Is there anything more ridiculous than watching state governments fulminate against the wickedness of gambling — while operating gigantic and rapacious lotteries of their own?
New York attorney general Eric Schneiderman took bold action this week to stop the fantasy football businesses DraftKings and FanDuel from taking bets within the state. These businesses run commercial online versions of your office pool, where people get to bet on the weekly performances of NFL players from Tom Brady on down.
Schneiderman said these illegal operations targeted vulnerable groups, misled consumers, “and caused real social and economic harm.”
Fantasy sports sites told to cease in New York State
FanDuel and DraftKings fantasy sports sites have been ordered to cease operations in New York State by Attorney General Eric Schneiderman, who announced that daily fantasy sports gameplay is equal to illegal gambling. Photo: Bloomberg
“DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” Schneiderman thundered as he hit the businesses with cease-and-desist orders.
OK, so apparently one of the many investors in DraftKings is FoxSports, which is connected to WSJ/MarketWatch via the Murdoch family. Make of that what you will.
And yes, I understand the concerns about online gambling. I’ve known gambling addicts.
But really, Mr. Schneiderman?
New York State runs a $9 billion gambling operation known as the state lottery. It is deliberately designed to attract the worst kind of fast-money, quick-hit betting favored by the desperate, the gullible and the addicted. These range from instant scratch-off tickets, to daily games, to “MegaMillions” and “PowerBall.”
The lottery’s motto: “Hey, you never know.” That’s actually registered as a trademark.
If you want to talk about fleecing customers: The New York State lottery’s finances show it paid out just 48 cents in prizes for every dollar wagered last year. Las Vegas slot machines typically pay out about 90 cents.
These are the people trying to “crack down” on fantasy football because of its “social and economic harm”?
None of this is likely to matter in the rigged, stupid and sanctimonious world of populist politics. U.S. authorities have been waging war against online gambling operations since 2005, so far with great success. The fantasy football companies are fighting Schneiderman’s move. We’ll see in what shape their businesses survive.
In the past, online betting businesses — such as online poker sites — tried to get around U.S. gambling laws by operating from overseas. But their weak point was always where they had to interact with the banking system. They depended on banks, credit card companies, and businesses such as PayPal Holdings
in order to take bets and pay out winnings.
The creation of anonymous cyber-currency bitcoin may change the game forever. Bitcoin was launched in 2009, but didn’t really take off until 2013. The price has so far been incredibly volatile — rocketing to almost $1,000 per bitcoin in 2013, and plunging to barely $200 earlier this year, before rallying to $340 lately. It is a free currency that is controlled by no central bank or government, and has a supply limited by complex computer algorithms. You can buy bitcoins on exchanges or even from ATMs.
So far, most of us have had no good reason to buy bitcoins. We can use dollars to make online purchases. It’s hard to know what a bitcoin is really worth. And the volatility means it’s basically a gamble.
But it is tailor-made for online gambling. Bitcoins may let you place online wagers that you can’t place with dollars. As for the volatility: If you’ve already taken the decision to gamble with $500, you’ve already taken the mental leap that makes it easier to convert that money into a cybercurrency.
As it happens, there are already offshore casinos that take and pay out in bitcoins. How the anti-gambling scolds hope to stop everyone making bets is anyone’s guess. If history is any guide, they’ll fight back by doubling down on the rhetoric and demanding even greater snoop-and-spy powers. In the meantime, you could buy some bitcoins, then take your smartphone and stand outside Eric Schneiderman’s office and play online poker all afternoon — and he’ll never know.
Bitcoin: Your moment has arrived.