Commercial Provision of Zero House-Edge Gambling Products

Abstract

In commercial gambling, the odds of winning are against the gambler. Roulette is a good game to demonstrate this principle with. A roulette wheel has the numbers from 1 -36 that the wheel can land on, and a successful stake of £1 on one of these numbers will pay-off £36 (including the return of the stake). However, a European roulette wheel has an extra number, zero, which the wheel can also land on (and which can also be bet on). This means that a bet on any specific number will only win 1 in 37 times on average, resulting in an average loss of 2.7% of all money staked. This average loss for the gambler is known as the house edge. 1 American roulette has a second zero (the double zero), but the payoffs are the same. These further reduced odds of winning in American roulette translate into a higher house edge of 5.3%, making this a less attractive gambling product. 2 This shows how the house edge can be compared across gambling products, 3 which along with the total amount bet, predicts gamblers' average losses. 4 Since these losses lead to harm, 5 some economists have proposed zero house-edge games as a theoretical harm reduction approach. 6 But these games are not just a theoretical possibility, as at least three significant online operators have either provided or promised to provide these games. This article reviews this short history of zero house-edge games, while also proposing an alternative model for how they could be commercially provided.Betfair is an innovative online operator, having introduced the first popular sports betting exchange, where bettors trade against one another like in the financial markets, with Betfair

Financial inducements in gambling marketing: An information disclosure proposal to inform gamblers of their true economic value

“…Slots-based products can have a broader range of house edges depending on the programming of each game (Harrigan & Dixon, 2010), but which average at around 10% (Woolley et al, 2013). Commercial gambling products have some sort of mechanic which makes the average gambler lose in some way (Newall & Andrade, 2022), such as the asymmetric rules between the player and dealer in blackjack (Spanier, 1987), the implied margin in sports betting odds (Hassanniakalager & Newall, 2019;Whelan & Hegarty, 2023), or the "rake" taken from every pot in poker (Lantz & Isaksson, 2016).…”

Cryptocurrencies as Gamblified Financial Assets and Cryptocasinos: Novel Risks for a Public Health Approach to Gambling

“…The odds of winning on casino games such as roulette are set so that gamblers lose money over time, a concept called the 'house edge' (Newall et al 2020). Two cryptocurrencies were launched to promote 'edgeless' cryptocasinos, where the odds of winning were fair (Newall and Andrade 2022). However, like some other cryptocurrency-based ventures, one of these cryptocasinos turned out to be a scam, which took millions of dollars from investors (Isaacs n.d.), while the other cryp-tocurrency appears dormant with very few active users (Newall and Andrade 2022).…”

“…Two cryptocurrencies were launched to promote 'edgeless' cryptocasinos, where the odds of winning were fair (Newall and Andrade 2022). However, like some other cryptocurrency-based ventures, one of these cryptocasinos turned out to be a scam, which took millions of dollars from investors (Isaacs n.d.), while the other cryp-tocurrency appears dormant with very few active users (Newall and Andrade 2022). Given the complete overlap between cryptocurrency investing and cryptocasinos when it comes to cryptocurrencies that are created to be exclusively used to gamble, it can be argued that this specific intersection exemplifies what has been termed affective-emotive gamblification (Macey and Hamari 2022), in which gambling is used to promote a new product or service, in this case new crypto coins.…”

“…Given the complete overlap between cryptocurrency investing and cryptocasinos when it comes to cryptocurrencies that are created to be exclusively used to gamble, it can be argued that this specific intersection exemplifies what has been termed affective-emotive gamblification (Macey and Hamari 2022), in which gambling is used to promote a new product or service, in this case new crypto coins. This argument is further strengthened by the fact that one edgeless casino was never launched as it was a scam, and the other failed to succeed as a casino despite the relative initial success of the coin (Newall and Andrade 2022).…”

“…As of January 2023, there have been eight peerreviewed studies conducted on cryptocurrency trading and its associations to gambling and gambling-related harm (Delfabbro et al 2021a;Johnson et al 2023;Kim et al 2020;Mills and Nower 2019;Oksanen et al 2022aOksanen et al , 2022bPhilander 2023;Sonkurt and Altınöz 2021;Steinmetz 2023). Additionally, seven peer-reviewed studies have been published on cryptocasinos with a focus on safer gambling features, gambling behaviour and/or policy and regulation (Brown 2022;Andrade et al 2022;Newall and Andrade 2022;Owens and Lavitch 2013), three of which focused on the less popular Dapps (Gainsbury and Blaszczynski 2017;Meng and Fu 2020;Scholten et al 2020), blockchain casinos that have remained largely theoretical when compared to widely popular web-based cryptocasinos, such as 'stake.com'.…”