Monday, December 16, 2013

How Online Casinos And Cell Phone Companies Are Similar


I get Google+ messages from readers every now and then asking about bonuses. I'm not surprised. I have been a vocal critic of bonuses yet they are the very foundation of the online casino industry. Most people want to know whether a specific bonus is a good deal. Some people want to know if I have any tips on how to beat bonuses. A few people want to know what the best bonuses are.

Well let me say in no uncertain terms that bonuses are bullshit. Say it with me, bonuses are bullshit!

Now how does this apply to cell phone companies? Because both industries are utterly built upon a trick. For cell phones, it is the $200, or $100, or free phone that you get at the beginning of your contract. The contract is critical but we'll get to that in a moment.

Have you ever looked up the price of your iPhone or Samsung Galaxy on Ebay or some other website that isn't affiliated with a carrier such as Verizon or AT&T? If you have, you'll have noticed that the iPhone that you get for $200 is selling for $700.

Where did that $500 go?

It went into the carrier subsidy. Basically, the carrier sells you the phone for $200. They are losing hundreds of dollars in this act. Their goal is to make their money back and then some over the course of your payments to them. And as you would expect from this arrangement, after the two years are up, they get far more than what they gave you on the phone. They rip you off.

That is why there are contracts. This guarantees the cell phone company your monthly payment for two years. This has become so popular that until T-Mobile began its Uncarrier initiative, you could not start service with AT&T or Verizon without a 2-year contract. They would only offer you their pre-paid phones which are crappy and have inferior plans. The only way to get all of the features of AT&T and Verizon was to sign your life away for two, goddamned years.

And what happens if you try to leave? Why they charge you huge amounts of money, of course! And there's nothing you can do about it because the devil's bargain that people made for cheap phones reduced the markets to only a few major players. They use this monopoly to squeeze profits from people while providing terrible service and customer support.

Online casino bonuses are basically the same thing. Long ago, users made a devil's bargain for bonuses. This handed an immense amount of power over to affiliates and locks users to a specific casino for a period of time and money. The terms are shorter than for your average cell phone contract, but the end result is the same: the casino gets all your munneez.

And just as with a cell phone, the casino is getting far more than they otherwise would. Most bonuses are locked to rollover requirements, meaning that you have to gamble a certain amount before you can take any money out, and these rollover requirements are usually tied to specific games. You usually cannot play blackjack or craps, because the RTP on those is too high.

Oh no. They won't have that! You must only play certain slots, meaning that in the end, the casino actually gets more from you then they otherwise would.

How is that possible, you may ask. Remember, when you spend money, you aren't just spending money, you are spending the opportunity to spend that money on other things. This is called the ooportunity cost in Econ-101 parlance. Basically, if I spend $5 on a move ticket, I also spending the sandwich that I could have bought on that movie ticket.

If you are forced to only play low-RTP slot machines, you are not only spending your money, you are spending the opportunity to play high-RTP games and are thus spending the opportunity to win at those games. The casino gets your money and gets it at a lower risk than they otherwise would if you were able to play high-RTP games. Just as with the cell phone companies, you are getting ripped off.

As I mentioned, the contract is a very important part of this comparison. Go read the legal agreement that you sign when getting your cell phone through AT&T or Verizon. It is a gazillion pages long and loaded with enough legalese to make the Supreme Court shit bricks. These contracts were humorously parodied in the South Park episode, "Human CentiPad."

These contracts are used to screw you like there is no tomorrow. Not only does the cell phone company get may more than they otherwise would in the end, if you step out of line, they are used as a legal cudgel to charge you huge fees.

Every now and then, these fees are comical enough to make news, but as some people have pointed out, with these contracts, the cell phone companies are under no legal obligation to cut the bills. The only thing that forces them to do so is the fact that charging someone $200,000 in cell phone charges would result in enough bad PR to destroy a company.

But for every person who gets charged $50,000, imagine the number who are overcharged by only a few hundred, or maybe a few thousand. The amount of hidden injustice is undoubtedly alarming.

Now, is this sounding familiar at all? Is this sounding a lot like, oh, I dunno'... terms & conditions?

That's because this is precisely like terms & conditions. It is the same, goddamned thing. The only reason why cell phone companies step out of line less often is because they are larger, more visible, and have much more to lose if people turn against their brand.

Online casinos, if their brand gets destroyed, they simply re-brand their casino, send new links out to all of their affiliates, and start anew! This is why the reality of the online casino industry is obscured by the illusion of competition. There is no competition. There are only a few major companies, producing poor products for an undiscerning market.

Also unlike the cell phone companies, online casino companies have the benefit of being seen as somewhat seedy. This means that they can, and always do, rely on the time-tested strategy of smearing their accuser. That is why we have clauses about robots, pattern betting, and cheating in casino T&C's. These are nothing more than tools for a greedy casino to smear their victim.

If cell phone companies could, they would do the same thing. But they can't, so they don't.

I make this comparison because cell phone companies are an excellent example of online casino greed and evil writ large. Cell phone companies are horrible creations and regularly make it to the top of Consumerist's Worst Company in America list. But in those companies, which are forced by exposure and legal fights to be somewhat upstanding, we have lessons that we can apply to the online casino industry.

We need to force major casinos into the light. We need governments to finally set aside their greed for taxes and regulate online casinos in the best ways they can. Current casino regulations are nothing more than a money-grab by corrupt politicians who want to avoid raising taxes on their rich buddies. We need to vote with our dollars and stop having twenty accounts and twenty shitty little casinos. We need to focus on those who uphold the highest ideals of good business.

We had one in Galewind, but they're now down. Who knows if or when they will reappear. So we're left with the other ugly children from which to choose. Good god, it's an ugly lot, but some of them stand out a bit, and we need to reward that. It is imperative that we reward that. If we don't, the next Galewind will simply appear then disappear, drowned out by corruption and noise.

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