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May-16-2009,
Ipod Casino Dispute Illustrates the Tenuous Relationship Between Gambling and Technology...By Jay Graziani

A few months ago, Nevada gaming regulators warned casinos of the newest threat to their eroding bottom line: the iPhone. A card-counting app had been making the rounds, and nothing scares pit bosses more than a bunch of geeks with mini-computers in their hands. The program features a "stealth mode" which keeps the screen dark while a vibration warns you of favorable counts - a useful app in Vegas, indeed.

Whether card counters actually hurt a casino's bottom line is oft debated, but the case does illustrate the tumultuous relationship between modern technology and games of chance. Technology has enabled tremendous advances in the gambling industry, but has posed plenty of problems as well. Technology and gambling have evolved hand-in-hand, like friend and foe, with both players and casinos looking to exploit the latest electronic wizardry to get a leg up on the person on the other side of the table.

Gambling is no more than a numbers game, and computers are nothing but souped-up bean counters, so computers have naturally driven the evolution of gambling in the last half century. Early punch-card computers were used to "Beat the Dealer" by devising optimal strategies in blackjack and, later, video poker and every other game imaginable. But the rise of computers helped the casino industry too, leading to smarter player-tracking systems, "video-game" slot machines, and eventually "dealer-less" table games.

A revolution happened in gambling with the growth of the internet, bringing us online casinos, offshore sports books, and virtual poker rooms. Gamblers could now place their bets from the privacy of their own homes. Poker went from the back rooms of smoky bars to the heights of pop culture practically overnight. The biggest impact to come from the growth of the internet may have been in sports betting, as it rapidly created a worldwide betting market that players could watch virtually in real-time and one that had a hair-trigger reaction to the ESPN news ticker.

And now yet another revolution is happening with the advent of smart phones, pocket-sized computers with 24/7 access to the internet. Like any other technological advance, this one is likely to spark major changes through all aspects of society. Gambling, both land-based and online, will feel the impact.

While mobile gaming has been hyped for years, the sector is just coming to fruition as more and more people go mobile, putting computing power in their hands that would have been unthinkable a decade ago. One of the main issues holding back growth is that few gaming companies have tried to exploit the unique qualities of next-generation smart phones. The New York Racing Association launched a mobile platform called mWager last year, but Apple's stranglehold on the app market, as well as the ambiguous U.S. laws surrounding mobile gambling, have prevented many others from jumping into this new opportunity.

Online gambling has yet to really exploit the iPhone trend, but being mostly web-based means they already have access to the smartphone demographic, if through nothing more than a standard web browser. Unfortunately, many have yet to deliver compatible mobile software for full-service betting. But the sky's the limit when you imagine the possibilities for mobile gambling applications. A clever Matchbook interface, for instance, or innovations in live-betting software. Poker apps. Live streaming score applications that alert you to scores on your current bets. Live odds service applications. The list of tools that can be integrated is endless.

The rapidly-advancing world of smartphones will soon be too much for land-based casino operators to contend with, as the recent iPhone case demonstrates. "Perfect Strategy" tables are available for every game, but these are by necessity generic; they can't handle every situation perfectly on a 3x5 index card. A smartphone armed with the right apps can quickly make the more advanced calculations necessary to make every player in the casino a perfect-strategy machine. Video poker pay tables and jackpot values can be input for precision optimal play calculations; Kelly fractions can be deduced with total accuracy. The gamblers suddenly have the potential to become very, very smart.

Of course every casino will see new technology as the enemy; those getting rich off the status quo always do. But the potential risks are easily countered. Nowadays, there are few video poker or slot machines that can be beaten even with perfect play, due to unfavorable pay tables. Card counting on a smartphone can be beaten by an even simpler technology: the continuous shuffle machine. And of course, the casinos always have the long arm of the law on their side: the use of a "device for calculating probabilities" at a Nevada gambling establishment is a felony carrying a minimum of 1 year in the slammer. Start charging some iPhone-slinging geeks with felonies and you'll see sales of the card-counting apps dry up really quickly.

Casinos should instead focus on the positives of smartphones. Anything that allows you to communicate with your customer should be seen as a positive. While mobile gaming on the casino floor may be a long time away, the smartphones can be exploited now for promotions, non-cash games, contests, and the like. And embracing new technology brings with it the interest of the highly sought-after 20's demographic.

Like any other technology, the sky's the limit with the latest smartphones. All we need is some smart casino execs (both onshore and off) to exploit it to the fullest.

05-16-09
Jay Graziani
MajorWager.com
graziani@majorwager.com

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