily News from November 11

http://www.nydailynews.com/opinion/editorial-fantasy-meet-reality-article-1.2431796  NYDN editorial says DFS is gambling.

http://www.nydailynews.com/sports/fantasy-sports-predatory-gambling-dangerous-article-1.2431896  sidebar by Stephen Shafer in Daily News article linked to above

http://www.ag.ny.gov/pdfs/DK_MOL.pdf complaint against Draft Kings submitted Nov 17, 2015

http://www.nydailynews.com/new-york/ag-schneiderman-bad-gamble-bluff-law-article-1.2441071  op- ed by AG Schneiderman November 19

http://www.nydailynews.com/opinion/fantasyland-n-y-bets-albany-casino-article-1.2652600 Daily News  holds its great position  May 31 2016

 

Generally Recognized as Gambling: Daily Fantasy Sports

Testimony Before the Hearing on Daily Fantasy Sports held by Committees of the New York State Legislature,  8 December 2015

GamblinglosspictureMy name is Stephen Shafer. I chair Coalition Against Gambling in New York, an all-volunteer organization registered in Buffalo since 2007. Our members have different philosophies about gambling. The mainstream holds that not all gambling is bad for society or the individual. A March Madness pool where 100% of entry fees are paid out to winners, a game of cards among true friends, a bet on whether it was Yogi or Casey who made a certain remark – these actions don’t bother us. What does, and deeply, is predatory gambling – gambling in which some party profits predictably over time by preying on others. That party can be “the house” or “sharks” or both.

I think Attorney General Eric Schneiderman  is entirely right that Daily Fantasy Sports of the DraftKings and FanDuel type is gambling under New York State law; payback depends on a future contingent event that the person placing the stake cannot control. That person controls the selection of his fantasy team, but not the actual performances of the component athletes from which the outcome of the contest derives. A horseplayer uses skill to decide which horses to pick at for the trifecta, but where the horses place that day is not in her control. No one denies that is gambling.

Assuming DFS is gambling, it is certainly illegal. The State Constitution bans all gambling in New York State except (by specific amendments allowing regulated parimutuel, charitable gambling, Lottery and (as of 2013) up to seven non-Indian casinos in the future. There is no exception for any kind of betting on sports, either live action or fixed odds. There is no exception for internet gambling.

The business model of i-poker and online FS is similar to that of a casino or a state lottery:

  • Recruit people through their hopes of payoffs far greater than investments.
  • Keep their loyalty with frequent small payouts and tidings of rich payoffs to others.
  • Replace them as they burn out, go broke or jump ship.

Result:  some, far from all, of the internet  “players” become problem gamblers and addicted gamblers. They damage, even wreck, not only their own lives but those of all around them, the hidden victims of predatory gambling – spouses, children, parents, in-laws, siblings, employers, employees, clients, neighbors. With  “land-based” casinos and state lotteries, half the revenue (sometimes more than half) comes from problem and addicted gamblers, maybe 12-15% of customers. Their net losses are drained from someone else by deception or bullying or crime. These gamblers need help; so, in greater measure because there are far more of them, do those they are ripping off. My organization has great respect for clinicians and peers who help problem gamblers day to day. Our focus, however, is to stop expansion of predatory gambling. That’s why we hold that DFS and all forms of so-called i-gaming are illegal and should stay that way. That’s why we support the AG’s stance.

There are differences between the model for i-poker and online DFS on the one hand and that for casinos and government-run lotteries on the other. In the first group, “players” pay real attention to the action.   Some win more consistently than others through preparation (e.g. scripts in DFS) and mental probability calculations as in i-poker. This is called skill, though it can verge on insider trading in DFS. In the second group, no decision-making is needed beyond which card to buy or slot machine to go to.

In i-poker and DFS newcomers have no idea how they will fare. They don’t know how their skills stack up to those of other players, most of whom are strangers; moreover, chance has a big role. The game board changes day to day, hour to hour. They are really less well-informed about their chances of success than slot players who know they can expect long-term about 88-93 cents back for every $ invested.

In i-poker and online DFS there are two types of predator: the house, or operator, which takes a  percentage of the pot (“the rake”) or of pooled wagers (which DFS calls “entry fees”);  and the elite stratum of well-prepared pros or near-pros who pocket most of the money laid out  by everyone. In the typical casino or state Lottery setup – a slot machine – the house is the only predator, setting its expected payout % as it sees fit under regulation.

Operations with player predators (“sharks”) need prey (“ fish”) to contribute to the betting pool or join the poker game. Heavy advertisement with upfront incentives is the way to get new fish. Fish may know a lot about their sports, but few can match the preparations of the sharks.   Some fish will fall into the cycle of chasing losses that spells problem gambling. If there are indeed 500,000 DFS participants in New York State , then it is likely there are, or will be soon, at least 20,000 problem gamblers and addicted gamblers among them.

I surmise that the distribution of players’ net losses and net wins is different from that of a casino or Lottery. In the latter, the small fraction of users who are the most “involved” – that is, invest the most time and money– provide the lion’s share of gamblers’ net losses (= house’s net win). In DFS, the biggest investors are the few sharks, who divide among themselves as their winnings nearly all the pooled bets. The investments of problem gamblers and addicted gamblers are perhaps not as over-represented in the winners’ pot as they are (> = 50%) in the gross gaming revenue of a casino or a state Lottery. In that sense the AG’s action in ordering a shutdown of DFS is consumer protection as well as an effort to prevent the cultivation of problem gamblers.

Why don’t we see many problem gamblers or members of their circles here today?  Why do most complaints voiced to the media re DFS relate to how the player was cheated or had winnings withheld, not how he was suckered into layers of debt and despair?

  • Most problem gamblers and addicted gamblers are in denial at any given moment.
  • The culture of recovery says “Don’t make the casino/game/track or whatever responsible for your gambling problem. You take responsibility.” This keeps current and recovering problem gamblers from taking a public stand against gambling.
  • The many victims of state-sponsored predatory gambling who are not gamblers themselves (collateral casualties) need not be “gambling-neutral,” but are often too ashamed or guilty to speak out against the casino or the operator.

Thus DFS and other longer-established forms of internet gambling not legal in most states, like i-poker, have great potential for harm that reaches beyond the ostensible victims, beyond the problem gamblers themselves. This is why they are illegal.

To legalize illegal activities and “regulate” them is not a solution. It gives government a conflict of interest. Tight regulation lowers profit margins and hence government’s share.

When DFS have been unequivocally recognized in NYS courts as gambling and therefore incontestably illegal, the legislature should not cure these companies by legalization and regulation. Thank you.

Post script: the operations of Fan Duel and Draft Kings in New York State have not ceased since the AG called for that to happen.  They  continue  while the case is on appeal.  A decision appears unlikely before the end of 2016.

Permission is hereby granted to reproduce any part of this piece as long as the permalink above is cited.

Hold ’em Harmless?

high7

The following letter was sent by US mail on 26 October 2015 to the Delhi District office of State Senator John J. Bonacic.  An electronic version  with attachment was transmitted to the  Senator’s  e-mail three days later.

 

 

Dear Senator Bonacic,

At the hearing you held Sept 9 regarding S5302 there was good news: you gave at least a little time to the important question of whether legalizing i-poker would have an impact on problem gambling and gambling addiction. The bad news was that you readily accepted a “negdec”   from Mr Pappas of the Poker Players Alliance. I fear your questioning was to get this assurance of no harm onto the record.

Your questioning of Mr Pappas did not show the trial lawyer skills that Mr Featherstonaugh accorded you later in the hearing. Was this just a lapse in preparation, or was it deliberate? Whichever it was, your “OK” to Mr Pappas’s reply surely gave most listeners the false impression that internet gambling — of all kinds – has been well-studied and found not to be worse in any dimension for individuals or populations than other kinds of gambling. Not so.

I would be glad to meet with you and your staff to go over some basic principles of epidemiology and public health that should be applied to the important work you and your colleagues do. They are explained in the enclosed 12-page critique. Sad to say, the approach in the September hearing to this basic science  is no more valid than evaluating a corporation by whether it declared a profit or loss in the most recent annual report.

Sincerely,

Stephen Q. Shafer MD MPH

Chairperson,  Coalition Against Gambling in New York  917 453 7371

Below is the critique that was enclosed with the cover letter

Considerations of Internet Problem Gambling in the New York State Senate i-Poker Hearings of September 9 2015: an Epidemiologist’s Critique

Stephen Q. Shafer MD MA MPH                                              27 October 2015

 

The author is a retired Clinical Professor of Neurology, Columbia University and Chairperson of Coalition Against Gambling in New York, a non-profit all-volunteer organization registered in Buffalo.

 

During the Sept 9 2015 hearing on legalizing i-poker held by Senator Bonacic there was scant mention of the potential for i-poker or other forms of i-gambling to cause addiction or problem gambling or to sustain these conditions when they had developed in another setting such as a b and m [bricks and mortar] casino. Below is the nearest approach.

At about 15:50 Mr Bonacic, chairing, asked Mr Pappas, CEO of the Poker Players Alliance and the first person to testify, “Is there a ratio for the amount of people that play on line poker, gaming, as opposed to those that get addicted? Is it one in three hundred, one in five hundred?   Is it ascertainable?”

Senator Bonacic seems here to be groping for the prevalence of gambling addiction among persons who do i-poker or i-“gaming.” I expect he meant to make the ratio as he set it up  500 to one, not one in 500. He is certainly leading the witness towards a very low proportion of addicted gamblers among all on-line gamblers.  Note also that the question does not separate poker from other types of i-gambling. This is likely intentional, to blur distinctions in readiness for the transition I think he and associates plan, from two particular forms of i-poker to all forms of casino-type “gaming” on the internet and ultimately to i-betting on sports.

 Mr Pappas responded that he didn’t have notes in hand but that his written testimony gave backup. He summarized,    “There is not a discernible increase, not any increase.” Mr. Bonacic replied “OK. ”

Note well: Mr Pappas did not answer the question Senator Bonacic asked, which was about a “ratio,” not an increase. His response belonged to a question not put. Perhaps he had been expecting something like one of the following:

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The Curse

Pachinko

Pachinko

 

A Talk at Patchogue-Medford Library Long Island NY  July 30, 2015  by Robert H. Steele

Mr. Steele is a Connecticut business executive and former U.S. Congressman, and was a nominee for Governor of Connecticut.

 

Comment by CAGNY editor: This talk starts about  a book set in Connecticut but moves through many important issues about predatory gambling before homing in on a location in New York State now threatened with the imposition of a 1000-device slot parlor.  It is a privilege to present it here.

Thank you for the invitation to come to Patchogue and for your interest in my book, The Curse: Big-Time Gambling’s Seduction of a Small New England Town.

The book is a fact-based novel set against the explosion of casino gambling that hit southeastern CT during the 1990.

The novel begins with the Pequot War in 1637, when Connecticut’s Puritan colonists joined with their Mohegan allies to defeat and almost destroy the Pequots, who were the largest and most warlike of the Connecticut tribes. The story then jumps 350 years, as these two tribes reemerge to build the world’s two biggest casinos – Foxwoods and Mohegan Sun – and a Connecticut family, led by a descendant of one of the Puritan colonists, becomes embroiled in a battle to stop a third casino that threatens the family’s town and ancestral home.

In the end, a small, quintessential New England town faces a Faustian dilemma in which it must choose between preserving its character and values or accepting an enormously seductive offer that would change the town forever.

The Curse, in sum, is a novel based on fact, and this evening I’d like to focus on the factual background of what has occurred in Connecticut and elsewhere – in other words, on the story behind the book.

First, I should probably give you a little more of my background since it entered into my writing the book.

I represented eastern Connecticut in Congress in the 1970s. Then, after running unsuccessfully for governor, I left politics and my family – my wife and four children and I – moved to Ledyard, Connecticut well before anyone dreamed of casinos coming to Connecticut. Those two experiences – knowing Connecticut’s politics as intimately as I did and then living in the midst of the subsequent casino explosion – gave me a front row seat for watching the political maneuverings that led to the casinos and then seeing their impact.

Indian casinos got their start in 1988, when Congress passed the Indian Gaming Regulatory Act, which was seen as a means of promoting tribal economic development and self-sufficiency by allowing federally recognized tribes to open casinos on their reservations.

It would be fair to say, however, that Congress had no idea of the Pandora’s Box it was opening when it passed the act.

As it turned out, the law not only opened the door to Indian-owned casinos, but it spurred the legalization of commercial casinos as many states rushed to open casinos as way to raise revenue without directly and overly raising taxes.

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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.

 

 

Revenue Enhancement via Problem Gambling

Revenue Enhancement Via  Problem Gambling

2269211810_030e548987PHLSunrise

 

 

 

 

 

 

 

 

The operational approach of the NY State Legislature to problem gambling is horribly clear from the voting records on S7833 (passed 55 to 4 on June 20 2014) and the Assembly “same as” (A 10075 , Goldfeder sponsor) which  passed 119 to 9 on June 19.  The approach is to exploit problem gamblers, not help them recover.  The bill, not signed by the Governor yet,  allows racinos to close their  video lottery terminal (VLT) floors  at  6 AM instead of (previously) 4 AM.  It also  increases “free” play credits.   The memo is below in italics.

BILL NUMBER: S7833

SPONSOR: KLEIN
TITLE OF BILL: An act to amend the tax law, in relation to the

authorized hours of conducting video lottery gaming and the amount of

free play authorized therefor

PURPOSE OR GENERAL IDEA OF THE BILL:

The purpose of this bill is to enhance the revenues of video lottery

gaming facilities in New York.

SUMMARY OF PROVISIONS:

Section 1: Amends section 1617-a (b) of the tax law to allow video

lottery gaming facilities to operate until 6:00 a.m.

Section 2: Amends section 1617-a (f)(3) of the tax law to increase the

annual value of free play allowance credits authorized for use by a

video lottery gaming facility from ten to fifteen percent of the total

amount wagered on video lottery games after payout of prizes.

Section 3: The effective date.

JUSTIFICATION:

This bill is needed to provide incentive for individuals to visit the

video lottery gaming facilities in order for these facilities to enhance

revenues and attendance.

PRIOR LEGISLATIVE HISTORY:

This is new legislation.

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None noted.

EFFECTIVE DATE: immediate

Comment by CAGNY editor: At 3:50 A.M. those racino VLT users who don’t want to stop at 4 o’clock are not the exhilarated, beaming young couples in racino advertisements. They are mostly problem gamblers and addicted gamblers who, if forced out at 4 A.M., would on the average leave less of the money they are using that morning than if they stayed until 6.  S 7833 was written deliberately to exploit that thin stratum of casino users (perhaps 12%) who provide about half the “net revenue” of the average casino.

Coalition Against Gambling in New York honors the insight and courage of the few legislators who voted NO.

 

The opinions expressed are those of the writer, Stephen Q. Shafer MD MPH and are not necessarily shared by any or all other members of CAGNY.  Permission is given hereby to quote or copy in whole or in part as long as the above permalink is cited.

The picture is from creative commons  2269211810_030e548987PHLSunrise.jpg

Cornfields and Dreamfields

The New Bridge

The New Bridge

 

States of the States in Casinoland: Cornfields  and  Dreamfields

Summary:  An overview of casino spread in the United States                                             (1) Looks at locations and fiscal markers of “cornfield casinos” in Iowa, a thinly-populated state that  has  eighteen commercial casinos and two Indian ones.                                       (2) Discusses likely rationales for two sites proposed for new casinos in Iowa.                (3) A table using  figures from  the American Gaming Association web site  compares  year-2012 fiscal data for commercial casinos or racetrack electronic gaming devices  among all  twenty-three states that have either or both.  States can be ranked on  characteristics such as “win per capita” or taxes paid to government.  

Talking with someone from a very small city in NY (pop 900)   proposed as casino site,  I  remarked  naively that it must be unique in the country in being a truly rural community into which a commercial casino might come. I had thought all commercial casinos are in suburbs,  exurbs or fair-sized towns when  not in big cities.  Iowa then came to mind as predominantly rural but with commercial casinos.

A look at that state surprised me.  Iowa has fifteen commercial casinos classed  as “riverboats,”  three tracks with electronic gambling devices (EGDs)  and two Indian casinos.   It is hard to understand how the state could support so many; yet it is  considering two more.    This count led me  to compare Iowa to other states as to number, size and locations of casinos.  Two questions arose:  (1) were  impacts on small rural communities  assessed  in any way by  independent studies?  (2) how  did landlocked rural casinos fare financially compared to ones at riverside  or more urban settings?

Question 1 is a rapid dead end. No.  Question 2 opened a window on the United States as casinoland that this essay props wide.

To imagine from  the Iowa experience what a very small rural community in upstate NY might expect from a casino’s arrival,   I picked  four  similar locales in Iowa that now have casinos and one (Jefferson, in Green County) for which a casino is proposed.  Click here for a map.    Four locales were chosen by developers.  One, in Tama (Tama County),  is Indian-operated and was thus not free to roam.  Because it is a small “city” like the other four  and evidently  a test case for new competition while Iowa plans  more  casinos,  I included Tama.

Emmetsburg, pop 3900,  is home since 2006 to the Wild Rose Casino (550 slots,  17 table games, or TGs).   The casino is right in town on (literally)  Main Street,  US Rte 18,  which crosses the state.  Emmetsburg is the County Seat of Palo Alto County,  with a population  density of 16.5/sq mile it ranks 84th out of 99 in the state (Iowa pop. density is about 54/sq mi).  The town’s web site shows merited civic pride in history.    A report by a consulting group  in 2009 commented that there are no communities of much size nearby,  though Highway 18 eases travel.  The report stated that win/admission ratio (“win” means “gaming revenue”  of course)  and gaming revenue in first two full years were below most other markets in Iowa.  This is still true through FY 2013.

Northwood, pop 1989,  hosts  the Diamond Jo Worth casino  with 1000 slots and 32 TGs.  The casino is right off  I-35,  ( 9 mi west of the center of town)  about 25 mi south of  I-90 as it traverses southern Minnesota.   Click here for  Christmas Greetings from the casino in  2009.   Worth County ,  with population  density of 18.9 / sq mi,  ranks 76th in the state.   The  report by a consulting group in 2009 remarked that  the casino’s nearness to I-35 brought Mason City  into its reach at the time.  In its first two years the casino had an   “win”/admission ratio  and adjusted gross gambling revenues that outdid the state average.

Larchwood (pop.  866) is the city in Iowa most remote from  the capital, Des Moines.  Lyon County ranks 75th in state in pop density,  at 19.7.  In the northwest corner of Iowa,  Larchwood  saw in 2011 the rapid   opening of the Grand Falls casino,  which cost $120 million and offers   900 slots.  Tables games are now up to thirty-seven. This casino was obviously sited to capture Sioux Falls, South Dakota,  the largest city in that state.  A website blurb says it’s just eight minutes from Sioux Falls.  Actually eight miles from the extreme eastern side,  it is  more like 15 mi and 25 minutes from the center of the city.  The manager of the Grand Falls casino   told a reporter that she expected  an annual revenue of $70 million,  with 80%  to come from out-of-staters.

South Dakota  on the AGA listing ( see table below ) has thirty-five (35) “casinos”  but total “gaming” revenue is only $107M with revenue to state only $ 16.6M.  [Note well: these data may be wrong, but are copied correctly from the web site.]  I did not research the  state  in detail but would guess that many  of the “casinos” are like Borrowed Buck’s Roadhouse, the only “casino” in Sioux Falls that shows on a commercial website map  It has ten (10)  VLTs, pool tables and foosball.  South Dakota had decided,  upon legalizing casinos,  to put all its  real commercial casinos in one town,  Deadwood, almost 400 miles from Sioux Falls.   Since 1989 S. D. has had video lottery.  In FY 2013 an average of 9133 machines operated in the state in an average of 1426 establishments.  The nearest real casino to S.F. is an Indian one at Flandreau, 44 miles away.   A casino in nearer-by Larchwood was supposed to appeal to people in Sioux Falls who want live table games and lots of slots.

In Larchwood  gaming revenue has not reached the anticipated 70 M .   At 59 M for 2012 it was in the red $ 4.8 million.  Adjusted gross revenue in 2013 was $58 million, and the “win”/capita $46 in FY 2013, below the state average.  It may be that Sioux Falls gamblers find the convenient VLTs in town surpass the call of the casino.

These three active commercial casinos can be compared in the table to the fifteen “riverboat” casinos in Iowa, which includes them.  Data are for FY 2013   Some figures are rounded-off.

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NYS Council of Churches: No on Prop. 1

Statement of the  Rev. Dr. Paula Gravelle, Executive Director, New York State Council of Churches    Oct 28, 2013

The New York State Council of Churches has long opposed casino gambling, and we stand in opposition to Proposal 1.  The stated purposes of this amendment are to promote job growth, increase funding to schools, and permit local governments to lower property taxes.  However, in places where casino gambling has been introduced, any actual gains have come at the high cost of addiction, family disintegration, and deepening poverty.  There are no quick fixes to the challenges of struggling cities and towns, and we call on our elected officials instead to focus on the kind of investment and hard work that will build sound, long-term economic health and self-sufficiency for New York’s communities.

transmitted by e-mail from the Rev. Dr. Gravelle to Coalition Against Gambling in New York.   The address of NYSCOC is 1880 Central Avenue Albany, NY, 12205                     518 436 9319                             nyscoc@aol.com