Good Article on the SL Economy and Gambling

The article is neither positive or negative...

An excerpt:

By PETER SVENSSON, AP Technology Writer

The "Second Life" equivalent of Bernanke is John Zdanowski. He's the chief financial officer at Linden Lab, the privately held company that runs the world. Using "Second Life" software, he spoke to The Associated Press as an "avatar," or 3-D representation, in Linden Lab's virtual headquarters.

Before the gambling crackdown, visitors (or as the company calls them, "residents" exchanged about 2 million U.S. dollars a day in "Second Life." That dropped to $1 million shortly after.

Gambling wasn't quite as important to the world's economy as those figures indicate, Zdanowski said. "Second Life" is considerably more than an online Las Vegas — it's a place for socializing, sex games, advertising and other activities enabled by a world where residents can, with sufficient skill, create almost anything they want out of thin air.

Gambling inflated the economic activity because it meant small amounts of money changed hands relatively quickly, often several times a day, like at a poker table.

But the gambling shutdown was still a potential problem for economy, because "Second Life" has its own currency. The Linden dollar is convertible to U.S. dollars at an ostensibly floating exchange rate.
--
http://tinyurl.com/2qjmva

I slept through most of my Economics classes, but it seems to me , that if the SL Economy was so dependant on the gambling business that it's removal will cause it to collapse totally, then there wasn't much hope for it in the first place.

I remain ecstatic that unregulated gambling - with it's implications for some vulnerable people elsewhere on the net and rl - has been quashed.

What? Yoe dont buy the theory that Somehow Gamblers all make money gambling?

Say its isnt so.

LOL ... and rl at work my email just flashed up with an invite to a Poker Night ...

yep yep

Texas Hold Em

Thats the game where its easy to win. Just gotta have skill. People brag about that.

Somehow they ALL win.

the money is created by Magic.

I went to a Poker night last month. I love Rl Gambling, in fcat I'm going to Atalantic City this weekend, but playing Texas Hold Em or hours on end just bored me to tears. I much prefer the deal around the table, dealer picks the game Poker Night. Now, put me on a craps table, and days can pass by without me realizing it.

Something to remember when they say the number of L$ that "changed hands daily" dropped from 2M to 1M: every time a L$ was lost or won, it counts. So if someone sat down with L$500 and gambled for a couple of hours, winning and losing steadily until they ran dry, they could account for thousands of L$ changing hands. E.g. round one, lose L$10, round two, win L$10, round three, lose L$10, round four, lose L$10, round five, win L$10...=L$50 changing hands, but a loss for the gambler of only L$10.

This kind of thing is why the whole "US spent in world today" number isnt a very useful metric.

A useful Metric is "LindenX activity in the last 24 hours" since it measures actual spending/ earning in SL.

was hoping they would have told us a bit more about john z's background

My dear you simply are not playing for the right stakes ... money, meh ... semi naked putting out the rubbish wearing silly headwear ... now that makes your game have an edge!

(No I am not joking. No I didn't lose that one! And yes of course I mean RL)

Even that is not a reliable figure. Lots of folks use the spread of buy and sell to make some profit, buying and selling the "same" money all the time.

ahh good point.

but it at least is more indicative than the USD spent in 24 hours.

As someone who does manage to supplement my income with Texas Holdem, I can assure you of two things.

1) It *is* a game of skill, although only when considered over the long term. Your short term mileage may vary.

2) SL Holdem sucked, compared to the online poker sites. I played occassionally for fun, but overall the experience was slow and the rakes were outrageous.

As an aside, I don't have any statistics to back this up, but its my estimate is that only about 10% of the poker players make money... the other 90% feed them.

- Ace

Yes You are right. I was being sarcastic.

Gambling is fueled by the losers, not the winners.

It doesnt really improve an economy so much as it redistributes wealth. The only gains you see is when it brings in money that ordinarily wouldnt be spend in that state or city , etc.

Vegas gets its money from tourism, those tourists spend it on gambling. Without the tourism, gambling does nothing to help their economy.

Poker was particularily bad in SL becuase people could share their cards over IMS or Skype.


------------------
I didnt mean there are no skilled Poker players - just that its a lot more rare than many players act like it is.

I think anyone gambling online is foolish - even granting the fact there are winners like ACe. There are too many steps along the way where the gaming can be rigged - particularly in poker, where anyone who has access to the "dealing" server has an unbeatable edge - for anyone who cares about the money involved to risk it.

Now, I guess a small-stakes game might be an exception - where it is not worth it to "game" the game, because the stakes involved are not so much more than the house rake to make it worthwhile to endanger the business by cheating the rubes. So, I'd say, play for small stakes if it entertains youl. If it gets into money very far above the house rake, get the hell out.

I'm struggling over whether to post here or not, but i'm going to give it a go. What a lot of people fail to realize is that online poker is a self-regulating industry. There are millions of dollars at stake, and dedicated players track every single hand they play and every statistic imaginable. There are programs that comb through your hand histories and give you your profile as a player as well as help you track the playing styles of other players. What this means is that if there are any statistical anomalies in the dealing, then those would be found very quickly. In the history of online poker there have been two scandals that I'm aware of. The first was the Pokertime fiasco where the player funds were not kept in a separate trust - that site is long gone, and the industry standard for the major sites is universally to keep player funds separate. The second was a site which is also gone (can't remember the name) that had problems with its random number generator. Again, the industry standard is very different now.

Also, there is no incentive for a poker site to rig the system. Poker is played against the other players at the table, not against the house, and there is a maximum rake that can be collected, regardless of the size of the pot. The house gets paid no matter who wins and if the pot is $100.00 or $1,000,000 the rake is the same.

Ace is right in that 90% of players lose. It's a skill based game, and most people don't have the skill to win. A lot of them don't have the discipline to learn to win, either. Calculating odds is difficult and playing a tight aggressive game is boring at times. Read the Theory of Poker by David Sklansky or Harrington on Hold'em - you'll DIE trying to plow through that stuff it's so boring. People want action, so they make bad moves. They also play outside of their bankrolls and skill levels. Who wants to grind out a few bucks playing $2.00 sit and go's? The games there are weak and beatable, but it takes forever to build any kind of money up. So the weak players play higher with the better players and get killed. I'd love to be able to sit at a $100 tournament and have good chance of cashing, but I know better.

Anyway - playing online poker is a choice that should be left to the individual. It's not for everyone, but nobody, and especially the government, should come into my home and tell me what I can and can't do with my own money in my spare time. If I blow a little playing poker, that's my business. I'm not hurting anyone but me, and I'm hurting me a whole lot less than I would be if I were chain smoking or drinking excessive amounts of alcohol, both of which would be perfectly legal.

/rant off
/me steps down off of soapbox

The funny thing is, its not illegal for me to play online poker, even though I'm in the US. What the UIGEA (Unlawful Internet Gaming Enforcement Act) did was prohibit US financial institutions from sending money to/from online gambling sites. It is this stupid piece of legislation that I'm sure motivated Linden Labs when they decided to ban in-world gambling. It is not in their financial best interest to be considered an online gambling site that is suddenly unable to process US credit card or PayPal transactions.

My favorite congressman, Barney Frank D-MA, is now chairman of the House Financial Services committee, and has introduced legislation to repeal the law. Former Senator Alfonse D'Amato (R-NY) is Chairman of a lobbying organization called the Poker Players Alliance that is pushing for legalization of online poker.

If UIGEA is repealed, I wouldn't be surprised to see gambling allowed back into SL.

- Ace

P.S. Don't listen to Trout. "Theory of Poker" and "Harrington on Holdem" are EXCELLENT reads, and I couldn't put either book down long enough to get in a good game of poker when I first read them.

lol - you're kidding. Those books are brilliant, but especially Sklansky's stuff is as dry as sawdust. That said, my copy of TOP is falling apart. and Vol 2 of Harrington has never been on a bookshelf long enough to collect any dust. I know exactly what the UIGEA says, and that at the national level, poker specifically has not been found to be illegal. However, I live in one of the banned states. My legislature enacted a law making it illegal after the senator who introduced it took campaign contributions from brick and mortar card rooms who wanted the bill introduced. That's about as shameful as it gets, isn't it?

The UIGEA was a direct shot at online poker, howver, even though it didn't specifically prohibit it. Online poker is by far the largest segment of online gaming. You can't effectively outlaw it, and you can't really enforce a ban on operating a poker site, since they are all operated offshore, so Sen. Frist attacked the choke point - the banks. If you can't move money on and offline, you strangle the game. In a particularly shameful move, he then attached the UIGEA to the PORT Security Bill, literally in the middle of the night before the vote so there could be no debate. The PORT bill was a must pass bill, so the UIGEA got shuffled through with it with it. Most of the legisltors who voted on it didn't even know it was attached.

Barney Frank isn't the only one who's introducing these laws.

So, Ace...S'up Bro? HU 4 Rolz?

So, sort of a dumb question: If I had an offshore bank account, like in the Caymans or Switzerland or something, could I, living in the US, gamble online? (Not in SL, just online in general.)

Think you can if somehow the money went directly from the one to the other, and not through some US intermediate.

There are ways around the ban. That is one of them.

- Ace

How's your roll? What's your Stars or FTP nick so I can look you up in my PT database

- Ace

Minor collusion such as 2 friends sharing hole card information does not give a significant advantage in most situations and it is generally an accepted risk by most online poker players. Serious efforts at intelligent collusion were simply not worth the effort in SL poker. For the amount of effort it would have taken and the stakes involved on most VGA poker tables in SL, scam artists could get a higher rate of return on their efforts by running other scams in RL, the internet or SL, like, oh I don't know, opening a "bank" on SL. Now give me my pie for slipping in references to both SL gambling and SL banks in my post!

Of course, those people are now safe. If only we could ban Bic Macs based on the same sort of reasoning.