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Gambling with Loans

2018-04-20

During my time running PokerNetwork, I spent 1000s of hours around casinos usually as a casual observer poker player in action while we covered the events all around Australia with online reporting through PokerNetwork. One of the things that amused me was the amount of side business that goes on between patrons, in what can only be described as a black-market economy.

A friend of mine, Linda Geenen, was a dealer in Las Vegas for years, dealing poker to the big end of town at the Bellagio and MGM, and has written in detail about her experiences observing player interacting. Her blogs are a fascinating read to say the least.

Like many who have been involved in the gambling scene for an extended period, I’ve seen my fair share of things too. The biggest black-market economy of course is the lending business, this is especially the case in the poker world. It also seems that the higher the limit that players play the more money that changes hands. Poker players are notorious for lending money to one another, and what’s always surprising is that they are usually interest free loans just done out of good will. You don’t want to see your mate go bad, which is ironic given the idea is you want to win money from them. These loans tend to be your smaller loans up to a few thousand dollars. However, I know of some players that owe so much money to multiple people that if you count it all up it approaches the millions.

Then there is the classic story of a well known Australian poker identity that sold more than 100% of himself at the world series one year (stories vary from 150% to 250%) with the deliberate intention of busing out of the event and profiting 10 to 20k. The issue was whenever he shoved he got lucky and found himself as one of the chip leaders well into the event. By that time the gig was up because his investors, while a little bemused with his play, were all starting to barrack hard and were quickly doing their sums as to what % they all owned, and it quickly totalled more than 100%. I think a quick shareholders meeting solved the issue with some pro-rata dilutions and fingers at risk for the player himself. I’m not exactly sure how that one ended.

Of course, other economies thrive at the poker table as well, this is particularly true when it comes to sports betting. Poker players love to bet between themselves on sports. This usually involves offering a slightly better line than the prevailing market. These bets can climb into the 1000s and are nearly always done on credit. The other favourite pastime is betting on golf. Poker players are notorious for large scale golf betting. I remember during the Aussie Million’s one year the Crown bus arrived taking all the VIP poker players to play at Capital. On the putting green was Phil Ivey who had apparently been there for hours. Rumours where he travelled with his golf coach he was so serious about the game. The amount of side bets that day in every group was mind boggling.

From my experience there are not too many winners in this environment, but there are a few that thrive in it. One disturbing trend was a few patrons also borrowed money on high interest rates to fund their gambling habits. To be honest, this was not the norm, but it did happen from time to time. Often this would be a last resort when they were so far in debt to others that they considered this option with the hope of turning their losing streak around. This of course is never a good idea, but it did happen. Most short-term lenders now have very strict guidelines about lending to those with gambling problems. Having said that, those with significant gambling problems are often good at hiding this. Responsible online loan providers will look for tell tale signs of gambling activity such as regular withdrawal amounts from ATMs at or near a gambling institute (be it the TAB, RSL, Casino or pokies venue). Most lenders will decline an application with significant gambling activity. The adage of “gamble responsibility” kind of goes in one ear and out the other sometimes among poker players. I think defining what responsible gambling is would be more effective that the current slogan. As a starting point never fund your gambling with high interest loans!

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