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An interesting experiment in gambling addiction was the Bitcoin betting site Just-Dice. There were two ways to participate: 1) Choose your bet size and chance

An interesting experiment in gambling addiction was the Bitcoin betting site Just-Dice. There were two ways to participate: 1) Choose your bet size and chance to win. The house always had a 1% edge, reflected in the payout. This edge is much lower than slot machines in Vegas. 2) Invest in the house. Every bet affected your bankroll based on your % invested relative to the total bankroll. The house edge was on your side. The operators of the site, Deb and Doog, encouraged anyone trying to make money to invest. They argued the expected value was positive, even though high-rollers sometimes went on winning streaks. Despite the warnings/statistics Doog produced and the fact that there was a +EV way to play (investing), players still got addicted to the dice game itself. The rolls resolved in a fraction of a second, so some players would go on a tear and bet 3-4 times a second. The minimum payout was 1% of the house bankroll, so single bets of several hundred bitcoin were possible. Several high-rollers ("whales") played for 14-16 hours straight in a state of intense "flow", generally winning early on and losing everything by the end. Sometimes hundreds of thousands of dollars of bitcoin (1000+ btc) lost in a single session. Sometimes coins would come out of cold storage to continue playing. The site had a chatroom where even investors encouraged the player to stop before they were ruined, but the players would generally deny addiction and continue rolling. After losing it all, some players described the experience they were having as a chemical rush- as if they had just taken a drug. Even users who were invested and had made sizable profits from investing were not immune to the lure of the game. Several withdrew their invested bankroll just to "play around" and fell in the same inevitable fashion.

logicallee 12y ago
>Even users who were invested and had made sizable profits from investing were not immune to the lure of the game. That is an insane level of product-market fit. Can you imagine if you got to claw back all of the equity you gave up at seed and Series A, because your investors wanted your product even more?
DanBC 12y ago
That's a deeply disturbing account of people knowingly exploiting vulnerable people to extract maximum money from them.
- sillysaurus3 12y ago
  The same thing happens at your local casino.
  - DanBC 12y ago
    Obviously. But you don't tend to hear them talking so blandly about it.
- darkFunction 12y ago
  Who exactly was being exploited here? Everything was completely transparent.
  - DanBC 12y ago
    Vulnerable people who were addicted to gambling.
  - coldtea 12y ago
    Something being transparent and people being exploited is not contradictory. If someone needs food because he is starving and you make him a (trasnparent) proposition to, say, have sex with you in exchange for food, he is still being exploited.
    - true_religion 12y ago
      Is every case where you don't commit charity to the starving exploitation or is it only since sex is involved?
      - coldtea 12y ago
        No, only the cases where you, you know, exploit the starving to get something out of it. You could not commit charity without also asking them to have sex with you (or work for minimum wage for you).
        12y ago
sillysaurus3 12y ago
Where is Just-dice based? I was just wondering whether the US anti-online-gambling laws apply.
- pmorici 12y ago
  The original founder Erik Voorhees was American but has since sold the site for 126k BTC and now lives in Panama. A few months prior to selling the site US IP addresses were banned due to legal concerns. The bigger legal issue, so far, besides the gambling and the one they actually got in trouble for was for selling unregistered securities to the investors. He got a 15k USD fine for that. https://www.sec.gov/litigation/admin/2014/33-9592.pdf https://www.sec.gov/litigation/admin/2014/33-9592.pdf
  - oscilloscope 12y ago
    That's Satoshi Dice, one of the first popular Bitcoin gambling games. It's very similar but differs from Just-Dice in at least three ways: 1) The house edge is 1.9% rather than 1% 2) Every bet is a transaction on Bitcoin's blockchain. So the rapid-fire style betting of Just-Dice is not possible as each bet needs to be verified. 3) The investment model was through shares that paid dividends. On months the site ran at a loss, a dividend was not paid. The anonymous Dooglus ran statistical analysis of Satoshi Dice for almost a year on the Bitcoin forums (to verify its odds were honest), then started Just-Dice as an experiment in a different investment model. Dooglus lived in Canada and closed the site due to a new virtual currency law there several months ago. He also ran the site Doge-Dice. He left the two sites running just so investors and gamblers could withdraw all their deposits, but new deposits and bets could not be made (almost the exact opposite of what happened at MtGox when it shut down).
trhway 12y ago
>After losing it all, some players described the experience they were having as a chemical rush- as if they had just taken a drug. dopamine. We're dopamine junkies by design. Be it HN posts/karma or gambling or crystal meth ...
- eli 12y ago
  Not exactly. Brain chemistry is complicated. http://www.theguardian.com/science/2013/feb/03/dopamine-the-unsexy-truth http://www.theguardian.com/science/2013/feb/03/dopamine-the-...
dooglus 12y ago
> The minimum payout was 1% of the house bankroll You mean "maximum" and 0.5% (after 1% was found to be too much). "Investing" in the house was generally too slow and boring for gamblers to consider. They are used to being able to double (or lose) their stake in a fraction of a second. By being part of the bankroll they get to make a 1% return per week if they're lucky. The site ran for a year and made investors a total of just over 40% in that year. For a gambler accustomed to making 100% (or -100%) per second, 40% per year is insignificant. To anyone else of course it's huge.

logicallee 12y ago

>Even users who were invested and had made sizable profits from investing were not immune to the lure of the game. That is an insane level of product-market fit. Can you imagine if you got to claw back all of the equity you gave up at seed and Series A, because your investors wanted your product even more?

DanBC 12y ago

That's a deeply disturbing account of people knowingly exploiting vulnerable people to extract maximum money from them.

sillysaurus3 12y ago
The same thing happens at your local casino.
- DanBC 12y ago
  Obviously. But you don't tend to hear them talking so blandly about it.
darkFunction 12y ago
Who exactly was being exploited here? Everything was completely transparent.
- DanBC 12y ago
  Vulnerable people who were addicted to gambling.
- coldtea 12y ago
  Something being transparent and people being exploited is not contradictory. If someone needs food because he is starving and you make him a (trasnparent) proposition to, say, have sex with you in exchange for food, he is still being exploited.
  - true_religion 12y ago
    Is every case where you don't commit charity to the starving exploitation or is it only since sex is involved?
    - coldtea 12y ago
      No, only the cases where you, you know, exploit the starving to get something out of it. You could not commit charity without also asking them to have sex with you (or work for minimum wage for you).
      - 12y ago

sillysaurus3 12y ago

Where is Just-dice based? I was just wondering whether the US anti-online-gambling laws apply.

pmorici 12y ago
The original founder Erik Voorhees was American but has since sold the site for 126k BTC and now lives in Panama. A few months prior to selling the site US IP addresses were banned due to legal concerns. The bigger legal issue, so far, besides the gambling and the one they actually got in trouble for was for selling unregistered securities to the investors. He got a 15k USD fine for that. https://www.sec.gov/litigation/admin/2014/33-9592.pdf https://www.sec.gov/litigation/admin/2014/33-9592.pdf
- oscilloscope 12y ago
  That's Satoshi Dice, one of the first popular Bitcoin gambling games. It's very similar but differs from Just-Dice in at least three ways: 1) The house edge is 1.9% rather than 1% 2) Every bet is a transaction on Bitcoin's blockchain. So the rapid-fire style betting of Just-Dice is not possible as each bet needs to be verified. 3) The investment model was through shares that paid dividends. On months the site ran at a loss, a dividend was not paid. The anonymous Dooglus ran statistical analysis of Satoshi Dice for almost a year on the Bitcoin forums (to verify its odds were honest), then started Just-Dice as an experiment in a different investment model. Dooglus lived in Canada and closed the site due to a new virtual currency law there several months ago. He also ran the site Doge-Dice. He left the two sites running just so investors and gamblers could withdraw all their deposits, but new deposits and bets could not be made (almost the exact opposite of what happened at MtGox when it shut down).

trhway 12y ago

>After losing it all, some players described the experience they were having as a chemical rush- as if they had just taken a drug. dopamine. We're dopamine junkies by design. Be it HN posts/karma or gambling or crystal meth ...

eli 12y ago
Not exactly. Brain chemistry is complicated. http://www.theguardian.com/science/2013/feb/03/dopamine-the-unsexy-truth http://www.theguardian.com/science/2013/feb/03/dopamine-the-...

dooglus 12y ago

> The minimum payout was 1% of the house bankroll You mean "maximum" and 0.5% (after 1% was found to be too much). "Investing" in the house was generally too slow and boring for gamblers to consider. They are used to being able to double (or lose) their stake in a fraction of a second. By being part of the bankroll they get to make a 1% return per week if they're lucky. The site ran for a year and made investors a total of just over 40% in that year. For a gambler accustomed to making 100% (or -100%) per second, 40% per year is insignificant. To anyone else of course it's huge.