The Corner

The $8 Million and Volokh

Eugene Volokh gets <a href="http://volokh.blogspot.com/2003_05_04_volokh_archive.html#200259523

” target=”_blank”> gets my back on the issue of hypocrisy. The least I can do is come to his defense on the charge of statistical <a href="http://volokh.blogspot.com/2003_05_04_volokh_archive.html#200253794

” target=”_blank”> illiteracy (shouldn’t that be innumeracy?). First of all, even Green admits that it wasn’t $8 million out of Bennett’s pocket. Rather, Bennett kept gambling his winnings which means the same dollars get counted several times. The relevant admission by Green from MSNBC Tuesday night:

SCARBOROUGH: OK, did he lose $8 million, though? He reported $8 million in losses, but is it minus $8 million?

GREEN: No, no, let’s be real clear about that. No, no, let’s be clear about that. That is net loss more than $1 million. These gambling records that we’ve got, they show losses, they show wins. He hit plenty of jackpots, $10,000, $15,000, $40,000, up to $80,000 jackpots. The problem is, is, he’d turn around and he would play them right back.

Keep in mind that slot machines “give back” 97% of the money that’s put into them. Over ten years if Bennett parlayed his winnings time and again, it’s hardly inconceivable that a “small” amount of money would look like a lot if you took snapshots of it being re-wagered a second, third or fiftieth time.

Here’s a useful email from one of several casino execs and gambling experts I’ve been talking to:

Jonah, a few things worth mentioning that we haven’t yet seen mentioned:

Casinos typically track what players put “at risk.” The info that was leaked was not what Bennett lost, just what he put at risk. A VIP player, or a “whale” in the industry, is not someone who necessarily loses a lot of money, it’s a person that puts a lot of money at risk. (I bet there’s a HUGE manhunt going on to find whoever leaked that info.)

Bennett’s game, slots, overall pays back in the range of 97% of what’s put in. Granted, one big winner can kill the odds for lots of other players by eating up a chunk of that 97%, but it’s the high-stakes players that have the best odds of winning and get the highest payback because they are risking more. Bennett is a high-limit slots player, so it’s just as conceivable that, over the course of 10 years, he has come out close to even or even made money as it is that he’s lost money. It’s the low-stakes nickel, dime, quarter players that are the bread and butter in the industry. There’s not a lot of money to be made with high-rollers. In fact, when our company stopped courting high-rollers and focused on the mom-and-pop recreational players, we’ve had record revenues every quarter since, including during this recession that has killed other tourist-dependent industries.

So, my point is, risking $8 million over 10 years does not make him an ultra-huge player and definitely not a compulsive gambler. There are whales that play, and win, that much in one night. Yes, it puts him WAY beyond the mom-and-pops, and definitely in the VIP category with all its perks, but he’s far from being the biggest whale out there, or even among the biggest. And what determines how much is “too much”? He appears to have been playing within his means. Again, he likely didn’t lose anywhere near $8 million.

Also worth mentioning, some of the strongest gaming markets in the U.S. — Biloxi, Tunica, Shreveport, Vicksburg — are thriving in the Bible Belt and were approved by voters.

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