January 8, 2015 • 39 mins
Pretty much immediately after the Internet was opened to the world online gambling sites sprang up. Over the last couple decades, U.S. law and online gambling have had an unusual and complicated relationship. Learn the ins and outs of this grey area.
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Episode Transcript
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Speaker 1 (00:01):
Welcome to you Stuff you should know from house Stuff
Works dot com. Hey, and welcome to the podcast. I'm
Josh Clark. There's Charles W. Chuck Bryant, and there's Jerry
for the third time, and this is stuff you should know.
The podcast two ball starts. Yeah. Really, Uh you a
(00:23):
gambler at all? Uh? No, I mean not really. I'm
I would lose too much money. But you've like been
to a casino and I mean, like, yeah, I've gambled before.
I'm just I realized pretty quickly that I'm a terrible
gambler now, like I'm an addict or anything like that.
(00:44):
Like I'd never win. So losing money's not fun. No, no,
it isn't. I enjoy I don't like Vegas at all,
as you know, but when I've had to go there,
I do enjoy a little gaming. Um, but I always
just I'm very disciplined to set aside a certain amount
of money. I'm like, I'm basically like paying that to
(01:05):
have a good time gambling. If I lose it all,
then that's what. Because it is enjoyable. I enjoy it.
And I did a little sports gambling at one point
in my life and got a got out of a
sort of a tight squeeze once and then I was like,
not doing that again. Did you have your thumbs broken
or something? No. I just owed um a lot of
money going into NFL Sunday, and I was like, I
(01:27):
can't afford this. So I did something really stupid and
I made ny two bets equal to that large amount
of money, one of both and broke even. And I
was like, no more. That was good that you weren't like, Okay,
I'm on the street and keep it going. That scared
me straight, you know. Um, for this episode, I did
(01:48):
a little online gambling. You know they let you try
it out for free or whatever. I was down five
d bucks in like four minutes. Well when it's not
when it's fun money then like not real money, it's
seed a bet a lot. I was just betting like
the normal amount. I just I was playing a roulette
called the Greedy Goblins. What site was it? Bovada? Have
(02:11):
you heard of Bovada? It was the first one that
came up when I put it online gambling. But it
was a classy site. It was a classy simulated casino,
pretty waitresses, I mean, well, there were pictures of people yeah,
you know, no one was actually moving except the three
D Goblins. They try to simulate a casino as much
as possible, right, A little bit like the background of
(02:32):
the website was like felt. I think maybe it was
like that, but um no, it seemed to be one
of the nicer ones. You could tell that the programmers
like really put some thought into it. But the the
the roulette or not the roulette the slot I was playing?
Did I say roulette? First? I was playing a slot
called Greedy Goblins, and it was nice looking, but I
(02:53):
lost very quickly, so I was like, forget this. I'm
so glad I'm not addicted to online gambling, because that
would be really rough, I'm sure, And actually, I mean
they say the online gambling is even possibly more addictive
than regular gambling, just because of its ubiquity and ease
of accessibility. Like not only can you get on the
computer at home, now the big pushes mobile, so you
(03:16):
can gamble anytime, anywhere, and if you have a problem, yeah,
that's super super dangerous for some folks. You can gamble
in your warm up pants, your shirt off, or your
city jogger pants. I think some casinos in Vegas you
could do that probably, h Maybe it's like the Golden
Nugget or one of the old ones, whether they're like
(03:37):
just just give us your money please, we're hurting so bad,
or in all of Atlantic City. Sure. So. Um, you
want to talk about the history of online gambling, you know,
it hasn't been around forever. It hasn't. Gambling might be
one of the oldest past times, but online gambling is
comparatively new. Yeah. In the mid nineteen nineties and Antigua
(03:59):
and Barbuda, they passed a law called the Free Trade
and Processing Act, which basically paved the way for some
of these smaller Caribbean island nations to get into the
gambling business. Well for that nation specifically, Yeah, to get
into the online gambling business. Right. Specifically, they created out
of thin air their own ability to create licenses for
(04:22):
online casinos. So they became the haven for online casino.
It's a pretty good idea, it is, and especially considering
that there was no such thing as online casinos yet.
Like that's some foresight right there. Yeah. Around the same time,
a company called Microgaming started the first uh kind of
workable software for online gaming, and that came along at
(04:43):
just the right time and U Canada they started opening
up some online casinos and basically all over the world
they started popping up. I think there were more than
two hundred online casinos and revenues in the late nineties
of up to eight hund in thirty million a year,
which is chump changed now. But um back then, you know,
(05:06):
you'll notice we did not mention the United States because
it was there's a lot of legality issues. Up to today,
you have online gambling virtually out of the gate. The
United States is like, no, that's illegal. Completely ignore the
fact that forty plus states have state lotteries. You can't
gamble online. And actually I read an article where Antigua
(05:29):
sued or filed the complaint against the United States with
the World Trade Organization. The w t O sided with
Antigua and they granted Antigua like a hundred and twenty
million dollars worth of freedom to distribute American intellectual property
(05:49):
without paying any royalties because America closed down it's um
it's population to Antigua's online casinos. And Antigua said, you
guys are violating treaties we have interesting and the w
t O actually sided with and levied sanctions against UM.
The US sided with Antigua Levi sanctions against US, which
(06:11):
is mine boxing. Yeah, that probably doesn't happen a lot. Uh.
In the early two thousand's, you could, all of a sudden,
thanks to a company called Betfair, wage wager appeared appear
bets on sports. A lot of this early stuff was
sports UM wagering, right, and then online poker of course
in the late nineties. UM really started to catch on.
(06:33):
In the late nineties and early two thousands, UH company
called Poker Spot and part Party Poker and Poker Stars.
They all have silly names, but UM they really hit
on it big when they UM allowed you to qualify
online for these real World Series of Poker tournaments. And
(06:55):
the one guy, Chris Moneymaker actually won the World Series
of Poker in two thousand three after having qualified online.
And then everyone was like, WHOA, that's a big deal
because I think he ended up having to pay in
like forty bucks to qualify for the World Series of Poker. Yeah,
and he didn't have to travel to Vegas and you know,
or Atlantic City or wherever else you can go to gamble. Yeah,
and that's the way it was going to and everybody
(07:16):
was really up on UM poker, especially Party Poker and
Poker Stars, and UM the US ended up cracking down
on it, which you'll talk about a little more in
detail coming up soon. But UM, let's talk about just
online gambling and how it's different, because it seems well,
there there's some pretty obvious UM distinctions, like one gift
(07:40):
to travel to Atlantic City or Las Vegas or your
local Indian reservation and sit there and and gamble in person.
That's I mean you might say, well, yes, obviously, if
you're gambling online, you can do it at home. But
that's that's there's a big difference. There's a lot of
nuances in between those two. That obvious difference between the two.
(08:03):
Sure one of them is you can play a lot
faster without all the chit chat and all the decision
making of the little old lady next to you at
the blackjack table. UM and I wrote an article where
with a guy named John Googliano or Gagliano. I mean
he's a New Jersey professional poker player, John the Goog.
I think it was like Googs thirty three years, gags
(08:24):
thirty three something like that. Seriously, Anyway, he um, he
plays up to a thousand hands an hour. Wow, he
plays of no poker. He's a pro poker player. He plays, um,
maybe a hundred hundred hands an hour per table, and
he plays up to about ten tables at a time.
About he's got to be playing more than one. Oh yeah,
so he's playing like a thousand hands an hour um.
(08:46):
And he says in real life he can play maybe
twenty five tops if he's really working. And a lot
of it is the chit chat the dealers. This is,
you know, and not being able to physically play ten
hands at a time. But see, that's the experience I
enjoy about gambling is being at the table and chit
chatting and having a couple of you know, free scotches.
It's like a good social fun social like a craps table,
(09:09):
a lot of fun okay to stand around. So yes,
I think that's what makes Gags thirty three a professional
poker player. You know, he's in it for the money. Yeah,
he doesn't care about all that stuff, and probably to
win too. Um. So yeah, it's a lot quicker. You
can win and lose money at the drop of a hat. Um.
And like you said, they try to dress it up
(09:29):
and make it look and feel like a real casino. UM.
Other than that, though, it's it's a lot of the
same games, like pretty much any game you can play
in a real casino you can find online from like
lotteries and Keno to Roulette and all that stuff. Yeah,
Bovada had UM more than a hundred and fifty different games. Yeah,
(09:51):
a lot of them more slots, but they did have
all the regular stuff too, in tons of different poker UM.
And then, like you said, sports betting, and then there's
a subsection of sports betting inter tainment betting, like you
can bet on the outcome of the two thousand and
sixteen presidential election or the oscars um apparently spelling bees,
competitive eating contests. Reality TV, Yeah, which I didn't get
(10:13):
because reality TV is not actually like unscripted. Yeah, like
you could easily find out from a producer what happened
on the show that was shot five months before. It's
not like it's live, you know, or who's going to
get the rose or whatever. I think those UM episodes
are live a lot of times. They've got to be
(10:35):
like the American Idol finale or the Survivor finale a
lot of or a Big Brother. But I I just
assume all those are extraordinarily rigged one way or another,
and that anybody connected well enough could find out and
make some big money, which I would guess that the
people laying on the bookers, you know, the bookies, the bookies. Uh,
they they would know well enough to stay away from
(10:57):
that kind of stuff because it could be rigged. But
wors is never right, So is that? Were you being facetious?
Of course sports is rigged a lot of times. Really, Yeah,
you kidn't me, Like, what we're not talking is Rourkes
boxing fight. No, boxing is notoriously historically fraught with boxers
taking dives. Okay, I thought you meant like Monday Night
(11:19):
football or something like that. I mean, the NFL is
a pretty good track record, but there most of the
pro sports have had one major betting throwing games scandal
in there at some point. Yeah. I don't think it
happens all the time, but um yeah, like the Black
Sox was baseball. Man, that was a good movie, Eight
Men Out and uh I think, um yeah, you'll hear
(11:41):
about every once in a while, like an n C
double A basketball team will come out years later like
we threw all those games? Oh, yeah didn't. Um, who
was it that played Billy Jane King? The man who
played Billy Jane King? Oh, Bobby Riggs? No? Who? Well,
well guy, was it kids player? Yeah, very famous men's
(12:02):
tennis player. I think it's Bobby Riggs. It wasn't Bobby Riggs. Anyway,
he came out within the last couple of years and
said that he threw the match. Oh please, which is
kind of like it was it. It wasn't Jimmy Conner.
Maybe it was Jimmy Conner save face. Yeah, but like
four decades later, which is weird, deathbed saving face. I
(12:22):
think he's still walking around. So um, we're going to
talk more about online gambling and gaming and the distinction
between the two. Um, right after this, you know, Josh,
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squar space, start here, go anywhere. Alright. So you mentioned
that you played, you tried it out for fun. Yeah,
and that is research. Yeah. That is one way though
(14:30):
that they can get you hooked, you know, is to
say that you don't have to pay any money. Um,
did you have to do anything? Did you have to
sign up? No? No, there's a there's a way you
can download the casino software, which seems like a really
bad idea to me. It's um like, do you want
to download the staff software from a Russian site? No?
(14:51):
I don't, but I will play it for free in
my web browser, which is what I did. Was it
really Russian software? No, this was Latvian. But I imagine
there's plenty of Russian uh Russian casinos out there. Uh.
Some of the other differences though, besides being able to
play for fun and get you hooked, is they will
offer different odds a lot of times sports wise than
(15:13):
you can get in a real casino. So the grabster
says that this isn't um. Oh, I'm sorry, you're saying
that they the odds are better. I'm just saying different,
Like sports odds can be different. Um. Usually they're better
for you because the overhead is lower. They don't have to,
you know, pay as much money exactly. They don't have
(15:34):
to give out the free scotches because there's nobody to
physically sit there and drink the scotch by your own scotch.
You're at home at home, So you can get different odds,
and then a lot of times the games themselves will
have different kinds of payouts that you can get in casinos. Um.
But you're also going to have to pay the big
as they call it, um in order to get your money.
(15:57):
And this is a whole different thing we have to
talk about at some point too. But you're gonna be
paying percentages, uh like tenient sometimes just to get your money.
And that's not the same as in Vegas. No, it's
definitely not one of the reasons why you you have
to pay that. And that's on top of the big
like you said, right, that's just basically that's like Okay,
(16:18):
here give us our house money just for letting you play,
and and then here's your transaction fee and then yeah,
but that's when you're trying to withdraw stuff from your
online account. And the reason that they do this and
that the rates are so steep is because they know
that you're an American player and you're not supposed to
be playing technically, that is correct. Historically that has been
(16:40):
very difficult to prosecute because you're in your house playing
a casino in Amsterdam online. So what are they gonna
do unless they've they're like spying on exactly where are
they gonna do? Go after the operators of these um
online gaming sites that are located overseas? Actually, yes, yeah,
that's exactly what did this article Friday? Yeah, this article
(17:02):
on how stuff works was written before Black Friday, so
it was it almost even though it's a grabs article,
it's naive because it was before this. Black Friday happened
on September twenty, two, thousand eleven, where the Feds basically
raided the top three and then some other ones, but
definitely the top three online poker sites and shut them down. Yeah,
(17:24):
Poker Stars, Full Tilt Poker and absolute poker. Uh. And
apparently there were a bunch of uh some say, kinky
allegations and arrest. Well, yeah, they used interpoll to go
arrest the people in other countries for breaking US law.
And yeah, a lot of US lawmakers had big problems
with that, even though they attached a bunch of other
(17:45):
charges like money laundering and fraud. Uh, there were you know,
I'm sure there were some legit illegalities as well, but yeah,
it was a pretty interesting sting operation, to say the least.
So So, there's this thing called the wire Wager Act,
I believe from nine and it said you can't use
(18:06):
any kind of UM communications device basically in the the
US for betting and um. The courts interpreted it in
various ways as the Internet came along and some court
some courts decided like, yeah, this this includes the Internet.
Other courts are like, no, this is too old and
too vague to really include the Internet. So the Feds, um,
(18:30):
we're kind of like making noises about making prosecutions and stuff, uh,
based on this. And when they kept running up against
the fact that it was too old, they came up
with a new law in two thousand and six. The
Unlawful Internet Gaming Enforcement Act, and this one had teeth.
The reason this one had teeth is because it didn't
go after the online gambling people. It went after the
(18:53):
third party processors, the payment processors. And what good is
gambling if you can't get your money right when you're
so all of a sudden visa PayPal, all the banks
are like, wait, we could be prosecuted for processing this payment,
so we're not gonna do it, which left these, um,
these online gambling sites basically just completely um exactly because
(19:20):
like you said, nobody who wants to gamble online wants
to do it for nothing. It's the whole point, you know,
is to try to win some money, right. Um. So
that was two thousand six. That's when like Party Poker
and Poker Stars and all those guys either shut down
or they moved overseas. So those were actually American companies,
(19:40):
but they moved to like the Isle of Man. They
moved to Ireland, and there was one in Costa Rica.
Full Tilt I think was in Costa Rica, and so
the FEDS were like, Okay, we we did our job.
Everything's cool, um. And these guys figured out loopholes and
so the in two thousand eleven when they raided on Friday.
(20:01):
The guy who actually ended up in real trouble was
this dude who served as the payment processor for the
three biggest online poker sites in the world. So not
the gambler, not the casino, it was the guy who
and it wasn't a company, it was a guy. And
the reason he got in troubles because he started he
(20:21):
made all these phony businesses up to get banks to
process payments so the banks wouldn't think that they were
doing any kind of illegal activity, right, So he he
learned money, so he did get in big trouble um,
and so did the three the top three sites. Until
that same year, all of a sudden, this crazy war
(20:45):
on online gambling was totally reversed by the Obama administration.
Within the Obama administration, It's not like this was the
Bush administration like aggressively prosecuting people for it. This was
the Obama administration. And then all of a sudden, Department
of Justice came up with a new opinion and said,
you know what, we don't think the Wire Wager Act
(21:05):
applies to this anymore, and we don't think that people
should be prosecuted for online gambling if the states allow it. Yeah,
and I think correct me if I'm wrong. Wasn't one
of the big reasons behind this, like we need to
start regulating this fast and get out in front of it,
or else it's gonna be a huge mess. Yes, it's
gonna be a huge mess. Um, it could be a
(21:27):
huge boon for UM states for taxes and grabstrre mentions
in this article that people tended to gravitate towards UM
sites that had like a dot n L domain or
a dot AU domain because they knew that Australia and
UM the Netherlands heavily regulate this kind of stuff. They're legit,
(21:48):
and so online casinos that operate out of those countries
have to tell the line, which means that if you win,
you're gonna get paid. So they provided a model that like, yes,
if this is legal and regulated, people will come to
it and you can actually manage it pretty well. Yeah.
So in other words, I don't have to set up
an offshore bank account or send money orders to some
shady h third party internet site that may or may
(22:13):
not pay you exactly. Um. I actually um. Last year
I was the commissioner of my fantasy Football League and
we all throw in twenty bucks. It's no big deal,
like twelve of us, you know, just to make a
little more interesting. At the end of the year, you
win the money, and um, I said, just pay me
through PayPal. And a few people said, you know, when
(22:34):
you go to make the payment, it's like writing a check.
You put what it's for. They were like fantasy football
payment and PayPal flagged it and wouldn't allow it through.
And I didn't even know at the time that was
against the laws. Like really, and so I, you know,
had them either send me money or just say, don't
put what it's for. Done exactly because apparently apparently anything
(22:55):
but fantasy football. Yeah, apparently that made me, I guess,
an illegal bookie. Yeah, they could have gotten you, Enrico probably.
So we're gonna we're gonna talk about legal online gambling
and all that kind of stuff right after this. Alright,
(23:15):
so today, my friend, it is a state issue, as
you said, still technically federally illegal. It's so weird when
this country. It's always amazes me, like this is the
illegal the United States, but it's legal in the state
if they say it's okay. Sports sports betting is still
very much illegal online sports betting. The Justice Department said,
(23:38):
it's very clear that this law was originally written, this
law that we've been aggressively prosecuting for for forty years,
fifty years, was actually really just pertained a sports betting
because that's chance. Is that correct? Is that why? That's
not necessarily why because like roulette is chance, and you
can do that now in some states. So it's it's
strictly because the laws said sports. Okay, it was written
(24:02):
in the law. But fantasy football now, one of the
big new trends are these day play sites for fantasy football.
What is it call one it's called Draft Kings, But
there's a name for the whole thing. It's not fantasy football.
It's it's like UM League draft or something like that.
They call it daily fantasy sports. In this article, that's
(24:24):
a little more generic than I was thinking. Yeah, but
there's one called Draft Kings, and there's another one, and
I hear these all the time on sports radio, the
ads for him uh fan duel dot com, where you
can draft the team in a day and have your team,
you know, play that weekend's football games and then cash
out that weekend as well. UM and so it's not
(24:46):
the same thing as like just your ESPN fantasy football league,
where it's just a season long thing for fun or
maybe a little bit of money thrown into pool. This
is weekly, and depending on the sport, it could be
daily exactly. Um, and all the sports like they allow
that though, because I don't think that's considered skill. So
fantasy football is currently considered skill and is allowed, I believe,
(25:09):
which is hysterical. This daily fantasy thing is apparently considered
a little more gambly, I guess, So it's it's in
a little more of a gray area, even though everybody's
is kind of currently ignoring it. But all of the
articles for some reason, Forbes is like really really into
online gambling and has been doing a lot of coverage
(25:30):
of it over the years. Um. And so from reading
these Forbes articles, the way that they track anything is
where the money's going. And they talked about, um, how
these daily fantasy foot like fan Duel are attracting like
tons of venture capital right now. There's just tens of
millions of dollars being thrown at these tiny little startups
(25:52):
that just allow you to do like daily or weekly
fantasy sports stress. Um, and that suggests that everybody on
the street Wall Street thinks that, um, there's going to
be either a federal law that allows it or this
federal ruling from two thousand eleven twelve that says it's cool,
(26:14):
just leave it up to the states is going to
lead to basically state across the country, state laws that
regulate and allow this kind of stuff, so that it
seems to be if you follow the money, the tide
is turning and online gambling is going to be where
it's at. Yeah, I mean right now you said gray
area earlier. There's a lot of gray area, um, all
(26:36):
over the country and all the states, because like you said,
some states would like let you play the lottery. Some
states will let you go to an O T b
uh and bet on racehorses or bet on racehorses at
home online. Um, some let you bet on reality TV online,
and some don't some. There are now three states I think, Delaware,
(26:57):
New Jersey, and Nevada that have fledged online poker online gambling,
and I think Nevada is actually running out of Nevada right.
So Nevada, as far as I know, hilariously only offers
online poker. They don't have a lottery either to do
know that, Yeah, they probably don't need one. I guess not,
(27:20):
but yeah, that's probably what But you could always need
more money, sure, you know, especially if you're Nevada, You're like,
give me more money. Yeah, but yeah, they don't have it.
So I think that you're right though, that Nevada has
opened up playing two people outside of their state, outside
of the country. Yeah, but originally they were only allowing
(27:41):
people in Nevada to play. But I think isn't the
website owned and run in that state as well? It's
not like an out of the country deal. Yes, yeah,
I see what you're saying. Yeah, um, and that's the
way you New Jersey's is too. So there's this whole
secondary um industry that's grown up around state sanctioned online gambling,
which is geolocation services which tracks where you, the computer
(28:05):
user or online gambler are located, so they're watching it
and if there yeah, well and if your computer comes
up as outside of the state of New Jersey, you'll
be blocked from playing. If you come up as inside
of New Jersey, you can play New Jersey, which has
a complete um suite of online gambling available and they
(28:27):
guess Chris Christie said there it was gonna be a
billion dollar industry in its first year, or there's gonna
be a billion dollars in tax revenue, and it came
to be like a tenth of that. So it's not
quite as Um, it's not catching on like wildfire like
they thought. But supposedly the casinos that are still standing
in Atlantic City are still standing because those are the
(28:47):
ones that went to the troubles setting up online gambling sites. Well,
that brings us to a good point. Um, there are
a lot of brick and mortar casino owners, notably um,
what's his name, Sheldon, Sheldon out Adelson. Yeah, those are
some of the biggest fat cats casino owners in Vegas,
and of course they feel threatened, even if they think.
(29:11):
Addleson's big quote was click your mouth, lose your house.
And he's saying we're gonna lose half a million jobs. Uh,
and people are gonna stop coming to casinos. I'm sure
they're also getting into the online casino game if they
were smart. I'm sure they are. But um, it raises
a good point though, Like Vegas, it used to be
(29:32):
that Vegas made all their money on gambling and you
could go and stay in a room for ten bucks
and eat for two dollars. But it's not the same anymore.
In Vegas is a destination family vacation spot with all
kinds of revenues coming in, and you need people there
to bring those revenues in to see the shows and
to take your kid to the stupid indoor amusement park
(29:54):
and uh by the now not so cheap food. But
but that raises question, then do you even need the
gambling if you have all this other stuff to attract people, Like,
do you need the casino? And even if you do
need the casino, if you have like the roller coaster
and the indoor like amusement park and all that stuff
(30:15):
that you're taking the kids to like, as long as
you're not losing money by having a casino open, it
doesn't seem like online gambling would detract from that. Yeah,
I see what you mean. I mean those casinos are
never losing money. Oh man, even Donald Trump can't make
money in Atlantic City. Well, that's probably just from overhead
(30:38):
in low attendance. They're not actually, I mean, the house
is always winning. Oh, I see what you mean. You
know what I mean, But less unless they own the
casino exactly. Uh. Yeah, we got a great episode on
casinos that you should look into, and we have one
on addiction to which is why we're not touching too
much upon gambling addiction. Yeah, I mean there's a different effort.
(31:00):
When I was researching this, that's all different things. Obviously,
it seems like it would make it super easy to
get addicted for online gambling. But there was this one
Harvard Medical School study of forty people that they said
the overwhelming majority of online gamblers playing a very moderate manner,
spending minimal amounts. I don't know how accurate that is though.
That was that's site like misused apostrophes and stuff like that.
(31:24):
I was like, your credibility is a little bit out
the window because of your grammar. Um, yeah, it's well,
or maybe it's like any other kind of gambling. If
you're a moderate gambler, then you'll probably stay that way.
But if you have a problem with it, it's certainly
gonna make it easier to throw away a bunch of
dough And it's not you know, it's not money cash
money in front of at least in Vegas. That's why
(31:45):
they used one reason they use chips is to kind
of trick your brain a little bit, right, to make
money more abstract. Yeah, but there's nothing more abstract than
just signing your bank account to something online and clicking it. Yeah,
because the little wheel on Greedy Goblins is like mesmerizing.
It's well, it's also it's small too, So I mean,
you see the slot going, but the amount that you
(32:07):
have in the bank is not that big, and it
doesn't seem like it's linked to real money. In my case,
it wasn't linked to any real money, but I could
see very easily how it just seems like a part
of a game, like a computer game. And apparently there's
a whole thing called slots for tots um, which is, uh,
if you were against online gambling, this stuff drives you crazy.
(32:29):
It's it's basically like Disney versions of casino games for
little kids, like apps and things like that where there's
no gambling going on. But it's basically like it's like
Joe Campbell, it's like prepare for your adulthood as a
gambler or a smoker or whatever. Make it cartoon in
(32:50):
fun exactly, or a McDonald's consumer or something like that. Yeah,
I would be worried. Uh, it seems like an online casino,
you can find a reputable one, but it seems like
it would be really really easy because the cards aren't
in front of you, to cheat the player every time. Well, okay,
that's another thing too that the grabster points out. So
(33:11):
if you're an American right now, it's still it's kind
of a gray area, especially if your state doesn't allow
online gambling. Um, so you are still a potential target
for shady online gambling sites. So, and one of the
things they can do is cheat you out of odds.
That's why if you play an Australian site, you can
(33:34):
feel comfortable that the Australian government has vetted this computer
program and found that the odds are there. It's the
real deal. Like if you're playing blackjack, that is a
fifty two card deck and every card is in there,
even though it's virtual. That's what I would worry about
is if you start winning too much, they'd be like,
let's just have this guy lose the next let's put
(33:54):
the governor on this thing. Yeah, not the governor of Australia, right,
because he's called the Prime minister. And you know, if
you listen to the Casinos podcast. Vegas used to be
fraught with rigged games as well. So, um, it's the
same thing. It's just the wild West right now as
far as the online version goes. So so Grabster gives
a couple of pieces of advice. UM. One, he said,
(34:17):
especially when you're trying out a new one and you're
using a payment processor and that kind of stuff. He said,
open up an account with a small amount of money initially,
just to see if it works. He said, put a
little in, try it out, try to get it back out. Um,
and if everything seems legitimate, then you can start to
add more money if that's what you want to do.
(34:38):
He also said that you, um, no matter how much
trust you have for this company, you want to get
your money out very regularly, and frequently they get under,
you're you're done, they go under, they get rated whatever.
You just want your money out. And again we should
say this is illegal in a lot in some weird
(34:58):
way still in the United States, so the Feds could
conceivably come along and take your money. Yeah, and you're
also signing up for terms of service, so you've their
age requirements and um, if you fraudlently sign up for
something is an underage gambler, then you're breaking the law
there too, and then recommend that. There's one more thing, man,
I wanted to talk about. So when the FEDS in
(35:19):
two thousand eleven rated those top three poker sites um
and then in the same year, the Department of Justice
issued that thirteen page memo that said, I think we've
been misreading this. Uh, those sites that were rated, UM,
the Department of Justice brokered a deal where one of
the sites that was rated bought the assets of its
(35:43):
rival that was also rated, with the Department of Justice
taking the money and then distributing the assets to the
other illegal gambling operations. They served as the middleman for
a merger. I would guess that they got a significant
cut of that the big Yeah, and that's crazy. The
Department of Justice was brokering a deal between online gambling outfits. Unbelievable. Man.
(36:08):
So that's it. That's online gambling. If you want to
know more about it, I suggest you go look it
up on Forbes because they have a ton of articles
on it. But first go to how stuff works dot
com and type in online gambling, and then I'll bring
up an excellent grab store articles start you out. And
since I say grab stir, it's time for listener mail.
(36:29):
I'm gonna call this the Brazilian. Hey guys, my name
is Raphael. I'm your greatest fan in Brazil. I've listened
to at least a hundred episodes. You keep surprising me
with new interesting topics. I love the Soccer Show, especially
because you know absolutely nothing about it, which was very
funny for Brazilian. I thought we were never going to
talk about that one again. I love podcasts because they
(36:50):
helped me improve my English, and I can listen to
them while I am riding the bike at the gym
or climbing. Last week I was listening to other podcasts
and I must say that you're winning the competition of
good knowledge providers. First, I listen to a program of
Freaconomics Radio called tell Me Something I Don't Know, and
one of the contenders presented the New York prohibition of
pinball machines to the early seventies. They might didn't know,
(37:12):
but I knew because of your show on pinball. I
remember when that happened. Do you remember that? What? We
got a lot of email that um, like two weeks
after we did our pinball show. This guy on Freaconomics
Radio on that show, but the guy was a pinball expert.
Because it did a little digging. He did not copy us.
(37:33):
Oh no, rarely do people copy as I think. No,
I think you're totally right. Second. Almost at the same
day that you launched the Nuclear Fusion show, the BBC
podcast in Our Time with Melvin Bragg invited three experts
to discuss nuclear fusion. Both programs are awesome, but yours
was funny. Only yours was funny. I could see that.
(37:55):
My conclusion is that you are beating the heck out
of other podcasts. Congratulations, WHI should all the best, And
if I might add, challenge you to make a show
on deflation and inflation. I'm sure that the crazy Latin
American experiences to challenge high inflation will amaze you. Ah.
We have. We've talked about that a bunch. Yeah, stag inflation.
We did one Rafael called what is stag inflation? Yea um,
(38:17):
And we've talked about deflation currency. I think currency the
stuff you should know. Guide to economics, that's right, super
stuff guide even that's right. So Raphael, the information is
out there for you and he says p S. Could
you please tell me if my English is actually improving? Um,
I don't know where you started. We don't have a
baseline rough, but your English is pretty darn good. It
(38:37):
is a couple of like little charming Latin americanisms, I think.
But um, I think you did a great job. Yeah. Thanks,
we're your biggest fans. That's right. We appreciate all the
flattering stuff. Thanks for that. If you want to flatter
Chuck and I, we're always up for that. And by
Chuck and I, of course your grammar nazis I mean
(38:58):
Chuck and me. Don't listen to that part, Raphael uh.
You can tweet to us at s Y s K podcast.
You can join us on Facebook dot com, slash stuff
you Should Know. You can send us an email to
Stuff Podcast at how stuff Works dot com, and as always,
join us at our home on the web, Stuff you
Should Know dot com For more on this and thousands
(39:21):
of other topics. Is it how stuff Works dot com.
Welcome to you Stuff you should know from house Stuff
Works dot com. Hey, and welcome to the podcast. I'm
Josh Clark. There's Charles W. Chuck Bryant, and there's Jerry
for the third time, and this is stuff you should know.
The podcast two ball starts. Yeah. Really, Uh you a
(00:23):
gambler at all? Uh? No, I mean not really. I'm
I would lose too much money. But you've like been
to a casino and I mean, like, yeah, I've gambled before.
I'm just I realized pretty quickly that I'm a terrible
gambler now, like I'm an addict or anything like that.
(00:44):
Like I'd never win. So losing money's not fun. No, no,
it isn't. I enjoy I don't like Vegas at all,
as you know, but when I've had to go there,
I do enjoy a little gaming. Um, but I always
just I'm very disciplined to set aside a certain amount
of money. I'm like, I'm basically like paying that to
(01:05):
have a good time gambling. If I lose it all,
then that's what. Because it is enjoyable. I enjoy it.
And I did a little sports gambling at one point
in my life and got a got out of a
sort of a tight squeeze once and then I was like,
not doing that again. Did you have your thumbs broken
or something? No. I just owed um a lot of
money going into NFL Sunday, and I was like, I
(01:27):
can't afford this. So I did something really stupid and
I made ny two bets equal to that large amount
of money, one of both and broke even. And I
was like, no more. That was good that you weren't like, Okay,
I'm on the street and keep it going. That scared
me straight, you know. Um, for this episode, I did
(01:48):
a little online gambling. You know they let you try
it out for free or whatever. I was down five
d bucks in like four minutes. Well when it's not
when it's fun money then like not real money, it's
seed a bet a lot. I was just betting like
the normal amount. I just I was playing a roulette
called the Greedy Goblins. What site was it? Bovada? Have
(02:11):
you heard of Bovada? It was the first one that
came up when I put it online gambling. But it
was a classy site. It was a classy simulated casino,
pretty waitresses, I mean, well, there were pictures of people yeah,
you know, no one was actually moving except the three
D Goblins. They try to simulate a casino as much
as possible, right, A little bit like the background of
(02:32):
the website was like felt. I think maybe it was
like that, but um no, it seemed to be one
of the nicer ones. You could tell that the programmers
like really put some thought into it. But the the
the roulette or not the roulette the slot I was playing?
Did I say roulette? First? I was playing a slot
called Greedy Goblins, and it was nice looking, but I
(02:53):
lost very quickly, so I was like, forget this. I'm
so glad I'm not addicted to online gambling, because that
would be really rough, I'm sure, And actually, I mean
they say the online gambling is even possibly more addictive
than regular gambling, just because of its ubiquity and ease
of accessibility. Like not only can you get on the
computer at home, now the big pushes mobile, so you
(03:16):
can gamble anytime, anywhere, and if you have a problem, yeah,
that's super super dangerous for some folks. You can gamble
in your warm up pants, your shirt off, or your
city jogger pants. I think some casinos in Vegas you
could do that probably, h Maybe it's like the Golden
Nugget or one of the old ones, whether they're like
(03:37):
just just give us your money please, we're hurting so bad,
or in all of Atlantic City. Sure. So. Um, you
want to talk about the history of online gambling, you know,
it hasn't been around forever. It hasn't. Gambling might be
one of the oldest past times, but online gambling is
comparatively new. Yeah. In the mid nineteen nineties and Antigua
(03:59):
and Barbuda, they passed a law called the Free Trade
and Processing Act, which basically paved the way for some
of these smaller Caribbean island nations to get into the
gambling business. Well for that nation specifically, Yeah, to get
into the online gambling business. Right. Specifically, they created out
of thin air their own ability to create licenses for
(04:22):
online casinos. So they became the haven for online casino.
It's a pretty good idea, it is, and especially considering
that there was no such thing as online casinos yet.
Like that's some foresight right there. Yeah. Around the same time,
a company called Microgaming started the first uh kind of
workable software for online gaming, and that came along at
(04:43):
just the right time and U Canada they started opening
up some online casinos and basically all over the world
they started popping up. I think there were more than
two hundred online casinos and revenues in the late nineties
of up to eight hund in thirty million a year,
which is chump changed now. But um back then, you know,
(05:06):
you'll notice we did not mention the United States because
it was there's a lot of legality issues. Up to today,
you have online gambling virtually out of the gate. The
United States is like, no, that's illegal. Completely ignore the
fact that forty plus states have state lotteries. You can't
gamble online. And actually I read an article where Antigua
(05:29):
sued or filed the complaint against the United States with
the World Trade Organization. The w t O sided with
Antigua and they granted Antigua like a hundred and twenty
million dollars worth of freedom to distribute American intellectual property
(05:49):
without paying any royalties because America closed down it's um
it's population to Antigua's online casinos. And Antigua said, you
guys are violating treaties we have interesting and the w
t O actually sided with and levied sanctions against UM.
The US sided with Antigua Levi sanctions against US, which
(06:11):
is mine boxing. Yeah, that probably doesn't happen a lot. Uh.
In the early two thousand's, you could, all of a sudden,
thanks to a company called Betfair, wage wager appeared appear
bets on sports. A lot of this early stuff was
sports UM wagering, right, and then online poker of course
in the late nineties. UM really started to catch on.
(06:33):
In the late nineties and early two thousands, UH company
called Poker Spot and part Party Poker and Poker Stars.
They all have silly names, but UM they really hit
on it big when they UM allowed you to qualify
online for these real World Series of Poker tournaments. And
(06:55):
the one guy, Chris Moneymaker actually won the World Series
of Poker in two thousand three after having qualified online.
And then everyone was like, WHOA, that's a big deal
because I think he ended up having to pay in
like forty bucks to qualify for the World Series of Poker. Yeah,
and he didn't have to travel to Vegas and you know,
or Atlantic City or wherever else you can go to gamble. Yeah,
and that's the way it was going to and everybody
(07:16):
was really up on UM poker, especially Party Poker and
Poker Stars, and UM the US ended up cracking down
on it, which you'll talk about a little more in
detail coming up soon. But UM, let's talk about just
online gambling and how it's different, because it seems well,
there there's some pretty obvious UM distinctions, like one gift
(07:40):
to travel to Atlantic City or Las Vegas or your
local Indian reservation and sit there and and gamble in person.
That's I mean you might say, well, yes, obviously, if
you're gambling online, you can do it at home. But
that's that's there's a big difference. There's a lot of
nuances in between those two. That obvious difference between the two.
(08:03):
Sure one of them is you can play a lot
faster without all the chit chat and all the decision
making of the little old lady next to you at
the blackjack table. UM and I wrote an article where
with a guy named John Googliano or Gagliano. I mean
he's a New Jersey professional poker player, John the Goog.
I think it was like Googs thirty three years, gags
(08:24):
thirty three something like that. Seriously, Anyway, he um, he
plays up to a thousand hands an hour. Wow, he
plays of no poker. He's a pro poker player. He plays, um,
maybe a hundred hundred hands an hour per table, and
he plays up to about ten tables at a time.
About he's got to be playing more than one. Oh yeah,
so he's playing like a thousand hands an hour um.
(08:46):
And he says in real life he can play maybe
twenty five tops if he's really working. And a lot
of it is the chit chat the dealers. This is,
you know, and not being able to physically play ten
hands at a time. But see, that's the experience I
enjoy about gambling is being at the table and chit
chatting and having a couple of you know, free scotches.
It's like a good social fun social like a craps table,
(09:09):
a lot of fun okay to stand around. So yes,
I think that's what makes Gags thirty three a professional
poker player. You know, he's in it for the money. Yeah,
he doesn't care about all that stuff, and probably to
win too. Um. So yeah, it's a lot quicker. You
can win and lose money at the drop of a hat. Um.
And like you said, they try to dress it up
(09:29):
and make it look and feel like a real casino. UM.
Other than that, though, it's it's a lot of the
same games, like pretty much any game you can play
in a real casino you can find online from like
lotteries and Keno to Roulette and all that stuff. Yeah,
Bovada had UM more than a hundred and fifty different games. Yeah,
(09:51):
a lot of them more slots, but they did have
all the regular stuff too, in tons of different poker UM.
And then, like you said, sports betting, and then there's
a subsection of sports betting inter tainment betting, like you
can bet on the outcome of the two thousand and
sixteen presidential election or the oscars um apparently spelling bees,
competitive eating contests. Reality TV, Yeah, which I didn't get
(10:13):
because reality TV is not actually like unscripted. Yeah, like
you could easily find out from a producer what happened
on the show that was shot five months before. It's
not like it's live, you know, or who's going to
get the rose or whatever. I think those UM episodes
are live a lot of times. They've got to be
(10:35):
like the American Idol finale or the Survivor finale a
lot of or a Big Brother. But I I just
assume all those are extraordinarily rigged one way or another,
and that anybody connected well enough could find out and
make some big money, which I would guess that the
people laying on the bookers, you know, the bookies, the bookies. Uh,
they they would know well enough to stay away from
(10:57):
that kind of stuff because it could be rigged. But
wors is never right, So is that? Were you being facetious?
Of course sports is rigged a lot of times. Really, Yeah,
you kidn't me, Like, what we're not talking is Rourkes
boxing fight. No, boxing is notoriously historically fraught with boxers
taking dives. Okay, I thought you meant like Monday Night
(11:19):
football or something like that. I mean, the NFL is
a pretty good track record, but there most of the
pro sports have had one major betting throwing games scandal
in there at some point. Yeah. I don't think it
happens all the time, but um yeah, like the Black
Sox was baseball. Man, that was a good movie, Eight
Men Out and uh I think, um yeah, you'll hear
(11:41):
about every once in a while, like an n C
double A basketball team will come out years later like
we threw all those games? Oh, yeah didn't. Um, who
was it that played Billy Jane King? The man who
played Billy Jane King? Oh, Bobby Riggs? No? Who? Well,
well guy, was it kids player? Yeah, very famous men's
(12:02):
tennis player. I think it's Bobby Riggs. It wasn't Bobby Riggs. Anyway,
he came out within the last couple of years and
said that he threw the match. Oh please, which is
kind of like it was it. It wasn't Jimmy Conner.
Maybe it was Jimmy Conner save face. Yeah, but like
four decades later, which is weird, deathbed saving face. I
(12:22):
think he's still walking around. So um, we're going to
talk more about online gambling and gaming and the distinction
between the two. Um, right after this, you know, Josh,
back in the old days, let me tell your story.
If you want a website, you had to learn how
(12:43):
to code, you had to learn how to design websites.
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they're now progressing even further. Squarespaces just hold out the
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(13:04):
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their customer support is seven right, They haven't done away
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(13:25):
you've got that seven support, vi alive, chat and email.
And at only eight dollars a month, you can get
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(14:08):
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squar space, start here, go anywhere. Alright. So you mentioned
that you played, you tried it out for fun. Yeah,
and that is research. Yeah. That is one way though
(14:30):
that they can get you hooked, you know, is to
say that you don't have to pay any money. Um,
did you have to do anything? Did you have to
sign up? No? No, there's a there's a way you
can download the casino software, which seems like a really
bad idea to me. It's um like, do you want
to download the staff software from a Russian site? No?
(14:51):
I don't, but I will play it for free in
my web browser, which is what I did. Was it
really Russian software? No, this was Latvian. But I imagine
there's plenty of Russian uh Russian casinos out there. Uh.
Some of the other differences though, besides being able to
play for fun and get you hooked, is they will
offer different odds a lot of times sports wise than
(15:13):
you can get in a real casino. So the grabster
says that this isn't um. Oh, I'm sorry, you're saying
that they the odds are better. I'm just saying different,
Like sports odds can be different. Um. Usually they're better
for you because the overhead is lower. They don't have to,
you know, pay as much money exactly. They don't have
(15:34):
to give out the free scotches because there's nobody to
physically sit there and drink the scotch by your own scotch.
You're at home at home, So you can get different odds,
and then a lot of times the games themselves will
have different kinds of payouts that you can get in casinos. Um.
But you're also going to have to pay the big
as they call it, um in order to get your money.
(15:57):
And this is a whole different thing we have to
talk about at some point too. But you're gonna be
paying percentages, uh like tenient sometimes just to get your money.
And that's not the same as in Vegas. No, it's
definitely not one of the reasons why you you have
to pay that. And that's on top of the big
like you said, right, that's just basically that's like Okay,
(16:18):
here give us our house money just for letting you play,
and and then here's your transaction fee and then yeah,
but that's when you're trying to withdraw stuff from your
online account. And the reason that they do this and
that the rates are so steep is because they know
that you're an American player and you're not supposed to
be playing technically, that is correct. Historically that has been
(16:40):
very difficult to prosecute because you're in your house playing
a casino in Amsterdam online. So what are they gonna
do unless they've they're like spying on exactly where are
they gonna do? Go after the operators of these um
online gaming sites that are located overseas? Actually, yes, yeah,
that's exactly what did this article Friday? Yeah, this article
(17:02):
on how stuff works was written before Black Friday, so
it was it almost even though it's a grabs article,
it's naive because it was before this. Black Friday happened
on September twenty, two, thousand eleven, where the Feds basically
raided the top three and then some other ones, but
definitely the top three online poker sites and shut them down. Yeah,
(17:24):
Poker Stars, Full Tilt Poker and absolute poker. Uh. And
apparently there were a bunch of uh some say, kinky
allegations and arrest. Well, yeah, they used interpoll to go
arrest the people in other countries for breaking US law.
And yeah, a lot of US lawmakers had big problems
with that, even though they attached a bunch of other
(17:45):
charges like money laundering and fraud. Uh, there were you know,
I'm sure there were some legit illegalities as well, but yeah,
it was a pretty interesting sting operation, to say the least.
So So, there's this thing called the wire Wager Act,
I believe from nine and it said you can't use
(18:06):
any kind of UM communications device basically in the the
US for betting and um. The courts interpreted it in
various ways as the Internet came along and some court
some courts decided like, yeah, this this includes the Internet.
Other courts are like, no, this is too old and
too vague to really include the Internet. So the Feds, um,
(18:30):
we're kind of like making noises about making prosecutions and stuff, uh,
based on this. And when they kept running up against
the fact that it was too old, they came up
with a new law in two thousand and six. The
Unlawful Internet Gaming Enforcement Act, and this one had teeth.
The reason this one had teeth is because it didn't
go after the online gambling people. It went after the
(18:53):
third party processors, the payment processors. And what good is
gambling if you can't get your money right when you're
so all of a sudden visa PayPal, all the banks
are like, wait, we could be prosecuted for processing this payment,
so we're not gonna do it, which left these, um,
these online gambling sites basically just completely um exactly because
(19:20):
like you said, nobody who wants to gamble online wants
to do it for nothing. It's the whole point, you know,
is to try to win some money, right. Um. So
that was two thousand six. That's when like Party Poker
and Poker Stars and all those guys either shut down
or they moved overseas. So those were actually American companies,
(19:40):
but they moved to like the Isle of Man. They
moved to Ireland, and there was one in Costa Rica.
Full Tilt I think was in Costa Rica, and so
the FEDS were like, Okay, we we did our job.
Everything's cool, um. And these guys figured out loopholes and
so the in two thousand eleven when they raided on Friday.
(20:01):
The guy who actually ended up in real trouble was
this dude who served as the payment processor for the
three biggest online poker sites in the world. So not
the gambler, not the casino, it was the guy who
and it wasn't a company, it was a guy. And
the reason he got in troubles because he started he
(20:21):
made all these phony businesses up to get banks to
process payments so the banks wouldn't think that they were
doing any kind of illegal activity, right, So he he
learned money, so he did get in big trouble um,
and so did the three the top three sites. Until
that same year, all of a sudden, this crazy war
(20:45):
on online gambling was totally reversed by the Obama administration.
Within the Obama administration, It's not like this was the
Bush administration like aggressively prosecuting people for it. This was
the Obama administration. And then all of a sudden, Department
of Justice came up with a new opinion and said,
you know what, we don't think the Wire Wager Act
(21:05):
applies to this anymore, and we don't think that people
should be prosecuted for online gambling if the states allow it. Yeah,
and I think correct me if I'm wrong. Wasn't one
of the big reasons behind this, like we need to
start regulating this fast and get out in front of it,
or else it's gonna be a huge mess. Yes, it's
gonna be a huge mess. Um, it could be a
(21:27):
huge boon for UM states for taxes and grabstrre mentions
in this article that people tended to gravitate towards UM
sites that had like a dot n L domain or
a dot AU domain because they knew that Australia and
UM the Netherlands heavily regulate this kind of stuff. They're legit,
(21:48):
and so online casinos that operate out of those countries
have to tell the line, which means that if you win,
you're gonna get paid. So they provided a model that like, yes,
if this is legal and regulated, people will come to
it and you can actually manage it pretty well. Yeah.
So in other words, I don't have to set up
an offshore bank account or send money orders to some
shady h third party internet site that may or may
(22:13):
not pay you exactly. Um. I actually um. Last year
I was the commissioner of my fantasy Football League and
we all throw in twenty bucks. It's no big deal,
like twelve of us, you know, just to make a
little more interesting. At the end of the year, you
win the money, and um, I said, just pay me
through PayPal. And a few people said, you know, when
(22:34):
you go to make the payment, it's like writing a check.
You put what it's for. They were like fantasy football
payment and PayPal flagged it and wouldn't allow it through.
And I didn't even know at the time that was
against the laws. Like really, and so I, you know,
had them either send me money or just say, don't
put what it's for. Done exactly because apparently apparently anything
(22:55):
but fantasy football. Yeah, apparently that made me, I guess,
an illegal bookie. Yeah, they could have gotten you, Enrico probably.
So we're gonna we're gonna talk about legal online gambling
and all that kind of stuff right after this. Alright,
(23:15):
so today, my friend, it is a state issue, as
you said, still technically federally illegal. It's so weird when
this country. It's always amazes me, like this is the
illegal the United States, but it's legal in the state
if they say it's okay. Sports sports betting is still
very much illegal online sports betting. The Justice Department said,
(23:38):
it's very clear that this law was originally written, this
law that we've been aggressively prosecuting for for forty years,
fifty years, was actually really just pertained a sports betting
because that's chance. Is that correct? Is that why? That's
not necessarily why because like roulette is chance, and you
can do that now in some states. So it's it's
strictly because the laws said sports. Okay, it was written
(24:02):
in the law. But fantasy football now, one of the
big new trends are these day play sites for fantasy football.
What is it call one it's called Draft Kings, But
there's a name for the whole thing. It's not fantasy football.
It's it's like UM League draft or something like that.
They call it daily fantasy sports. In this article, that's
(24:24):
a little more generic than I was thinking. Yeah, but
there's one called Draft Kings, and there's another one, and
I hear these all the time on sports radio, the
ads for him uh fan duel dot com, where you
can draft the team in a day and have your team,
you know, play that weekend's football games and then cash
out that weekend as well. UM and so it's not
(24:46):
the same thing as like just your ESPN fantasy football league,
where it's just a season long thing for fun or
maybe a little bit of money thrown into pool. This
is weekly, and depending on the sport, it could be
daily exactly. Um, and all the sports like they allow
that though, because I don't think that's considered skill. So
fantasy football is currently considered skill and is allowed, I believe,
(25:09):
which is hysterical. This daily fantasy thing is apparently considered
a little more gambly, I guess, So it's it's in
a little more of a gray area, even though everybody's
is kind of currently ignoring it. But all of the
articles for some reason, Forbes is like really really into
online gambling and has been doing a lot of coverage
(25:30):
of it over the years. Um. And so from reading
these Forbes articles, the way that they track anything is
where the money's going. And they talked about, um, how
these daily fantasy foot like fan Duel are attracting like
tons of venture capital right now. There's just tens of
millions of dollars being thrown at these tiny little startups
(25:52):
that just allow you to do like daily or weekly
fantasy sports stress. Um, and that suggests that everybody on
the street Wall Street thinks that, um, there's going to
be either a federal law that allows it or this
federal ruling from two thousand eleven twelve that says it's cool,
(26:14):
just leave it up to the states is going to
lead to basically state across the country, state laws that
regulate and allow this kind of stuff, so that it
seems to be if you follow the money, the tide
is turning and online gambling is going to be where
it's at. Yeah, I mean right now you said gray
area earlier. There's a lot of gray area, um, all
(26:36):
over the country and all the states, because like you said,
some states would like let you play the lottery. Some
states will let you go to an O T b
uh and bet on racehorses or bet on racehorses at
home online. Um, some let you bet on reality TV online,
and some don't some. There are now three states I think, Delaware,
(26:57):
New Jersey, and Nevada that have fledged online poker online gambling,
and I think Nevada is actually running out of Nevada right.
So Nevada, as far as I know, hilariously only offers
online poker. They don't have a lottery either to do
know that, Yeah, they probably don't need one. I guess not,
(27:20):
but yeah, that's probably what But you could always need
more money, sure, you know, especially if you're Nevada, You're like,
give me more money. Yeah, but yeah, they don't have it.
So I think that you're right though, that Nevada has
opened up playing two people outside of their state, outside
of the country. Yeah, but originally they were only allowing
(27:41):
people in Nevada to play. But I think isn't the
website owned and run in that state as well? It's
not like an out of the country deal. Yes, yeah,
I see what you're saying. Yeah, um, and that's the
way you New Jersey's is too. So there's this whole
secondary um industry that's grown up around state sanctioned online gambling,
which is geolocation services which tracks where you, the computer
(28:05):
user or online gambler are located, so they're watching it
and if there yeah, well and if your computer comes
up as outside of the state of New Jersey, you'll
be blocked from playing. If you come up as inside
of New Jersey, you can play New Jersey, which has
a complete um suite of online gambling available and they
(28:27):
guess Chris Christie said there it was gonna be a
billion dollar industry in its first year, or there's gonna
be a billion dollars in tax revenue, and it came
to be like a tenth of that. So it's not
quite as Um, it's not catching on like wildfire like
they thought. But supposedly the casinos that are still standing
in Atlantic City are still standing because those are the
(28:47):
ones that went to the troubles setting up online gambling sites. Well,
that brings us to a good point. Um, there are
a lot of brick and mortar casino owners, notably um,
what's his name, Sheldon, Sheldon out Adelson. Yeah, those are
some of the biggest fat cats casino owners in Vegas,
and of course they feel threatened, even if they think.
(29:11):
Addleson's big quote was click your mouth, lose your house.
And he's saying we're gonna lose half a million jobs. Uh,
and people are gonna stop coming to casinos. I'm sure
they're also getting into the online casino game if they
were smart. I'm sure they are. But um, it raises
a good point though, Like Vegas, it used to be
(29:32):
that Vegas made all their money on gambling and you
could go and stay in a room for ten bucks
and eat for two dollars. But it's not the same anymore.
In Vegas is a destination family vacation spot with all
kinds of revenues coming in, and you need people there
to bring those revenues in to see the shows and
to take your kid to the stupid indoor amusement park
(29:54):
and uh by the now not so cheap food. But
but that raises question, then do you even need the
gambling if you have all this other stuff to attract people, Like,
do you need the casino? And even if you do
need the casino, if you have like the roller coaster
and the indoor like amusement park and all that stuff
(30:15):
that you're taking the kids to like, as long as
you're not losing money by having a casino open, it
doesn't seem like online gambling would detract from that. Yeah,
I see what you mean. I mean those casinos are
never losing money. Oh man, even Donald Trump can't make
money in Atlantic City. Well, that's probably just from overhead
(30:38):
in low attendance. They're not actually, I mean, the house
is always winning. Oh, I see what you mean. You
know what I mean, But less unless they own the
casino exactly. Uh. Yeah, we got a great episode on
casinos that you should look into, and we have one
on addiction to which is why we're not touching too
much upon gambling addiction. Yeah, I mean there's a different effort.
(31:00):
When I was researching this, that's all different things. Obviously,
it seems like it would make it super easy to
get addicted for online gambling. But there was this one
Harvard Medical School study of forty people that they said
the overwhelming majority of online gamblers playing a very moderate manner,
spending minimal amounts. I don't know how accurate that is though.
That was that's site like misused apostrophes and stuff like that.
(31:24):
I was like, your credibility is a little bit out
the window because of your grammar. Um, yeah, it's well,
or maybe it's like any other kind of gambling. If
you're a moderate gambler, then you'll probably stay that way.
But if you have a problem with it, it's certainly
gonna make it easier to throw away a bunch of
dough And it's not you know, it's not money cash
money in front of at least in Vegas. That's why
(31:45):
they used one reason they use chips is to kind
of trick your brain a little bit, right, to make
money more abstract. Yeah, but there's nothing more abstract than
just signing your bank account to something online and clicking it. Yeah,
because the little wheel on Greedy Goblins is like mesmerizing.
It's well, it's also it's small too, So I mean,
you see the slot going, but the amount that you
(32:07):
have in the bank is not that big, and it
doesn't seem like it's linked to real money. In my case,
it wasn't linked to any real money, but I could
see very easily how it just seems like a part
of a game, like a computer game. And apparently there's
a whole thing called slots for tots um, which is, uh,
if you were against online gambling, this stuff drives you crazy.
(32:29):
It's it's basically like Disney versions of casino games for
little kids, like apps and things like that where there's
no gambling going on. But it's basically like it's like
Joe Campbell, it's like prepare for your adulthood as a
gambler or a smoker or whatever. Make it cartoon in
(32:50):
fun exactly, or a McDonald's consumer or something like that. Yeah,
I would be worried. Uh, it seems like an online casino,
you can find a reputable one, but it seems like
it would be really really easy because the cards aren't
in front of you, to cheat the player every time. Well, okay,
that's another thing too that the grabster points out. So
(33:11):
if you're an American right now, it's still it's kind
of a gray area, especially if your state doesn't allow
online gambling. Um, so you are still a potential target
for shady online gambling sites. So, and one of the
things they can do is cheat you out of odds.
That's why if you play an Australian site, you can
(33:34):
feel comfortable that the Australian government has vetted this computer
program and found that the odds are there. It's the
real deal. Like if you're playing blackjack, that is a
fifty two card deck and every card is in there,
even though it's virtual. That's what I would worry about
is if you start winning too much, they'd be like,
let's just have this guy lose the next let's put
(33:54):
the governor on this thing. Yeah, not the governor of Australia, right,
because he's called the Prime minister. And you know, if
you listen to the Casinos podcast. Vegas used to be
fraught with rigged games as well. So, um, it's the
same thing. It's just the wild West right now as
far as the online version goes. So so Grabster gives
a couple of pieces of advice. UM. One, he said,
(34:17):
especially when you're trying out a new one and you're
using a payment processor and that kind of stuff. He said,
open up an account with a small amount of money initially,
just to see if it works. He said, put a
little in, try it out, try to get it back out. Um,
and if everything seems legitimate, then you can start to
add more money if that's what you want to do.
(34:38):
He also said that you, um, no matter how much
trust you have for this company, you want to get
your money out very regularly, and frequently they get under,
you're you're done, they go under, they get rated whatever.
You just want your money out. And again we should
say this is illegal in a lot in some weird
(34:58):
way still in the United States, so the Feds could
conceivably come along and take your money. Yeah, and you're
also signing up for terms of service, so you've their
age requirements and um, if you fraudlently sign up for
something is an underage gambler, then you're breaking the law
there too, and then recommend that. There's one more thing, man,
I wanted to talk about. So when the FEDS in
(35:19):
two thousand eleven rated those top three poker sites um
and then in the same year, the Department of Justice
issued that thirteen page memo that said, I think we've
been misreading this. Uh, those sites that were rated, UM,
the Department of Justice brokered a deal where one of
the sites that was rated bought the assets of its
(35:43):
rival that was also rated, with the Department of Justice
taking the money and then distributing the assets to the
other illegal gambling operations. They served as the middleman for
a merger. I would guess that they got a significant
cut of that the big Yeah, and that's crazy. The
Department of Justice was brokering a deal between online gambling outfits. Unbelievable. Man.
(36:08):
So that's it. That's online gambling. If you want to
know more about it, I suggest you go look it
up on Forbes because they have a ton of articles
on it. But first go to how stuff works dot
com and type in online gambling, and then I'll bring
up an excellent grab store articles start you out. And
since I say grab stir, it's time for listener mail.
(36:29):
I'm gonna call this the Brazilian. Hey guys, my name
is Raphael. I'm your greatest fan in Brazil. I've listened
to at least a hundred episodes. You keep surprising me
with new interesting topics. I love the Soccer Show, especially
because you know absolutely nothing about it, which was very
funny for Brazilian. I thought we were never going to
talk about that one again. I love podcasts because they
(36:50):
helped me improve my English, and I can listen to
them while I am riding the bike at the gym
or climbing. Last week I was listening to other podcasts
and I must say that you're winning the competition of
good knowledge providers. First, I listen to a program of
Freaconomics Radio called tell Me Something I Don't Know, and
one of the contenders presented the New York prohibition of
pinball machines to the early seventies. They might didn't know,
(37:12):
but I knew because of your show on pinball. I
remember when that happened. Do you remember that? What? We
got a lot of email that um, like two weeks
after we did our pinball show. This guy on Freaconomics
Radio on that show, but the guy was a pinball expert.
Because it did a little digging. He did not copy us.
(37:33):
Oh no, rarely do people copy as I think. No,
I think you're totally right. Second. Almost at the same
day that you launched the Nuclear Fusion show, the BBC
podcast in Our Time with Melvin Bragg invited three experts
to discuss nuclear fusion. Both programs are awesome, but yours
was funny. Only yours was funny. I could see that.
(37:55):
My conclusion is that you are beating the heck out
of other podcasts. Congratulations, WHI should all the best, And
if I might add, challenge you to make a show
on deflation and inflation. I'm sure that the crazy Latin
American experiences to challenge high inflation will amaze you. Ah.
We have. We've talked about that a bunch. Yeah, stag inflation.
We did one Rafael called what is stag inflation? Yea um,
(38:17):
And we've talked about deflation currency. I think currency the
stuff you should know. Guide to economics, that's right, super
stuff guide even that's right. So Raphael, the information is
out there for you and he says p S. Could
you please tell me if my English is actually improving? Um,
I don't know where you started. We don't have a
baseline rough, but your English is pretty darn good. It
(38:37):
is a couple of like little charming Latin americanisms, I think.
But um, I think you did a great job. Yeah. Thanks,
we're your biggest fans. That's right. We appreciate all the
flattering stuff. Thanks for that. If you want to flatter
Chuck and I, we're always up for that. And by
Chuck and I, of course your grammar nazis I mean
(38:58):
Chuck and me. Don't listen to that part, Raphael uh.
You can tweet to us at s Y s K podcast.
You can join us on Facebook dot com, slash stuff
you Should Know. You can send us an email to
Stuff Podcast at how stuff Works dot com, and as always,
join us at our home on the web, Stuff you
Should Know dot com For more on this and thousands
(39:21):
of other topics. Is it how stuff Works dot com.
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