April 22, 2014

Why more governments should offer their citizens a one-in-a-million chance to win

People love lotteries. Almost half of Americans play at least once a year; Spain’s annual national lottery has been going strong for more than a century; and in China the national welfare lottery has collected $167 billion since it began in 1987. This love is unrequited: The odds of winning are abysmal, which can turn them into a tax on the poor.

But that’s why some economists love lotteries, too. They demonstrate a great way to trick people into doing things they ought to be doing anyhow.

Take Slovakia: Like some of its fiscally-troubled European brethren, the government finances itself through a value-added tax, which it’s having some trouble collecting, since businesses are not reporting their sales for VAT-collection. How do you change that? The government there recently started a new lottery that citizens could enter with a receipt from any purchase of more than €1. That turned the country’s lottery-loving citizenry into a corps of internal revenue inspectors, demanding receipts from merchants and, according to the finance minister, increasing VAT collections.

Their eagerness comes from a quirk of human psychology which, when documented, helped win Daniel Kahneman and Vernon Smith the 2002 Nobel Prize in economics. Their research found that rational decisions about costs and benefits were distorted by how people framed them in their minds: People tend to embrace risk when there is a potentially large gain, and avoid it when there is potential for even a small loss. That’s why someone who will pay $5 for an infinitesimal chance to win a huge jackpot might not put away $5 they could spend today in a bank to save for the future.

That’s been a long-time message of Peter Tufano, an economist and dean of Oxford’s Said Business School. His non-profit, D2D Fund, promotes a number of programs to build financial assets for the poor that take advantage of this facet of human behavior. One of the most effective is known as the save to win fund. Consumers are encouraged to enter a “lottery” which is actually a savings account. The money they spend to enter is saved, and they become eligible for a cash prizes drawn from the combined interest earnings.

This is behavioral economics at work: While people won’t save money for the guaranteed-but-small return of interest on a certificate of deposit, they will pay for a tiny chance of a large return. Tufano’s pilot programs in the United States have led to $72.2 million in savings (pdf) for more than 40,000 account holders between 2009 and 2012. The lottery is a bonus, Tufano says—what’s important is that they are saving rather than spending or gambling their principal in the first place, making them more resilient to financial shocks.

Fans of these methods have been encouraging policymakers to use them more often. Four years ago, Harvard Business Review floated a proposal that would enter US taxpayers in a lottery as a way to encourage accurate and timely filing. But despite president Obama’s much bally-hooed “nudge”-friendly policy team, that plan hasn’t been implemented.

There are those that might object to lotteries as a nudge toward wise choices. Several religious faiths are skeptical, seeing gambling as sinful. Some governments, from China to many US states, are already using lotteries to fund social welfare or arts programs, and might not like to see competition from savings-building programs. And maybe it all feels a bit manipulative.

But if sweepstakes like these can be more widely useful, maybe we need a lottery that gives an entry ticket to every lawmaker who votes for smart social policies like these. After all, everything is about incentives.

Louis van Gaal favourite to replace Moyes

David Moyes' appointment at Manchester United raised plenty of questions about the former Everton boss and his ability to live up to the expectations that accompany such a prestigious job.

In truth, Moyes hasn't really looked as if he belonged in the Old Trafford dugout and Gthe Premier League defeat to Everton is to be the final straw for the 50-year-old Scot.

Leading the market to replace him is Louis van Gaal at 3/1 (4.00), the man who has been heavily linked with a summer move to Tottenham in recent weeks. But punters clearly believe that the man who will lead the Netherlands in Brazil this summer will be a highly-sought after appointment.

The 62-year-old's contract with the Dutch FA will expire after the World Cup, and he has been open about his desire to manage in the Premier League, so it's of little surprise to see him as the market favourite.

There are a number of candidates with strong links to the club in the other front running positions to replace Moyes, with former assistant manager Carlos Queiroz being backed into 9/2 (5.50) with Paddy Power, having been as big as 66/1 (67.0) just a few days ago.

Ryan Giggs has also been backed in recent weeks and now resides at 4/1 (5.0), although given the number of high profile, experienced candidates that could be available it seems unlikely that the Old Trafford hierarchy would risk appointing someone without any managerial experience on a long-term basis.

It could be more likely that Giggs would take over in an interim capacity for the final few games of the season, but the bookmakers could require the United midfielder to be appointed on a longer term basis in order to settle the market so punters should use caution with this selection.

That same logic could apply to the fact that Paddy Power make Sir Alex Ferguson a 6/1 (7.0) chance to be the next Manchester United manager.

Bayern Munich boss Pep Guardiola is made a 16/1 (17.0) chance, although even at that price such a switch seems increasingly unlikely given how well the Bavarian club are doing under the former Barcelona man and how much work appears to be required at Old Trafford.

Jurgen Klopp is a 7/1 (8.0) bet according to the Irish bookmakers and although perhaps more plausible than Guardiola, the fact remains that United could struggle to lure a manager of his ilk who is currently employed at a stable, successful club, especially after defeat to Everton meant that United could no longer qualify for the Champions League.

April 21, 2014

Czech Republic drafting online gambling bill

The Czech Republic has the highest number of bars with gambling licenses per capita worldwide. But with just under 60,000 gambling machines in operation within its borders, the Czech government is looking to tighten control over the gaming industry.

Recently, Czech Deputy Finance Minister Ondrej Zavodsky revealed in an interview with Bloomberg that his office is currently in the process of drafting a new gambling bill that would allowing online gaming for all operators in the Czech Republic. Sounds like a good plan, right?

But there’s a catch. The proposed bill would allow online gambling, but would increase taxes for casino operators who ultimately decide to offer online gambling services.

As it stands now, the Czech government collects roughly $400 million in taxes from the gaming industry a year. But Deputy Finance Minister Ondrej Zavodsky also pointed out that costs related to the gaming industry are at least four times higher than the tax revenue, hence the proposal to increase tax rates for the gambling operators

“We need to create an environment that will allow us to tackle hardcore gaming like slots or table games,” Zavodsky told Bloomberg.

Separate tax rates will apply for different types of gaming to augment the Government’s current take of around 8 billion koruna (approx. $400 million) in gaming industry tax revenues per annum.

Should the bill pass, a 2016 timeline for its implementation is expected, giving casino operators enough time to weigh the pros and cons of offering online gambling in the country. Casinos and slot operators would receive the short end of the stick as they stand to face higher tax rates, while lottery companies would get the benefit of being taxed less, or at least lower than the 20 percent operators currently pay.

April 16, 2014

So Far, US Online Gambling Revenues Have Been Pathetic

State budget makers and gaming interests have drastically, laughably overestimated the amount of money that would be generated with the advent of legalized online gambling, especially in New Jersey.

In March 2013, New Jersey officials forecast that online gambling would yield somewhere in the neighborhood of $180 million in tax revenues for the state during the first fiscal year Internet gaming was legal. But the estimates have been falling ever since—to $160 million when Christ Christie signed the state budget last summer, and down to just $34 million earlier this year, after a few months of legalized online gambling had passed. More recently, the state treasurer said that no more estimates on online gambling revenues would be made public, which seems wise considering how previous predictions have fared.

From the end of November, when legalized online gambling in New Jersey, through February 2014, a mere $4.2 million in tax revenues has been collected by the state, leading one legislative budget officer to now project an estimate of $12 million in revenues for the year, the Associated Press reported. The revised estimate for next year’s revenues was listed at $48 million. At that pace, it would take four or five years for the state to take in revenues equal to the amount it was supposed to collect in tax revenues during the first year of legal online gambling.

It’s not just state officials who seem mystified by the lackluster returns. Caesars Entertainment recently informed the New Jersey Star-Ledger that its online gaming operation was experiencing decent success in a few parts of the state—Jersey City, Toms River, Cherry Hill—but that it couldn’t explain why interest was strong in some areas and almost nonexistent in others.

New Jersey isn’t the only state that seems to have drastically overestimated online gambling’s potential as a budgetary savior. When Delaware’s gambling sites launched, there were often only a couple dozen players online at any moment, and almost immediately it became apparent that revenues wouldn’t come anywhere near to the first-year estimates. Toward the end of March, Morgan Stanley issued a note regarding longer term prospects for online gambling in the U.S. “We are lowering our estimates to better reflect the insights we have gained following the first few months of operations in New Jersey, Nevada and Delaware,” the note stated, lowering the anticipated gross online gambling spending for 2017 from $5 billion to $3.5 billion, and for 2020 from $9.3 billion to $8 billion.

Toward the end of 2011, mind you, Morgan Stanley was estimating an online gambling market of $14 billion annually, though that was based on broader legalization.

Casino companies give plenty of reasons why online gambling hasn’t taken off in New Jersey and other states, including the continued existence of unregulated (illegal) gambling site competitors, the fact that some banks aren’t allowing their credit cards to be used for placing bets online, and basic lack of awareness among consumers. Surely, some if not all of the factors holding online gambling back can be addressed in time.

That’s assuming legalized online gambling will be around for a while. Sheldon Adelson, the billionaire CEO of the Las Vegas Sands Corp., who obviously has no problem with people gambling in person because he runs casinos, has been waging a war against online gambling for months, at one point penning an op-ed calling Internet gaming “a societal train wreck waiting to happen.” With the backing of Adelson, U.S. Senator Lindsey Graham (R-SC) and Sen. Dianne Feinstein (D-CA) recently sponsored a bill that would effectively outlaw online gambling throughout the country.

A group supported by Adelson, the Coalition to Stop Internet Gambling, has released a series of online ads warning about the risks posed to children and their families in a world where gambling is available on screens 24/7, and it’s not always possible to tell who is using an online account. As the National Journal pointed out, one of the ads shows how a kid with a smartphone can be playing Angry Birds one minute, then be addicted to blackjack the next:

“I was playing Angry Birds and then, you know, I just found it,” the teen narrates, as images of online blackjack and poker tables flash on screen. “It’s a lot cooler knowing that I’m playing a real game, not just, like, Candy Crush or Fruit Ninja.”

Atari partners with Pariplay to launch real-money gambling

Atari’s recently-announced partnership with social casino company FlowPlay to create a multi-platform gambling product called Atari Casino isn’t the only news coming out of the old video game company. Even bigger news has dropped with a new announcement that Atari has sealed the deal on another partnership, this time with online gambling operator Pariplay, to launch Atari’s video game brands across real money gambling formats, including iLottery, social, online and mobile platforms.

Remember those old Atari games like Asteroids, Pong, Centipede, and Missile Command? Well, prepare yourself for the return of these games, albeit in a different format from what you’ve come to know. As part of the Atari-Pariplay partnership, these games are expected to be offered in a multitude of real money gambling formats on Atari’s soon-to-launch real money gambling web site. And you thought Atari Casino was big news? This one has the potential to be even bigger.

The launch of Atari’s real money gambling web site is expected to happen later this year and in addition to seeing these games in the new site, all of them will also be made available in the Pariplay network, allowing operators with existing deals with the company to run these games through their sites.

If this Atari-Pariplay deal isn’t a match made in iGaming heaven, it is at the very least an intriguing one for both parties concerned. Unlike modern video games like the PlayStation 4 and the XBox One, Atari still has a legion of adult fans who grew up playing its games. And we’re not talking about the young and hipster crowd; these are people who are at least in their 30′s, an important segment to have on your side when you’re starting out in the business of real money gambling.

Pariplay’s expertise in the world of real money gambling category also makes it an ideal partner for Atari, allowing the latter to branch out of the video game industry where it initially made its name.

“Atari was a pioneer in the interactive entertainment space, having built tremendous brand equity through their rich suite of beloved brands,” Pariplay CEO Gili Lisani said in a press release. “We are proud to steward their entry into the evolving iGaming category where players can engage with their properties in exciting new ways.”

This new partnership with Pariplay, coupled with Atari’s equally new Flowship deal, are the first two of what’s shaping up to be a lot of steps to successfully transition into the world of social and real money online gambling.

Austrian match fixing players charged

Former footballers Dominique Taboga, Sanel Kuljic and ‘several other people’ have been charged in connection with the Austrian match-fixing scandal which came to light last year, state prosecutors said on Monday. Reuters reported that prosecutors in Graz said that they would not give any further details for the time being while investigations continued.

Taboga was initially hailed as a whistle-blower when he claimed he was being blackmailed to manipulate results, although it later transpired that he was more involved in events than he initially suggested. He left Austrian team Groedig by mutual consent on 14 November after the club said he had admitted trying to persuade four team mates to manipulate matches and in February he was given a life ban by the Austrian Football Federation.

Kuljic, who retired in 2012, played for Austria 20 times between 2005 and 2007 and was joint topscorer in the Austrian Bundesliga in 2005/06 for SV Ried with 15 goals.

Last November criminal investigators suggested that up to 17 first and second division matches could have been manipulated in the last seven years, nine of these were in the top flight Bundesliga and three involved Groedig. Nine of the 17 matches involved former Bundesliga club Kapfenberger, which was relegated at the end of the 2011-12 season.

Football integrity is one of the many issues that will be debated at next month’s Betting on Football Conference, held at Stamford Bridge on 8 May.

BetButler under siege from angry punters

BetButler under siege from an array of angry punters as a hoard of complaints surface on sports betting forums and twitter over withdrawal issues and a lack of communication.

Bodugi customers receive BetButler lifeline.

BetButler Under Siege From Angry PuntersThat was the headline that your truly selected just days ago after the news broke that BetButler had entered into an arrangement to take over the player balances from the troubled social betting site owned by Bodugi Technology.

I think I had better go back and change that word lifeline, and amend the sentence where I told worried Bodugi customers to worry no more, as it had become apparent that all is not well within the corridors of BetButler towers.

BetButler’s mantra is, “we’re on your side,” but that’s not exactly the feeling that their punters are getting, after sports betting forums and twitter have lit up in recent days, over allegations of slow withdrawals and a communications strategy that makes Chris ‘Jesus’ Ferguson sound like a motor mouth.

‘David,’ an administrator at the Gambling Times website, got so fed up with the constant complaints, and lack of feedback, that he even marched up to the BetButler main offices in London to demand answers in person.

He was met with stony silence.

BetButler is still paying out, albeit at a pace that doesn’t seem to fit into the customer’s ideal, but their behavior has created mass confusion, especially when you factor in their decision to take over the balances of the Bodugi punters.

I mean why would do you do that if you were on the brink of going flat broke?

Muddying the waters even more, Betclearer (BetButlers owners) are currently shown on the Companies House website as being in the state of dissolution. The company accounts for Betclearer were supposed to be posted on 31/12/2013 but they never materialized.

One forum poster explained how they had spent ’20 minutes talking to a very nice lady at the Gambling Commission, who is also owed money by Butler.’ That same poster went on to say that the ‘very nice lady’ said that, ‘part of the reason that they have fallen behind with payments, is the new regulations that have been imposed on Bet Butler by TGC. When pressed on this point, she went on to explain the TGC had ordered Butler to tighten up on verification of customers, particularly in respect of AGE VERIFICATION.’

BetButler couldn’t ignore their customers forever and eventually a reply was received from one irate customer who once again shared it with his fellow posters.

In the e-mailed response a Bet Butler representative acknowledged that there had been delays with withdrawals, stating, ‘as a brokerage, the funds you have deposited to place bets have been used to place bets and at present we are waiting for monies to be returned to us from other bookmakers. We don’t envisage this delay to be much longer and as soon as funds are returned to Bet Butler, your funds can be returned.’

Bet Butler also laid some of the blame on a huge increase in customers, which has resulted in more activity than ever before, therefore placing huge demands on their customer service teams, hence the lack of communication.

Not the warmest of welcomes for Bodugi players, who have also been told that before they can withdraw their funds through Bet Butler they have to wager their whole balance at bets of even money or above.

More of a line than a lifeline now I come to think of it?

If anyone is worried about the goings on at BetButler then the process is pretty straightforward.

Contact the Gambling Commission who will do absolutely nothing for you and then go home and pray to whichever God you believe in that you will one day receive your money.

Best of luck.

April 14, 2014

Unibet strengthens horseracing ties

Sportsbook Unibet is putting further investment behind racing by becoming ARC’s official starting stall sponsor for 2014. The new sponsorship will see Unibet branded starting stalls at ARC’s portfolio of racecourses across the length and breadth of the country. In addition, over 90 stall handlers will also wear Unibet branded clothing throughout the year. This sponsorship will run alongside Unibet’s freshly announced official betting and gaming partnership with Royal Windsor Racecourse.

This significant sponsorship will see Unibet’s eye catching logo’s prominently displayed on front and rear of the starting stalls at Royal Windsor, Wolverhampton, Lingfield, Ffos Las, Bath, Yarmouth, Newcastle, Brighton, Chepstow and Southwell throughout the flat season.

Unibet announced last week that it was embarking on a programme of horse racing associations and marketing initiatives in the coming months, and less than a week into the flat season the Wimbledon based company has announced sponsorships at Chepstow, Royal Windsor and this new starting stall initiative.

Ed Nicholson, Head of Unibet’s UK Marketing Operations, said: “This sponsorship is an extremely simple but effective way of informing those who like to bet on horse racing that Unibet now offers a fully comprehensive horse racing offering.

“Unibet’s sole racing product aim in 2014 is to ensure that those who like to bet on horse racing are aware that Unibet have launched a new racing odds line and have a comprehensive product that matches and exceeds our competitors offering. We would like this group to consider opening an account with us, and then to enjoy placing their horse racing bets with us on a regular basis.”

ARC’s Jo Mapletoft, Group Sponsorship Manager said: “ARC is delighted to be working with Unibet to develop its racing proposition. The exposure and reach that Unibet will gain through the brand being seen on Sky Sports At The Races and from the thousands of visitors at the ARC courses will be sure to gain positive results.”

Denmark orders ISP to block five illegal gambling sites

For a country that was one of the first to embrace online gambling in its shores, Denmark seems to be doing a decent of job cracking down on what it considered as “illegal” online gambling sites.

Quite happily, the Danish Gambling Authority recently instructed Internet service provider Three to block five suspected sites, which have been named to include 7red.com, 7red.dk, quasargaming.com, wintrillions.com and trillonario.com.

Turns out, these five sites aren’t licensed by the Danish government and worse for them, they were already warned by the authority to stop operating in the country lest they feel the wrath of getting blocked out of a market that doesn’t have any shortage of online gambling options for its residents.

This isn’t the first time the DGA has taken this step to request a block on illegal gambling sites, or at least what it deemed as such. Back in 2012, the DGA imposed blocks on 12 gambling firms lacking official Danish online gambling licenses, most notably Betclic Everest subsidiary Bet-At-Home and several Playtech-powered sites, including Titan Poker.

So clearly, the DGA already knows the go-around on the measures needed to prevent illegal online gambling sites from operating in the country. Not surprisingly, Internet service provider Three was once again the recipient of the city court of Frederiksberg’s latest injunction same as it was back in 2012. With this new injuction, Three is now forced to once again take the necessary steps to ensure that none of the five blocked sites can finagle their way into the country again.

Three really has no choice but to comply again, anyway. It’s got two weeks to do so, although it’ll probably take the company a lot sooner than that to act on the DGA’s orders.

Betclic Everest withdraw operations from Russia

Senior management at igaming operator Betclic Everest have announced that the operator will withdraw all of its igaming operations from targeting the Russian igaming market.

The decision by the operator, comes days after Betclic announced that it would no longer allow wagering and accept customer subscriptions from Belgium.

Betclic Everest announced its decision following the Russian gaming authorities’ decision to extend its internet ISP blacklist. It is thought that the Russian Government will look to toughen its stance on unlicensed igaming operators, as Russia looks to set a future igaming policy.

Russian ISP blocks have affected a number of igaming operators including Unibet, Pokerstars and Bwin. The blocks have been undertaken by Russian internet watchdog – Roskomnadzor.

Betclic Everest, actions to withdraw from the region have been followed by sports betting exchange Betfair that they would no longer accept customers from the Russian Federation.

Betclic Everest are set to make more statements regarding their decision to withdraw operations from the region.