THE NEXT GOLD RUSH: ONLINE POKER AND THE LOTTERY

Scratcher

My brother-in-law bought me several California Lottery scratchers as a stocking stuffer this year. Two of them were $5.00 games based on poker. It says on the California Lottery website, “LIKE POKER? Then our $75,000 Poker Scratchers® game is the one for you.” I LOVE poker, so how could I resist?

I scratched eight spots to reveal poker hands that I had to use to beat the dealer’s hand. Three of my hands won! I felt like it was my lucky day. I won more with my scratcher that day than I did playing real poker.

After scratching for five minutes and leaving plastic shavings everywhere, I can see why lottery players look forward to the day they will be able to log onto their state’s lottery site and let their computer do the scratching for them. Look for your favorite lottery games coming to a computer near you.

The Obama administration’s decision in December 2011 limiting the Wire Act to sports betting paved the way for the legalization of online lottery sales. Three months later on March 25, 2012, Illinois became the first jurisdiction to sell lottery tickets online. Currently, that is the only state which allows Internet lottery sales, but in the not-too-distant future, expect the lottery to be online in many more states.

People think the lottery is just picking numbers, but it is much more than that. Pretty soon every casino game you can imagine will be adapted and played with a lottery ticket. According to the website of the North American Association of State and Provincial Lotteries, U.S. lottery sales totaled $78 billion in 2012. The New York Lottery, North America’s largest and most profitable lottery, accounts for over $9 billion of that total. In comparison, New Jersey Governor Chris Christie has projected online gambling in his state will generate over $1 billion in revenue by July 2014, and many industry analysts are calling that number overly optimistic. Regardless what the final number is, it will pale in comparison to the revenue state lotteries generate.

Factor in the fact that lotteries often use funding education as a way to get passed in legislatures and then as a selling point (though as little as 11 cents of every dollar actually goes back to some states), lotteries hit the marketing jackpot. With record jackpots making the national news and multi-state drawing games like Powerball now played in 44 jurisdictions, online gambling will have a hard time competing.

While the gaming industry is spending millions lobbying for the legalization of online gaming, the lotteries are sitting back cheering them on. When all the hard work is done, they will take it over from there. Online poker is currently being used to pass all other forms of Internet gambling because it is easier to push online poker through legislatures because it is generally considered a game of skill. It would be difficult to pass online gambling if it was presented as games of pure chance.

All eyes will now turn to New York, Massachusetts and the big prize, California. The bills introduced in the California legislature specify online poker only at this time, but do not be fooled by the words poker only. It is just the beginning of what is coming. Online poker will increase in popularity for the next ten years when New York and California finally offer online gaming.

During this time, online poker will create the pathway for all other forms of online gaming. These states with the largest populations in the nation will become meccas for online poker, and in ten years or so they will also be home to the biggest gaming companies in the world, the lotteries. Poker players can look back one day and say, “We started it all.”

I believe poker will all but vanish from the online gambling sites once it has served its purpose. One day you will have to search hard on any gambling website to find the poker tab and look even harder for a poker game.

The big winners in all this are the state lotteries if they are allowed to cross state lines and become legal in every home. The lottery will create slots and poker games and camouflage them to look like scratcher games much like the one I described at the beginning of this article.

The lottery industry is not as innocuous as it seems. It is about more than just picking some numbers; it is a whole new gambling platform. Do not be surprised if America’s game changes from poker to the lottery. Think about that the next time you buy a Powerball ticket with a 1 in 175,223,510 chance of winning the jackpot, roughly the same chance as getting hit by lightning–on your birthday.

Robert Turner is a legendary poker player and marketing expert. Robert is most well-known for introducing the game of Omaha poker to Nevada in 1982 and to California in 1986. He also created the Legends of Poker for the Bicycle Casino in 1995. He helped create Live at the Bike, the first live gaming site broadcast on the Internet in 2002.

He has spent over 30 years in casino marketing and player development. He is currently working with his new companies Crown Digital Games developing mobile apps and Vision Poker, a poker marketing group.

Follow Robert on Facebook at http://www.facebook.com/thechipburner and on Twitter @thechipburner. Robert is available for consulting, marketing or teaching. He can be reached at robertturnerpoker@gmail.com.

Advertisements

A Casino in Your Pocket

myfirstsmartphone

When my son Jaden was five years old, I gave him a Los Angeles Lakers’ poker set given to me by the late Dr. Jerry Buss.  His mother hid it in the garage.  Jaden, now 14, found it and brought it to my house this Thanksgiving and asked me if I could teach him how to play poker. I had wrestled with what I would do on the day my children would want to learn to play and whether I should teach them.

I am sure many gaming industry professionals have had the same thoughts. All my children know their dad works in the gaming industry and has played poker for fifty years. My younger kids like to Google my name and tell me about what they read online, and they are starting to ask me many questions about gambling like why I haven’t won the Main Event. With the Internet and social media, young people today are exposed to social gaming at an early age.

Children today grow up playing games, and gambling is just an extension of gaming to them.  It is so much harder to shield children nowadays, so I decided if I am going to teach my kids about gaming, I will make sure they understand all the pitfalls–the good, bad and ugly.  In our conversation about poker, my fourteen year old tried to convince me that his video games Call of Duty and Grand Theft Auto are educational. Those games make gambling look like Candy Land.   I find these videos games very disturbing.  In fact, they inspired me to form my own company, Crown Digital Games, so I can develop games like Giant Paintball, which uses paint instead of bullets that my children can play that keeps the competitive element without the blood and gore.

I feel poker, unlike video games, can teach so much about life.  It teaches about winning and losing, math, money management and psychology just to name a few things; most of all, it teaches you about people. I teach my children there is a time and place for gaming, and it should never interfere with their family or education.  The key is to remember to keep it fun and to gamble responsibly within one’s limits and make sure it never interferes with family.  Poker has created a blessed life for me the past fifty years, but it has come with some pain and suffering. As I reflect back, I do have some regrets and wished I had spent more time on the important things in life.  As the Poker Hall of Famer Fred “Sarge” Ferris said when he realized he was terminally ill, he wished he had stopped and smelled the roses.

On Thanksgiving it’s a tradition at my wife’s family gathering to play poker. Her 21-year-old niece is very competitive and beat us all out of our $5 buy-in. She was taught poker at an early age. She informed me she is taking a course at San Diego State University called “Cross Cultural Gambling.”  She said she watched the movie Rounders in class where the students discussed the consequences of gambling.  At the peak of the poker boom, there is no telling how many students played poker online on their computers in their dorm rooms.  Now with smartphones in the hands of our youth, it is time for them to learn about the personal and social impact of gambling in the classroom.

The gaming industry is going through a seismic shift. For the first time, gaming has a chance to become mainstream.  It is moving from the back room to your living room. The leap from play money to real money is just a click away. Putting our heads in the sand pretending our children are not being exposed to gambling is naïve.

As parents we need to be aware of the proliferation of all forms of social gaming and know what our kids are downloading and playing.  As the Washington Post reported in February 2011, an eight-year-old girl rang up a $1400 bill in the Capcom game Smurfs’ Village. Though the game was free to download, the smurfberry purchases made within it cost real money. The lesson here is the virtual games in our children’s pockets are one step away from real gambling, and it is playing on their competitive and addictive behavior.

I am 65 years old.  One thing I want to leave in my children’s minds about the business I have been in for fifty years is that gambling has consequences, both good and bad.  I want them to be winners in life.  With gambling now becoming legal online and at our fingertips 24/7, it is imperative we educate the young as they walk around with a casino in their pocket.

Robert Turner is a legendary poker player and marketing expert. He is most well-known for introducing the game of Omaha poker to Nevada in 1982 and to California in 1986. He created Live at the Bike, the first live gaming site broadcast on the Internet in 2002. He also created the Legends of Poker for the Bicycle Casino in 1995.

He has spent over 30 years in casino marketing and player development and has served as an executive host at the Bicycle Casino and MGM Grand.  He is currently working with his new companies Crown Digital Games developing mobile apps and Vision Poker, a poker marketing group.

The Man Who Lost $127 Million: Responsible Gambling and the Duty of Care

ProblemGambling

Putting a 24-hour casino in every home comes with great responsibility. Ensuring a safe, responsible gambling experience should be of paramount importance. Online gambling companies talk incessantly about revenue, but it is everyone’s responsibility from regulatory bodies to operators, from governments to the citizens themselves to require that all proper consumer protections and safeguards are in place before online gambling can go live. It is imperative that all stakeholders in online gambling be well versed not just in its benefits but its pitfalls as well.

Perhaps one of the most dramatic illustrations of what happens when a gaming company puts revenue before responsibility is the case of Terrance Watanabe who is reported to have lost most of his personal fortune recklessly gambling in Las Vegas. According to an article in the Wall Street Journal published December 5, 2009, “During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million. The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history.” While Steve Wynn is reported to have barred Watanabe from his casino for compulsive gambling, Harrah’s Entertainment Inc. welcomed him and derived 5.6% of its Las Vegas gambling revenue from him that year.

This case showed such an egregious lack of sound business judgment on the part of Harrah’s, now Caesars Entertainment, that the company was fined $225,000 by New Jersey regulators in March of this year. Gary Thompson, Director of Corporate Communications for Caesars Entertainment said, “Because of the confidential settlement agreement we reached with Watanabe, neither he nor we can make any official comment.” However, he points out that Caesars hired an outside agency to investigate the situation and made procedural changes deemed necessary to prevent recurrences.

New Jersey Governor Chris Christie has taken a more proactive approach to responsible gaming and has expressed great concern over the potential spread of excessive gambling in his state. When he conditionally vetoed that state’s online gambling bill in February of this year, one of his main recommendations was to increase funding of compulsive gambling programs.

In a statement released with his veto, Gov. Christie said his recommendations are intended to continue “the tradition in New Jersey of a fine, careful, and well-regulated implementation of gaming.” The operative word here is “careful.” In the rush to reap the financial windfall online gambling companies promise, oftentimes the need for consumer safeguards is overlooked. Gov. Christie signed the bill into law once the Legislature agreed to his changes. It is the duty of all jurisdictions considering introducing gambling to its citizens, whether in brick-and-mortar or online casinos, to take such a thoughtful, measured approach to the issue. Doing any less could have devastating effects. Today, November 21, Internet gambling begins a five-day trial run in New Jersey.  This will put Gov. Christie’s promise to the test.

As Keith Whyte, Executive Director of the National Council on Problem Gambling (NCPG), states, “We are concerned that as jurisdictions race to legalize internet gambling, often in an attempt to boost their gaming tax revenues, they are neglecting serious problem gambling concerns. Without comprehensive responsible gaming policies, the massive expansion of internet and social gaming may exacerbate gambling addiction. Our IRG (Internet Responsible Gaming) standards incorporate best practices from around the world, and we strongly urge they be incorporated into online gaming legislation and regulation.” There is no question problem gambling destroys lives. Organizations such as NCPG propose that a comprehensive public health strategy is the most ethical and cost-effective response to the gambling addiction issues raised by internet gambling. The universal adoption of responsible gaming standards by operators and regulators alike, in tangent with well-informed consumers, is an important aspect of this approach. Legislation and regulation of online gambling must keep up with the rapid pace of technology.

While I was marketing director for The Bicycle Casino in Los Angeles, I produced many successful events that created enormous revenue for the casino. The morning after one such event I drove into the parking lot of the casino and noticed an elderly woman crying into her hands. This image has haunted me to this day. I thought to myself, “Did I do this to her?” This is the question all the stakeholders in online gambling should ask themselves. Let’s not forget there is a human face in front of that computer screen.

Resources for Problem Gambling:

National Council on Problem Gambling, http://www.ncpgambling.org, 1-800-522-4700

Gamblers Anonymous, http://www.gamblersanonymous.org, 1-855-222-5542

Robert Turner is a legendary poker player and marketing expert.  Robert is most well-known for introducing the game of Omaha poker to Nevada in 1982 and to California in 1986.  He also created the Legends of Poker for the Bicycle Casino in 1995. He helped create Live at the Bike, the first live gaming site broadcast on the Internet in 2002.

He has spent over 30 years in casino marketing and player development and has served as an executive host at the Bicycle Casino and MGM Grand.  He is currently working with his new companies Crown Digital Games developing mobile apps and Vision Poker, a poker marketing group.

Find Robert on Facebook at www.facebook.com/thechipburner and on Twitter @thechipburner.  Contact Robert at robertturnerpoker@gmail.com for consulting, marketing or teaching.