Gambling CW -- What's the catch with these promos?

Submitted by twovests in just_post

So, up front: All the game / probability / measure theory tells me I'll lose money gambling. All the street smarts tells me the house has better mathematicians than me, and if I had better knowledge of the game than they did, they'd figure that out and shut me out before I put a dent in their wallet.

But most people either (1) don't have that knowledge integrated into their actions, or (2) have a nonlinear cost function w.r.t. money they gain and lose.

Now... I love doing things like opening new bank accounts for $400 or opening new credit cards for $300. People call this "churning" or "beer money".

Now, I'm seeing promos like "Bet $5, get $200 in bonus bets."

For instance, if there are 50/50 odds with 49% payouts, that's (205) / (1/2) * 0.49 - 5 = $200 expected profit. Pretty nice.

I'm assuming the point is that DraftKings et al will lose money on that in the short run, but gain money by getting gamblers in the door, addicted to the flashing lights.

I'm not worried at all that I will become addicted to gambling. To me, this looks like a good way to make a quick buck, while taking money away from an evil organization.

TLDR: "Bet $5 get $200 in free bets" seems like a good deal if I don't place any bets after. Am I missing a catch?

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Comments

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devtesla wrote

This feels like the first chapter of a cyberpunk novel. It should be easy money.... but then you're in too deep and the digital mafia is after you....

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twovests OP wrote

I mean, I think that's the idea right? First step is you put in a tiny fee, you see a big $200 number, and then you're hooked.

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hollyhoppet wrote (edited )

This is literally how professional gamblers do their thing lol. One of the strategies is to drift from "free money" deal to "free money" deal and take advantage of it without falling for the addiction trap. The thing is you only get those promos once per place. If you're going to do it read the terms of service very carefully to make sure there isn't a catch.

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twovests OP wrote

Oh wow, I thought professional gamblers operated mostly in the place where skill and knowledge is useful, like poker or investing. I can't see one making a living on $200 promos.

The TOS, at least in my state, lacks an arbitration clause, which is a huge surprise.

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flabberghaster wrote

My understanding is you don't get actually paid out until you wager a certain amount that's much much higher. Like you bet five dollars and get two hundred, but to be eligible you have to bet like a thousand dollars total.

That's what they said on a podcast, or what I took from what that podcast.

Not an expert.

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rain wrote

I was figuring something like this would be the case. I wonder if I could find paired hedge bets that would let me get at least a hundred out of those bets.

If I try there are a few self imposed rules…

Rule 1) no extra money loaded - no matter what it looks like on paper if I can’t do it solely off of the initial deposit then the whole thing needs to be abandoned.

Rule 2) Just as soon as I can get the money out, pull it and never use their site again

What do y’all think, should I try? Fair disclosure: even if everyone says yes I may decide not to

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flabberghaster wrote

I think you should not give these casinos one red cent, you're not gonna beat the house. Everyone who gambles thinks they might, and if they were right, there would be no casinos.

If you gamble, go in expecting to lose. If you're doing it for fun, then have fun. But you're giving money to some of the worst and most rapaciously exploitative businesses in America.

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rain wrote

I upvoted you because in general I agree.

If I did do it, it would be with the intent of doing a write up on the experience. Probably won’t because I have more than enough on my plate right now, but if I had the extra free time it would make an interesting post.

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twovests OP wrote

Yeah, that's another issue. I was looking at this as "their business model is to lose money to get people hooked, but if I don't get hooked, I'm just taking money from an evil business."

But that ~$200 loss is subsidized by the people who do get hooked. The fact that they offer $200 in bonus bets means they're expecting to extract at least $200 from every person who takes the bet to break even, which is a mind-boggling amount to spend to gamble.

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rain wrote

$200 is peanuts to a gambling addict. I remember back in the 80s I had a relative who bought $100 in lotto tickets every week. It’s scary to think how much she would have spent in a casino.

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twovests OP wrote (edited )

At least at the site I'm looking at, this doesn't seem to be the case. But yeah, "bet $1000 get $200 in bets" doesn't make it worth it to me. Especially with a sublinear cost function (i.e. $1000 is worth more than half of $2000 for me).

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twovests OP wrote

By "nonlinear cost function", I mean scenarios where the dollars gained are worth more than those lost, or scenarios with quantifiable factors other than dollars gained and lost.

I've gambled four times in my life under a nonlinear cost function:

  • Need 4 Pee: Bladder 'bout to blast, I hid myself away into a Boston Bodega, begging for the bathroom. "For customers only," said the sign, and the cheapest product was a $2 scratch off. I paid, peed, and knew my winnings: One trip to the bathroom. This was nonlinear because I was going to pee.

  • Not going to finish that? Years ago, I went to a casino with a friend, and having had never used the machines before, I wanted to try them out. I had $40. The experience was underwhelming, but someone had left cash in the machine and I win on my first bet. I ended up coming out with $100. This was nonlinear because (1) I was paying for the novel experience, and (2) I ended up getting free money.

  • Orange lining: This most recent election, I put some money on Trump. The thinking was this would hedge against layoffs a bit, and give me something to look forward to even in the worst case. I didn't put in a lot, maybe I should have? This was nonlinear because I expected dollars to be worth less if Trump won, and also for emotional reasons.

  • The 401K account counts too: Putting money into investment account is also gambling. But that employer match and tax incentive makes it nonlinear, even if you believe the economy is just a bubble.

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rain wrote

Now you have me seriously thinking about signing go to a gambling site with the intent of taking their promo and running - mostly to write up the experience. But I just had a $250 car repair bill I need to pay for. Maybe this is the way to do it lol

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