Anyone who has watched streaming tv will have noticed the vast number of commercials for online gambling apps. These must be very popular and successful or they wouldn’t be able to afford so many ads.
Do you suppose these online gambling apps are biting into the brick and mortar casinos’ market share (I can’t help but notice some of these apps are sponsored by brick and mortar casinos like MGM) or are they creating a whole new market for people that may not have been into gambling before?
I don’t know, but my guess would be that every gambling app that you can legally get in the US is just another business venture owned by the same companies that own brick and mortar casinos. DraftKings is an exception, being owned by a Bulgarian acquisition company. FanDuel is owned by an Irish sportsbook; I don’t know if the company has a brick-and-mortar presence anywhere.
I always see these new customer promos on these sites that seem unbelievable – like bet $5 and we give you $200! Or “if either team makes a 3-pointer, you win $100!”
What is the catch?
Most of the ones I’ve seen, it basically unlocks a dollar-for-dollar matching scheme. So, if you deposit $10, they’ll match at least some of it. This is valid up to the limit of what they’re offering, which as you said is usually $100.
Of course, they know that most people will end up losing, particularly if they’re betting big using “free money”, so it doesn’t actually end up costing them much. Even if you do win a bit, it acts as a loss leader to get you onto their site.
Sort of like those promos, decades ago, the Atlantic City casinos would offer free bus rides from New York City to the casino, a ten-dollar roll of quarters and a coupon for a free lunch. Some seniors would go, spend the day there and return with the roll of quarters intact. But probably most spent all of it along with part of their Social Security check.
The “catch” is they are hoping you have so much fun that you get addicted to it and keep playing. They are generous with the $200 to make it feel like you aren’t risking anything but still playing with more than a bit of cash. I went to FanDuel and deposited $25. I bet a few dollars on some NFL playoff games, won some, lost some. Luckily, I was in the black, so I pulled out my $25 stake and just bet with my winnings and $100 of the free $200. I bet on my team to go to the Superb Owl and who their opponent would be. Both lost the semi-final. I knew then that I had no interest in gambling (you never bet on your team). I took the remaining money and bet half on the Eagles and half on the Chiefs. Didn’t matter who won, I was betting with free money. I then opened an account with DraftKings, which had the same “bet $5 and get $200 in free bets”. I deposited the minimum $15, bet $5 on a random Hockey game which beat the spread and won me $5. I pulled my $15 (had to leave my $5 win, as that is the minimum to stay a member) and split the free $200, $100 on each team straight money bet. If Eagles won, I’d get $80, the Chiefs $100. Somehow I got an extra $15 bonus netting me $120. FanDuel won me $50 on the same bet. I pulled all my money out of FanDuel and the $115 out of DraftKings. So, I won around $165 or so and it didn’t cost me a thing.
Not on the free bet. Those are engineered to be basically 100% winners. They’re stupid-easy like “anyone strikes out on either team” or “someone scores a goal”. The catch is that you can’t withdraw that $100 prize money. You have to bet it a number of times and win it again and again before it becomes your money, able to be withdrawn. THAT is where they expect you to lose it. Or at least your opponent.
Usually the catch is that you can’t immediately withdraw what you won, keeping you in the game. Usually until you have lost it.
I have worked for two online casinos, one a startup, the other the largest (conglomerate) in the world, as a developer.
The payout rate is in excess of 90% as they need to compete with bricks & mortar - and the glitz, the glamour, the free drinks, the experience (not that that attracts me, but people do enjoy that). That payout rate though, comes with rules about how and when you can withdraw your winnings.
Work there was fun, although I find gambling itself pretty boring.
Alongside porn, gambling is one of the major innovators on the internet. It is a cut-throat industry where you need to be both better than the numerous competitors and really concious of security.
Even with that payout rate, the owners make a ton of cash.
Who wants to help me write a betting on porn app?
Don’t waste your time, these already exist.
The vast majority of casinos, and casino games, have pay outs well above 90%. They all make bank, because that means they have a built in average revenue of a few cents for every dollar you gamble.
So long as you keep playing, eventually that few percent per bet adds up to all your money, unless you get lucky, hit it really big early on, and then walk away from the casino.
And the vast majority of regular gamblers cannot do all of those things.