Gaming the System

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One of the biggest enemies of internet gambling is the brick-and-mortar gambling industry. Imagine Barnes & Noble pressuring lawmakers to ban Amazon and you have a fair picture of the relationship between internet gambling and, say, Las Vegas. Fortunately, Amazon wasn’t able to get the feds to lock up Jeff Bezos. With internet gambling, the bricks-and-mortars have had more success with regulating and criminalizing away their competition.
Over on the Becker-Posner blog, Judge Richard Posner today examines whether one of the claims of the casinos is true. Do they really offer better controls over possibly addictive and self-destructive gambling than online gambling sites? Surprisingly, Posner says they do. The reason is even more surprising. Real world casinos have higher overheads and must charge higher premiums—worse odds—to stay in business than the online gambling sites, Posner says.

So the legal casinos are correct that they offer a measure of control over gambling: by offering only bad odds, they reduce the demand for their product.

What’s interesting about this is that one possible casino response actually makes the case for online gambling stronger. Casino operators no doubt would like to deny that their odds are worse than online gambling—and that they make up their higher overhead by providing other services like splashy shows, restaurants, spas and luxury shops. But since spending money on these things isn’t any more “productive” or responsible than gambling, this actually makes online betting more responsible. At least the gamblers aren’t wasting their money watching Celine Dion!
Internet Gambling--Posner [The Becker-Posner Blog]

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