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I Have No Clue What (Illegal) Gambling is Anymore

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There was a time when I thought I knew was legal and illegal gambling was. Now, I have no clue. It's fine if I'm clueless (I'm used to it), but it seems like the rest of American and even the courts are unsure. That's a problem.

We can't obey the rules if we can't even agree what they are.

The reason why this all changed seems to be Daily Fantasy Sports (DFS) websites like DraftKings and FanDuel. John Oliver explains them (and the situation) in hilarious fashion here:

Before Oliver's great video I wrote about DraftKings and FanDuel.

The confusion comes about in that there's a carve-out of some federal gambling law (2006 Unlawful Internet Gaming Enforcement Act) that allows for fantasy sports. The idea was to enable your office to run a March Madness bracket.

Here's a rundown from that previous article of what I think I understand about gambling.

That description makes it sound like a lottery right? You put in some money and some event churns out a winner who receives the bulk of it, with a sizable portion siphoned off for the lottery operator. Except that companies can't operate lotteries. State laws vary, but almost all of them frown on that. The states make an exception for a few operations that give the operating back to the state to fund infrastructure.

What's the difference? Law is just a passing interest of mine, but it seems to whether it is a game of luck or a game of skill. Games of luck are "bad." Games of skill are "maybe okay?"

State lotteries are quite clearly games of luck. Anyone trying to claim they know which way the ping-pong balls are going to bounce is simply nuts...

This has always been interesting to me. I don't understand why regulators would draw a line in the sand between luck and skill. It opens up a ton of issues. There are many, many cases where gambling is a combination of luck and skill.

Let's take some casino games for example. Roulette seems to fall under luck. As a (rare) craps player, I'd say there's some skill in making bets that gives the house the least advantage. Many argue that if you can count cards, you can even beat the house at '21'. I'd say that counting cards is a skill and thus I could be justified in opening a '21' casino. Of course poker is the most obvious example. The cards you are dealt are luck, but the decisions you make after that are firmly in the skill category.

Staff writer Kosmo made a better, more succinct point:

Horse racing is unequivocally gambling, but it's clearly not a game of pure chance. Someone who has expert knowledge is going to do far better (over the long run) betting the horses than I will. Daily Fantasy Sports is basically betting the horses, but swapping out humans for the horses.

There have been questions for some time about the legality of Daily Fantasy Sports, but they sure seem legitimate when you read the companies that have taken investments in the companies. (John Oliver points this out in his video well.)

I'm left to wonder about all other gambling. Using the casino logic above (and the fact that casinos themselves are legal in many, many states), it seems that gambling websites such as Guts would be legal too.

It seems like at some point we need a bright line to know what is illegal gambling and what is legal gambling. I'm not convinced that the difference between skill and luck is where that line should be. Maybe you can say that if anything is 100% luck it is gambling, but even then lotteries are legal, so you can't call them illegal gambling.

This is one of the few areas where my gut isn't telling me what is right and what is wrong. I like for people to have freedom of choice to spend their money on the entertainment they want. At the same time, I like to protect consumers from potentially harmful addictive behaviors whenever possible.

So I leave it to the readers? What do you think?

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Gambling

Posted on February 11, 2016.

Student Loan Refinancing: Is It Worth It?

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Student loans have become a huge problem and a topic of much debate in our nation lately. In fact, 7 out of 10 graduates are graduating with a diploma in one hand and a bag of student loan debt in the other. If you are one of these people and have been looking for ways […]

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College

Last updated on February 10, 2016.

Text Digit to Boost Your Savings

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I’m a big fan of Lifehacker and last week one article caught my attention: Boost Your Savings Account by Adding the Money You Save on Every Deal. The article brings up a great point by Eric Nisall of DollarVersity in an article posted on The Simple Dollar about saving money: “If you’re constantly scouring the […]

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Money Management

Posted on February 10, 2016.

FinMason: Find Out if Your Investments Match Your Risk Tolerance

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The title above is a little more wordy than my original working title: “FinMason is Awesome.” I hope my effort to be more descriptive hasn’t lost readers. In any event, I think you’ll find both titles are true. When I went to FinCon in Charlotte last year, I talked with a lot of companies. However, […]

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Investing

Posted on February 9, 2016.

Improve Your Health, Improve Your Income: Why Happy People Earn More

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A reader, Ben, sent this as a guest post. I identified with it immediately. I’ve found that as I improve one area of my life, other areas seem to fall in place. It’s one of the main themes at Be Better Now. We all have that person in our lives we love to hate. They […]

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Income Growth

Posted on February 8, 2016.

Save Money on Valentine’s Day

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[You might have read this article in the past, but frugal Valentine’s Days ideas are timeless. And one of my favorite Buffy the Vampire Slayer quotes is, “You look timely.” Use this as a reminder to act soon… prices will only go up.] The Super Bowl in the rear view mirror (congrats to the Denver […]

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Spending

Posted on February 8, 2016.

Ten Reasons Why You Should be a Personal Finance Blogger

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Back in May of 2007, I wrote Top Ten Ways Personal Finance Blogging has Helped Me. With nearly 9 years of more experience to look at my blogging experience (and correct the formatting issues), I think it’s time for an updated article. For nostalgia reasons (Letterman), I’ll keep the same countdown system as the original […]

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Blogging

Last updated on February 5, 2016.

Things I Love: Instant Pot

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Editor’s Note: It’s been a long time I’ve written a “Things I Like” article. You’ll have to wait a little longer, because this is a “Things I Love” article written by my wife. Any typos were likely introduced by my editing as I changed some sentence structure for clarity. With two little kids, I don’t […]

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Smart Purchases, Spending

Posted on February 3, 2016.

Why Frugality Matters

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Lately, I’ve been reading some personal finance gurus who are against the frugal mindset. I understand their point. On one hand, life is too short to not enjoy it. It’s easy to sell a “just earn more money” message. It also makes it easy to follow it up with, “Buy my book or buy my […]

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Frugal

Posted on February 2, 2016.

Major Money Mistakes: Things to Avoid When Adopting Your Frugal Way of Living

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The following is guest post by Connor Gray. He is known by his friends and family as Mr Frugal. He loves saving money, and helping others do the same, and writes for a variety of lifestyle and personal finance sites sharing his tips and tricks. Being frugal is a great way to live. You will […]

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Frugal

Posted on January 28, 2016.

 
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