4 ms·

There are so many "basically online gambling" adjacent companies. They seem to take advantage of the same psychological loophole, but likely leave the vast majo

There are so many "basically online gambling" adjacent companies. They seem to take advantage of the same psychological loophole, but likely leave the vast majority of people involved worse off. -Penny Auction sites. Tons of TV commercials for these. They let you bid on expensive items. For example, bid for a $500 iPad for $4. The trick is that you must pay for each bid, so it's more like a lottery than an auction.[1] -Omaze is an interesting one, and seems to be growing pretty large. It's a type of lottery, but they seem to give the majority of proceeds to charity.[2] Of course people should be able to do stupid things with their own money. But when you read the stories of folks involved with this stuff, it does feel sad. I used to be quite overweight. There were times in my life where I was mentally weak, and I would absolutely have paid money to remove the temptations (fast food) from the streets for my own benefit. Of course, there is no real market way to pay to remove temptation. This really does feel like a true market failure, the same as having these apps in the app stores... Perhaps legislation to remove temptation is actually what is best for most everyone involved. Anytime there is an industry/company with high percentages of dissatisfied customers, that is not a net positive thing to have. [1]https://www.consumer.ftc.gov/articles/0037-online-penny-auctions https://www.consumer.ftc.gov/articles/0037-online-penny-auct... [2]https://www.distractify.com/p/is-omaze-a-scam https://www.distractify.com/p/is-omaze-a-scam

drchopchop 6y ago
That is a great point, and I have been fascinated by these, especially the penny auction sites. DealDash is clever and has a mechanic where if you bid it keeps the auction alive for 10 more seconds (which must keep user engagement sky-high). Someone does actually win something, but everyone else loses both time and money - which is the difference between this and, say, eBay. The difference, I think, in online casino gaming is that the vast majority of players do not actually spend money at all. Only a small amount of players do, and of those only a fraction are the hardcore people mentioned in this article. Thus it's hard to show it's causing harm in court, because the companies will simply say "it's a free app, microtransactions are not mandatory", and ignore the people who are taking our second mortgages on their houses. It's a scenario where a small fraction of the consumer base spends so much money that they subsidize the free players.
- rasz 6y ago
  Almost everyone does extended time on bid now. Even places like Copart auto salvage auctions, the thing is for B2B sales yet looks like Vegas slot machine.

drchopchop 6y ago

That is a great point, and I have been fascinated by these, especially the penny auction sites. DealDash is clever and has a mechanic where if you bid it keeps the auction alive for 10 more seconds (which must keep user engagement sky-high). Someone does actually win something, but everyone else loses both time and money - which is the difference between this and, say, eBay. The difference, I think, in online casino gaming is that the vast majority of players do not actually spend money at all. Only a small amount of players do, and of those only a fraction are the hardcore people mentioned in this article. Thus it's hard to show it's causing harm in court, because the companies will simply say "it's a free app, microtransactions are not mandatory", and ignore the people who are taking our second mortgages on their houses. It's a scenario where a small fraction of the consumer base spends so much money that they subsidize the free players.

rasz 6y ago
Almost everyone does extended time on bid now. Even places like Copart auto salvage auctions, the thing is for B2B sales yet looks like Vegas slot machine.