Greedy Goblin

Wednesday, April 1, 2009

Liars and casinos

I got a troll comment:

In the past three days, I made 110K.
I make around 40k in an hour.
I run my own casino, my casino's odds are 65+ = 2x, 95+ = 3x, I generally have some very good customers who pay in excess of 5-10k bets.
I was the first on my server.. so everybody trusts me.

Why did I care? I could simply delete it with the rest of the trolls. However this troll is typical. He can be rather dangerous for the inexperienced since he can make him learn something stupid. Obviously for anyone who is in the moneymaking game in WoWm his results are ridiculous. 40K/hour means 660/min, no way that so many idiots exists in the game with that money. No doubt that there are lots of morons who would waste their money in the casino, but such idiots never had 660G in their life. However for someone who just started making money this is not obvious.

Let's see what kind of internal errors can be found that could even by having 0 background information:
  • "I made 110K. I make around 40k in an hour": If he made 40K/hour he would definitely not stop at 110K, but keep on doing it until he has all alts full of gold.
  • I made a Google search and found that 1000G is around $5 at the goldsellers. So his income would be 200$/hour. How come that all the goldfarmers are not in the casino business?
  • "so everybody trusts me" Yeah, like there is anyone in the world who is trusted by everybody?
So a simple troll can be pointed out by simple logic. Among business information there are lot of incorrect and purposefully false information. By simple logical scan against itself and easily available information one can filter out obvious lies.

Now let's talk about casinos! Usually the "casino" is a low level character in a populated city, seeking clients. They group, the client trade him the bet, /roll, and if the roll is higher than a preset value, he wins 2xbid or some other amount.

Blizzard says: Casinos are, in and of themselves, not currently against our policies. ... While this practice may not, in an of itself, necessarily represent a violation at the moment, there are activities associated with running an in-game casino which certainly can represent violations; such as spamming or scamming.

So one can run a casino. Does it worth it?

The profitability of a casino is based on four assumptions:
  • The odds favors the house. For example the troll's odds above make B*3*0.06+B*2*0.3+B*0*0.64=B*0.78 average payment (B: bid). So in an average match he takes 22% of the bids.
  • There are enough dumb people who can't calculate the odds.
  • When someone wins, he is dumb enough to put the money back to another roll, until he finally lose them all.
  • The mentioned dumb people have significant gold.
The first one is easily set. We can assume the second, ... khmm... crystallized fire. The third is guaranteed, since those who want to win money, want more.

The catch is the fourth one. Actually, I don't know if there are enough farmed money at the hand of the dumbs to make a casino worthy. I have to add, that I haven't seen any casino myself, just read about them. My server is clean of this practice. So if you want to try your luck in casino management, do it and post the results.

Update: here is the reason why I see no casinos:
This is correct. While European and US policies are usually similar, they aren't necessarily identical. Casinos remain against European scam policies at this time, and submitting an in-game ticket to report the matter is indeed an appropriate step to take. Thank you! The European scam policies can be viewed at:


Unknown said...

Gold sellers might facilitate assumption #4. Even in such an unforgiving game as EvE, some pilots routinely lose incredibly expensive ships in PvP, only to come back next day with an equally expensive ship. For example, there was one pilot a few days ago that lost two brand new and ultra-rare tech 3 ships, each with a price tag of 3+ billion isk. By comparison, other cruiser-sized ships cost around 40-100 million isk.

Anonymous said...

I've only seen one casino alt, and that was 2-3 days ago. So it's a new thing, methinks.

But I still think that the casino idea is a bad thing - not for the operator, but the clients. For one, if Gevlon is right, then these guys won't have nearly enough money to make a nice return on their investment. On the other hand, those rich enough to play it big will probably dismiss it as a non-profitable venture and continue their business (be it AH, farming etc)

- Aenur of Hydraxis

Anonymous said...

This is interesting. I wasn't aware that they lifted the ban on running Casinos.

Way back in Vanilla WoW, Casinos were absolutely flooding my server. There would be at least four or five people running them at a time with different odds. The spam was crazy.

Saturas said...

40K/hour means 660K/min

40K/hour = 40000/60=660/min, and not 660K/min

mute said...

we have mathematicians following the blog, it seems.

it was just a simple typo, Saturas. I love people looking for opportunities that they can write "orly".

Anonymous said...

It's illegal.

Saturas said...

I hope its not forbidden to raise the blog's standard by correcting typoes. Anyway the "^^" would like to show I knew it was just a typo, since the "660" part is good.


Kring said...

> It's illegal.

I don't think the government cares about your WoW casino...

Cingy said...

Some additions to the casino logic. First of all, RL shows that casino's exist and keep being very profitable, even though betting odds are against the player. This should be a pointer for the situation in WoW.

If people would behave economically always, there never would be casino's. The reasons for the continued existence of casino's is, that people are very bad at perceiving risk. One of the most influencial publications on this is the article: "Prospect Theory: An Analysis of Decision under Risk" by Daniel Kahneman and Amos Tversky. Kahneman received a nobel price in economics for his work.

The finding of this paper are pretty complex, and cannot easily be summorized but some of them are:

1. People prefer certainty to uncertainty even when the odds favor uncertainty.

2. This mechanism works out different for positive and negative outcomes. People are willing to take considerable risk to avoid negative outcomes, but are not willing to take risk in getting positive outcomes.

3. People will interpret taking risk to get out of a certain negative situation to be a choice for avoidance of a negative outcome, thus willing to take risk. This also facilitates taking repeated risk when people have already lost.

Putting this to normal language. Someone who is already rich is much less likely to gamble then someone who is poor now. The catch here is that being rich or not depends more on self image then on reality.

From this information it can be expected that gold farmers will prefer certain, low risk ways to get gold, while M&S will be willing to take considerable risk to get it, e.g. buying gold from gold sellers and gambling.

The reason casino's exist is that some people think they are in an underpriviledged situation and that taking risk will get them out of it.

Daniel said...

The European WoW terms of use actually do expressly forbid casinos. It's interesting that the US rules are not the same.

Kring said...

Cingy, you forget one thing.

Casinos are monumental buildings with a very special atmosphere. You can't just gamble there, they "sell" you an experience. Like what Coca Cola does (did?).

You get the Casino-effect.

If you run a "WoW Casino" it lacks the most important part. The Casino itself.

It is more like the scum offering the game with 3 coconuts and a marble on a market.

Some stupid people play this coconut game and get cheated but they will never pull in the money a casino can.

Gevlon said...

@Saturas: K fixed

@Cingy: In RL the casinos are a place of entertainment. I believe that most of the clients fully aware that they will lose money and they consider it a payment for the service which is a "high society environment". The same cannot be assumed when dealing with a lvl1 orc called Casinoman next to the post box in Orgrimmar.

BTW: trusting in "fate" to save them from their "underpriviledged" situation definitely sounds like M&S.

@Kring: quite right.

Cingy said...

Perhaps I should have phrased differently. Where casino obviously has some entertainment value next to the gambling aspect, there are various other gambling opportunities that do not.

When thinking of risk taking in gambling I was also referring to participating in the lottery and other more common ways to put your money at risk.

Also please consider that casino's attract totally different people to other high class experiences e.g. a high end theatre.

Anonymous said...

There was a casino on my server a few days ago. Roll higher than a 70 and you win x2. He was basically ridiculed into silence. He claimed to have paid out thousands (which would make this the most altruistic casino ever) but no one spoke up.
So the customers would have a 29% chance to double their money. No gambler in their right mind would play those odds.

Anonymous said...

This fad will quickly pass. Anyone remember the great casino purge of Second Life? Blizzard will soon ban this practice.

Anonymous said...

Yesterday was the first time I saw Casino spamming in /trade and it came from at least 4-5 diff alts. Yet another reason to turn /trade off : /

Sydera said...

Casinos were illegal, but are now legal again with certain restrictions. Ner'zhul-US has been flooded with them. It's a serious annoyance. I dislike having to leave general channels or undisplay /s and /y from other players.

Charlie said...

Hey, "troll" here. I'd like to point out several things. I make 40/k hour at *absolute* peak, I have a very minimal play schedule, therefore I can't be on all day making 500k+! I make a lot of money selling gold to gold farmers, but mostly, I just use the gold for my toons. Recently, more and more casinos have popped up, and more and more "White Knights" have popped up in trade telling people "CASINOS HAVE BAD ODDS" etc. Now, the money that I made was from about 4 different people, all whom had 20-60k on their toons, and they lost it all, they would get into a betting frenzy after losing several times, constantly betting at 5k MAX bet.

I'll post on my name this time, as a) it's not "illegal", b) I really like this blog, and continue to read it, casinos were a one-off, a fluke, a very lucky fluke. If you'd like to come onto Blackrock-US feel free to.

I recieved a couple of 10k bets.

Gevlon, you also have to understand that this is a *VERY* volatile/random luck to this, I can win 40k in 2 mins, or lose 40k in 2 mins...

Sorry if you thought of this as trolling. My casino alt is at around 24 hours /played, because so much time in IF is spent waiting for the highbetters. And yes, 660g/min sounds about right.

Gevlon said...

Come on! NO ONE, who is capable of collecting 60K would ever go near to any ingame casino! I believe that some moron loses his last 100G, but anyone betting 5K? No way!

Anonymous said...

I was running a casino game last night, and my account got suspended for 3 hours and a warning placed on my account this morning. Not a big deal in general, but still annoying.
Personally, I only did it because I was bored and I liked the idea of a little risk. I was bringing in good money for a while (nowhere near 40k/hour) but in the end I broke even.

Anonymous said...


Apparently, its illegal in the EU

Heywood Djiblomi said...

Maybe I'm being anal-retentive about semantics, but being "against the Terms of Use" and "illegal" are two VERY different things. Violating ToU won't get you in jail - violating an actual law will.

Unknown said...

Come on! NO ONE, who is capable of collecting 60K would ever go near to any ingame casino! I believe that some moron loses his last 100G, but anyone betting 5K? No way!
If only that were true. I recommend that you read Sway, which explores the reasons why people make such silly decisions. In this case, the players' thought process might have gone something like this: "I know that the situation is hardly ideal, but I've invested so much in this that I can't give up now while I still have a chance to win." Indeed, one trait of a good gambler is to know when to quit.

One example in the book is a game that a Harvard professor set up for his students: An auction of a $20 bill, starting at $1 with $1 increments. The catch is that both the high bidder and the second-highest will have to pay. In the end, that $20 bill cost $204.

Charlie said...

Gevlon, sad to say, I'm one hundred percent sure most of my customers were either high, or ebayed their accounts. And usually, they get addicted. I guess you don't understand the concept.

Someone bets 100g, they lose, they bet 200g, lose, and keep going until they get to 5k, furiously betting all their gold in an attempt to salvage their lost gold.

As I have said, feel free to log on to Blackrock-US, and I will happily give you details on who, and get testimonials from people. I've had to pay out a quadrupled 5k bet... 20k... ouch.

Again, I love this blog and am not trying to troll, just suggesting it as a way to make a quick buck.

You also might want to cover the theory of doubling bets, if somebody has a min/max bet of 100g/5k, you can play the dealer, and double your bet each time you lose, and then when you win, revert to 100g again, and repeat. This will gain you some gold. If you're very unlucky and lose enough times to lose a 5k bet lowered from 6.4k (after 3.2k etc.)... sucks for you.

Fixee said...

If this really is the same guy, he claimed in his first post that people were betting 5-10K. In this post he says 5k is MAX bet. I'm sure there is a great explanation...

Anyway, I have written to Blizzard explaining that since gold carries real world value, they are allowing online gaming via their server, which is subject to U.S. Laws that Blizzard does not comply with.

Anonymous said...

Well, looking back over Mr.Troll's statement (people betting up to 5k in an attempt to win back their money) and Gevlon's comment that no one who's capable of amassing 60k would ever go for in-game casino, I'll assumed that:

a) People who is crazy enough to risk 5k bets over and over again in an attempt to recoup their losses are most likely gold-buyer. Why? Because someone who worked his butt off to amass 60k gold knows how hard it is to get there. The gold buyers don't - when out of money, they'll just purchase more.

b) People who are addicted enough to gambling that they have this "Next time it's gonna be different!" mentality while doing the same thing over and over again. They're addicted, I tell you!

c) People are stupid enough to throw away 60k gold worth. What can I say? There will always be that guy who moves during Flame Wreath - and there are people who will cry in Trade "Casino took all mah money!!"

- Aenur of Hydraxis

Marko said...

Would like to have a look at Mr Trolls theory of doubling bets.

First of all if you lost 6 bets and your 7th bet was 5000g (instead of 6.4k), even if you win that bet you have made a net lose of 1300g. Therefore in your senario in order for the player to win anything they must win in 6 bets.

Now the other thing even when you do win, if you have rolled less then 95 you have only made a net earning of 100g...Woopty Fn'doo

Here's a breakdown of your likely outcome(not including the 5k bet):

7.54% chance you'll lose 6300g
79.25% chance you'll win 100g
5% chance you'll win 200g(95+ 1st bet)
3.25% chance you'll win 300g(95+ 2nd bet)
2.11% chance you'll win 500g(95+ 3rd bet)
1.38% chance you'll win 900g(95+ 4th bet)
0.89% chance you'll win 1700g(95+ 5th bet)
0.58% chance you'll win 3300g(95+ 6th bet)

... Doesn't look good does it....

Which ever try to spin it, the odds are gunna be the bloody same. It's like flipping a coin... no matter how many heads you got in a row, you still have a 50% chance its gunna be another fucken head.

Charlie said...

I put a 5k max bet, I took a 10k bet once. 'Nuff said. It was a friend from my guild. Check IPs if you want, Gevlon.

Charlie said...

@Marco: I appreciate your math, thank you for clarifying this. You'll be suprised... using the goblin way you could make more than 100g every 0-2 mins... but it could be also very profiting, especially if you roll over a 95.

Can people stop calling me troll? I'm not trolling. Trolling is inciting argument, I'm not, I'm inciting a discussion. =/

Marko said...

Sorry to continue this, it's a bit off topic and i'm guessing it will be deleted.

The double-up theory into laymans terms...

On average you will lose 6.3k once every 13 games for an average win of just 156g per game.

On average you would have a net loss of 330g per game.

Thats more like -330g per 0-2minutes.

Anonymous said...

We are seeing betting on duels instead of casinos in our realm. Apparently the duelist challenging everyone has a buff making him/her almost invincible. Stay tuned....

phoenixboy said...

And heres another "way to mmake money" thats just un-profitable in the long run despite the short begining bang. Although they give a reason for duels besides e-peen stroking and annoyance.

Remus said...

your dealing with a random system which is further randomized for each person..
i personally (Tortheldrin horde- the 70 casino) made 3k within the first hour because of 1 the level trust; and 2 we have high rollers who are willing to test some waters; highest out of that gold i had to payout was a 700g in 2 rolls to a random lucky bidder at one time.

the addicted factor and want of i can make a comeback is high- 1 bidder dropped 1.2k (did 200g max bids for him) and lost every single roll.

68-93 x2
94-99 x3
1 or 100 x4
19 a free roll of previous bid
min 20g/max 100g

i view it as perfectly fine so long as the spam is minimal- i get more spam from retards in trade than from casinos. once every 3 minutes is perfect;

in the 2 days i have run the casino i have seen 5k G on the account at peak; while an easy 10k from flipping in the ah over a week.

btw love the blog itself- alot of it i view as some high quality stuff.

i'd love to see your stats on that.

ntan1 said...

I'm furthering the "troll's" analysis. As you know, Ner'zhul is quite crowded with casinos here and there, but Ner'zhul also has the strange case that a *lot* of people are rich off their toes, and not necessarily smart. I've hosted a casino and have easily gotten 3000 gold bids repetitively with an expected value of wins at .84.

I had a friend on the same server who started bids of 10k gold in order to make it seem like a game... He won a total of 70k within minutes, and the funny thing is that a lot of people who had originally hosted casinos bet on him. I admit that he was *quite* lucky (as 14 bids of 10k is quite frankly not within 1-2 standard deviations), but shit happens!

You're making overly zealous assumptions about the market, sir.

ABenning said...

I ran a casino in another game, and it was quite profitable, even at a 98% payback rate (55-95 x2, 96-99x3, 100 x4). Most of my profits came not from the M&S, but from the very rich and very bored. IRL, most people know that gambling (over time) is a losing proposition, yet Vegas makes money hand over fist. Not everyone who visits a casino is a M&S, many are, for example, raiders waiting for their raid to start, or PvPers waiting for the rest of their arena team to log on.