Bookmaker William Hill will officially launch in the Australian market tomorrow when its Sportingbet.com.au business is rebranded.
Existing Sportingbet clients will be migrated to the global betting giant’s new local website, WilliamHill.com.au. New clients will also be able to sign-up through the site.
William Hill acquired the Sportingbet Australia business, which included Centrebet, in March 2013, and the acquisition of TomWaterhouse.com followed in August 2013. Centrebet and TomWaterhouse.com will also be rebranded as William Hill in due course.
Tom Waterhouse, CEO William Hill Australia, commented:
“This is the exciting first step towards merging three Australian betting brands into one highly regarded, international brand. Placing all of our assets behind one brand will allow us to provide our customers with the best possible wagering experience and more diverse betting opportunities. William Hill has a rich history in betting on racing and sports, and the brand will enable us to leverage decades of global wagering expertise and understanding to help us establish the best possible product for punters in Australia.”
Founded in the UK in 1934, William Hill today employs more than 17,000 staff around the world and has more than 240 employees in Australia.
The company has over 2300 betting shops throughout the UK, and operates businesses in countries including Italy, Spain and the US.
February 23, 2015
February 17, 2015
William Hill end takeover talks with 888, bwin.party next?
William Hill has pulled out of talks to acquire 888 Holdings because the UK largest bookie feels the price that 888 were asking for was too high.
The news of the collapsed talks was announced by 888: “Due to a significant difference of opinion on value with a key stakeholder, it has not been possible to reach agreement on the terms of a possible offer and the Board of the Company has agreed with William Hill to terminate discussions.”
Brian Mattingley, chief executive of 888, said: “The Company is in good health and continues to trade comfortably in line with expectations.”
At first William Hill valued the company at £720 million, at 203p-a-share along with a 3p dividend but it is understood at least one major shareholder believed the online gambling firm was worth significantly more. News of the failed talks drove down 888 shares by 16%.
888 Holdings began life in 1997 by founding brothers Avi and Aaron Shaked, and Shay and Ron Ben-Yitzhak .The two families’ trusts continue control around 60% of the company.
Some observers now believe that William Hill may turn their attention to bwin.party entertainment who are rumoured to be in talks of a takeover back in November of last year, but no new developments have taken place since then.
It is understood William Hill sees the future with consolidation and now with 888 Holdings out it could very well be the turn of bwin.party.
The news of the collapsed talks was announced by 888: “Due to a significant difference of opinion on value with a key stakeholder, it has not been possible to reach agreement on the terms of a possible offer and the Board of the Company has agreed with William Hill to terminate discussions.”
Brian Mattingley, chief executive of 888, said: “The Company is in good health and continues to trade comfortably in line with expectations.”
At first William Hill valued the company at £720 million, at 203p-a-share along with a 3p dividend but it is understood at least one major shareholder believed the online gambling firm was worth significantly more. News of the failed talks drove down 888 shares by 16%.
888 Holdings began life in 1997 by founding brothers Avi and Aaron Shaked, and Shay and Ron Ben-Yitzhak .The two families’ trusts continue control around 60% of the company.
Some observers now believe that William Hill may turn their attention to bwin.party entertainment who are rumoured to be in talks of a takeover back in November of last year, but no new developments have taken place since then.
It is understood William Hill sees the future with consolidation and now with 888 Holdings out it could very well be the turn of bwin.party.
Playtech snap up Yoyo Games
Playtech has announced the acquisition of UK-based Yoyo Games Limited for $16.4 million, Yoyo, which is headquartered in Dundee, is the home of Game Maker: Studio (“GMS”), a mobile driven cross-platform casual game development technology that enables developers to create games using a single programming code and then publish them to run natively across most common platforms, including iOS, Android, OS X, HTML5, PlayStation, Xbox, Ubuntu, Windows 8, Windows Phone 8 and Windows RT. The entire Game Maker family of products has been downloaded more than five million times. GMS enables game developers to create cross-platform games in hours with a user-friendly intuitive platform. Given the simplicity of the platform and its capabilities, GMS has secured more than 750,000 registered games developers who currently use the platform on a freemium basis with chargeable add-ons.
February 16, 2015
Powerball lottery: The states where you can't win $563m
According to US lottery officials there were three winning tickets sold for Wednesday night's Powerball jackpot, with an estimated total payout of $563m (£366m).
That was the fifth-largest prize in Powerball history, and it had created the kind of buzz that only the (minuscule) chance to win incomprehensible sums of money can generate.
The winning tickets were sold in Texas, North Carolina and Puerto Rico, and customers lined up all over the US in the days leading up to the drawing to take their shot at a piece of the big prize. All over, that is, except for six states.
Alabama, Alaska, Hawaii, Mississippi, Nevada and Utah don't participate in Powerball. In fact, they have no state-run lottery whatsoever.
A look at the list of states reveals that there's no one explanation for their reluctance. It all comes down to local concerns - fiscal, moral and geographical.
In Nevada, casino interests dominate state politics, and the prospect of a government-run gambling enterprise operating alongside the Mirages and MGM Grands of the Las Vegas Strip is a non-starter.
What's more, the Nevada government already gets a cut from the state's gambling industry, says Mark Hichar, chair of the gaming law practice group at the law firm Hinckley Allen.
"The government revenues from gambling are such that they don't see the need to have a lottery competing with those commercial interests," he says.
The same goes for Mississippi, where riverboat gambling and Biloxi-based casinos are a popular - and influential - industry that has successfully joined with anti-gambling religious institutions that hold greater sway in the Deep South "Bible Belt" to keep the lottery at bay.
Those Christian ethical concerns are even more dominant in Mississippi's neighbour, Alabama, and Mormon-heavy Utah.
"The Church of Jesus Christ of Latter-day Saints is opposed to gambling, including lotteries sponsored by governments," the church writes on its website. "Gambling is motivated by a desire to get something for nothing. This desire is spiritually destructive."
Of course the lack of locally sold lottery tickets isn't much of an obstacle for residents who are able to drive to a neighbouring state that participates.
The prospect of losing money across the state line has been an often-cited reason for why states have ended up adopting their own lottery.
According to Terry Rich, president of the Iowa Lottery Authority, the cross-border traffic was a prime reason why his state adopted the lottery in 1985 - and the lure of winning millions is still at play in the non-lottery states.
"A lot of the folks in Utah are heading to Idaho today," he says, "and Nevada people are all heading to California."
It's not a challenge faced by two of the states that don't participate, however - isolated Alaska and Hawaii.
In Hawaii one of the state's political giants - Senator Daniel Inouye - was adamantly opposed to gambling of any kind, arguing it would harm his home-state tourism industry. Gambling, he said, will attract a "different type of people" - "it will not be the type you no see now with their young children, young folks spending their honeymoon."
Inouye died in 2012, but his state's opposition lives on.
In Alaska, on the other hand, the lack of a lottery seems to have less to do with moral questions and more to do with oil. The state generates so much revenue from drilling that it operates with a budget surplus and gives a dividend of nearly $2,000 back to each of its residents every year.
Where states like Georgia, Colorado and Texas use lottery revenues to fund college scholarships, environmental programmes and public schools, Alaskans see no such fiscal urgency.
The numbers involved in the US lottery industry are inarguably massive, however. According to the North American Association of State and Provincial Lotteries, US lottery revenue in 2014 was $70bn. Powerball alone accounted for $4.81bn.
For comparison's sake, the combined 2014 gross revenue for professional American football, baseball and basketball was only $23.6bn.
It's a booming business that 44 states have found impossible to resist.
That was the fifth-largest prize in Powerball history, and it had created the kind of buzz that only the (minuscule) chance to win incomprehensible sums of money can generate.
The winning tickets were sold in Texas, North Carolina and Puerto Rico, and customers lined up all over the US in the days leading up to the drawing to take their shot at a piece of the big prize. All over, that is, except for six states.
Alabama, Alaska, Hawaii, Mississippi, Nevada and Utah don't participate in Powerball. In fact, they have no state-run lottery whatsoever.
A look at the list of states reveals that there's no one explanation for their reluctance. It all comes down to local concerns - fiscal, moral and geographical.
In Nevada, casino interests dominate state politics, and the prospect of a government-run gambling enterprise operating alongside the Mirages and MGM Grands of the Las Vegas Strip is a non-starter.
What's more, the Nevada government already gets a cut from the state's gambling industry, says Mark Hichar, chair of the gaming law practice group at the law firm Hinckley Allen.
"The government revenues from gambling are such that they don't see the need to have a lottery competing with those commercial interests," he says.
Those Christian ethical concerns are even more dominant in Mississippi's neighbour, Alabama, and Mormon-heavy Utah.
"The Church of Jesus Christ of Latter-day Saints is opposed to gambling, including lotteries sponsored by governments," the church writes on its website. "Gambling is motivated by a desire to get something for nothing. This desire is spiritually destructive."
Of course the lack of locally sold lottery tickets isn't much of an obstacle for residents who are able to drive to a neighbouring state that participates.
The prospect of losing money across the state line has been an often-cited reason for why states have ended up adopting their own lottery.
According to Terry Rich, president of the Iowa Lottery Authority, the cross-border traffic was a prime reason why his state adopted the lottery in 1985 - and the lure of winning millions is still at play in the non-lottery states.
"A lot of the folks in Utah are heading to Idaho today," he says, "and Nevada people are all heading to California."
It's not a challenge faced by two of the states that don't participate, however - isolated Alaska and Hawaii.
In Hawaii one of the state's political giants - Senator Daniel Inouye - was adamantly opposed to gambling of any kind, arguing it would harm his home-state tourism industry. Gambling, he said, will attract a "different type of people" - "it will not be the type you no see now with their young children, young folks spending their honeymoon."
Inouye died in 2012, but his state's opposition lives on.
In Alaska, on the other hand, the lack of a lottery seems to have less to do with moral questions and more to do with oil. The state generates so much revenue from drilling that it operates with a budget surplus and gives a dividend of nearly $2,000 back to each of its residents every year.
Where states like Georgia, Colorado and Texas use lottery revenues to fund college scholarships, environmental programmes and public schools, Alaskans see no such fiscal urgency.
The numbers involved in the US lottery industry are inarguably massive, however. According to the North American Association of State and Provincial Lotteries, US lottery revenue in 2014 was $70bn. Powerball alone accounted for $4.81bn.
For comparison's sake, the combined 2014 gross revenue for professional American football, baseball and basketball was only $23.6bn.
It's a booming business that 44 states have found impossible to resist.
February 12, 2015
Chinese Teenager Chops Off Hand to Cure Online Gaming Addiction
A Chinese teenager known only as Little Wang (which is what I would have been called had I chopped off said cock), has reached worldwide infamy after severing his left hand, at the wrist, in a bid to cure his addiction to online gaming.
According to press reports, Little Wang’s mother – who we will refer to as Mummy Wang, as she wanted her identity kept a secret – said that Little Wang was a ‘smart boy’ (I think we will withhold judgment on that one). She told reporters that she went into his bedroom to find a note that read:
“Mum, I have gone to the hospital for a while. Don’t worry. I will definitely come back this evening.”
It’s believed he took a knife from the house, found a suitably comfortable park bench, severed the hand, before hailing a cab with his other hand, and instructing the man to drive him to the hospital.
The kid left the hand on the park bench.
“We cannot accept what has happened,” Mummy Wang told reporters, “It was completely out of the blue.”
It’s estimated that 24 million kids in China are addicted to some form of Internet ‘something or other’. The problem has even become so concerning that military style boot camps are being created as a way of helping the addicted go cold turkey.
And just think, the WPT President, Adam Pliska, recently told us that he was excited about the Chinese online poker market.
According to press reports, Little Wang’s mother – who we will refer to as Mummy Wang, as she wanted her identity kept a secret – said that Little Wang was a ‘smart boy’ (I think we will withhold judgment on that one). She told reporters that she went into his bedroom to find a note that read:
“Mum, I have gone to the hospital for a while. Don’t worry. I will definitely come back this evening.”
It’s believed he took a knife from the house, found a suitably comfortable park bench, severed the hand, before hailing a cab with his other hand, and instructing the man to drive him to the hospital.
The kid left the hand on the park bench.
“We cannot accept what has happened,” Mummy Wang told reporters, “It was completely out of the blue.”
It’s estimated that 24 million kids in China are addicted to some form of Internet ‘something or other’. The problem has even become so concerning that military style boot camps are being created as a way of helping the addicted go cold turkey.
And just think, the WPT President, Adam Pliska, recently told us that he was excited about the Chinese online poker market.
February 11, 2015
Unibet results hit by currency conversion
Swedish operator Unibet has been hit by the exchange rate fluctuations across Europe, meaning that the company’s Q4 results are much flatter than its performance suggested.
As it is listed on the London Stock Exchange, Unibet declares in pounds sterling, with gross winning revenues of £78.0m for the quarter, only slightly up on the £74.4m generated in Q4-2013. However in Swedish Krona, gross winnings was SEK917.4m compared to SEK784.8m in Q4-2013.
Henrik Tjärnström, CEO of Unibet, explained: “Compared with the fourth quarter 2013 this quarter is significantly influenced by exchange rate movements on Unibet’s main currencies. If the average exchange rates for the fourth quarter 2013 were applied to this quarter, gross winnings revenue would be approximately £84.5m. Excluding the effects of exchange rate movements and excluding Kambi’s contribution the underlying growth in gross winnings revenue was 16 per cent compared to the fourth quarter 2013.
“In spite of a sports betting margin below the long term average, Unibet’s markets continue to show strong growth and profitability. Also our mobile offering continues to grow and is now over 43 per cent of the gross winnings revenue.”
The total number of registered customers has continued to increase and exceeded 9.7 (8.6) million at 31 December 2014, whilst at 30 September 2014, over 9.5 million customers were registered. For the fourth quarter of 2014 the number of active customers amounted to 570,360 (516,799) compared with 573,074 for the third quarter of 2014.
The gross margin for pre-game sports betting before Free Bets for the fourth quarter of 2014 was 11.0 (12.4) per cent. The gross margin for total sports betting for the fourth quarter of 2014 before Free Bets was 7.8 (8.3) per cent. The gross margin for total sports betting for the fourth quarter of 2014 after Free Bets was 6.7 (7.4) per cent.
Tjärnström added that performance has been good since the turn of the year: “In the first five weeks of the first quarter average daily gross winnings revenue has increased by approximately 5 per cent in GBP and approximately 16 per cent in local currencies over the same period in 2014.”
As it is listed on the London Stock Exchange, Unibet declares in pounds sterling, with gross winning revenues of £78.0m for the quarter, only slightly up on the £74.4m generated in Q4-2013. However in Swedish Krona, gross winnings was SEK917.4m compared to SEK784.8m in Q4-2013.
Henrik Tjärnström, CEO of Unibet, explained: “Compared with the fourth quarter 2013 this quarter is significantly influenced by exchange rate movements on Unibet’s main currencies. If the average exchange rates for the fourth quarter 2013 were applied to this quarter, gross winnings revenue would be approximately £84.5m. Excluding the effects of exchange rate movements and excluding Kambi’s contribution the underlying growth in gross winnings revenue was 16 per cent compared to the fourth quarter 2013.
“In spite of a sports betting margin below the long term average, Unibet’s markets continue to show strong growth and profitability. Also our mobile offering continues to grow and is now over 43 per cent of the gross winnings revenue.”
The total number of registered customers has continued to increase and exceeded 9.7 (8.6) million at 31 December 2014, whilst at 30 September 2014, over 9.5 million customers were registered. For the fourth quarter of 2014 the number of active customers amounted to 570,360 (516,799) compared with 573,074 for the third quarter of 2014.
The gross margin for pre-game sports betting before Free Bets for the fourth quarter of 2014 was 11.0 (12.4) per cent. The gross margin for total sports betting for the fourth quarter of 2014 before Free Bets was 7.8 (8.3) per cent. The gross margin for total sports betting for the fourth quarter of 2014 after Free Bets was 6.7 (7.4) per cent.
Tjärnström added that performance has been good since the turn of the year: “In the first five weeks of the first quarter average daily gross winnings revenue has increased by approximately 5 per cent in GBP and approximately 16 per cent in local currencies over the same period in 2014.”
February 10, 2015
Online gaming group 888 jumps 24% on William Hill bid talk
Online gaming group 888 has jumped by nearly a quarter following reports of a possible £750m bid from William Hill.
The company’s shares are up 35p to 180p after the Times said it had held talks with William Hill about a 210p a share offer. William Hill is currently down 4.7p at 384.9p.
888 issued a trading update just before Christmas, saying it was confident of meeting full year expectations.
888 has confirmed it has received an approach from William Hill regarding a possible offer. But as is the way of these things it added there was “no certainty.. that any firm offer will be made nor as to the terms.”
Another announcement will be made within 28 days.
Meanwhile the news has sent rival online group Bwin 4.85p higher to 103.2p.
The company’s shares are up 35p to 180p after the Times said it had held talks with William Hill about a 210p a share offer. William Hill is currently down 4.7p at 384.9p.
888 issued a trading update just before Christmas, saying it was confident of meeting full year expectations.
888 has confirmed it has received an approach from William Hill regarding a possible offer. But as is the way of these things it added there was “no certainty.. that any firm offer will be made nor as to the terms.”
Another announcement will be made within 28 days.
Meanwhile the news has sent rival online group Bwin 4.85p higher to 103.2p.
Slow count fraudster avoids jail
A ‘slow count’ fraudster has avoided jail despite costing bookmaker Ladbrokes an estimated £10,000 across an 18 month period.
Snaresbrook Crown Court heard how John O’Connor conned staff at 14 branches of Ladbrokes over 18 months from July 2012. Among the tactics used by O’Connor was the placing of a bet near to the off, then using a variety of distraction techniques to confuse the cashier staff to see if the bet had any chance of winning. If it did then he would pay for the bet and pick up the winnings, if it didn’t he would simply leave the premises without paying for the bet.
O’Connor was charged with 15 counts of a fraud by misrepresentation, to which he pleaded guilty in November. He has been sentenced to 18 months in prison, suspended for two years, for 16 counts of fraud. He was also given a 12-month supervision order and a four-month alcohol treatment order.
O’Connor carried out his crimes at branches in Hillingdon, Redbridge, Tower Hamlets, Newham, Waltham Forest, Wandsworth and Westminster, plus other locations around the country. He even carried out the same offence in Birmingham while awaiting sentence on bail.
Snaresbrook Crown Court heard how John O’Connor conned staff at 14 branches of Ladbrokes over 18 months from July 2012. Among the tactics used by O’Connor was the placing of a bet near to the off, then using a variety of distraction techniques to confuse the cashier staff to see if the bet had any chance of winning. If it did then he would pay for the bet and pick up the winnings, if it didn’t he would simply leave the premises without paying for the bet.
O’Connor was charged with 15 counts of a fraud by misrepresentation, to which he pleaded guilty in November. He has been sentenced to 18 months in prison, suspended for two years, for 16 counts of fraud. He was also given a 12-month supervision order and a four-month alcohol treatment order.
O’Connor carried out his crimes at branches in Hillingdon, Redbridge, Tower Hamlets, Newham, Waltham Forest, Wandsworth and Westminster, plus other locations around the country. He even carried out the same offence in Birmingham while awaiting sentence on bail.
February 06, 2015
Online poker is rigged
We all hear the arguments in cardrooms, on forums, and especially after a suckout occurs. The standard rebuttal is that these sites are making plenty of money, why would they risk losing everything if they juice their flops? There are a few things wrong with this rebuttal.
First, these online poker sites were making plenty of money. But how much is plenty? With increasing competition and a move towards publicly traded companies (Party Poker IPO, Empire Poker IPO, Paradise Poker takeover by SportingBet, and the pending Pacific Poker IPO), the pie is being divided up into smaller pieces while to pressure to continue growth rises. When all you have to do is spend your cash, it is easy to stay fair. Why rock the boat? But when the industry is shattering into a million tiny poker sites and your board of directors is holding you accountable for a few billion of investors’ money, you might try to squeak out a few pennies.
Second, are they really risking everything if they are certain they will not get caught? If Party Poker and Poker Stars can find subtle ways to juice their flops, it would be damn near undetectable. Over a few billion hands the difference of a fraction of a cent of rake per hand would make such deception worthwhile. So the two big questions are why and how.
Why Would Online Poker Be Rigged?
Why is simple. Money! As mentioned earlier, external and internal pressures are increasingly weighing on poker sites. Boards of directors and shareholders need to see returns, and customers need to be retained. Think of things from the perspective on an internet poker site who is considering their cash flow. They have a few problems facing them.
First, their players are going broke. Bad players will supposedly lose over the long run. Once they are gone, the poker sites are left with fewer players and therefore less rake. This must be a huge problem for poker sites. If they can tip the scales in favor of the fish occasionally, they can avoid detection. Most “lucky runs” are well within the realm of statistical probability, so they can give a loser a break every now and then to rejuvenate his rake producing bankroll.
Second, if overall growth stalls, then the only way to grow revenue is to squeeze more money per hand out of the poor saps at the tables. This is already happening. Party Poker has been peaking at 70,000 players for over a year. Their astronomical growth took them from 40,000 at peak hours to 70,000 in about a year. It has not moved from that point. Party Poker’s response was to rewrite their rake requirements to rake up to $3 from tables starting with 6 players rather than 7. This has had a huge impact on the rake generated at the 6-max tables, which have proliferated in recent months. They obviously need to squeeze their players, why not cheat them to squeeze out an extra dime per hand?
Finally, there is an intangible benefit to creating action. Not only does it produce more rake, but it gives the gambling type a feeling of exhiliration. Players feel like they were involved in a significant pot and boast of their wins and whine about their losses after the hand. No one brags up a 2 big bet win. Everyone tells the story of the 30 big bet pot they scooped.
It is obvious, then, that there is plenty of motivation to cheat. However, rigging online poker is a dangerous game. If they are accused and it is proven that there is a discepancy in the randomness of the cards, that internet poker site is done. They will be ass-raped and crucified by the playing public. Therefore, they need to insure they are not caught.
How Would Online Poker be Rigged?
There are two basic types of rigging. One is designed to retain players who would otherwise bust and leave, thus maximizing long-term rake, and one is designed to maximize the rake on an individual hand, or pump up short term rake. Each goal would require different methods.
Fluctuations are a normal part of poker. Everyone knows that. But poker sites are in a unique position where they can control those fluctuations. If a player is about to go broke and another player has done well, software could easily detect that they are at the same table. One or two bad beats will ensue and big pots will be taken by the poor player. Setting this up would not be difficult for a clever designer. As long as it does not happen to any individual player too often, it would be undetectable.
Another trick that would keep players playing is the so-called cashout curse. This is when a player withdraws and then goes on a slide, losing a chunk of change. It does not even need to be real, as long as the fear is there then people will be less inclined to withdraw their money and will continue to play. Rigging online poker to punish people who cash out would be the same as any other form of rigging.
Pump Up the Rake!
What if Party Poker intentionally dealt AA and KK to players once more than would normally occur every 1000 hands? If these monster hands generate an extra $0.50 of rake, then Party Poker would have made an extra $1,350,000 over the 2.7 billion hands they have dealt so far. While this is not a lot of money given their huge worth, imagine if they could flop an extra flush draw here, an extra out-kicked trip aces there. It would add up and put additional millions on the bottom line.
All of these internet poker sites claim to be audited by third party companies who check the veracity of their randomness claims. There are a few problems with this. The third parties verify the data given to them by the online poker site. The poker site can control what data they get to see and thus control their assessments. If a poker site were intentionally cheating, would they turn over proof to a consultant? Never! In fact, it is possible to cheat under the consultants’ noses. If a consultant were to examine 1 million flops they may not see aces flop more often than expected. However, if the consultants cannot see all of the players’ hole cards, they cannot make a judegement on randomness. Sure the flops might be random, but if three aces are out preflop, would it be too difficult to flop the last ace more often than expected and flop fewer aces when fewer aces are dealt preflop? By using the hidden nature of the players’ hole cards, the online poker sites can effectively skew the deal while appearing random.
Finally, the huge amounts of data collected by poker sites could be mined to find profitable patterns. If a player chases flush draws every time he flops them, then the software could flop him a lot of flush draws while keeping the flops random. This player will miss and fold the river often enough that other players will never know what he may have had or how likely it was. By knowing which players will bet and raise certain hands, a good data miner can create specific subtle flopping rules to entice that playr to bet and raise, increasing the rake. They could also calculate a deposit threshold for players. If they know he redeposits at $400 they may let him get there just to get the money into their system. The possibilities of effective and undetectable rigging through data mining are endless and a little scary.
So Is Online Poker Rigged? How the hell should I know? I have never sat at a table with 9 friends whose cards I could factor into calculations for the 500,000+ hands that it would likely take to uncover any statistical anomolies with an acceptable margin of error. Is it rigged? Maybe. Is that scary? Sure. The point is that these poker sites have too much motivation to juice their flops and bouy up their shitty players. Rigging their site may seem to be an easy way to go.
First, these online poker sites were making plenty of money. But how much is plenty? With increasing competition and a move towards publicly traded companies (Party Poker IPO, Empire Poker IPO, Paradise Poker takeover by SportingBet, and the pending Pacific Poker IPO), the pie is being divided up into smaller pieces while to pressure to continue growth rises. When all you have to do is spend your cash, it is easy to stay fair. Why rock the boat? But when the industry is shattering into a million tiny poker sites and your board of directors is holding you accountable for a few billion of investors’ money, you might try to squeak out a few pennies.
Second, are they really risking everything if they are certain they will not get caught? If Party Poker and Poker Stars can find subtle ways to juice their flops, it would be damn near undetectable. Over a few billion hands the difference of a fraction of a cent of rake per hand would make such deception worthwhile. So the two big questions are why and how.
Why Would Online Poker Be Rigged?
Why is simple. Money! As mentioned earlier, external and internal pressures are increasingly weighing on poker sites. Boards of directors and shareholders need to see returns, and customers need to be retained. Think of things from the perspective on an internet poker site who is considering their cash flow. They have a few problems facing them.
First, their players are going broke. Bad players will supposedly lose over the long run. Once they are gone, the poker sites are left with fewer players and therefore less rake. This must be a huge problem for poker sites. If they can tip the scales in favor of the fish occasionally, they can avoid detection. Most “lucky runs” are well within the realm of statistical probability, so they can give a loser a break every now and then to rejuvenate his rake producing bankroll.
Second, if overall growth stalls, then the only way to grow revenue is to squeeze more money per hand out of the poor saps at the tables. This is already happening. Party Poker has been peaking at 70,000 players for over a year. Their astronomical growth took them from 40,000 at peak hours to 70,000 in about a year. It has not moved from that point. Party Poker’s response was to rewrite their rake requirements to rake up to $3 from tables starting with 6 players rather than 7. This has had a huge impact on the rake generated at the 6-max tables, which have proliferated in recent months. They obviously need to squeeze their players, why not cheat them to squeeze out an extra dime per hand?
Finally, there is an intangible benefit to creating action. Not only does it produce more rake, but it gives the gambling type a feeling of exhiliration. Players feel like they were involved in a significant pot and boast of their wins and whine about their losses after the hand. No one brags up a 2 big bet win. Everyone tells the story of the 30 big bet pot they scooped.
It is obvious, then, that there is plenty of motivation to cheat. However, rigging online poker is a dangerous game. If they are accused and it is proven that there is a discepancy in the randomness of the cards, that internet poker site is done. They will be ass-raped and crucified by the playing public. Therefore, they need to insure they are not caught.
How Would Online Poker be Rigged?
There are two basic types of rigging. One is designed to retain players who would otherwise bust and leave, thus maximizing long-term rake, and one is designed to maximize the rake on an individual hand, or pump up short term rake. Each goal would require different methods.
Fluctuations are a normal part of poker. Everyone knows that. But poker sites are in a unique position where they can control those fluctuations. If a player is about to go broke and another player has done well, software could easily detect that they are at the same table. One or two bad beats will ensue and big pots will be taken by the poor player. Setting this up would not be difficult for a clever designer. As long as it does not happen to any individual player too often, it would be undetectable.
Another trick that would keep players playing is the so-called cashout curse. This is when a player withdraws and then goes on a slide, losing a chunk of change. It does not even need to be real, as long as the fear is there then people will be less inclined to withdraw their money and will continue to play. Rigging online poker to punish people who cash out would be the same as any other form of rigging.
Pump Up the Rake!
What if Party Poker intentionally dealt AA and KK to players once more than would normally occur every 1000 hands? If these monster hands generate an extra $0.50 of rake, then Party Poker would have made an extra $1,350,000 over the 2.7 billion hands they have dealt so far. While this is not a lot of money given their huge worth, imagine if they could flop an extra flush draw here, an extra out-kicked trip aces there. It would add up and put additional millions on the bottom line.
All of these internet poker sites claim to be audited by third party companies who check the veracity of their randomness claims. There are a few problems with this. The third parties verify the data given to them by the online poker site. The poker site can control what data they get to see and thus control their assessments. If a poker site were intentionally cheating, would they turn over proof to a consultant? Never! In fact, it is possible to cheat under the consultants’ noses. If a consultant were to examine 1 million flops they may not see aces flop more often than expected. However, if the consultants cannot see all of the players’ hole cards, they cannot make a judegement on randomness. Sure the flops might be random, but if three aces are out preflop, would it be too difficult to flop the last ace more often than expected and flop fewer aces when fewer aces are dealt preflop? By using the hidden nature of the players’ hole cards, the online poker sites can effectively skew the deal while appearing random.
Finally, the huge amounts of data collected by poker sites could be mined to find profitable patterns. If a player chases flush draws every time he flops them, then the software could flop him a lot of flush draws while keeping the flops random. This player will miss and fold the river often enough that other players will never know what he may have had or how likely it was. By knowing which players will bet and raise certain hands, a good data miner can create specific subtle flopping rules to entice that playr to bet and raise, increasing the rake. They could also calculate a deposit threshold for players. If they know he redeposits at $400 they may let him get there just to get the money into their system. The possibilities of effective and undetectable rigging through data mining are endless and a little scary.
So Is Online Poker Rigged? How the hell should I know? I have never sat at a table with 9 friends whose cards I could factor into calculations for the 500,000+ hands that it would likely take to uncover any statistical anomolies with an acceptable margin of error. Is it rigged? Maybe. Is that scary? Sure. The point is that these poker sites have too much motivation to juice their flops and bouy up their shitty players. Rigging their site may seem to be an easy way to go.
Subscribe to:
Posts (Atom)