Setting Win Limitations

[Frank Kneeland]

I Nelson Rose and Dr. William McCown (two of my guests) believe we are in the Third Wave of Gambling and just as has happened in the past society will return to a state of general condemnation towards all gambling, it's just a matter of time.

[Alan Mendelson]

That's a very interesting idea, Frank. I guess if the economy gets bad enough gambling can become the "witch" that gets burned at the stake in an attempt to improve society and rid the economy of "non productive evils." Of course, this line of thinking disregards the "gambling economy" which provides employment and income and taxes.

Similar things have happened with alcohol and even with fashion in a more subtle way. When the economy is poor, fashion becomes more conservative and fashionable colors are muted and dark. When the economy is good, fashion changes radically and colors brighten.

Public reaction to gambling similarly would be affected the same way fashion is affected.

[Frank Kneeland]

I believe the research says it's opposite to how you're thinking of it. In times of economic stress, gambling, which is a "non productive evil" is instead perceived as a panacea by society to solve financial problems. After a time the honeymoon wares off and society returns to condemning it. It is largely accepted by researchers that most of Gambling's so call positive effects are illusory, and the result of an inability to properly quantify the downsides. It hard to get solid numbers from anyone other than the winners (I.E. Politicians, casinos, etc...).

~FK

[arcimede$]

I believe much of the success of the gambling industry is tied to increases in longevity. As we all know casinos are filled with retired folks. Many of them have little else to do with their time.

Now, a more severe economic crises with massive inflation might make it difficult for this segment to continue gambling. Otherwise, I don't see anything that would change their behavior.

What could happen is the next generation is not able to save enough and/or SS can only meet subsistence needs. That would mean less money available to gamble, and less gamblers.

[Alan Mendelson]

What could happen is the next generation is not able to save enough and/or SS can only meet subsistence needs. That would mean less money available to gamble, and less gamblers.

An excellent point.

[Alan Mendelson]

I believe the research says it's opposite to how you're thinking of it. In times of economic stress, gambling, which is a "non productive evil" is instead perceived as a panacea by society to solve financial problems. After a time the honeymoon wares off and society returns to condemning it. It is largely accepted by researchers that most of Gambling's so call positive effects are illusory, and the result of an inability to properly quantify the downsides. It hard to get solid numbers from anyone other than the winners (I.E. Politicians, casinos, etc...).

~FK

It's true that the politicians look to expanded gambling to help generate revenue when the economy is bad. But look at what happened here in California when an extension of casino gambling went to the voters a couple of years ago: it was voted down.

Politicians might like gambling to boost revenue, but socially it is still taboo. There are no plans in California for another attempt to expand gaming here, despite what the various card casinos and race track operators would really like.

I've spoken to several of the card casino operators who privately admit they want to be able to offer the games similar to what the Indian casinos have, and the Indian casinos do their best to mimic what Vegas has with "card craps" and "card roulette" but they know they are unlikely to get the "real thing" in the near, or possibly, distant future.

[Frank Kneeland]

I'd like to discuss Source Bias. Are you all aware of the common bias people have for and against people they like and don't like?

And that we tend to be more accepting of information from sources with which we have had previous positive results?

It is a common bias used by confidence men to gain trust and the scam people. I'd like to know if you've all heard of it.

Comments?

[Alan Mendelson]

Frank, your source bias idea is commonly used by con men. I sent you a private message about putting this on our Open Forum where I would be happy to discuss it. You probably know about the relativity this has to financial cons including Ponzi schemes, but it also applies to sports betting cons.

If we had a thread on sports betting I could post it there. (I don't know much about sports betting, but I do know about some of the cons in sports betting.)

Edited to add: Oh what the heck, you have it here and you mentioned scams, and its used in sports betting so here it goes:

A con man gets a list of 1,000 sports betters, and on week one of a sports season he picks a game. Half of the list is told Team A will win, and the other half of the list is told Team B will win. He asks for no money... it's a sample of his "skill."

Week#2 The winners from week #1 are divided into two groups... half get Team A and half are told to bet on Team B in the second week's game. Again no money is requested... it's another example of his skill.

And this continues until the con man has a small group of gamblers who may be convinced that the tipster "can't be wrong" because they got the winning picks.

And so the tipster says to his small group of winners... "send me ten grand and let me make the bet on this XXXX game. I know who will win. You've seen my record."

(I still think this should be a different thread.)

[Frank Kneeland]

Frank, your source bias idea is commonly used by con men. I sent you a private message about putting this on our Open Forum where I would be happy to discuss it. You probably know about the relativity this has to financial cons including Ponzi schemes, but it also applies to sports betting cons.

If we had a thread on sports betting I could post it there. (I don't know much about sports betting, but I do know about some of the cons in sports betting.)

I know how to send but not how to receive private messages.

[Alan Mendelson]

To receive a private message, go to the small toolbar at the top of the page and click "Private Messages" which will open a small window with various choices.

I started a new thread on the Open Forum using your original post. I hope that is OK with you as I think this is a good topic for discussion for others who are not involved with gambling. As I noted it affects everything from advertising to investing to shopping.

[Rob.Singer]

"What could happen is the next generation is not able to save enough and/or SS can only meet subsistence needs. That would mean less money available to gamble, and less gamblers."

An excellent point.

I'm not buying that. That next generation is the generation of baby boomers. They might not get the SS benefits we will, but it'll be the most prolific of the "my parents left me an incredible amount of money" generation ever. Of course, that assumes the parents didn't pour all their savings into the poker machines chasing long-term myths, and that they engaged in healthy activities long enough to have accumulated such wealth.

[Alan Mendelson]

"What could happen is the next generation is not able to save enough and/or SS can only meet subsistence needs. That would mean less money available to gamble, and less gamblers."



I'm not buying that. That next generation is the generation of baby boomers. They might not get the SS benefits we will, but it'll be the most prolific of the "my parents left me an incredible amount of money" generation ever. Of course, that assumes the parents didn't pour all their savings into the poker machines chasing long-term myths, and that they engaged in healthy activities long enough to have accumulated such wealth.

Rob, all I hear about are baby boomers without 401ks, without pensions, and living either on severance or with jobs that pay 60% of previous salaries. Sure there are a few lucky ones who escaped this downturn, but there are too many underemployed and without long term savings.

Years ago retirement was funded by cashing in on the sale of a residence. Who can sell their home today at a profit? And too many are forced to sell without being able to pay off that second mortgage they were forced to take to put the kids through school.

After Arc made his post it made me think that the "leisure industry" could face a generational shock because the next retiring generation will not have money to spare.

[Rob.Singer]

Then we must be friends with a different set of people. The most frequent issue I hear about from fellow "boomers" is all their griping about how much of their wealth has gone south because of a divorce or two. And to be honest, if I didn't watch TV or look at the Internet, I wouldn't have the slightest clue that something was wrong with the economy.

I do hear what you're saying though, but I believe there's more boomers walking in my type shoes than the type you mentioned. A friend of mine called me from LV the other night (he lives there and always has, and he's 54). We were talking about all the troubles in LV with the foreclosures and unemployment and the hotels/condos mess etc., and he said he can't understand what all the fuss with the economy is. His words: "Rob, the casinos have tons of people in them every night, the sports bars are packed, there's lines at the sportsbooks, the strip clubs (Spearmint Rhino, etc.) are loaded all the time, and the restaurants have lines. Where's the problem?"

I'm taking that to mean there's a lot of people like me who actually prepared for retirement. I was lucky to have a wife who's done the same, and these are the type people still spending--which to me says there are more of them than anyone thinks. Naturally the news is going to focus on the problems and the gutters some people worked themselves into. No one wants to read about Joe Normal--they want to read about sufferring and dismay.

[Alan Mendelson]

Indeed, Rob, what makes the news is that 12% are unemployed in states like Nevada and California -- and not that 88% are working.

But then, consider that a certain percentage of the 88% with jobs are being paid less than what they used to earn.

Then consider that just about every home in the USA is worth less than what it was worth about two years ago. (Yes, there can be exceptions).

Every day I work with small business owners and believe me that they are all feeling the pain of a slow economy. If you invested in the bond market a few years ago the selling prices on your bonds are lower now. CD rates aren't what they used to be, stock prices are down from their highs.

Rob, unless your retirement was put into gold, you have less retirement money now than you had two years ago-- unless you've been hitting lots of royals.

[Rob.Singer]

I understand the unemployment problem but it doesn't affect me or my family, which I'm sure is part of the reason economic issues seem a million miles away from us today. We're now both retired, my son's in the Army as a career grunt (he really a Master Sgt.), his wife's a hospital nurse, my daughter is a nursing consultant now in Chicago (and healthcare is THE field these days), and her husband is a manager at the IRS. All are pretty secure career paths.

Your point on home values is even more valid than I'd like it to be. In 2005 we paid more than twice what the house was valued at when we gave it to my daughter, and they just sold it for even less. But we paid cash, and I looked at that as being gone the moment I made the bank transfer. We always intended to give it to her anyway since we had this RV plan in the works for years.

I have a little gold (~10% of my portfolio) and 401k's are 401k's. Of course ours have shrunk in the past few years, but they have, over the "long-term", proved a huge asset for us. Sure we'd have much more if the market wasn't so fussy, but with our pensions and upcoming SS, I'll never go through it anyway and the kids will end up getting it. We're going to spend the rest of our days living in an RV & hotels, buying LOTS of fuel, and not having to take care of a house. Pride of ownership, you know.... Just comfortable living, and we're not unhappy at all over giving up the lavish stuff.

I can sort of feel the small business owner's pain these days, but my belief is everyone who wants to do well again can and will. If you put in the effort you'll always get a good result. It's coming at them from all sides--something we never had to deal with. But I'm confident I'd be able to succeed if it were my time.

[Lucky(St)Louis]

Thanks, although "awhile back" may be a rather big understatement.

Is anything in anyone's life really that long ago?

But on to the purpose of this post. I just wanted to add some additional research to the discussion as it does pertain to the question of "Can and do game designers and manufacturers purposely exploit players?" We all know the answer is yes, but even the designers and manufacturers probably didn't imagine it would be quantified as this video perhaps demonstrates. I asked for permission from the mod's before posting to be sure this is OK.

Dr Hans Brieter, Harvard School of Medicine, Mass General Hospital:

[Alan Mendelson]

Thank you for posting. I want to address the video first. YES I encourage everyone to make use of the video function we have here. There are a series of icons in the upper left of the "reply box" and the icon on the second to the right allows you to enter the URL (web address) of a video from YouTube or other sources. As an alternate, you can post the link to the video in your reply.

I went back to YouTube to find the original video and it came from a public hearing, but the actual YouTube post was made by an anti-gambling group. Was there another side to the Doctor's comments?

I don't doubt that the effect of gambling can be as great as some narcotics and illicit drugs. And yes, there are addicted gamblers who rob their employers or steal from their own retirement funds to keep gambling -- just as drug addicts do.

There are also people who rob their employers and steal from their own retirement funds to carry on extra marital affairs.

[Lucky(St)Louis]

I'm not surprised that an anti-gambling proliferation group posted the vid to YouTube. And yes, I'm sure there are many other opinions on the research findings. I find it interesting that maybe there is a solid scientific basis to suggest that the pursuit of gambling has reasons that might explain what in some cases is illogical behavior. Some people, no doubt, will see the research findings as allowing people to not be personally responsible for their actions, an avenue that I think is similar to some Frank posted as being a help to those who need help quitting.

[arcimede$]

I'm sorry but the claim that the exact same brain cells are activated is nonsense. There is nothing that can track brain activity to that level. The general area ... sure, but not anything that precise. So, I think this dude was overstating his claims a bit.

I suspect there are pleasure centers in the brain that are activated for many different activities. It could be solving a crossword puzzle would get the same results. The brain is a massively complex organ and if our medical community had the kind of capabilities claimed in this video we could cure just about any disease. It doesn't exist and won't exist for many decades if not centuries.

Finally, some parts of the brain are used for multiple functions. It's likely that they are somewhat like subroutines in a computer program and have very different meaning depending on exactly how they are activated.

Sorry, but this video is taking advantage of the lack of scientific knowledge of the general population. I sure the good doctor thinks he is doing a good thing with his exaggerations.

[redietz]

I find it interesting that no sub-group of therapists and other professionals have come to the fore to address the gamble that affected the largest segment of the US population, namely those who bought homes in the last 10 years. From the standpoint of financial damage done, certainly this kind of "gambling" has had more widespread and devastating effects than the usual behaviors lumped under this word.

This addiction to home buying has bankrupted millions of individuals, and done significant financial harm to millions of others. But no major cottage industry addressing the need to control or reduce this behavior has arisen. I'm shocked.