Jeremy Schwartz

Prof. Keefer

2 August 2001

The Effect on High Tech on Gambling

Nothing will have changed the course of American gambling more than its transitory upheaval from brick and mortar casinos to online gambling over the internet. Examining America during the time of the gambling’s high technology transition and shortly thereafter, our discussion leads us to American culture’s inevitable embracement of gambling over the internet by examining its legal status, the changes associated with actual gaming that potentially take place, cheating and underage gaming, and finally what will be in store for us in the future as it pertains to gambling in a high tech age.

According to Bear Stearns the number of gambling destinations on the World Wide Web doubled from the year 2000 to 2001 to about 1400 sites. In the year 2001 the United States, a country which claims to believe in liberty, free trade and even the ability of the internet to permeate world borders and allow freedom to run its due course, does not allow domestic companies to set up internet casinos. Americans and people the world over gamble on the internet today, despite its absence in physical America. This situation is going to change, and change fast.

Already there are challenges, specifically in the Nevada State Legislature, to US law that states that no gambling can be done over phone lines. Besides, the internet is hardly just phone lines. Our laws are antiquated as they pertain to technology. It is indeed hard to imagine that the composers of laws over thirty years ago had the internet in mind. Regardless of law, due in large part to the decentralized nature of the internet, there are currently few barriers on the internet for anyone who has access to the internet and a credit card to gamble online.

America’s legal battle with gambling will be fiercely waged for the foreseeable future. In 1999, Providian Financial became the first credit card company to step forward and ban credit card transactions for web gambling (Wellen). Today in mid 2001, the government is trying to persuade credit card companies to ban these transactions, with little effect. The credit card companies will seek to do what is profitable for themselves, so credit cards will exist that will allow online gambling as long as there is a market of gamblers who pay their credit card bills on time. Even if the credit card companies were swayed and outlawed internet gaming transactions, people could still send money orders to the casinos. The US is also trying to engage other countries in a universal ban on internet gaming through the UN and other conventions, but these channels will not expectedly lead to success. Also, private wagering takes place every day, and high technology can serve as a bridge across which players in distant lands can compete and wager. The internet facilitates wagering in general with its associated anonymity for wagering between strangers and with its ability to allow a group of friends who live far away from one another to get together online and gamble with one another. Any obstacle erected by government can be struck down by persistent gamblers and the gambling market, leading to the inevitability of internet gambling.

Eventually the federal government will allow the online gambling companies abroad to come to the US and set up shop. The money hungry US federal government will probably not be able to resist the potential tax revenue it will be able to leech from the online gambling businesses. One need only look to the embracement of lotteries by states in our union. The already powerful corporate conglomerate hotel casinos in Las Vegas and Atlantic City would also provide a strong incentive to legalize internet gambling in both lobbying power and again, revenue.

With the addition of famous names such as Trump and classic gambling staples like the Mirage and Harrah's, in a regulated United States means that even more people will trust the system of gambling (which is one component vital in gambling) and hence more people will be drawn to it.

Today, most internet gamblers have likely never heard of the various companies which own internet casinos. Little recourse can be taken against foreign gambling domains which open and close on a daily basis. The internet casino companies have no accountability to be fair. Already people blindly trust these companies in full awareness that even in traditional casinos, the House wins. That's how all the big buildings got there in Vegas. Currently there is nothing keeping these unregulated internet casinos in a different countries from cheating players and making the game payouts lower. Or to develop an elaborate psychological profile of your gambling patterns to use against you so that you pay the internet casino the highest possible amount of money over time. B. F. Skinner would be proud.

The trend in medium for the determination of the random element in gaming is from physical cards, dice and roulette wheels to something that the House would have us believe is randomness within fixed odds. From the physical world to video machines in casinos to online gambling from our homes, internet gamblers, like the slot machine gamblers before them, abandon any notion of the use of skill to nudge luck along to the player’s advantage. There has always been a latent market for people wishing to wager on blind luck. When technology caught up to slot machines and many were put on computers that manipulated their payouts, people did not stop playing them. Gamblers trust casinos.

Advancements in AI will yield to better play on the part of the house and computer. Pattern recognition will detect when players are counting cards in blackjack and using high mathematics in craps wagering. The only question will be, does the house take this as an acceptable loss and not let the player on to the fact that it knows, allowing the player to continue? Will the House AI then take revenge and screw the player’s odds? All this calculation and tinkering could be performed and implemented dynamically and instantaneously. Software has no difficulties watching players' betting patterns and egging players on accordingly. Elaborate psychological profiles could be set up so that the player will pay the house the most money over time. Employing techniques such as this is at the sole discretion of the internet casino operator.

Over the internet players can have their Microsoft Excel spreadsheet calculating their optimum play strategy right next to their web window where they are gambling. Professional gamblers no longer need memorize mundane tables of odds and methods of play, nor keep running counts of cards in their heads. Gaming over vast distances, especially via multitasking computers, begs the participant to come much closer to the line of cheating with assistance from your computer. Likely the House will be aware of such practices and while it may not like it, unless the players algorithms get so good as to beat the house on a consistent basis (which is quite a possibility), it will likely tolerate it as a concession.

After all, online casinos lose several of their brethren’s magnetic charms. Traditional casinos employ many devices which either serve as reinforcement to the whole gambling odyssey, or complement it in such a way that the experience becomes more than just gambling. Caesar’s Palace in Las Vegas not only has an amazingly lavish and awe-inspiring decor, its sky painted ceiling that cycles from night to day and back again subtly highlighting the fact that it is especially easy to lose one's concept of time in such a fantastic place as this. The grand environments in Las Vegas casinos serve to enchant and intoxicate gamblers, drawing them into its world thereby closing off the outside and time. In established casinos there is often free medical care. Alcoholic beverages are served for free in most casinos provided that you are gambling to further compel patrons-- how are internet casinos to compete with that?! They cannot, but they hope to, in part, by giving away free money in the form of gambling credits, hoping to get people to gamble on their site.

Casino's attention to layout is excruciatingly comprehensive. There is no reason for this to change in the online world. Many physical casinos of today carefully plan their layouts to shuffle players through a complicated maze, walking past gambling opportunities just to exit serves as a sort of trap. Clearly, these tactics cannot work with web based gambling in its current form with escape just a click away at all times. Web based gaming must effectively make good use of its medium by making good accessibility paramount. When thinking about what type of businesses have survived on the internet despite all of the fluctuations in the information economy, the pornography industry comes to mind. This is likely due in no small part to the fact that they use the successful technique of swapping their customers around. With banners and link pages they move their prospective customers from one site to another. They help each other out and they all grow. Gambling sites still rarely do this with one another and as a result it is incumbent upon the potential gambler to find a gambling directory to find different online casinos to their liking.

As long as there have been gamblers there have been young gamblers. Today is no exception. Everyday young people in this country gamble and some do so online. Underage gambling, that is to say gambling by persons under the age of 21 in the United States, has long been an issue by casino operators. A fairly effective means of dealing with this form of illegal gaming has evolved. In Las Vegas, for example large casinos employ city police officers to stay in the casino to help with underage gambling among other tasks.

When I went to Vegas, looking young and just having turned 21 years of age, I had several police officers approach me and proof me for age. They were polite, courteous, and even poked jokes at the situation. They also gave me a wristband to prevent further superfluous inquisition from others. Their system is not perfect, but it relatively effective.

Currently there are many destinations on the internet where one can gamble with a credit card alone. There are win and loss limits that these internet casinos employ to help make sure that their customers will pay what they owe. Upon reaching one of these limits the casino will wish to know more about the internet gambler they have already been playing with, and been playing with long enough to reach said limit. Online casinos might do a credit check, a background check or even ask the person to fax them a driver’s license. In other words, unregulated internet casinos are only concerned with the patron’s ability to pay. If a person wins a significant amount of money, the casino might likewise wish to delve into the identity of the winner to find a way out of paying the gambler (for example finding out if the patron is underage).

Some talk has been going on of special systems utilizing Global Positioning Satellite technology well as other methods to help the case for legalizing domestic internet gambling. Proponents argue that these systems will aid in regulation by both confining areas internet users can access internet casinos from (to help certain states abstain from internet gambling if they wish), and to ensure that the players are of legal age to play. Two problems arise with these new systems of regulation enforcement. First, as long as there have been security devices, on the internet or otherwise, man has always found a relatively quick and easy way to bypass it, over time. Secondly, the unregulated internet casino will always exist in unregulated parts of the world. No barrier can really prevent this, again due in large part to the decentralized nature of the internet. As always, it will be incumbent upon the parent to make sure that their child does not gamble if that is their wish.

Instead, new forms of gaming for stake will arise, and initially they will be most attractive to children. Online communities have sprung up around multiplayer games—whether the game is a Quake death match, where each player takes on a character and fights all of the other player’s characters to rack up the most kills, or more traditional family games such as Checkers and Battleship. Within these communities there are hierarchal ranking systems and tournaments that occur. Sometimes, on some sites, there are even cash and prizes awarded for doing well in these tournaments. Along these lines, there will be a shift from virtual dice and virtual cards to non-traditional online casino games that take advantage of its medium.

Sure, there will always be room in the market for the business executive playing blackjack online wirelessly on his Palm™ organizer during a business meeting as it looks like he is ostensibly just keeping notes (Adkins, Gambling Online). But, why play with virtual cards when you can, for an entry fee, play something ‘completely skill based’ for money. Gamblers are attracted to the increased perceived control they have upon the outcome of the game, so they will flock to these competitive gambling oases.

‘Completely skill based’ of course assumes again that the server operators as well as casino and game operators, and this time even players are not cheating by using bots or by some other means. Bots are computer controlled artificially intelligent mechanisms which can play the game on behalf of the player optimally, but in a convincingly human way, and they can be entered into tournaments by anyone with the know how to do so. Bot detecting technology continues to evolve, but this form of cheating correlates to the different types of struggles casinos have had with cheating gamblers throughout time. The more casinos’ security gets better, the more new cheating methods are devised; it is a constant escalation and it is a fact of life, online or off.

While it may be easy to conceive of degenerate people sitting by their computers, obese, unhealthy and gambling for hours, there will be many people who will be drawn into the charms that high technology has to offer gaming and gambling that do not fit the typical gambler, or even online gambler’s profile. New online multiplayer games will draw people out of there homes to compete in casino-arcades with their virtual reality equipment.

Right alongside of being able to simulate hitting a grand-slam home run at the bottom of the ninth inning to win the final game of the World Series in an arcade, there will be linked systems within this casino/arcade site and links also to people around the world and people in other high tech arcades the world over. Within these systems any game that the imagination can conceive can be played and wagered on. Playing the part of a character in a murder mystery movie with suspenseful cinematography where if you solve case and stay alive you can win prizes, fighting in a huge war that actually took place in the past and surviving, or more abstract sports like competitive flying gymnastics can become a (virtual) reality.

Initially, the interface equipment between the player and the game will likely be costly and cumbersome so players will probably go out to play them on the best equipment possibly. For example, in a driving race one could go to an arcade and play in something resembling an actual car with other people around them doing the same thing as them. Of course, some of the people who are being played against are at home controlling their cars by keyboard but there is a definite allure of social gaming—especially in situations where actual people are present playing against people that they either know or can readily meet and get acquainted with.

Going to these social gatherings of players would bring back the allure of free drinks and the rest of the associated benefits of their older relatives, traditional casinos, thus helping to bestowing staple-status to arcade/casinos. Even as technology further develops and their costly interfaces are no longer needed, when people can have all that they need to play in a virtual reality against many others at home, we will still find these casino/arcades. Even today we see the importance of the social element in online gambling. Some online casinos offer the allure of ‘real dealers’ to chat with whilst playing as well as providing the means for players to chat with one another.

The casino/arcade operators and the computer server operators (computer servers being the physical location of the internet gambling and gaming sites) take a cut of the entry fee of the players for operational fees and profit and offer the rest as scaled prize money to the competitive gamblers. Sponsors will likely come aboard due its sports-like appeal and offer their merchandise as prizes as well paving the way for huge corporate tie ins. New high tech gaming and the gambling associated with it will become trendy.

Even parents who told their children not to play videogames and to go play outside or do their homework as games will rot their brains will be humbled by the seemingly newly acquired marketable skill—video game gambler. These online games will be more akin to sports where being the best gamer is equated to being a Michael Jordan. However, in the online world anyone can compete against this ‘best player in the world’ in their game of choice for an entry fee. Sometimes free play could be earned as an incentive for the player to continue their play did not merit actual money or prizes in the tournament.

Online casinos of all kinds will also take issue with people’s assumptions about games and the type of players who play games and gamble. For parents’ assumption that games ‘rot brains’ online casino conglomerates will supply innumerable studies showing the benefits engendered by gaming. Looking beyond mere help in hand-eye-coordination, casinos will market gaming and gambling (as gaming with a stake ‘provides the reinforcement necessary to instill the benefits to the player,’ they’ll say) as mental exercises which improves the mind’s capacity and efficiency in cognition, flexibility/adaptability, quickness, enhancement of pattern recognition skills, as well as aiding visio-spatial recall and cause and effect reasoning. Additionally, men and women are competing in these games on an equal playing field.

Corporate contracts will elevate these expert gamer gamblers to superstar status with endorsement deals. These superstars will be intelligent and unless people’s conceptions of the overweight change quickly, not obese. These gamblers will become role models, as they are at the top of their sport. This will turn gambling small in stake at the unskillful level into more of a sport in the minds of the public. A lot of the stigma which is attached to traditional gambling will likely go away in this evolved form of gaming.

Today there we have propaganda and free offer filled pages of a bi-monthly magazine called Gambling Online Magazine as well as a slew of ‘official’ online gamblers association that give their stamp of approval on ‘fair’ (read: companies that pay for the stamp) gambling destinations on the web. Tomorrow there will be a sort of Sports Illustrated™ for online gambling gaming for the cultural aspects of the regulated leagues of sport surrounding high tech gambling. With its associated cognitive benefits, perceived superstar lifestyle and trendy-ness surrounding online gaming, gambling will have attained mainstream status in a way that it never has before.


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