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How Online Gambling Works · Stuff You Should Know

0:01
Speaker 1: Welcome to you Stuff you should know from house Stuff
0:04
Speaker 1: Works dot com. Hey, and welcome to the podcast. I'm
0:12
Speaker 1: Josh Clark. There's Charles W. Chuck Bryant, and there's Jerry
0:16
Speaker 1: for the third time, and this is stuff you should know.
0:18
Speaker 1: The podcast two ball starts. Yeah. Really, Uh you a
0:23
Speaker 1: gambler at all? Uh? No, I mean not really. I'm
0:30
Speaker 1: I would lose too much money. But you've like been
0:33
Speaker 1: to a casino and I mean, like, yeah, I've gambled before.
0:37
Speaker 1: I'm just I realized pretty quickly that I'm a terrible
0:40
Speaker 1: gambler now, like I'm an addict or anything like that.
0:44
Speaker 1: Like I'd never win. So losing money's not fun. No, no,
0:48
Speaker 1: it isn't. I enjoy I don't like Vegas at all,
0:53
Speaker 1: as you know, but when I've had to go there,
0:55
Speaker 1: I do enjoy a little gaming. Um, but I always
0:59
Speaker 1: just I'm very disciplined to set aside a certain amount
1:02
Speaker 1: of money. I'm like, I'm basically like paying that to
1:05
Speaker 1: have a good time gambling. If I lose it all,
1:08
Speaker 1: then that's what. Because it is enjoyable. I enjoy it.
1:11
Speaker 1: And I did a little sports gambling at one point
1:13
Speaker 1: in my life and got a got out of a
1:15
Speaker 1: sort of a tight squeeze once and then I was like,
1:17
Speaker 1: not doing that again. Did you have your thumbs broken
1:20
Speaker 1: or something? No. I just owed um a lot of
1:23
Speaker 1: money going into NFL Sunday, and I was like, I
1:27
Speaker 1: can't afford this. So I did something really stupid and
1:30
Speaker 1: I made ny two bets equal to that large amount
1:35
Speaker 1: of money, one of both and broke even. And I
1:38
Speaker 1: was like, no more. That was good that you weren't like, Okay,
1:42
Speaker 1: I'm on the street and keep it going. That scared
1:45
Speaker 1: me straight, you know. Um, for this episode, I did
1:48
Speaker 1: a little online gambling. You know they let you try
1:51
Speaker 1: it out for free or whatever. I was down five
1:54
Speaker 1: d bucks in like four minutes. Well when it's not
1:57
Speaker 1: when it's fun money then like not real money, it's
2:00
Speaker 1: seed a bet a lot. I was just betting like
2:02
Speaker 1: the normal amount. I just I was playing a roulette
2:05
Speaker 1: called the Greedy Goblins. What site was it? Bovada? Have
2:11
Speaker 1: you heard of Bovada? It was the first one that
2:13
Speaker 1: came up when I put it online gambling. But it
2:16
Speaker 1: was a classy site. It was a classy simulated casino,
2:19
Speaker 1: pretty waitresses, I mean, well, there were pictures of people yeah,
2:23
Speaker 1: you know, no one was actually moving except the three
2:26
Speaker 1: D Goblins. They try to simulate a casino as much
2:29
Speaker 1: as possible, right, A little bit like the background of
2:32
Speaker 1: the website was like felt. I think maybe it was
2:35
Speaker 1: like that, but um no, it seemed to be one
2:37
Speaker 1: of the nicer ones. You could tell that the programmers
2:39
Speaker 1: like really put some thought into it. But the the
2:42
Speaker 1: the roulette or not the roulette the slot I was playing?
2:45
Speaker 1: Did I say roulette? First? I was playing a slot
2:49
Speaker 1: called Greedy Goblins, and it was nice looking, but I
2:53
Speaker 1: lost very quickly, so I was like, forget this. I'm
2:55
Speaker 1: so glad I'm not addicted to online gambling, because that
2:58
Speaker 1: would be really rough, I'm sure, And actually, I mean
3:02
Speaker 1: they say the online gambling is even possibly more addictive
3:06
Speaker 1: than regular gambling, just because of its ubiquity and ease
3:10
Speaker 1: of accessibility. Like not only can you get on the
3:13
Speaker 1: computer at home, now the big pushes mobile, so you
3:16
Speaker 1: can gamble anytime, anywhere, and if you have a problem, yeah,
3:20
Speaker 1: that's super super dangerous for some folks. You can gamble
3:24
Speaker 1: in your warm up pants, your shirt off, or your
3:28
Speaker 1: city jogger pants. I think some casinos in Vegas you
3:31
Speaker 1: could do that probably, h Maybe it's like the Golden
3:34
Speaker 1: Nugget or one of the old ones, whether they're like
3:37
Speaker 1: just just give us your money please, we're hurting so bad,
3:41
Speaker 1: or in all of Atlantic City. Sure. So. Um, you
3:46
Speaker 1: want to talk about the history of online gambling, you know,
3:48
Speaker 1: it hasn't been around forever. It hasn't. Gambling might be
3:51
Speaker 1: one of the oldest past times, but online gambling is
3:54
Speaker 1: comparatively new. Yeah. In the mid nineteen nineties and Antigua
3:59
Speaker 1: and Barbuda, they passed a law called the Free Trade
4:03
Speaker 1: and Processing Act, which basically paved the way for some
4:07
Speaker 1: of these smaller Caribbean island nations to get into the
4:11
Speaker 1: gambling business. Well for that nation specifically, Yeah, to get
4:14
Speaker 1: into the online gambling business. Right. Specifically, they created out
4:18
Speaker 1: of thin air their own ability to create licenses for
4:22
Speaker 1: online casinos. So they became the haven for online casino.
4:25
Speaker 1: It's a pretty good idea, it is, and especially considering
4:29
Speaker 1: that there was no such thing as online casinos yet.
4:31
Speaker 1: Like that's some foresight right there. Yeah. Around the same time,
4:34
Speaker 1: a company called Microgaming started the first uh kind of
4:39
Speaker 1: workable software for online gaming, and that came along at
4:43
Speaker 1: just the right time and U Canada they started opening
4:47
Speaker 1: up some online casinos and basically all over the world
4:51
Speaker 1: they started popping up. I think there were more than
4:55
Speaker 1: two hundred online casinos and revenues in the late nineties
4:59
Speaker 1: of up to eight hund in thirty million a year,
5:01
Speaker 1: which is chump changed now. But um back then, you know,
5:06
Speaker 1: you'll notice we did not mention the United States because
5:08
Speaker 1: it was there's a lot of legality issues. Up to today,
5:13
Speaker 1: you have online gambling virtually out of the gate. The
5:15
Speaker 1: United States is like, no, that's illegal. Completely ignore the
5:19
Speaker 1: fact that forty plus states have state lotteries. You can't
5:24
Speaker 1: gamble online. And actually I read an article where Antigua
5:29
Speaker 1: sued or filed the complaint against the United States with
5:33
Speaker 1: the World Trade Organization. The w t O sided with
5:36
Speaker 1: Antigua and they granted Antigua like a hundred and twenty
5:42
Speaker 1: million dollars worth of freedom to distribute American intellectual property
5:49
Speaker 1: without paying any royalties because America closed down it's um
5:55
Speaker 1: it's population to Antigua's online casinos. And Antigua said, you
6:00
Speaker 1: guys are violating treaties we have interesting and the w
6:03
Speaker 1: t O actually sided with and levied sanctions against UM.
6:07
Speaker 1: The US sided with Antigua Levi sanctions against US, which
6:11
Speaker 1: is mine boxing. Yeah, that probably doesn't happen a lot. Uh.
6:14
Speaker 1: In the early two thousand's, you could, all of a sudden,
6:17
Speaker 1: thanks to a company called Betfair, wage wager appeared appear
6:21
Speaker 1: bets on sports. A lot of this early stuff was
6:26
Speaker 1: sports UM wagering, right, and then online poker of course
6:29
Speaker 1: in the late nineties. UM really started to catch on.
6:33
Speaker 1: In the late nineties and early two thousands, UH company
6:37
Speaker 1: called Poker Spot and part Party Poker and Poker Stars.
6:43
Speaker 1: They all have silly names, but UM they really hit
6:46
Speaker 1: on it big when they UM allowed you to qualify
6:51
Speaker 1: online for these real World Series of Poker tournaments. And
6:55
Speaker 1: the one guy, Chris Moneymaker actually won the World Series
6:58
Speaker 1: of Poker in two thousand three after having qualified online.
7:01
Speaker 1: And then everyone was like, WHOA, that's a big deal
7:04
Speaker 1: because I think he ended up having to pay in
7:06
Speaker 1: like forty bucks to qualify for the World Series of Poker. Yeah,
7:09
Speaker 1: and he didn't have to travel to Vegas and you know,
7:12
Speaker 1: or Atlantic City or wherever else you can go to gamble. Yeah,
7:14
Speaker 1: and that's the way it was going to and everybody
7:16
Speaker 1: was really up on UM poker, especially Party Poker and
7:21
Speaker 1: Poker Stars, and UM the US ended up cracking down
7:25
Speaker 1: on it, which you'll talk about a little more in
7:27
Speaker 1: detail coming up soon. But UM, let's talk about just
7:31
Speaker 1: online gambling and how it's different, because it seems well,
7:35
Speaker 1: there there's some pretty obvious UM distinctions, like one gift
7:40
Speaker 1: to travel to Atlantic City or Las Vegas or your
7:44
Speaker 1: local Indian reservation and sit there and and gamble in person.
7:50
Speaker 1: That's I mean you might say, well, yes, obviously, if
7:53
Speaker 1: you're gambling online, you can do it at home. But
7:55
Speaker 1: that's that's there's a big difference. There's a lot of
7:59
Speaker 1: nuances in between those two. That obvious difference between the two.
8:03
Speaker 1: Sure one of them is you can play a lot
8:05
Speaker 1: faster without all the chit chat and all the decision
8:08
Speaker 1: making of the little old lady next to you at
8:10
Speaker 1: the blackjack table. UM and I wrote an article where
8:14
Speaker 1: with a guy named John Googliano or Gagliano. I mean
8:17
Speaker 1: he's a New Jersey professional poker player, John the Goog.
8:21
Speaker 1: I think it was like Googs thirty three years, gags
8:24
Speaker 1: thirty three something like that. Seriously, Anyway, he um, he
8:27
Speaker 1: plays up to a thousand hands an hour. Wow, he
8:30
Speaker 1: plays of no poker. He's a pro poker player. He plays, um,
8:35
Speaker 1: maybe a hundred hundred hands an hour per table, and
8:39
Speaker 1: he plays up to about ten tables at a time.
8:41
Speaker 1: About he's got to be playing more than one. Oh yeah,
8:43
Speaker 1: so he's playing like a thousand hands an hour um.
8:46
Speaker 1: And he says in real life he can play maybe
8:48
Speaker 1: twenty five tops if he's really working. And a lot
8:51
Speaker 1: of it is the chit chat the dealers. This is,
8:54
Speaker 1: you know, and not being able to physically play ten
8:56
Speaker 1: hands at a time. But see, that's the experience I
8:58
Speaker 1: enjoy about gambling is being at the table and chit
9:02
Speaker 1: chatting and having a couple of you know, free scotches.
9:06
Speaker 1: It's like a good social fun social like a craps table,
9:09
Speaker 1: a lot of fun okay to stand around. So yes,
9:12
Speaker 1: I think that's what makes Gags thirty three a professional
9:16
Speaker 1: poker player. You know, he's in it for the money. Yeah,
9:18
Speaker 1: he doesn't care about all that stuff, and probably to
9:20
Speaker 1: win too. Um. So yeah, it's a lot quicker. You
9:24
Speaker 1: can win and lose money at the drop of a hat. Um.
9:28
Speaker 1: And like you said, they try to dress it up
9:29
Speaker 1: and make it look and feel like a real casino. UM.
9:33
Speaker 1: Other than that, though, it's it's a lot of the
9:36
Speaker 1: same games, like pretty much any game you can play
9:39
Speaker 1: in a real casino you can find online from like
9:42
Speaker 1: lotteries and Keno to Roulette and all that stuff. Yeah,
9:46
Speaker 1: Bovada had UM more than a hundred and fifty different games. Yeah,
9:51
Speaker 1: a lot of them more slots, but they did have
9:52
Speaker 1: all the regular stuff too, in tons of different poker UM.
9:56
Speaker 1: And then, like you said, sports betting, and then there's
9:58
Speaker 1: a subsection of sports betting inter tainment betting, like you
10:01
Speaker 1: can bet on the outcome of the two thousand and
10:03
Speaker 1: sixteen presidential election or the oscars um apparently spelling bees,
10:09
Speaker 1: competitive eating contests. Reality TV, Yeah, which I didn't get
10:13
Speaker 1: because reality TV is not actually like unscripted. Yeah, like
10:18
Speaker 1: you could easily find out from a producer what happened
10:21
Speaker 1: on the show that was shot five months before. It's
10:24
Speaker 1: not like it's live, you know, or who's going to
10:26
Speaker 1: get the rose or whatever. I think those UM episodes
10:32
Speaker 1: are live a lot of times. They've got to be
10:35
Speaker 1: like the American Idol finale or the Survivor finale a
10:38
Speaker 1: lot of or a Big Brother. But I I just
10:41
Speaker 1: assume all those are extraordinarily rigged one way or another,
10:43
Speaker 1: and that anybody connected well enough could find out and
10:46
Speaker 1: make some big money, which I would guess that the
10:49
Speaker 1: people laying on the bookers, you know, the bookies, the bookies. Uh,
10:54
Speaker 1: they they would know well enough to stay away from
10:57
Speaker 1: that kind of stuff because it could be rigged. But
11:00
Speaker 1: wors is never right, So is that? Were you being facetious?
11:04
Speaker 1: Of course sports is rigged a lot of times. Really, Yeah,
11:07
Speaker 1: you kidn't me, Like, what we're not talking is Rourkes
11:11
Speaker 1: boxing fight. No, boxing is notoriously historically fraught with boxers
11:16
Speaker 1: taking dives. Okay, I thought you meant like Monday Night
11:19
Speaker 1: football or something like that. I mean, the NFL is
11:22
Speaker 1: a pretty good track record, but there most of the
11:24
Speaker 1: pro sports have had one major betting throwing games scandal
11:28
Speaker 1: in there at some point. Yeah. I don't think it
11:30
Speaker 1: happens all the time, but um yeah, like the Black
11:34
Speaker 1: Sox was baseball. Man, that was a good movie, Eight
11:36
Speaker 1: Men Out and uh I think, um yeah, you'll hear
11:41
Speaker 1: about every once in a while, like an n C
11:42
Speaker 1: double A basketball team will come out years later like
11:45
Speaker 1: we threw all those games? Oh, yeah didn't. Um, who
11:49
Speaker 1: was it that played Billy Jane King? The man who
11:51
Speaker 1: played Billy Jane King? Oh, Bobby Riggs? No? Who? Well,
11:57
Speaker 1: well guy, was it kids player? Yeah, very famous men's
12:02
Speaker 1: tennis player. I think it's Bobby Riggs. It wasn't Bobby Riggs. Anyway,
12:05
Speaker 1: he came out within the last couple of years and
12:07
Speaker 1: said that he threw the match. Oh please, which is
12:10
Speaker 1: kind of like it was it. It wasn't Jimmy Conner.
12:13
Speaker 1: Maybe it was Jimmy Conner save face. Yeah, but like
12:17
Speaker 1: four decades later, which is weird, deathbed saving face. I
12:22
Speaker 1: think he's still walking around. So um, we're going to
12:25
Speaker 1: talk more about online gambling and gaming and the distinction
12:29
Speaker 1: between the two. Um, right after this, you know, Josh,
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Speaker 1: squar space, start here, go anywhere. Alright. So you mentioned
14:23
Speaker 1: that you played, you tried it out for fun. Yeah,
14:27
Speaker 1: and that is research. Yeah. That is one way though
14:30
Speaker 1: that they can get you hooked, you know, is to
14:33
Speaker 1: say that you don't have to pay any money. Um,
14:36
Speaker 1: did you have to do anything? Did you have to
14:38
Speaker 1: sign up? No? No, there's a there's a way you
14:40
Speaker 1: can download the casino software, which seems like a really
14:44
Speaker 1: bad idea to me. It's um like, do you want
14:48
Speaker 1: to download the staff software from a Russian site? No?
14:51
Speaker 1: I don't, but I will play it for free in
14:53
Speaker 1: my web browser, which is what I did. Was it
14:56
Speaker 1: really Russian software? No, this was Latvian. But I imagine
14:59
Speaker 1: there's plenty of Russian uh Russian casinos out there. Uh.
15:04
Speaker 1: Some of the other differences though, besides being able to
15:07
Speaker 1: play for fun and get you hooked, is they will
15:10
Speaker 1: offer different odds a lot of times sports wise than
15:13
Speaker 1: you can get in a real casino. So the grabster
15:16
Speaker 1: says that this isn't um. Oh, I'm sorry, you're saying
15:20
Speaker 1: that they the odds are better. I'm just saying different,
15:25
Speaker 1: Like sports odds can be different. Um. Usually they're better
15:29
Speaker 1: for you because the overhead is lower. They don't have to,
15:32
Speaker 1: you know, pay as much money exactly. They don't have
15:34
Speaker 1: to give out the free scotches because there's nobody to
15:36
Speaker 1: physically sit there and drink the scotch by your own scotch.
15:40
Speaker 1: You're at home at home, So you can get different odds,
15:43
Speaker 1: and then a lot of times the games themselves will
15:46
Speaker 1: have different kinds of payouts that you can get in casinos. Um.
15:51
Speaker 1: But you're also going to have to pay the big
15:54
Speaker 1: as they call it, um in order to get your money.
15:57
Speaker 1: And this is a whole different thing we have to
15:59
Speaker 1: talk about at some point too. But you're gonna be
16:01
Speaker 1: paying percentages, uh like tenient sometimes just to get your money.
16:07
Speaker 1: And that's not the same as in Vegas. No, it's
16:10
Speaker 1: definitely not one of the reasons why you you have
16:13
Speaker 1: to pay that. And that's on top of the big
16:14
Speaker 1: like you said, right, that's just basically that's like Okay,
16:18
Speaker 1: here give us our house money just for letting you play,
16:22
Speaker 1: and and then here's your transaction fee and then yeah,
16:25
Speaker 1: but that's when you're trying to withdraw stuff from your
16:27
Speaker 1: online account. And the reason that they do this and
16:29
Speaker 1: that the rates are so steep is because they know
16:33
Speaker 1: that you're an American player and you're not supposed to
16:35
Speaker 1: be playing technically, that is correct. Historically that has been
16:40
Speaker 1: very difficult to prosecute because you're in your house playing
16:44
Speaker 1: a casino in Amsterdam online. So what are they gonna
16:48
Speaker 1: do unless they've they're like spying on exactly where are
16:50
Speaker 1: they gonna do? Go after the operators of these um
16:54
Speaker 1: online gaming sites that are located overseas? Actually, yes, yeah,
16:59
Speaker 1: that's exactly what did this article Friday? Yeah, this article
17:02
Speaker 1: on how stuff works was written before Black Friday, so
17:04
Speaker 1: it was it almost even though it's a grabs article,
17:07
Speaker 1: it's naive because it was before this. Black Friday happened
17:12
Speaker 1: on September twenty, two, thousand eleven, where the Feds basically
17:17
Speaker 1: raided the top three and then some other ones, but
17:20
Speaker 1: definitely the top three online poker sites and shut them down. Yeah,
17:24
Speaker 1: Poker Stars, Full Tilt Poker and absolute poker. Uh. And
17:28
Speaker 1: apparently there were a bunch of uh some say, kinky
17:31
Speaker 1: allegations and arrest. Well, yeah, they used interpoll to go
17:35
Speaker 1: arrest the people in other countries for breaking US law.
17:39
Speaker 1: And yeah, a lot of US lawmakers had big problems
17:43
Speaker 1: with that, even though they attached a bunch of other
17:45
Speaker 1: charges like money laundering and fraud. Uh, there were you know,
17:49
Speaker 1: I'm sure there were some legit illegalities as well, but yeah,
17:54
Speaker 1: it was a pretty interesting sting operation, to say the least.
17:57
Speaker 1: So So, there's this thing called the wire Wager Act,
18:01
Speaker 1: I believe from nine and it said you can't use
18:06
Speaker 1: any kind of UM communications device basically in the the
18:11
Speaker 1: US for betting and um. The courts interpreted it in
18:17
Speaker 1: various ways as the Internet came along and some court
18:21
Speaker 1: some courts decided like, yeah, this this includes the Internet.
18:24
Speaker 1: Other courts are like, no, this is too old and
18:26
Speaker 1: too vague to really include the Internet. So the Feds, um,
18:30
Speaker 1: we're kind of like making noises about making prosecutions and stuff, uh,
18:36
Speaker 1: based on this. And when they kept running up against
18:39
Speaker 1: the fact that it was too old, they came up
18:41
Speaker 1: with a new law in two thousand and six. The
18:43
Speaker 1: Unlawful Internet Gaming Enforcement Act, and this one had teeth.
18:48
Speaker 1: The reason this one had teeth is because it didn't
18:50
Speaker 1: go after the online gambling people. It went after the
18:53
Speaker 1: third party processors, the payment processors. And what good is
18:57
Speaker 1: gambling if you can't get your money right when you're
19:00
Speaker 1: so all of a sudden visa PayPal, all the banks
19:03
Speaker 1: are like, wait, we could be prosecuted for processing this payment,
19:09
Speaker 1: so we're not gonna do it, which left these, um,
19:13
Speaker 1: these online gambling sites basically just completely um exactly because
19:20
Speaker 1: like you said, nobody who wants to gamble online wants
19:23
Speaker 1: to do it for nothing. It's the whole point, you know,
19:26
Speaker 1: is to try to win some money, right. Um. So
19:29
Speaker 1: that was two thousand six. That's when like Party Poker
19:33
Speaker 1: and Poker Stars and all those guys either shut down
19:37
Speaker 1: or they moved overseas. So those were actually American companies,
19:40
Speaker 1: but they moved to like the Isle of Man. They
19:42
Speaker 1: moved to Ireland, and there was one in Costa Rica.
19:44
Speaker 1: Full Tilt I think was in Costa Rica, and so
19:47
Speaker 1: the FEDS were like, Okay, we we did our job.
19:52
Speaker 1: Everything's cool, um. And these guys figured out loopholes and
19:57
Speaker 1: so the in two thousand eleven when they raided on Friday.
20:01
Speaker 1: The guy who actually ended up in real trouble was
20:04
Speaker 1: this dude who served as the payment processor for the
20:09
Speaker 1: three biggest online poker sites in the world. So not
20:13
Speaker 1: the gambler, not the casino, it was the guy who
20:16
Speaker 1: and it wasn't a company, it was a guy. And
20:18
Speaker 1: the reason he got in troubles because he started he
20:21
Speaker 1: made all these phony businesses up to get banks to
20:24
Speaker 1: process payments so the banks wouldn't think that they were
20:27
Speaker 1: doing any kind of illegal activity, right, So he he
20:31
Speaker 1: learned money, so he did get in big trouble um,
20:35
Speaker 1: and so did the three the top three sites. Until
20:39
Speaker 1: that same year, all of a sudden, this crazy war
20:45
Speaker 1: on online gambling was totally reversed by the Obama administration.
20:50
Speaker 1: Within the Obama administration, It's not like this was the
20:53
Speaker 1: Bush administration like aggressively prosecuting people for it. This was
20:57
Speaker 1: the Obama administration. And then all of a sudden, Department
21:00
Speaker 1: of Justice came up with a new opinion and said,
21:02
Speaker 1: you know what, we don't think the Wire Wager Act
21:05
Speaker 1: applies to this anymore, and we don't think that people
21:08
Speaker 1: should be prosecuted for online gambling if the states allow it. Yeah,
21:13
Speaker 1: and I think correct me if I'm wrong. Wasn't one
21:15
Speaker 1: of the big reasons behind this, like we need to
21:19
Speaker 1: start regulating this fast and get out in front of it,
21:22
Speaker 1: or else it's gonna be a huge mess. Yes, it's
21:24
Speaker 1: gonna be a huge mess. Um, it could be a
21:27
Speaker 1: huge boon for UM states for taxes and grabstrre mentions
21:33
Speaker 1: in this article that people tended to gravitate towards UM
21:36
Speaker 1: sites that had like a dot n L domain or
21:39
Speaker 1: a dot AU domain because they knew that Australia and
21:43
Speaker 1: UM the Netherlands heavily regulate this kind of stuff. They're legit,
21:48
Speaker 1: and so online casinos that operate out of those countries
21:52
Speaker 1: have to tell the line, which means that if you win,
21:54
Speaker 1: you're gonna get paid. So they provided a model that like, yes,
21:57
Speaker 1: if this is legal and regulated, people will come to
22:00
Speaker 1: it and you can actually manage it pretty well. Yeah.
22:03
Speaker 1: So in other words, I don't have to set up
22:04
Speaker 1: an offshore bank account or send money orders to some
22:08
Speaker 1: shady h third party internet site that may or may
22:13
Speaker 1: not pay you exactly. Um. I actually um. Last year
22:18
Speaker 1: I was the commissioner of my fantasy Football League and
22:23
Speaker 1: we all throw in twenty bucks. It's no big deal,
22:26
Speaker 1: like twelve of us, you know, just to make a
22:28
Speaker 1: little more interesting. At the end of the year, you
22:30
Speaker 1: win the money, and um, I said, just pay me
22:32
Speaker 1: through PayPal. And a few people said, you know, when
22:34
Speaker 1: you go to make the payment, it's like writing a check.
22:36
Speaker 1: You put what it's for. They were like fantasy football
22:39
Speaker 1: payment and PayPal flagged it and wouldn't allow it through.
22:42
Speaker 1: And I didn't even know at the time that was
22:43
Speaker 1: against the laws. Like really, and so I, you know,
22:46
Speaker 1: had them either send me money or just say, don't
22:49
Speaker 1: put what it's for. Done exactly because apparently apparently anything
22:55
Speaker 1: but fantasy football. Yeah, apparently that made me, I guess,
23:00
Speaker 1: an illegal bookie. Yeah, they could have gotten you, Enrico probably.
23:04
Speaker 1: So we're gonna we're gonna talk about legal online gambling
23:08
Speaker 1: and all that kind of stuff right after this. Alright,
23:15
Speaker 1: so today, my friend, it is a state issue, as
23:20
Speaker 1: you said, still technically federally illegal. It's so weird when
23:24
Speaker 1: this country. It's always amazes me, like this is the
23:26
Speaker 1: illegal the United States, but it's legal in the state
23:29
Speaker 1: if they say it's okay. Sports sports betting is still
23:33
Speaker 1: very much illegal online sports betting. The Justice Department said,
23:38
Speaker 1: it's very clear that this law was originally written, this
23:42
Speaker 1: law that we've been aggressively prosecuting for for forty years,
23:46
Speaker 1: fifty years, was actually really just pertained a sports betting
23:50
Speaker 1: because that's chance. Is that correct? Is that why? That's
23:53
Speaker 1: not necessarily why because like roulette is chance, and you
23:55
Speaker 1: can do that now in some states. So it's it's
23:58
Speaker 1: strictly because the laws said sports. Okay, it was written
24:02
Speaker 1: in the law. But fantasy football now, one of the
24:06
Speaker 1: big new trends are these day play sites for fantasy football.
24:12
Speaker 1: What is it call one it's called Draft Kings, But
24:15
Speaker 1: there's a name for the whole thing. It's not fantasy football.
24:17
Speaker 1: It's it's like UM League draft or something like that.
24:21
Speaker 1: They call it daily fantasy sports. In this article, that's
24:24
Speaker 1: a little more generic than I was thinking. Yeah, but
24:27
Speaker 1: there's one called Draft Kings, and there's another one, and
24:29
Speaker 1: I hear these all the time on sports radio, the
24:31
Speaker 1: ads for him uh fan duel dot com, where you
24:36
Speaker 1: can draft the team in a day and have your team,
24:40
Speaker 1: you know, play that weekend's football games and then cash
24:42
Speaker 1: out that weekend as well. UM and so it's not
24:46
Speaker 1: the same thing as like just your ESPN fantasy football league,
24:49
Speaker 1: where it's just a season long thing for fun or
24:52
Speaker 1: maybe a little bit of money thrown into pool. This
24:54
Speaker 1: is weekly, and depending on the sport, it could be
24:56
Speaker 1: daily exactly. Um, and all the sports like they allow
25:00
Speaker 1: that though, because I don't think that's considered skill. So
25:04
Speaker 1: fantasy football is currently considered skill and is allowed, I believe,
25:09
Speaker 1: which is hysterical. This daily fantasy thing is apparently considered
25:14
Speaker 1: a little more gambly, I guess, So it's it's in
25:19
Speaker 1: a little more of a gray area, even though everybody's
25:21
Speaker 1: is kind of currently ignoring it. But all of the
25:24
Speaker 1: articles for some reason, Forbes is like really really into
25:27
Speaker 1: online gambling and has been doing a lot of coverage
25:30
Speaker 1: of it over the years. Um. And so from reading
25:33
Speaker 1: these Forbes articles, the way that they track anything is
25:36
Speaker 1: where the money's going. And they talked about, um, how
25:40
Speaker 1: these daily fantasy foot like fan Duel are attracting like
25:44
Speaker 1: tons of venture capital right now. There's just tens of
25:48
Speaker 1: millions of dollars being thrown at these tiny little startups
25:52
Speaker 1: that just allow you to do like daily or weekly
25:54
Speaker 1: fantasy sports stress. Um, and that suggests that everybody on
26:01
Speaker 1: the street Wall Street thinks that, um, there's going to
26:05
Speaker 1: be either a federal law that allows it or this
26:09
Speaker 1: federal ruling from two thousand eleven twelve that says it's cool,
26:14
Speaker 1: just leave it up to the states is going to
26:15
Speaker 1: lead to basically state across the country, state laws that
26:21
Speaker 1: regulate and allow this kind of stuff, so that it
26:23
Speaker 1: seems to be if you follow the money, the tide
26:26
Speaker 1: is turning and online gambling is going to be where
26:29
Speaker 1: it's at. Yeah, I mean right now you said gray
26:32
Speaker 1: area earlier. There's a lot of gray area, um, all
26:36
Speaker 1: over the country and all the states, because like you said,
26:39
Speaker 1: some states would like let you play the lottery. Some
26:41
Speaker 1: states will let you go to an O T b
26:44
Speaker 1: uh and bet on racehorses or bet on racehorses at
26:47
Speaker 1: home online. Um, some let you bet on reality TV online,
26:53
Speaker 1: and some don't some. There are now three states I think, Delaware,
26:57
Speaker 1: New Jersey, and Nevada that have fledged online poker online gambling,
27:04
Speaker 1: and I think Nevada is actually running out of Nevada right.
27:08
Speaker 1: So Nevada, as far as I know, hilariously only offers
27:13
Speaker 1: online poker. They don't have a lottery either to do
27:16
Speaker 1: know that, Yeah, they probably don't need one. I guess not,
27:20
Speaker 1: but yeah, that's probably what But you could always need
27:23
Speaker 1: more money, sure, you know, especially if you're Nevada, You're like,
27:26
Speaker 1: give me more money. Yeah, but yeah, they don't have it.
27:29
Speaker 1: So I think that you're right though, that Nevada has
27:32
Speaker 1: opened up playing two people outside of their state, outside
27:37
Speaker 1: of the country. Yeah, but originally they were only allowing
27:41
Speaker 1: people in Nevada to play. But I think isn't the
27:44
Speaker 1: website owned and run in that state as well? It's
27:47
Speaker 1: not like an out of the country deal. Yes, yeah,
27:49
Speaker 1: I see what you're saying. Yeah, um, and that's the
27:51
Speaker 1: way you New Jersey's is too. So there's this whole
27:53
Speaker 1: secondary um industry that's grown up around state sanctioned online gambling,
28:00
Speaker 1: which is geolocation services which tracks where you, the computer
28:05
Speaker 1: user or online gambler are located, so they're watching it
28:09
Speaker 1: and if there yeah, well and if your computer comes
28:12
Speaker 1: up as outside of the state of New Jersey, you'll
28:15
Speaker 1: be blocked from playing. If you come up as inside
28:19
Speaker 1: of New Jersey, you can play New Jersey, which has
28:21
Speaker 1: a complete um suite of online gambling available and they
28:27
Speaker 1: guess Chris Christie said there it was gonna be a
28:29
Speaker 1: billion dollar industry in its first year, or there's gonna
28:32
Speaker 1: be a billion dollars in tax revenue, and it came
28:34
Speaker 1: to be like a tenth of that. So it's not
28:36
Speaker 1: quite as Um, it's not catching on like wildfire like
28:39
Speaker 1: they thought. But supposedly the casinos that are still standing
28:44
Speaker 1: in Atlantic City are still standing because those are the
28:47
Speaker 1: ones that went to the troubles setting up online gambling sites. Well,
28:51
Speaker 1: that brings us to a good point. Um, there are
28:53
Speaker 1: a lot of brick and mortar casino owners, notably um,
28:57
Speaker 1: what's his name, Sheldon, Sheldon out Adelson. Yeah, those are
29:02
Speaker 1: some of the biggest fat cats casino owners in Vegas,
29:06
Speaker 1: and of course they feel threatened, even if they think.
29:11
Speaker 1: Addleson's big quote was click your mouth, lose your house.
29:14
Speaker 1: And he's saying we're gonna lose half a million jobs. Uh,
29:18
Speaker 1: and people are gonna stop coming to casinos. I'm sure
29:21
Speaker 1: they're also getting into the online casino game if they
29:24
Speaker 1: were smart. I'm sure they are. But um, it raises
29:28
Speaker 1: a good point though, Like Vegas, it used to be
29:32
Speaker 1: that Vegas made all their money on gambling and you
29:35
Speaker 1: could go and stay in a room for ten bucks
29:36
Speaker 1: and eat for two dollars. But it's not the same anymore.
29:40
Speaker 1: In Vegas is a destination family vacation spot with all
29:45
Speaker 1: kinds of revenues coming in, and you need people there
29:48
Speaker 1: to bring those revenues in to see the shows and
29:51
Speaker 1: to take your kid to the stupid indoor amusement park
29:54
Speaker 1: and uh by the now not so cheap food. But
29:58
Speaker 1: but that raises question, then do you even need the
30:01
Speaker 1: gambling if you have all this other stuff to attract people, Like,
30:06
Speaker 1: do you need the casino? And even if you do
30:09
Speaker 1: need the casino, if you have like the roller coaster
30:13
Speaker 1: and the indoor like amusement park and all that stuff
30:15
Speaker 1: that you're taking the kids to like, as long as
30:19
Speaker 1: you're not losing money by having a casino open, it
30:22
Speaker 1: doesn't seem like online gambling would detract from that. Yeah,
30:25
Speaker 1: I see what you mean. I mean those casinos are
30:27
Speaker 1: never losing money. Oh man, even Donald Trump can't make
30:33
Speaker 1: money in Atlantic City. Well, that's probably just from overhead
30:38
Speaker 1: in low attendance. They're not actually, I mean, the house
30:41
Speaker 1: is always winning. Oh, I see what you mean. You
30:43
Speaker 1: know what I mean, But less unless they own the
30:47
Speaker 1: casino exactly. Uh. Yeah, we got a great episode on
30:51
Speaker 1: casinos that you should look into, and we have one
30:54
Speaker 1: on addiction to which is why we're not touching too
30:56
Speaker 1: much upon gambling addiction. Yeah, I mean there's a different effort.
31:00
Speaker 1: When I was researching this, that's all different things. Obviously,
31:02
Speaker 1: it seems like it would make it super easy to
31:05
Speaker 1: get addicted for online gambling. But there was this one
31:09
Speaker 1: Harvard Medical School study of forty people that they said
31:12
Speaker 1: the overwhelming majority of online gamblers playing a very moderate manner,
31:16
Speaker 1: spending minimal amounts. I don't know how accurate that is though.
31:20
Speaker 1: That was that's site like misused apostrophes and stuff like that.
31:24
Speaker 1: I was like, your credibility is a little bit out
31:26
Speaker 1: the window because of your grammar. Um, yeah, it's well,
31:31
Speaker 1: or maybe it's like any other kind of gambling. If
31:33
Speaker 1: you're a moderate gambler, then you'll probably stay that way.
31:36
Speaker 1: But if you have a problem with it, it's certainly
31:38
Speaker 1: gonna make it easier to throw away a bunch of
31:40
Speaker 1: dough And it's not you know, it's not money cash
31:43
Speaker 1: money in front of at least in Vegas. That's why
31:45
Speaker 1: they used one reason they use chips is to kind
31:48
Speaker 1: of trick your brain a little bit, right, to make
31:49
Speaker 1: money more abstract. Yeah, but there's nothing more abstract than
31:52
Speaker 1: just signing your bank account to something online and clicking it. Yeah,
31:56
Speaker 1: because the little wheel on Greedy Goblins is like mesmerizing.
32:01
Speaker 1: It's well, it's also it's small too, So I mean,
32:04
Speaker 1: you see the slot going, but the amount that you
32:07
Speaker 1: have in the bank is not that big, and it
32:12
Speaker 1: doesn't seem like it's linked to real money. In my case,
32:14
Speaker 1: it wasn't linked to any real money, but I could
32:16
Speaker 1: see very easily how it just seems like a part
32:18
Speaker 1: of a game, like a computer game. And apparently there's
32:22
Speaker 1: a whole thing called slots for tots um, which is, uh,
32:26
Speaker 1: if you were against online gambling, this stuff drives you crazy.
32:29
Speaker 1: It's it's basically like Disney versions of casino games for
32:35
Speaker 1: little kids, like apps and things like that where there's
32:38
Speaker 1: no gambling going on. But it's basically like it's like
32:42
Speaker 1: Joe Campbell, it's like prepare for your adulthood as a
32:47
Speaker 1: gambler or a smoker or whatever. Make it cartoon in
32:50
Speaker 1: fun exactly, or a McDonald's consumer or something like that. Yeah,
32:54
Speaker 1: I would be worried. Uh, it seems like an online casino,
32:58
Speaker 1: you can find a reputable one, but it seems like
33:01
Speaker 1: it would be really really easy because the cards aren't
33:04
Speaker 1: in front of you, to cheat the player every time. Well, okay,
33:08
Speaker 1: that's another thing too that the grabster points out. So
33:11
Speaker 1: if you're an American right now, it's still it's kind
33:15
Speaker 1: of a gray area, especially if your state doesn't allow
33:18
Speaker 1: online gambling. Um, so you are still a potential target
33:24
Speaker 1: for shady online gambling sites. So, and one of the
33:28
Speaker 1: things they can do is cheat you out of odds.
33:30
Speaker 1: That's why if you play an Australian site, you can
33:34
Speaker 1: feel comfortable that the Australian government has vetted this computer
33:38
Speaker 1: program and found that the odds are there. It's the
33:41
Speaker 1: real deal. Like if you're playing blackjack, that is a
33:43
Speaker 1: fifty two card deck and every card is in there,
33:47
Speaker 1: even though it's virtual. That's what I would worry about
33:49
Speaker 1: is if you start winning too much, they'd be like,
33:51
Speaker 1: let's just have this guy lose the next let's put
33:54
Speaker 1: the governor on this thing. Yeah, not the governor of Australia, right,
33:58
Speaker 1: because he's called the Prime minister. And you know, if
34:02
Speaker 1: you listen to the Casinos podcast. Vegas used to be
34:04
Speaker 1: fraught with rigged games as well. So, um, it's the
34:09
Speaker 1: same thing. It's just the wild West right now as
34:11
Speaker 1: far as the online version goes. So so Grabster gives
34:14
Speaker 1: a couple of pieces of advice. UM. One, he said,
34:17
Speaker 1: especially when you're trying out a new one and you're
34:20
Speaker 1: using a payment processor and that kind of stuff. He said,
34:23
Speaker 1: open up an account with a small amount of money initially,
34:28
Speaker 1: just to see if it works. He said, put a
34:29
Speaker 1: little in, try it out, try to get it back out. Um,
34:33
Speaker 1: and if everything seems legitimate, then you can start to
34:35
Speaker 1: add more money if that's what you want to do.
34:38
Speaker 1: He also said that you, um, no matter how much
34:42
Speaker 1: trust you have for this company, you want to get
34:44
Speaker 1: your money out very regularly, and frequently they get under,
34:49
Speaker 1: you're you're done, they go under, they get rated whatever.
34:52
Speaker 1: You just want your money out. And again we should
34:55
Speaker 1: say this is illegal in a lot in some weird
34:58
Speaker 1: way still in the United States, so the Feds could
35:02
Speaker 1: conceivably come along and take your money. Yeah, and you're
35:04
Speaker 1: also signing up for terms of service, so you've their
35:07
Speaker 1: age requirements and um, if you fraudlently sign up for
35:12
Speaker 1: something is an underage gambler, then you're breaking the law
35:14
Speaker 1: there too, and then recommend that. There's one more thing, man,
35:17
Speaker 1: I wanted to talk about. So when the FEDS in
35:19
Speaker 1: two thousand eleven rated those top three poker sites um
35:24
Speaker 1: and then in the same year, the Department of Justice
35:27
Speaker 1: issued that thirteen page memo that said, I think we've
35:30
Speaker 1: been misreading this. Uh, those sites that were rated, UM,
35:36
Speaker 1: the Department of Justice brokered a deal where one of
35:39
Speaker 1: the sites that was rated bought the assets of its
35:43
Speaker 1: rival that was also rated, with the Department of Justice
35:47
Speaker 1: taking the money and then distributing the assets to the
35:50
Speaker 1: other illegal gambling operations. They served as the middleman for
35:55
Speaker 1: a merger. I would guess that they got a significant
35:59
Speaker 1: cut of that the big Yeah, and that's crazy. The
36:01
Speaker 1: Department of Justice was brokering a deal between online gambling outfits. Unbelievable. Man.
36:08
Speaker 1: So that's it. That's online gambling. If you want to
36:10
Speaker 1: know more about it, I suggest you go look it
36:13
Speaker 1: up on Forbes because they have a ton of articles
36:15
Speaker 1: on it. But first go to how stuff works dot
36:18
Speaker 1: com and type in online gambling, and then I'll bring
36:21
Speaker 1: up an excellent grab store articles start you out. And
36:24
Speaker 1: since I say grab stir, it's time for listener mail.
36:29
Speaker 1: I'm gonna call this the Brazilian. Hey guys, my name
36:33
Speaker 1: is Raphael. I'm your greatest fan in Brazil. I've listened
36:36
Speaker 1: to at least a hundred episodes. You keep surprising me
36:39
Speaker 1: with new interesting topics. I love the Soccer Show, especially
36:42
Speaker 1: because you know absolutely nothing about it, which was very
36:45
Speaker 1: funny for Brazilian. I thought we were never going to
36:47
Speaker 1: talk about that one again. I love podcasts because they
36:50
Speaker 1: helped me improve my English, and I can listen to
36:52
Speaker 1: them while I am riding the bike at the gym
36:54
Speaker 1: or climbing. Last week I was listening to other podcasts
36:56
Speaker 1: and I must say that you're winning the competition of
36:59
Speaker 1: good knowledge providers. First, I listen to a program of
37:02
Speaker 1: Freaconomics Radio called tell Me Something I Don't Know, and
37:06
Speaker 1: one of the contenders presented the New York prohibition of
37:08
Speaker 1: pinball machines to the early seventies. They might didn't know,
37:12
Speaker 1: but I knew because of your show on pinball. I
37:16
Speaker 1: remember when that happened. Do you remember that? What? We
37:19
Speaker 1: got a lot of email that um, like two weeks
37:21
Speaker 1: after we did our pinball show. This guy on Freaconomics
37:25
Speaker 1: Radio on that show, but the guy was a pinball expert.
37:30
Speaker 1: Because it did a little digging. He did not copy us.
37:33
Speaker 1: Oh no, rarely do people copy as I think. No,
37:36
Speaker 1: I think you're totally right. Second. Almost at the same
37:40
Speaker 1: day that you launched the Nuclear Fusion show, the BBC
37:43
Speaker 1: podcast in Our Time with Melvin Bragg invited three experts
37:46
Speaker 1: to discuss nuclear fusion. Both programs are awesome, but yours
37:51
Speaker 1: was funny. Only yours was funny. I could see that.
37:55
Speaker 1: My conclusion is that you are beating the heck out
37:57
Speaker 1: of other podcasts. Congratulations, WHI should all the best, And
38:00
Speaker 1: if I might add, challenge you to make a show
38:02
Speaker 1: on deflation and inflation. I'm sure that the crazy Latin
38:06
Speaker 1: American experiences to challenge high inflation will amaze you. Ah.
38:10
Speaker 1: We have. We've talked about that a bunch. Yeah, stag inflation.
38:13
Speaker 1: We did one Rafael called what is stag inflation? Yea um,
38:17
Speaker 1: And we've talked about deflation currency. I think currency the
38:20
Speaker 1: stuff you should know. Guide to economics, that's right, super
38:23
Speaker 1: stuff guide even that's right. So Raphael, the information is
38:27
Speaker 1: out there for you and he says p S. Could
38:28
Speaker 1: you please tell me if my English is actually improving? Um,
38:32
Speaker 1: I don't know where you started. We don't have a
38:34
Speaker 1: baseline rough, but your English is pretty darn good. It
38:37
Speaker 1: is a couple of like little charming Latin americanisms, I think.
38:42
Speaker 1: But um, I think you did a great job. Yeah. Thanks,
38:45
Speaker 1: we're your biggest fans. That's right. We appreciate all the
38:49
Speaker 1: flattering stuff. Thanks for that. If you want to flatter
38:52
Speaker 1: Chuck and I, we're always up for that. And by
38:55
Speaker 1: Chuck and I, of course your grammar nazis I mean
38:58
Speaker 1: Chuck and me. Don't listen to that part, Raphael uh.
39:00
Speaker 1: You can tweet to us at s Y s K podcast.
39:04
Speaker 1: You can join us on Facebook dot com, slash stuff
39:06
Speaker 1: you Should Know. You can send us an email to
39:08
Speaker 1: Stuff Podcast at how stuff Works dot com, and as always,
39:12
Speaker 1: join us at our home on the web, Stuff you
39:14
Speaker 1: Should Know dot com For more on this and thousands
39:21
Speaker 1: of other topics. Is it how stuff Works dot com.