[jfoutz]

The article appears to break gamblers into 3 groups.

1) casual players

2) problem players

3) professional gamblers.

so basically casual players gamble something like 50 bucks a year. Problem gamblers get money however they can (and although it's unstated and I have no evidence, I think this is where the actual money comes from). And finally, people that can snipe the mispriced bets, and make a lot of money.

Feels sort of submarine-ish. Casino's can't survive off casual players. They need the addicts to make payroll. The pros eat up casino margins.

I dunno. Feels like a "I run a business, but I'm not really good at it so we need laws to force the pros out". Please don't regulate me, but regulate who can play.

Interesting that it's in Bloomberg. Interesting that the casinos are so bad at laying odd they lose. I have no sympathy for anyone but the addicts. Those folks are sick and need help.

[JumpCrisscross]

> Casino's can't survive off casual players. They need the addicts to make payroll.

The fact that the pros are simulating problem players because then the betting apps give you more leeway, e.g. by "send[ing] you bonus money" and raising your limits, paints the picture quite effectively in my book.

> Casino's can't survive off casual players. They need the addicts to make payroll

To what degree is this true? Sure, a casino with a massive spend on free alcohol and structure needs a high profit margin to return its capital. But betting apps don't have those costs.

[dkrich]

This is backwards. Casinos offer huge cross subsidization opportunities like getting people to spend lots of money in clubs and bars or gamble on games like slots that have a huge house edge while apps have near zero cross subsidization opportunities and massive overhead. An app running at draftkings scale costs a lot to operate.

I’ve believed for a long time and continue to that the math on these businesses just doesn’t work. Eventually they won’t exist because they aren’t profitable.

[jfoutz]

You nailed the key point my muddy intuition (and the article) failed to express.

Pro gamblers simulate problem gamblers, so they can bet more.

I said, "Casino's can't survive off casual players. They need the addicts to make payroll"

> To what degree is this true?

I don't know the ROI. It's hyperbolic, I'll freely admit that.

But I think there is an important point. We let problem gamblers gamble more, and it's not fair pros take advantage of that dark pattern.

[victorbjorklund]

The aqusition costs are extremly high for online betting and online casinos. If you pay 1000 usd to aquire one customer it is not profitable if they gamble 50 usd / year.

[FireBeyond]

> The pros eat up casino margins.

In games against the house, the house usually ensures that even with mathematically perfect play, that they will still have a margin (though, admittedly, it's a tighter margin than when a bachelor party is drunk and playing blackjack and hitting on 19 because "I'm feeling lucky!").

Most pros play against the other players (i.e. poker, etc.), and the rake is the rake, regardless of that - the old adage, "If you look around the table and can't figure out who the chump is, you're the chump" stands, i.e. you don't have to beat the house, you just have to beat Bob who flew in from Iowa (not intended to insult anyone or anywhere, just more exaggerate the casual player).

[orwin]

No, advantage betting is pretty much only against the houses, not against other players. While people who know the sport and manage to bet misplaced lines can be winning over a season, advantage betting is the only way to reliantly have a positive EV. Casinos and now sport betting apps try to prevent professionals to use this, but with the number of shit you can now bet on, and since you don't have to tie an account to your real identity yet, it is becoming very difficult to catch that, especially if you muddy the water with dumb bets.

[dustincoates]

> and although it's unstated and I have no evidence, I think this is where the actual money comes from

The article links to a WSJ article that says this group of problem players provides more than 50% of revenue to the betting companies despite being just 3% of all bettors.

> Of the more than 700,000 people in the SMU panel, fewer than 5% withdrew more from their betting apps than they deposited... The next 80% of bettors made up for those operators’ losses. And the 3% of bettors who lost the most accounted for almost half of net revenue

[DrScientist]

> fewer than 5% withdrew more from their betting apps than they deposited... The next 80% of bettors made up for those operators’ losses. And the 3% of bettors who lost the most accounted for almost half of net revenue

That's a deliberately misleading representation - they offset the 80 against losses rather then the 3%. In terms of net revenue the 3% are less than half net revenue - not more.

[Yeul]

This is why Vegas is all about entertainment not just rows of slot machines.

[ebiester]

Vegas is about entertainment because it brings people to the rows of slot machines. And ideally, from their perspective, traps a handful of whales from every cohort.

[015a]

I highly, highly doubt that the share of people who consistently stay in category 1 year-over-year is more than a couple percentage points. Lots of people put $50 in to try the whole thing out, lose, then never return. Extremely few people will then return in 2025 and be like "lets do that again".

I cannot for the life of me understand why these apps can't make money off the pros, and instead need to ban them. Ignoring all the dumb promotions these apps do: Sports betting is zero sum, you're betting against the other players, not the house. The odds are set by who you're betting against. Literally, how does it not work out that the profit is just the money from the losers minus the house 30%-or-whatever cut? Is "pros" in this context people who also frequently abuse the (oftentimes wild) promotions these apps run?

But, if it did work like that, the problem is even more apparent: these apps are at best a direct wealth transfer from addicts and idiots to corporations and pros. Wait, I just described the stock market, we're talking about sports betting :)

[elbasti]

Sports betting is zero sum, but the market is very inefficient. So you need market makers (the gambling sites) that will fill any order and that set the initial price.

The correct price is often not known for a short while, and that's when the pros bet. Immediately when the line (price) comes out, if they think the line is miss-priced, they will place large bets.

Eventually the house realizes the mispricing and they change the line, but by that point a pro might have placed a six figure bet.

So pros really are winning from the gambling sites, not from other gamblers.

[an_account]

In sports betting you are betting against the house. If the sportsbook sets a bad line, you can lock it in and make money off of it.

Horse racing is what you describe, parimutuel, where the house just takes a commission. But the odds shift even after you place your bet. Very different for traditional sports betting.