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Reason Foundation

Out of Control Policy Blog

How Players Police Online Gambling

Steven Titch
November 15, 2011, 1:26pm

The big news in online gambling circles these past two weeks has been the busting of BLR Technologies, a software supplier for a number of online gambling sites, after a leading gaming mathematician determined the variance against winning at its craps game was statistically off the charts.

While most online gambling sites host honest games, there's bound to be some bad apples. What's often overlooked is that there is a market-enforced structure that militates against suspect play or outright cheating. That was clearly at work here.

The finding already has led at least one online casino, 5Dimes, to remove the BLR software from its site. That the news circulated the online gambling community as quickly as it did, and led to immediate action from a major online casino group, testifies to the knowledge and power of online gamblers. Of course, the image of informed players backed by mathematical and statistical experts contrasts with the views of government policymakers, who tend to treat online gamblers as gullible knuckleheads who need to be protected from unscrupulous gambling predators, predominantly through bans. This misconception is worth keeping in mind as a Congressional panel convenes this week to revisit federal laws against online gambling.

In the BLR case, Michael Shackleford, whose Wizard of Odds website takes an in-depth mathematical approach to all manner of gaming probabilities, strategies and odds, personally tested the software after a reader complained that he had won only 25 percent of 3,200 "pass" or "don't pass" bets made.

In craps, the bettor wins a pass bet by rolling a 7 or 11 on the initial, or "come-out," roll. He loses immediately on a 2, 3 or 12. Rolling a 4, 5, 6, 8, 9 or 10 establishes a "point." After this, in order to win, the player must roll the point before rolling another 7. A "don't pass" bet works exactly the opposite.

In a Nov. 2 blog post, Shackleford said he first dismissed the complaint. Then, after reviewing videos the reader posted on YouTube, Shackleford decided to conduct his own series of trials, which confirmed the anomaly.

For example, the probability of rolling a 7 or 11 on a come-out roll is 22.2 percent. In the 328 bets Shackleford made, his expectation was about 73 come-out wins. His actual result with the BLR software was 33. Wins by successfully rolling an established point were not just below expectation, but statistical outliers. By Shackleford's calculations, the odds of his overall result--a 24.7 percent win rate against an expectation of 49.29 percent--was 1 in 6 billion. Putting this in layman's perspective, he said, "it would be 184 times easier to win the Powerball [lottery] 2 out of 2 times than to be as unlucky as I was in this craps game."

Shackleford's test was repeated by mathematician and gaming software consultant Eliot Jacobson, who also experienced the same extreme improbabilities. While Shackleford simply cautioned players against sites using the BLR software, Jacobson went as far to call the software "rigged."

As the House panel gathers this week to evaluate the pros and cons of online gambling, members should be aware that most online gamblers are smart, responsible and sensible when it comes to playing. They are also very good at sniffing out suspicious sites, verifying whether real problems exist, and exposing them when they do. The online gambling ban, effectively managed through intrusive regulation of international financial transactions, was a mistake to begin with and deprives law-abiding Americans from using the Internet to engage in a recreational activity legal, in some form or another, in a majority of states. The busting of BLR is simply another reason to end the nannying over online wagering.



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