7 ms·

"The company has said in previous court filings that only a fraction of the game's players actually spend money." I was recruited by a sports gambling company

by dkarl 3y ago

"The company has said in previous court filings that only a fraction of the game's players actually spend money." I was recruited by a sports gambling company and went as far as interviewing with them. I really enjoyed the interview (interesting tech, really smart people) and I've placed a few bets along with friends before in the past without ill effect, so I did some quick checking about how gambling businesses make money. As far as I could tell, across different gambling businesses, the focus is on "whales" -- chronic gamblers who spend as much as they can or more on gambling. The public image of these "whales" is the immensely rich person who visits a casino a few weekends per year and casually loses a hundred million that they won't miss, but a lot of the "whales" are people like the ones in the article, middle class people who lose hundreds of thousands of dollars while desperately trying, and ultimately failing, to stop their addiction from ruining their lives. Online gambling makes it profitable to pursue smaller and smaller whales, because you aren't limited by the amount of space inside your casino, or the number of people who live near or can afford to visit your casino. Your targets are everybody where you can legally operate, and you're running A/B tests and other optimization technology to increase an addictive behavior. I.e., their business model is to stoke a ruinous addiction across every social and economic class in every jurisdiction they can legally operate in. Standard disclaimers: I'm not an expert, not an insider, not in the industry at all. Also, none of the information I learned was directly about the company I interviewed with. I'm just talking about my understanding of how gambling businesses work from what I could glean online. Anyway, I didn't take that job.

iancmceachern 3y ago
Reminds me of most social media
- dragontamer 3y ago
  Social media doesn't cause $100,000+ in direct losses like gambling does.
  - iancmceachern 3y ago
    It does cause serious lifelong mental illness, which often results on $100k+ in indirect losses. https://mitsloan.mit.edu/ideas-made-to-matter/study-social-media-use-linked-to-decline-mental-health https://mitsloan.mit.edu/ideas-made-to-matter/study-social-m... And they, including Mark, actively worked against doing something about it: https://www.google.com/amp/s/www.cbsnews.com/amp/sacramento/news/zuckerberg-rejected-meta-proposals-to-improve-teen-mental-health-court-documents-allege/ https://www.google.com/amp/s/www.cbsnews.com/amp/sacramento/...
    - zeroonetwothree 3y ago
      The article you linked certainly doesn't use the words "cause" or "lifelong".
      - iancmceachern 3y ago
        Correct, I inferred those words. It would be difficult to prove that social media causes lifelong anything, because there social media hasn't been around long enough. It's like smoking. They used to say the same things. Smoking hasn't been proven to cause cancer, etc. Then over time the science got better, more data, and bam. It was proven. I believe this is similar. You don't. That's OK. Time will tell.
  - charcircuit 3y ago
    This isn't gambling as you don't win anything of value. Every dollar you spend is guaranteed to never get you any money back.
- vkou 3y ago
  Social media can certainly ruin your life, but it doesn't seem to do it quite as spectacularly and as thoroughly as a bad case of gambling addiction does. And if it weren't for those bad cases, most of the gambling industry wouldn't exist. They aren't making their money from my friends flying down to Vegas and losing $50 each at the blackjack table.
deleted 3y ago
[deleted]
nobodyandproud 3y ago
This is the business model of many free-to-play games. For instance: Overwatch relies on whales to purchase their excessively expensive and worthless in-game skins, and fund the business.
- alstonite 3y ago
  In my experience most free-to-plays just use a battlepass nowadays and don’t rely on whales (though obviously all games have them) Gambling based games like cs:go and genshin absolutely apply to what you’re saying though
  - whateveracct 3y ago
    Battle Pass is just a subscription with more steps. It was cool when I could just pay $50 for an online game and play it for years in dedicated servers so long as there were other people who paid $50 out there.
    - StableAlkyne 3y ago
      I miss community-hosted servers in games. Nowadays it's all servers that are only run by the developer, who could just flip a switch tomorrow and tell you "Remember that $80 you spent on Game 1 few years ago? You're gonna have to pay up again for Game 2. Also we're turning off the servers for Game 1."
      - pests 3y ago
        Overwatch 2 was odd because it was only half that. "Remember that $80 you spent on Game 1 a few years ago? Well, you get Game 2 for free. Also, were turning off the servers for Game 1" It doesn't sound as wrong but the community still hated it.
        Jochim 3y ago
        > It doesn't sound as wrong but the community still hated it. It only seems odd if all context is left out. Blizzard's whole pitch for Overwatch 2 is that it would introduce single player and co-op PvE content. It didn't do that. Overwatch 2 was much stingier with rewards for gameplay than Overwatch 1. Overwatch 2 started locking new heroes behind a paywall, where they'd previously been entirely free in Overwatch 1. Overwatch 2 charged much more for it's items, and limited specific items to bundles in an attempt to force players to spend much more than they would for the item itself. Overwatch 2 made multiple changes to balance, that weren't always well received. The sad thing is that people seemed fairly excited for PvE Overwatch. That excitement was strangled through a combination of hubris, corporate greed, and an inability to deliver.
TacticalCoder 3y ago
> ... but a lot of the "whales" are people like the ones in the article, middle class people who lose hundreds of thousands of dollars while desperately trying, and ultimately failing, to stop their addiction from ruining their lives. $4.4 m of net worth puts you in the top 1% by US standards. In the rest of the world (short of Monaco, Luxembourg and Switzerland and the likes), it's much less. For example top 1% in France means a net worth of $2m. I find it hilarious the notion that the "middle class" would have "hundreds of thousands of dollars" of disposable income to splurge on gambling. I'd go as far as saying that being in the top 1% in, say, France, puts you in the "rich" class, not the "middle class" and that with a net worth of $2m you do not have line of credits allowing you to bet hundreds of thousands of EUR/USD. P.S: I was invited at some dude's place where he had this 3 meters high Jeff Koens sculpture (Ballerinas, kinda Jeff Koens' trademark), probably worth millions. He had four house employees serving coffee, cooking, etc. Reading HN I'd be tempted to believe he was actually a poor middle class chap and that only the Zuck and Gates are "rich".
- Espressosaurus 3y ago
  I think dkarkl's point is that it's not disposable income. Using the house HELC or emptying the retirement account to fund your gambling habit is an easy and ruinous way to get your hands on hundreds of thousands of dollars if you're middle class.
- mathgeek 3y ago
  > I find it hilarious the notion that the "middle class" would have "hundreds of thousands of dollars" of disposable income to splurge on gambling. Don’t forget that there’s also an entire industry looking to loan money to middle class folks.
- dasil003 3y ago
  I'm confused, are you just mad about the label middle class, or do you believe that the only people spending large sums on gambling can afford it and therefore there are no ethical issues in this type of business? Because you seem to be setting up a straw man bringing in a lot of talk about net worths in the millions, when the conversation was about losing "hundreds of thousands". The median net worth for a US family is $192k according to a recent Nerdwallet article, so it's absolutely in the realm of possibility that millions of Americans are vulnerable to losing hundreds of thousands to a gambling addiction. Certainly a lot of people would have their lives destroyed by losing $50k to a gambling addiction, and no doubt that happens plenty. Where we draw the line on what constitutes middle class doesn't really seem all that relevant to me.
kurthr 3y ago
A co-worker's spouse took a job at a company like that. I heard about it at a company dinner. I knew that they were quite religious so I had to ask how that squared, and the response was, "Oh, I would never use the product". It made me feel really uneasy, since I knew I'm fairly libertarian and I'd have a problem sleeping on it. The argument is always, if I don't take the money, someone else will. I guess I wouldn't like working in a liquor store or a bank either.
- paulryanrogers 3y ago
  IME religious beliefs require suspension of disbelief and a certain amount of cognitive dissonance. When I was religious I was uncomfortable with gambling and always voted to outlaw or heavily regulate it. Yet I can see folks I knew easily justifying taking such a job. The mentality was work for the heathen to win them to Jesus, and if you got really well paid then that's more you can tithe to the kingdom.
DanielHB 3y ago
They are called VIPs, not whales, in sports-betting world I worked with it for a while and if I was in a position to leave that industry I would have done it sooner. But I do have to say that at least the sports betting companies I worked on they did try their hardest to follow the law as much as possible. One thing I have to say is that it is abhorrent that betting websites are allowed to advertise at all. It should be threated the same as smoking ads regulations.
- alexashka 3y ago
  Wait until you realize advertising should not be allowed.
  - allenrb 3y ago
    I can’t see how this deserves to be downvoted. As far as I’m concerned, anything other than “just the facts, ma’am” advertising is about preying on human weakness. It’s legal, but is it right?
    - jjeaff 3y ago
      I don't think it is correct to say all advertising is preying on human weakness. Some people create good and beneficial products. advertising is how you get the word out about your product.
      - alexashka 3y ago
        Just have a website/app/whatever that displays a database of products and information about each, comparisons, etc. There is no excuse for invading people's lives with unasked for media of any kind. People who want to know about new products can go to places where such information is available and seek it out.
      - weaksauce 3y ago
        > Some people create good and beneficial products. and those would shine with a "just the facts ma'am" approach.
qingcharles 3y ago
From experience the stats are roughly thus: - 4% of users pay for something - 1% of users fund the entire business
uconnectlol 3y ago
food should also be illegal because the one time month you buy some special flour for $10 it gives you some shit recipe on the back that also says to buy Xcorp's other $12 special grain then it also requires some meme ingredient of the month like gochujang sauce. when you go to buy the $12 special grain, there will also be a conveniently placed $20 bottle of """premium""" gochujang sauce beside it and you think, "wow i'm glad this happened to be here so i didn't have to go search for it". now you will also buy a $5 package of some spice that will go bad by the time you use half the bag finally, you can make the meal. and it turns out okay. then repeat next month with all new ingredients. and you throw out all these previous ones then as your cupboard is getting too full of things you will never use for anything else. in fact cooking should be illegal for these reasons because they create too much unnecessary waste and co2 emissions. then the next day you realize you still don't know how to cook even the most basic thing and buy KFC because you already spent like 5 hours on the previous venture. $40 for the family. then there's the medical visits due to eating deep fried food and 100ml of water 3 times a day. > how you're telling me there's something wrong with my diet? everyone else eats like this! i'm getting a new doctor all this could have been avoided by real education such as just buying a cook book published 100 years ago. and don't even get me started with websites, they meme you into buying 10x more fake ingredients and meme recipes that will not teach you anything. the average poor stressed out mom spends $20K a year on this, more than twice her retail salary! making her even more dependent on her abusive husband! what else should be illegal? alcohol. also the article mentions that an addiction counselor got addicted. reminds me of shit arguments alex jones people make up. like when "redpillers" thought covid was ebola they would state how a top medical authority got covid. then when they thought covid was fake the would state how a top medical authority got sick from the vaccine.

by dkarl 3y ago

iancmceachern 3y ago

Reminds me of most social media

dragontamer 3y ago
Social media doesn't cause $100,000+ in direct losses like gambling does.
- iancmceachern 3y ago
  It does cause serious lifelong mental illness, which often results on $100k+ in indirect losses. https://mitsloan.mit.edu/ideas-made-to-matter/study-social-media-use-linked-to-decline-mental-health https://mitsloan.mit.edu/ideas-made-to-matter/study-social-m... And they, including Mark, actively worked against doing something about it: https://www.google.com/amp/s/www.cbsnews.com/amp/sacramento/news/zuckerberg-rejected-meta-proposals-to-improve-teen-mental-health-court-documents-allege/ https://www.google.com/amp/s/www.cbsnews.com/amp/sacramento/...
  - zeroonetwothree 3y ago
    The article you linked certainly doesn't use the words "cause" or "lifelong".
    - iancmceachern 3y ago
      Correct, I inferred those words. It would be difficult to prove that social media causes lifelong anything, because there social media hasn't been around long enough. It's like smoking. They used to say the same things. Smoking hasn't been proven to cause cancer, etc. Then over time the science got better, more data, and bam. It was proven. I believe this is similar. You don't. That's OK. Time will tell.
- charcircuit 3y ago
  This isn't gambling as you don't win anything of value. Every dollar you spend is guaranteed to never get you any money back.
vkou 3y ago
Social media can certainly ruin your life, but it doesn't seem to do it quite as spectacularly and as thoroughly as a bad case of gambling addiction does. And if it weren't for those bad cases, most of the gambling industry wouldn't exist. They aren't making their money from my friends flying down to Vegas and losing $50 each at the blackjack table.

deleted 3y ago

[deleted]

nobodyandproud 3y ago

This is the business model of many free-to-play games. For instance: Overwatch relies on whales to purchase their excessively expensive and worthless in-game skins, and fund the business.

alstonite 3y ago
In my experience most free-to-plays just use a battlepass nowadays and don’t rely on whales (though obviously all games have them) Gambling based games like cs:go and genshin absolutely apply to what you’re saying though
- whateveracct 3y ago
  Battle Pass is just a subscription with more steps. It was cool when I could just pay $50 for an online game and play it for years in dedicated servers so long as there were other people who paid $50 out there.
  - StableAlkyne 3y ago
    I miss community-hosted servers in games. Nowadays it's all servers that are only run by the developer, who could just flip a switch tomorrow and tell you "Remember that $80 you spent on Game 1 few years ago? You're gonna have to pay up again for Game 2. Also we're turning off the servers for Game 1."
    - pests 3y ago
      Overwatch 2 was odd because it was only half that. "Remember that $80 you spent on Game 1 a few years ago? Well, you get Game 2 for free. Also, were turning off the servers for Game 1" It doesn't sound as wrong but the community still hated it.
      - Jochim 3y ago
        > It doesn't sound as wrong but the community still hated it. It only seems odd if all context is left out. Blizzard's whole pitch for Overwatch 2 is that it would introduce single player and co-op PvE content. It didn't do that. Overwatch 2 was much stingier with rewards for gameplay than Overwatch 1. Overwatch 2 started locking new heroes behind a paywall, where they'd previously been entirely free in Overwatch 1. Overwatch 2 charged much more for it's items, and limited specific items to bundles in an attempt to force players to spend much more than they would for the item itself. Overwatch 2 made multiple changes to balance, that weren't always well received. The sad thing is that people seemed fairly excited for PvE Overwatch. That excitement was strangled through a combination of hubris, corporate greed, and an inability to deliver.

TacticalCoder 3y ago

> ... but a lot of the "whales" are people like the ones in the article, middle class people who lose hundreds of thousands of dollars while desperately trying, and ultimately failing, to stop their addiction from ruining their lives. $4.4 m of net worth puts you in the top 1% by US standards. In the rest of the world (short of Monaco, Luxembourg and Switzerland and the likes), it's much less. For example top 1% in France means a net worth of $2m. I find it hilarious the notion that the "middle class" would have "hundreds of thousands of dollars" of disposable income to splurge on gambling. I'd go as far as saying that being in the top 1% in, say, France, puts you in the "rich" class, not the "middle class" and that with a net worth of $2m you do not have line of credits allowing you to bet hundreds of thousands of EUR/USD. P.S: I was invited at some dude's place where he had this 3 meters high Jeff Koens sculpture (Ballerinas, kinda Jeff Koens' trademark), probably worth millions. He had four house employees serving coffee, cooking, etc. Reading HN I'd be tempted to believe he was actually a poor middle class chap and that only the Zuck and Gates are "rich".

Espressosaurus 3y ago
I think dkarkl's point is that it's not disposable income. Using the house HELC or emptying the retirement account to fund your gambling habit is an easy and ruinous way to get your hands on hundreds of thousands of dollars if you're middle class.
mathgeek 3y ago
> I find it hilarious the notion that the "middle class" would have "hundreds of thousands of dollars" of disposable income to splurge on gambling. Don’t forget that there’s also an entire industry looking to loan money to middle class folks.
dasil003 3y ago
I'm confused, are you just mad about the label middle class, or do you believe that the only people spending large sums on gambling can afford it and therefore there are no ethical issues in this type of business? Because you seem to be setting up a straw man bringing in a lot of talk about net worths in the millions, when the conversation was about losing "hundreds of thousands". The median net worth for a US family is $192k according to a recent Nerdwallet article, so it's absolutely in the realm of possibility that millions of Americans are vulnerable to losing hundreds of thousands to a gambling addiction. Certainly a lot of people would have their lives destroyed by losing $50k to a gambling addiction, and no doubt that happens plenty. Where we draw the line on what constitutes middle class doesn't really seem all that relevant to me.

kurthr 3y ago

A co-worker's spouse took a job at a company like that. I heard about it at a company dinner. I knew that they were quite religious so I had to ask how that squared, and the response was, "Oh, I would never use the product". It made me feel really uneasy, since I knew I'm fairly libertarian and I'd have a problem sleeping on it. The argument is always, if I don't take the money, someone else will. I guess I wouldn't like working in a liquor store or a bank either.

paulryanrogers 3y ago
IME religious beliefs require suspension of disbelief and a certain amount of cognitive dissonance. When I was religious I was uncomfortable with gambling and always voted to outlaw or heavily regulate it. Yet I can see folks I knew easily justifying taking such a job. The mentality was work for the heathen to win them to Jesus, and if you got really well paid then that's more you can tithe to the kingdom.

DanielHB 3y ago

They are called VIPs, not whales, in sports-betting world I worked with it for a while and if I was in a position to leave that industry I would have done it sooner. But I do have to say that at least the sports betting companies I worked on they did try their hardest to follow the law as much as possible. One thing I have to say is that it is abhorrent that betting websites are allowed to advertise at all. It should be threated the same as smoking ads regulations.

alexashka 3y ago
Wait until you realize advertising should not be allowed.
- allenrb 3y ago
  I can’t see how this deserves to be downvoted. As far as I’m concerned, anything other than “just the facts, ma’am” advertising is about preying on human weakness. It’s legal, but is it right?
  - jjeaff 3y ago
    I don't think it is correct to say all advertising is preying on human weakness. Some people create good and beneficial products. advertising is how you get the word out about your product.
    - alexashka 3y ago
      Just have a website/app/whatever that displays a database of products and information about each, comparisons, etc. There is no excuse for invading people's lives with unasked for media of any kind. People who want to know about new products can go to places where such information is available and seek it out.
    - weaksauce 3y ago
      > Some people create good and beneficial products. and those would shine with a "just the facts ma'am" approach.

qingcharles 3y ago

From experience the stats are roughly thus: - 4% of users pay for something - 1% of users fund the entire business

uconnectlol 3y ago

food should also be illegal because the one time month you buy some special flour for $10 it gives you some shit recipe on the back that also says to buy Xcorp's other $12 special grain then it also requires some meme ingredient of the month like gochujang sauce. when you go to buy the $12 special grain, there will also be a conveniently placed $20 bottle of """premium""" gochujang sauce beside it and you think, "wow i'm glad this happened to be here so i didn't have to go search for it". now you will also buy a $5 package of some spice that will go bad by the time you use half the bag finally, you can make the meal. and it turns out okay. then repeat next month with all new ingredients. and you throw out all these previous ones then as your cupboard is getting too full of things you will never use for anything else. in fact cooking should be illegal for these reasons because they create too much unnecessary waste and co2 emissions. then the next day you realize you still don't know how to cook even the most basic thing and buy KFC because you already spent like 5 hours on the previous venture. $40 for the family. then there's the medical visits due to eating deep fried food and 100ml of water 3 times a day. > how you're telling me there's something wrong with my diet? everyone else eats like this! i'm getting a new doctor all this could have been avoided by real education such as just buying a cook book published 100 years ago. and don't even get me started with websites, they meme you into buying 10x more fake ingredients and meme recipes that will not teach you anything. the average poor stressed out mom spends $20K a year on this, more than twice her retail salary! making her even more dependent on her abusive husband! what else should be illegal? alcohol. also the article mentions that an addiction counselor got addicted. reminds me of shit arguments alex jones people make up. like when "redpillers" thought covid was ebola they would state how a top medical authority got covid. then when they thought covid was fake the would state how a top medical authority got sick from the vaccine.