DFS players say that daily fantasy sports isn’t gambling because it’s a game of skill. Unfortunately, that argument sucks.
It is gambling. Of course it is. The typical DFS player will argue that if DFS is gambling, then the stock market is, too. They’re right. Both are gambling. But so is just about everything in life.
The argument is used primarily to try and dodge America’s ridiculous gambling laws. It goes, “if it’s a game of skill, it’s not gambling.” Wrong. Online Poker was banned in most states; it’s also a game of skill, but it’s definitely gambling.
However, (and though I’m not a fan) I appreciate Chris Christie’s line (regarding DFS): “Let people play, who cares?!”
It’s hypocritical for the government to allow gambling in most other areas of life but restrict it when bets are made on games. Yes, our government does tons of other hypocritical things… but why are we letting it?
Some may argue that gambling is a destructive, addictive habit — that the government should step up and protect people from themselves. I’m in the libertarian camp on this; I don’t believe that the government — especially Federal — should be stepping in to control and define morality whenever they feel like it.
Anti-gambling laws are stupid; it’s all about control and money. “I know better than you, so I’m going to force you to live the way I think is best.” DFS was just banned in Nevada. Why? Because DraftKings and FanDuel aren’t licensed by the state. No other reason other than “give us money.” It’s not like you can’t bet on sports here… in a sportsbook.
How everything in life is a gamble.
Gambling can be broken into three categories: pure chance, skill and chance, and pure skill. It’s all gambling.
Most people play “slot machines.” This is a pure luck-based game. A random number generator sets odds on the machine to pay out a certain amount a certain amount of the time (over a theoretically infinite number of bets). There is no set schedule, no hot or cold machines. Playing craps? Odds of rolling 12 is 1/36. Can it be thrown three times in a row? Of course. That’s variance. You could also roll 200 times and never throw 12. But over hundreds of thousands and millions of rolls, it will average out to approximately once every 36 throws. Slot machines run on similar math.
Other examples of slot machines: keno, bingo, lotteries, scratchers and roulette.
Most people gamble on everything else like they’re playing a slot machine.
Blackjack, Video Poker, Texas Hold’em, sports… games of skill that people just take a shot at without skill or much thought. These are games where there’s a mathematically correct thing to do; if you know this math and act on the knowledge (making a correct decision), you will have an edge (over acting randomly or making a suboptimal choice). But most people don’t care to make correct decisions — they just want the action. People do this with other life decisions, too.
But… so what?
Gambling, for most people, is entertainment. Like TV, an amusement park or a movie. All of those things cost money with close to a 0% chance you’ll make money while enjoying those activities. Looking at most gambling like other entertaining things makes sense; you pay money (place a bet) and some action happens (reels spin, numbers appear, cards are dealt).
Some people don’t see it that way. Those people are wrong.
I don’t tell you what shows you can or cannot watch — what business is it of yours to tell me or anyone else (adults) how we can spend our money? If you choose not to gamble on games, good for you, that’s probably a good decision. If you do gamble, good for you, too.
Yes, some people get addicted, and it’s very damaging. Some people skydive and plummet to their deaths. A better analogy; some people spend all day in front of the TV and slowly kill themselves in the process. Some people drink themselves to death. That doesn’t mean that we should ban any of those things. Individuals make choices and those choices have consequences. That’s why there are some things children can’t do — as a society, we don’t believe that they’re fully aware of the rammifications of their actions, so we protect them. Either being an adult means something or it doesn’t.
Games of skill with chance.
In contrast to “slot machines” of various sorts, there are games where good decision-making leads to victory. This most closely resembles everyday life.
Daily Fantasy Sports and Poker are both games where, if you make better choices than your opponents, you’ll win over time. However, both are incomplete information games filled with uncertainty and randomness.
As a first example, football: a star player could get the flu or have a migraine that hinders his performance. You’re not likely to know about it beforehand, or to what degree his performance will be affected. Likewise, a player in your lineup could suffer a devastating injury removing him from the game. You can’t know with certainty that this will or won’t happen. That’s just chance. Bad luck. However, a skilled DFS player will still pick the best lineup, hope for the best, and win more than lose.
In Texas Hold’em: the best hand you can be dealt preflop is two Aces. The odds of this? 1/221. Very rarely your opponent will be dealt two Kings in the same hand — the second best hand, but very unlucky for him. Heads-up (one-on-one against two Kings), if all five community cards are dealt, your Aces will win about 81% of the time. However, it’s not a surefire win: about 19% of the time, your opponent will catch a King (or two) for three or four-of-a-kind, a King-high straight or perhaps a King-high flush.
Still, if I have Aces, I will stick in as much money as I can because I’m a big favorite to win, and most of the time, I do.
Then there’s complete information games of skill with practically no luck. Most things in life aren’t like this.
Chess is probably the best example. All the pieces are in full view 100% of the time. Every move can be seen and is recorded. The most skilled player will win practically always. There’s no random element that could remove a piece from the board, switch sides mid-game or reconfigure the pieces. If you play Chess for money, and you’re highly skilled, it’s a fairly safe bet.
But you’re still gambling, because you’re betting on whether or not you’re more skilled than your opponent.
If you risk money on something, you’re gambling.
It doesn’t matter if you’re starting a new business, buying a house, or getting some Chinese take-out. Your business could fail, your house could end up underwater (figuratively or literally) and your food could make you sick.
Everything else in life is also a gamble.
If you leave your house, you’re gambling. You could be hit by a car or get attacked by a rabid animal. If you stay in your house, you’re gambling. It could catch fire or a robber could break in and shoot you. You can’t know with 100% certainty that these things won’t happen.
You can mitigate these risks by gambling intelligently — gambling with an edge.
You can make a business plan and make sure you have proper capital (a bankroll). You can choose to buy a house in a good area and actively maintain it. You can prepare your own food, and select restaurants carefully (even inspect them first). You can avoid the likelihood of getting hit by a car by watching traffic and by not walking in the street. You can keep your distance from wild animals when you see them. You can make sure you have working smoke detectors in your home, and purposefully live in a safer neighborhood where home invasions are rare.
DFS and poker players make these kinds of intelligent, deliberate choices every day. You can do everything right to set yourself up to win, but sometimes you won’t. It’s a gamble, but if you make good decisions, one you’re likely to win.
Adults are free to make all sorts of decisions, good and bad. All carry consequences.
Do you go to college? Do you drive in the rain? Do you apply for a new job? Do you stay out too late on a worknight? Do you have another drink? Do you bet it all on red? Do you sit down at the poker table or play $5 DFS game online?
All of these carry risks and rewards, and adults should be free to make these choices without government interference. If you decide that the bad outweighs the good, don’t partake — but don’t make that decision for me or your neighbor. I highly doubt you want me telling you how to live and spend your money — even if I’m right. And I’m almost certain that you don’t want people like me using government force to make you do what we like.
So just let people play.
You play the odds, take risks, take chances — with your money and your life. Just like everyone else. Sometimes, these decisions are made intelligently; other times, it’s a slot machine. Let others make good and bad choices with their own lives.
Next: how poker teaches life skills; why it’s not just a gambling game, and why everyone should learn it. (But obviously, I don’t believe that they should have to.)
Poker won’t be the next thing posted here. However, there will be an entry later today.