It’s all a seamless web here at LGM today:
For those of you who aren’t degenerate gamblers who just have to bet, a parlay bet works when the
mark gambler makes a string of two or more bets that all have to hit in order for the bet to pay off. So in this story our hero made a string of 16 bets, putting down a total of $25, with the potential payout being almost three quarters of ONE MILLION DOLLARS if they should all pan out.
The Greek Tragedy element of the story is that the last bet was on the Detroit Lions to win a football game.
I’m not even going to go into why this is kind of like the Oresteia if the Oresteia was about owing a guy named Lenny next month’s mortgage payment. Just take my word for it.
Now, given the declining marginal utility of income, even degenerate gambling income, the thing to do when faced with these potentially tragic circumstances is to either hedge the bet — putting down a big bet for Green Bay to win — or to cash out ahead of time. Hedging this particular bet would be tough as a practical matter, because Green Bay was such a big favorite that our hero would have had to put down hundreds of thousands of dollars in order to hedge it effectively, and not everybody is Brett Kavanaugh and can just put that kind of scratch down on his credit card when he’s fronting the cost of baseball tickets for his good friends. His very very many very very good friends apparently.
(Seriously is anybody ever going to actually look into that? Are we going to just pretend that didn’t happen?).
So the more practical option was to cash out, but our hero couldn’t because the ticket was bought in the context of a “promotion,” also known as a hook to turn an ordinary average person into a degenerate gambling addict.
But whaddaya know, BetMGM just decided that they weren’t going to be hard-hearted man, and that it’s not all about the dollars and the cents. Isn’t that nice of them?
ETA: I should have explained this more clearly. If Detroit had a 20% chance of winning, this makes the ex ante value of the ticket at that point in the parlay $145K (20% of $726K). Since people who aren’t rich or true gambling addicts would prefer a sum close to $145K over a 20% chance of winning $726K, they will cash out for some sum in that general neighborhood rather than gamble on Detroit winning. The ticket the gambler had didn’t allow for this option. Now either MGM decided to give the gambler that option anyway, and the gambler cashed out for $133K before the game, or in an act of supreme advertorial cynicism, MGM gave the gambler the cash out option value of the ticket AFTER the gambler lost the bet. It’s unclear which of these things happened.
Of course what’s really going on here is that this whole thing was just great publicity for gambling on NFL games in particular, and it wouldn’t be such great publicity if our hero simply lost it all in the end, even though that’s how this business goes.
The NFL, which for years studiously pretended that 63.71% of the interest in its product was not in fact generated by gambling, has now decided to go all-in, and is “partnering” with all the big online gambling sites to promote wagering on its games (On Denver sports talk radio the proportion of advertising is currently 43% online gambling sites, 22% home mortgages, 18% ED drugs, and 17% PI and divorce lawyers. I suspect some mysterious interconnections may be at play here).
Less facetiously, an endemic problem to capitalism in general is that by far the most profitable sector of any market is that made up of addicts, rather than those who gamble or drink or what have you “responsibly,” as the purveyors of these goods are required to remind their audience that they should, when advertising products that couldn’t make any kind of real profit if those who use them actually did so responsibly.
I saw some stats about the market for alcoholic beverages a few years back, which showed that basically 70% of the adult population drinks little or no alcohol. This then was the average weekly consumption of alcoholic drinks for those in the 8th decile: 7. For those in the 9th decile: 15. For those in the 10th decile: 74. 60% of all sales would have disappeared if the 10th decile were to consume “only” the two drinks per day averaged by the 9th decile!
Basically everything is like this, but gambling is like this more than anything else, except maybe sex, drugs, and rock and roll.
This seems like a problem of a very basic structural kind with our entire society, which is why odds of winning are one in 35 and prizes equal 50% of sales.