Bad omen for expansion of gambling in NY

February 21, 2013

This article in the New York Times  does not bode well for any hope that the new era of expanded gambling “opportunities” for New Yorkers will be in their best interests.  Quick Draw is the most exploitive of games.  It has an exorbitant house edge — 40%, according to the article.  It is fast, exposing the player to that house edge over and over again in a relatively short period of time.  It has high volatility, meaning that it is easy to exhaust a relatively small bank roll before getting lucky.  The only “good” thing about this game is that it can be played for relatively low stakes.

One might argue that, in a game that can be played only by adults, it is up to each individual to decide whether to play, and the only obligations of the government are to provide full disclosure and to run an honest game.  Donald Catlin, a mathematician, analyzes Quick Draw in this article.  He concludes that it, like most other Keno games, is not a good bet.  More important, he claims the Lottery advertises Quick Draw in a misleading way, counting ties (draws where you get your original bet back and nothing more) as wins in advertising the “odds of winning,” which is itself an almost meaningless statistic, the house edge and volatility being far more relevant. Of course, accepting this “buyer beware” argument across the board would mean dismantling many federal and state government agencies and programs whose purpose is consumer protection, a mission that often includes protecting consumers from themselves.  Pennsylvania, in rejecting industry lobbying aimed at allowing it to increase the house edge on its blackjack games, recently indicated an awareness of the need to give the players a decent chance, possibly saving the industry from the consequences of its own avarice (see, by contrast, Atlantic City).  It looks like New York is poised to go in the opposite direction, which will cause more gambling-related problems and fuel for the anti-gambling forces, especially because the minimum age for gambling in New York is 18, rather than 21, as in most other states, which suggests the need for more consumer disclosure and protection, not less.

As someone who believes adults who want to gamble responsibly should be given the opportunity, with the concomitant opportunity for the State to derive non-tax income from those who participate in that activity voluntarily, I despise the Lottery for its exploitive games and its implicit misrepresentation of the lousy products it offers, which include not only the “odds of winning” disclosure explained above, but marketing video poker that resembles the decent games found elsewhere but is anything but, as described in a previous post on this blog.