How Online Gambling Works


Josh: Josh Clark

Chuck: Charles W. "Chuck" Bryant

Vo: Voiceover Speaker

Vo: Welcome to Stuff You Should Know from HowStuffWorks.com.

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Josh: Hey, and welcome to the podcast. I'm Josh Clark, there's Charles W. "Chuck" Bryant, and there's Jeri, for the third time, and this is Stuff You Should Know the podcast.

Chuck: Two false starts.

Josh: Yeah, really.

Chuck: Are you a gambler at all?

Josh: No. I mean, not really.

Chuck: Have you ever?

Josh: I would lose too much money.

Chuck: But you've been to a casino?

Josh: Sure, yeah. I've gambled before, I realized pretty quickly that I'm a terrible gambler. Not like I'm an addict or anything like that, but just that I never win, so-

Chuck: Losing money is not fun.

Josh: No.

Chuck: No.

Josh: It isn't.

Chuck: I enjoy it. I don't like Vegas at all, as you know, but when I have had to go here, I do enjoy a little gaming. I'm very disciplined. I set aside a certain amount of money. I'm basically paying that to have a good time gambling.

Josh: Right.

Chuck: If I lose it all then that's what-because it is enjoyable. I enjoy it. I did a little sports gambling at one point in my life and got out of sort of a tight squeeze once, and then I was like, "Not doing that again."

Josh: Did you have your thumbs broken or something?

Chuck: No, I just owed a lot of money going into NFL Sunday and I was like, "I can't afford this," so I did something really stupid and I made-

Josh: Sold a kidney.

Chuck: -two bets equal to that large amount of money.

Josh: Wow.

Chuck: Won them both and broke even and I was like, "No more, no more."

Josh: Wow. That was good that you weren't like, "Okay, I'm on a streak, let's keep it going."

Chuck: That scared me straight.

Josh: You know, for this episode I did a little online gambling. You know they let you try it out for free. I was down 500 bucks in four minutes.

Chuck: When it's fun money, like not real money, it's easy to bet a lot.

Josh: I was just betting the normal amount. I was playing a roulette called the Greedy Goblins.

Chuck: Oh boy, you can lose at roulette fast.

Josh: On what site was it? Bovada. Have you heard of Bovada?

Chuck: No.

Josh: It was the first one that came up when I put in "online gambling." But it was a classy site. It was a classy simulated casino.

Chuck: Pretty waitresses?

Josh: Well, there are pictures of people.

Chuck: Yeah, sure.

Josh: No one was actually moving except the 3-D goblins.

Chuck: They try to simulate a casino as much as possible, right?

Josh: A little bit. Like the background of the website was felt, I think, maybe. It was like that. But no, it seemed to be one of the nicer ones. You could tell that the programmers really put some thought into it. The roulette, or not the roulette, the slot I was playing-did I say roulette first?

Chuck: Oh yeah. You were playing slots?

Josh: I was playing a slot called Greedy Goblins, and it was nice-looking, but I lost very quickly. So I was like, forget this. I'm so glad I'm not addicted to online gambling, because that would be really rough.

Chuck: I'm sure.

Josh: Actually I mean, they say that online gambling is even possibly more addictive than regular gambling, just because of its ubiquity and ease of accessibility.

Chuck: Sure.

Josh: Like not only can you get on the computer at home, now the big push is mobile.

Chuck: Yeah.

Josh: So you can gamble anytime, anywhere, and if you have a problem, you're in big trouble.

Chuck: Yeah, that's super, super dangerous for some folks.

Josh: Yeah.

Chuck: You can gamble in your warm-up pants and your shirt off.

Josh: Or your city jogger pants.

Chuck: I think some casinos in Vegas you could do that probably.

Josh: Maybe at like the Golden Nugget, or one of the old ones.

Chuck: Yeah, yeah. Downtown.

Josh: Where they're like, "Just give us your money, please. We are hurting so bad." Or, in all of Atlantic City.

Chuck: Sure.

Josh: So do you want to talk about the history of online gambling? You know it hasn't been around forever.

Chuck: No, it hasn't.

Josh: Gambling might be one of the oldest past-times but online gambling is comparatively new.

Chuck: Yeah, in the mid 1990s in Antigua and Barbuda, they passed a law called the Free Trade and Processing Act, which basically paved the way for some of these smaller Caribbean Island nations to get into the gambling business.

Josh: Well, for that nation, specifically

Chuck: Yeah, to get into the online gambling business, more specifically.

Josh: Right. They created, out of thin air, their own ability to create licenses for online casinos, so they became the haven for online casinos.

Chuck: It's a pretty good idea.

Josh: It is, and especially considering that there was no such thing as online casinos yet. That's some foresight right there.

Chuck: Yeah. Around the same time, a company called Microgaming started the first, kind of, workable software for online gaming, and that came along at just the right time. In Canada they started opening up some online casinos and basically all over the world they started popping up. I think by 1997 there were more than 200 online casinos and revenues in the late '90s of up to 830 million a year, which is chump change now.

Josh: Sure.

Chuck: But back then, you'll notice we did not mention the United States because there's a lot of legality issues, up to today, with online gambling.

Josh: Virtually out of the gate the United States was like, "Nope, that's illegal." Completely ignore the fact that 40-plus states have state lotteries; you can't gamble online.

Chuck: Yeah.

Josh: Actually I read an article where Antigua sued, or filed a complaint against the United States with the World Trade Organization. The WTO sided with Antigua and they granted Antigua a $120 million worth of freedom to distribute American intellectual property without paying any royalties.

Chuck: Wow.

Josh: Because America closed down its population to Antigua's online casinos and Antigua said, "You guys are violating treaties we have."

Chuck: Interesting.

Josh: The WTO actually sided with and levied sanctions against the U.S. Sided with Antigua, levied sanctions against the U.S., which is mind-boggling.

Chuck: Yeah. That probably doesn't happen a lot.

Josh: Yeah.

Chuck: In the early 2000s, you could all of a sudden, thanks to a company called Betfair, wager peer-to-peer bets on sports. A lot of this early stuff was sports wagering. And then online poker, of course, in the late '90s really started to catch on. In the late '90s and 2000s, a company called Poker Spot, and PartyPoker and PokerStars-they all have silly names, but they really hit on it big when they allowed you to qualify online for these real World Series of Poker Tournaments.

Josh: Right.

Chuck: The one guy, Chris Moneymaker, actually won the World Series of Poker in 2003, after having qualified online, and then everyone was like, "Whoa, that's a big deal."

Josh: I think he ended up having to pay in like 40 bucks to qualify for the World Series of Poker.

Chuck: Yeah, and he didn't have to travel to Vegas or Atlantic City, or wherever else you can go to gamble.

Josh: Yeah, and that's the way it was going, too, and everybody was really up on poker. Especially PartyPoker and PokerStars.

Chuck: Yeah.

Josh: The U.S. ended up cracking down on it, which we'll talk about a little more in detail coming up soon, but, let's talk about online gambling and how it's different. Because it seems-there's some pretty obvious distinctions. Like one, you have to have to travel to Atlantic City or Las Vegas or your local Indian reservation and sit there and gamble, in person. You might say, "Well, yes, obviously if you're gambling online you can do it at home," but there's a big difference. There's a lot of nuances in between those two, that obvious difference between the two.

Chuck: Sure. One of them is you can play a lot faster without all the chitchat and all the decision-making of the little old lady next to you at the blackjack table.

Josh: Yeah. I read an article with a guy named John Gagliano, he is a New Jersey professional poker player.

Chuck: John "the Googs" Gagliano?

Josh: I think it was like "Googs33" or "Gags33," or something like that. Seriously. Anyway, he plays up to a thousand hands an hour.

Chuck: Wow. Of what? Blackjack?

Josh: No, of poker. He's a pro poker player. He plays maybe a hundred hands an hour, per table, and he plays up to about ten tables at a time.

Chuck: I was about to say, he has got to be playing more than one.

Josh: Oh yeah. So he is playing like a thousand hands an hour, and he says in real life he can play maybe 25 tops, if he is really working. A lot of it is the chitchat, the dealer.

Chuck: Sure.

Josh: And not being able to physically play ten hands at a time.

Chuck: But see, that's the experience I enjoy about gambling, is being at the table and chitchatting and having a couple of free scotches.

Josh: Right.

Chuck: It's like a good fun social-like a craps table? Lot of fun to stand around.

Josh: Yes, I think that's what makes "Gags33" a professional poker player, you know? He is in it for the money.

Chuck: Oh yeah. He doesn't care about all that stuff.

Josh: Probably to win too.

Chuck: So yeah, it's a lot quicker. You can win and lose money at the drop of a hat, and like you said, they try to dress it up and make it look and feel like a real casino. Other than that, though, it's a lot of the same games. Pretty much any game you can play in a real casino you can find online.

Josh: Right.

Chuck: From like lotteries, keno, to roulette and all that stuff.

Josh: Yeah. Bovada had more than 150 different games.

Chuck: Really?

Josh: Yeah. A lot them are slots but they did have all the regular stuff, too. Tons of different poker. And then, like you said, sports betting. There's a subsection of sports betting, entertainment betting. To where you can bet on outcome of the 2016 presidential election or the Oscars, apparently spelling bees, competitive eating contests.

Chuck: Reality TV.

Josh: Yeah, which I didn't get, because reality TV is not actually unscripted.

Chuck: Yeah.

Josh: Like you could easily find out from a producer what happened on a show that was shot five months before; it's not like its live, or who's going to get the rose, or whatever. I don't see betting on that.

Chuck: Well, I think those episodes are live, a lot of times.

Josh: They've got to be.

Chuck: Like the American Idol finale or the Survivor finale or Big Brother.

Josh: But I just assume all of those are extraordinarily rigged one way or another-

Chuck: Of course they are.

Josh: -and that anybody connected well enough could find out and make some big money, which I would guess that the people laying odds, the bookers, no, the bookies-yeah, the bookies, they would know well enough to stay away from that kind of stuff, because it could be rigged, but I could be totally wrong.

Chuck: Sports is never rigged, so.

Josh: Were you being facetious?

Chuck: Of course. Sports is rigged, a lot of times.

Josh: Really?

Chuck: Yeah, are you kidding me?

Josh: Like what?

Chuck: Boxing is-

Josh: I mean we're not talking like Mickey Rourke's boxing fight.

Chuck: No, boxing is notoriously, historically fraught with boxers taking dives.

Josh: Okay. I thought you meant like Monday Night Football, or something that, was rigged.

Chuck: No, I mean, the NFL has a pretty good track record, but most of the pro sports have had one major betting throwing games scandal in there, at some point. I don't think it happens all the time, but yeah. Like the Black Sox was baseball.

Josh: Man that was a good movie, Eight Men Out.

Chuck: Yeah, you'll hear about it every once in a while, like an NCAA basketball will come out years later and be like, "We threw all those games."

Josh: Oh yeah. Who was it that played Billie Jean King? The man who played Billie Jean King?

Chuck: Oh, Bobby Riggs?

Josh: No. Who? What guy was it?

Chuck: A tennis player?

Josh: Yeah, a very famous men's tennis player?

Chuck: I think it was Bobby Riggs.

Josh: It wasn't Bobby Riggs. Anyway he came out within the last couple of years and said that he threw the match.

Chuck: Oh please.

Josh: Which is kind of like-it wasn't Jimmy Connors. Maybe it was Jimmy Connors?

Chuck: Save face.

Josh: Yeah, but like four decades later, which is weird.

Chuck: Deathbed saving face.

Josh: I think he is still walking around. So we are going to talk more about online gambling and gaming and the distinction between the two, right after this.

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Chuck: So you mentioned that you played-you tried it out for fun.

Josh: Yeah, for research.

Chuck: That is one way, though, that they can get you hooked, you know, is to say you don't have to pay any money. Did you have to do anything? Did you have to sign up?

Josh: No, no. There's a way you can download the casino software.

Chuck: Okay.

Josh: Which seems like a really bad idea to me.

Chuck: Yeah.

Josh: Like, do you want to download the software from a Russian site? No. I don't. But I will play it for free in my web browser, which is what I did.

Chuck: Was it really Russian software?

Josh: No, this was Latvian, but I imagine there is plenty of Russian casinos out there.

Chuck: Some of the other differences, though, besides being able to play for fun and get you hooked, is they will offer different odds a lot of time, sports-wise, than you can get in a real casino.

Josh: So the Grabster says that this isn't-oh I'm sorry, you're saying that the odds are better.

Chuck: No, I'm just saying different. Sports odds can be different. Usually they are better for you because the overhead is lower, like you don't have to pay as much money.

Josh: Exactly, they don't have to give out the free scotches because there's nobody to physically sit there and drink the scotch.

Chuck: Yeah, buy your own scotch. You're at home. So you can get different odds and then a lot of times the games themselves will have different kinds of payouts that you can get in casinos, but you're also going to have to pay the vig, as they call it, in order to get your money, and this is a whole different thing we have to talk about at some point, too, but you're going to be paying percentages, like 10 to 15% sometimes, just to get your money. That's not the same as in Vegas.

Josh: No, it's definitely not, and one of the reason why you have to pay that-and that's on top of the vig, like you said, right?

Chuck: I think so, yeah.

Josh: That's like, okay, here, give us our house money, just for letting you play.

Chuck: Then, here's your transaction fee.

Josh: Yeah. But that's when you're trying to withdraw stuff from your online account, and the reason that they do this and the rates are so steep is because they know that you're an American player and you're not supposed to be playing.

Chuck: Technically that is correct. Historically that has been very difficult to prosecute because you're in your house, playing a casino in Amsterdam online. So what are they going to do, unless they are spying on people?

Josh: Exactly, what are they going to do, go after the operators of these online gaming sites that are located overseas? Actually yes, that's exactly what they did.

Chuck: Black Friday?

Josh: This article onHow Stuff Works was written before Black Friday so even though it's a Grabster article, its naïve, because it was before this Black Friday happened on September 20, 2011, where the Feds basically raided the top three, and then some other ones, but definitely the top three online poker sites, and shut them down.

Chuck: Yeah, PokerStars, Full Tilt Poker and Absolute Poker. And apparently there were a bunch of, some say, hinky allegations and arrests.

Josh: Well, yeah, they used Interpol to go arrest the people in other countries for breaking U.S. law; that's as shady as it gets.

Chuck: Yeah, a lot of U.S. lawmakers had big problems with that, even though they attached a bunch of other charges, like money laundering and fraud. I'm sure there was some legit illegalities, as well, but yeah, it was a pretty interesting sting operation, to say the least.

Josh: Right. So there's this thing called the Wire Wager Act, I believe, from 1961. It said you can't use any kind of communications device basically, in the U.S., for betting. And the courts interpreted it in various ways as the internet came along. Some courts decided like, yeah, this includes the internet, other courts were like no, this is too old and too vague to really include the internet. So the Feds were kind of like making noises about making prosecutions and stuff, based on this. When they kept running up against the fact that it was too old, they came up with a new law in 2006, the Unlawful Internet Gaming Enforcement Act, and this one had teeth. The reason this one had teeth is because it didn't go after the online gambling people, it went after the third-party processors, the payment processors.

Chuck: Exactly, and what good is gambling if you can't get your money when you're finished?

Josh: So all of a sudden Visa, PayPal, all the banks are like, "Wait, we could be prosecuted for processing this payment, so we're not going to do it," which left these online gambling sites basically just completely-

Chuck: Without Americans.

Josh: Exactly, because like you said, nobody who wants to gamble online wants to do it for nothing. That's the whole point, you know, is to try to win some money, right?

Chuck: Yeah.

Josh: So that was 2006. That's when PartyPoker and PokerStars and all those guys either shut down or they moved overseas. Those were actually American companies, but they moved to the Isle of Man, they moved to Ireland, there was one in Costa Rica, Full Tilt, I think was in Costa Rica. So the Feds were like, "Okay, we did our job, everything's cool," and these guys figured out loopholes.

Chuck: Of course.

Josh: In 2011, when they raided on Black Friday, the guy who actually ended up in real trouble was this dude who served as the payment processor for the three biggest online poker sites in the world.

Chuck: So not the gambler, not the casino, the payment processor.

Josh: It wasn't a company, it was a guy. The reason he got in trouble was because he made all these phony businesses up to get banks to process payments, so the banks wouldn't think that they were doing any kind of illegal activity.

Chuck: That's money laundering.

Josh: Right, so he laundered money. So he did get in big trouble, and so did the top three sites until that same year, all of a sudden, this crazy war on online gambling was totally reversed by the Obama administration.

Chuck: Yeah.

Josh: Within the Obama administration, it's not like this was the Bush administration aggressively prosecuting people for it, this was the Obama administration. Then all of a sudden the Department of Justice came up with a new opinion and said, "You know what? We don't think the Wire Wager Act applies to this anymore, and we don't think that people should be prosecuted for online gambling if the states allow it."

Chuck: Yeah, and I think, correct me if I'm wrong. Wasn't one of the reasons behind this like, we need to start regulating this fast and get out in front of it or else it's going to be a huge mess.

Josh: Yes, it's going to be a huge mess. It could be a huge boon for states.

Chuck: Well, that too. Yeah, sure.

Josh: For taxes. And Grabster mentions in this article that people tended to gravitate toward sites that had a dot nl domain or a dot au domain because they knew that Australia and the Netherlands heavily regulate this kind of stuff.

Chuck: Right, they are legit.

Josh: And so online casinos that operate out of those countries have to toe the line, which means that if you win, you're going to get paid. So they provided a model that like, yes, if this is legal and regulated, people will come to it and you can actually manage it pretty well.

Chuck: So in other words, I don't have to set up an offshore bank account or send money orders to some shady third-party internet site.

Josh: Exactly, that may or may not pay you.

Chuck: Exactly. I actually, last year I was the commissioner of my fantasy football league. We all throw in 20 bucks, it's no big deal; there's like 12 of us, you know. Just to make it a little more interesting at the end of the year, you win the money. I said just pay me through PayPal, and a few people said, "You know when you go to make the payment, it's like writing a check; you put what it's for." They were like "fantasy football payment" and PayPal flagged it and wouldn't let it through. I didn't even know at the time that was against the law. I was like, "Really?" So I had them either send me money or just say don't put what it's for.

Josh: Right exactly. For woodworking. Anything but fantasy football.

Chuck: Yeah, apparently that made me, I guess, an illegal bookie.

Josh: Yeah, they could have gotten you on RICO probably.

Chuck: Nice.

Josh: So we are going to talk about legal online gambling and all that kind of stuff, right after this.

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Chuck: Josh?

Josh: Yes.

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Chuck: All right, so today, my friend, it is a state issue, as you said.

Josh: Right.

Chuck: Still technically federally illegal. It's so weird in this country, it always amazes me. This is illegal in the United States but it's legal in the state if they say it's okay.

Josh: Sports betting is still very much illegal, online sports betting, that the Justice Department said, "It's very clear that this law was originally written-this law that we have been aggressively prosecuting for 40 years, 50 years, was actually really just pertained to sports betting."

Chuck: Because that's chance, is that correct? Is that why?

Josh: That's not necessarily why, because roulette is chance and you can do that now in some states. It's strictly because the law said sports.

Chuck: Oh, okay. It was written in the law?

Josh: Yeah.

Chuck: But fantasy football now, one of the big new trends are these day play sites for fantasy football.

Josh: What is it called?

Chuck: One is called DraftKings.

Josh: But there's a name for the whole thing, it's not fantasy football, it's like league draft or something like that.

Chuck: They call it daily fantasy sports, in this article.

Josh: That's a little more generic than I was thinking.

Chuck: Yeah. But there's one called DraftKings and there is another one-and I hear these all the times on sports radio, the ads for them. FanDuel.com.

Josh: Yeah, right.

Chuck: You can draft a team in a day and have your team play that weekend's football games and cash out that weekend, as well.

Josh: Yeah.

Chuck: So, it's not the same thing as like just your ESPN Fantasy Football League, where it's just a season-long thing for fun or maybe a little bit of money thrown in a pool.

Josh: This is weekly, and depending on the sport, it can be daily.

Chuck: Exactly. And all the sports, like they allow that, though, because I don't think-that's considered skill, somehow.

Josh: So fantasy football is currently considered skill and is allowed, I believe.

Chuck: Which is hysterical.

Josh: This daily fantasy thing is apparently considered a little more gambly, I guess? So it's in a little more of a gray area, even though everybody is kind of currently ignoring it. But all of the articles, for some reason Forbes is like really, really, into-

Chuck: I noticed that.

Josh: -online gambling and has been doing a lot of coverage of it over the years.

Chuck: Yeah.

Josh: So from reading these Forbes articles, the way that they track anything is where the money is going. And they talked about how these daily fantasy, like FanDuel, are attacking like tons of venture capital right now.

Chuck: Oh, I'm sure.

Josh: There's tens of millions of dollars being thrown at these tiny little startups that just allow you to do like daily or weekly fantasy sports drafts. That suggests that everybody on the street, Wall Street, thinks that there is going to be either a federal law that allows it or this federal ruling from 2011, 2012, that says it's cool, just leave it to up to the states, it's going to lead to basically across the country state laws that regulate and allow this kind of stuff. So it seems to be if you follow the money, the tide is turning and online gambling is going to be where it's at.

Chuck: Yeah, I mean, right now, you said "gray area" earlier, there's a lot of gray area all over the country, in all the states, because like you said, some states will let you play the lottery, some states will let you go to an OTB and bet on race horses or bet on race horses at home online, some let you bet on reality TV online and some don't. There are now three states, I think-Delaware, New Jersey and Nevada-that have full-fledged online poker, online gambling, and I think Nevada is actually running it out of Nevada, right?

Josh: So Nevada, as far as I know, hilariously, only offers online poker.

Chuck: Okay.

Josh: They don't have a lottery, either, did you know that?

Chuck: What?

Josh: Yeah.

Chuck: They probably don't need one.

Josh: I guess not. Yeah, that's probably what it is.

Chuck: But you could always need more money.

Josh: Sure.

Chuck: You know?

Josh: Especially if you're Nevada, you're like, "Give me more money."

Chuck: Yeah.

Josh: But yeah, they don't have it. I think that you're right, though, that Nevada has opened up playing to people outside of their state, outside of the country.

Chuck: Yeah, but originally they were only allowing people in Nevada to play. But I think isn't the website owned and run in that state, as well? It's not like an out-of-the-country deal.

Josh: Yes, yeah, I see what you're saying, yeah. That's the way New Jersey's is, too. So there's this whole secondary industry that's grown up around state-sanctioned online gambling, which is geolocation services, which tracks where you, the computer user or online gambler, are located.

Chuck: So they're watching you.

Josh: Yeah, well, and if your computer comes up as outside of the state of New Jersey, you will be blocked from playing. If you come up as inside New Jersey, you can play New Jersey, which has a complete suite of online gambling available.

Chuck: Right.

Josh: I guess Chris Christie said it was going to be a billion dollar industry in its first year, or there's going to be a billion dollars in tax revenue, and it came to be like a tenth of that. So it's not quite as-it's not catching on like wildfire like they thought, but supposedly the casinos that are still standing in Atlantic City are still standing because those are the ones that went to the trouble of setting up online gambling sites.

Chuck: Well, that brings us to a good point. There are a lot of brick-and-mortar casino owners. Notably, what's his name? Sheldon Adelson.

Josh: And Steve Wynn.

Chuck: Yeah, those are some of the biggest fat cats, casino owners in Vegas. Of course they feel threatened, even if they think they-I think Adelson's big quote was "Click your mouse, lose your house." He's saying we are going to lose half a million jobs and people are going to stop coming to casinos. I'm sure they are also getting into the online casino game. If they are smart, I'm sure they are. It raises a good point, though, like, it used to be that Vegas made all of their money on gambling. You could go and stay in a room for ten bucks and eat for $2.00.

Josh: Uh-huh.

Chuck: But it's not the same anymore. Vegas is a destination family vacation spot.

Josh: Right.

Chuck: With all kinds of revenues coming in, and you need people there to bring those revenues in.

Josh: Yep.

Chuck: To see the shows, and take your kid to the stupid indoor amusement park and buy the now not-so-cheap food.

Josh: But that raises the question then, do you even need the gambling?

Chuck: Well, yeah, sure.

Josh: If you have all this other stuff to attract people, do you need the casino? And even if you do need the casino, if you have the rollercoaster and the indoor amusement park and all that stuff that you're taking the kids to, like as long as you're not losing money by having a casino open, it doesn't seem like online gambling would detract from that.

Chuck: Yeah, I see what you mean. I mean those casinos are never losing money.

Josh: In Atlantic City they do.

Chuck: Really?

Josh: Oh man. Even Donald Trump can't make money in Atlantic City.

Chuck: Well, that's probably just from overhead and low attendance, they're not actually-I mean, the house is always winning.

Josh: Oh, I see what you mean.

Chuck: You know what I mean?

Josh: Right, right. Unless they own the casino.

Chuck: Yeah, exactly. Yeah, we've got a great episode on casinos-

Josh: That was a good one.

Chuck: -that you should look into.

Josh: And we have one on addiction, too, which is why we are not touching too much upon gambling addiction.

Chuck: Yeah, I mean there's different-when I was researching this, I saw different things. Obviously it seems like it would make it super easy to get addicted for online gambling.

Josh: Uh-huh.

Chuck: But there was this one Harvard Medical School study of 40,000 people that they said the overwhelming majority of online gamblers play in a very moderate manner, spending minimal amounts. I don't know how accurate that is, though.

Josh: That site like misused apostrophes and stuff like that, and I was like, "Your credibility is a little bit out the window."

Chuck: Yeah, because of your grammar.

Josh: Yeah.

Chuck: Yeah, well, or maybe it's like any other kind of gambling; if you're a moderate gambler then you'll probably stay that way, but if you have a problem with it, it's certainly going to make it easier to throw away a bunch of dough.

Josh: Sure.

Chuck: It's not cash money in front of you. At least in Vegas, that's why they use-one reason they use chips, is to kind of trick your brain a little bit.

Josh: Right, to make money more abstract.

Chuck: Yeah, but there's nothing more abstract than just signing your bank account to something online and clicking it.

Josh: Yeah, because the little wheel on Greedy Goblins is like-

Chuck: It's mesmerizing.

Josh: Well, it's also, it's small too. So I mean you see the slot going but the amount that you have in the bank is not that big and it doesn't seem like it's linked to real money. In my case it wasn't linked to any real money. I can see very easily how it just seems like a part of a game, like a computer game.

Chuck: Yeah.

Josh: Apparently there's a whole thing called Slots for Tots.

Chuck: Oh boy.

Josh: Which is if you are against online gambling, this stuff drives you crazy. It's basically like Disney versions of casino games for little kids, like apps and things like that, where there's no gambling going on but it's basically like Joe Camel.

Chuck: Yeah, yeah.

Josh: It's like prepare for your adulthood as a gambler, or a smoker, or whatever.

Chuck: Right. Make it cartoony and fun.

Josh: Exactly, or a McDonald's consumer, or something like that.

Chuck: Yeah, I would be worried, it seems like an online casino, you can find a reputable one, but it seems like it would be really, really easy, because the cards aren't in front of you, to cheat the player every time.

Josh: Well, okay, that's another thing, too, that theGrabsterpoints out. If you're an American, right now it's still kind of a gray area, especially if your state doesn't allow online gambling.

Chuck: Yeah.

Josh: So you are still a potential target for shady online gambling sites, and one of the things they can do is cheat you out of odds. That's why if you play an Australian site, you can feel comfortable that the Australian government has vetted this computer program and found that the odds are the real deal.

Chuck: Like if you're playing blackjack, that it's a 52 card deck and every card is in there, even though it's virtual. That's what I would worry about, is if you start winning too much they'd be like, "Ah, let's just have this guy lose the next ten hands."

Josh: Exactly. Let's put the governor on this thing. Not the governor of Australia, because he is called the prime minister.

Chuck: If you listen to the casinos podcast, Vegas used to be fraught with rigged games, as well. It's the same thing; it's just the Wild West right now as far as the online version goes.

Josh: So Grabster give a couple pieces of advice. One, he said, especially when you're trying out a new one and your using a payment processor and that kind of stuff, he said open up an account with a small amount of money initially.

Chuck: Don't throw $10,000 in there just to see if it works.

Josh: No. He said put a little in, try it out, try to get it back out, and if everything seems legitimate then you can start to add more money, if that's what you want to do. He also said that no matter how much trust you have for this company, you want to get your money out very regularly and frequently.

Chuck: Sure, they go under, you're done.

Josh: They go under, they get raided, whatever.

Chuck: Yeah.

Josh: You just want your money out. And again, we should say, this is illegal in some weird way, still, in the United States, so the Feds could conceivably come along and take your money.

Chuck: Yeah, and you're also signing up for terms of service, so there are age requirements and if you fraudulently sign up for something as an underage gambler, then you're breaking the law there, too.

Josh: Yep.

Chuck: We don't recommend that.

Josh: There's one more thing that I wanted to talk about. So when the Feds in 2011 raided those top three poker sites, and then in the same year the Department of Justice issued that 13-page memo that said, "I think we've been misreading this," those sites that were raided, the Department of Justice brokered a deal where one of the sites that was raided bought the assets of its rival, that was also raided, with the Department of Justice taking the money and then distributing the assets to the other illegal gambling operations.

Chuck: What?

Josh: They served as the middleman for a merger.

Chuck: Did they take a cut?

Josh: I would guess that they got a significant cut of that.

Chuck: They got the vig.

Josh: Yeah, isn't that crazy? The Department of Justice was brokering a deal between online gambling outfits.

Chuck: Unbelievable.

Josh: So that's it. That's online gambling. If you want to know more about it, I suggest you go look it up on Forbes, because they have a ton of articles on it, but first go to HowStuffWorks.com and type in "online gambling," and it will bring up an excellentGrabster article to start you out. And since I said Grabster, it's time for listener mail.

[CHIMES]

Chuck: I'm going to call this the Brazilian. "Hey guys, my name is Rafael. I'm your greatest fan in Brazil. I've listened to at least a hundred episodes and you keep surprising me with new interesting topics. I loved the soccer show especially, because you know absolutely nothing about it, which was very funny for a Brazilian."

Josh: I thought we were never going to talk about that one again.

Chuck: "I love podcasts because they help me improve my English and I can listen to them while I am riding the bike, at the gym, or climbing. Last week I was listening to other podcasts and I must say you are winning the competition of good knowledge providers."

Josh: Awesome.

Chuck: "First I listened to a program of Freakonomics Radio called Tell Me Something I Don't Know, and one of the contenders presented the New York prohibition of pinball machines till the early '70s. They might didn't know, but I knew, because of your show on pinball." I remember when that happened. Do you remember that?

Josh: What?

Chuck: We got a lot of email that like two weeks after we did our pinball show this guy on Freakonomics Radio, on that show, had a thing on that.

Josh: Oh yeah, yeah.

Chuck: But the guy was a pinball expert, because I did a little digging. He did not copy us.

Josh: Oh no, rarely do people copy us, I think.

Chuck: No. I think you're totally right.

Josh: Rarely, if ever.

Chuck: "Second, almost at the same day that you launched the nuclear fusion show, the BBC podcast In Our Time with Melvyn Bragg invited three experts to discuss nuclear fusion. Both programs were awesome but yours was funny. Only yours was funny."

Josh: I can see that.

Chuck: "My conclusion is that you are beating the heck out of other podcasts. Congratulations. I wish you all the best and if I might add, challenge you to make a show on deflation and inflation. I'm sure that the crazy Latin American experiences to challenge high inflation will amaze you."

Josh: We have, we have talked about that a bunch.

Chuck: Yeah, stagflation.

Josh: We did one, Rafael, called "What is Stagflation."

Chuck: Yeah.

Josh: And we've talked about deflation.

Chuck: Currency.

Josh: Yep. The Stuff You Should Know "Guide to Economics"

Chuck: That's right.

Josh: "Super Stuffed Guide" even.

Chuck: That's right. So, Rafael, the information is out there for you. He says, "P.S., could you please tell me if my English is actually improving?" I don't know where you started?

Josh: We don't have a baseline, Rafael.

Chuck: But your English is pretty darn good.

Josh: It is.

Chuck: A couple of like little charming Latin Americanisms, I think, but I think you did a great job.

Josh: Yeah, thanks, Rafael. We're your biggest fans.

Chuck: That's right.

Josh: We appreciate all the flattering stuff. Thanks for that. If you want to flatter Chuck and I, we are always up for that. By Chuck and I, of course, you grammar Nazis, I mean Chuck and me.

Chuck: Don't listen to that part, Rafael.

Josh: You can tweet to us @SYSKPodcast, you can join us on Facebook.com/StuffYouShouldKnow, you can send us an email to StuffPodcast@HowStuffWorks.com, and as always, join us at our home on the web, StuffYouShouldKnow.com.

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Vo: For more on this and thousands of other topics, visit HowStuffWorks.com.

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