The Global Economic Crisis...How Will It Affect Gambling And Cheating, Both Online And Off?

You’re a gambler, right? (Or maybe a cheater!) And the world is undergoing a severe financial crisis, right? Well, here are two issues that should concern you: How will the slumping worldwide economy affect both brick and mortar and online gambling? And how will it effect cheating in both venues? The answers to these questions might not be what you think. Before we get into how falling financial markets and failing businesses might affect cheating, let’s first take a look at how the global economic swoon is changing overall casino and poker room gambling, both online and off.

As you might expect, brick and mortar casino gaming revenues across the world are sharply down the past few months, but less so in Europe and the UK than in the US and Asia. Some land-based casinos in the most stricken areas have taken drastic measures in what is probably as much the anticipation of casino revenues continuing to fall as reaction to the current dismal situation. The most pronounced of these has been taken by the Mohegan Sun Casino in Connecticut, USA, since its opening one of the most profitable casinos in the world. Mohegan officials have recently announced that all of its employees will be subject to pay cuts in 2009. Whether this is due solely to realised drops in revenue or in conjunction with projected drops, it is concrete evidence that the worldwide brick and mortar casino industry will be suffering somewhat in the months to come.

Another remarkable example of real-world gambling chaos is the boom to bust devolution of the giant casinos in Macau. Just six months ago we heard how revenues and profits of the casinos in this Asian gambling mecca had surpassed those of Las Vegas, becoming the new gambling capital of the world. The children of casino mogul Stanley Ho and others were embarking on yet the development of more billion-dollar casino megaresorts. Growth seemed like it would sprout up forever with a never-ending influx of gamblers from mainland China and the Pacific Rim. Well, that bubble the size of London has burst, and now reports out of Macau say that ex-casino workers are transforming into everything from day labourers to clerks at the post office to simply unemployed. Despite this, Ho’s son and daughter claim they will continue developing billion-dollar projects already in the works.

What about online poker and casinos? How the deflated economy is affecting them is a bit harder to gauge. The problem is that nearly all the news and statistics analysing online casinos and poker rooms comes from online sources, whose accuracy tends to be less dependable than that of real-world news networks. I have read online reports whose data measuring the drop-off in Internet gaming vary from 20% decline to 80%. Whatever the true number, it is clear that online gaming is suffering, although the online poker and casino sites themselves have displayed no signs of panic.

Personally, I would be surprised if online gaming revenues are truly down as much as 80%. Why? Well, first of all, online gambling has proven to be more addictive than brick and mortar gambling—as much for its easy availability as its speed of dealing and playing hands. Furthermore, there has always been a correlation between unemployment and increased online gambling by those newly jobless. To put is simply, people out of work often find themselves more frequently online gambling because they have more time on their hands than when they’d been working. Unfortunately, many of these people dig into their savings to stay in the games when their luck runs bad. Others look to online poker and casinos to make their ends meet while out of work. Of course you don’t need me to tell you that these attempts more often fail than succeed.

But there is potentially an even darker side to the effect on online gambling from the current economic plight. You might have guessed it: I’m talking about the possibility of more cheating and more large-scale online gambling scams. One very notable aspect of this financial crisis is that it has exposed many financial frauds, including perhaps the biggest in history, the $50 billion “pyramid scam” allegedly engineered by American Bernard Madoff that victimised some superrich owners of online gambling entities. As far as actual play on online sites is concerned, the average number of players will, for at least a while, remain lower than in recent years, but the average number of cheaters and scammers will likely rise. We probably won’t see any major inside scams like Absolute Poker and UltimateBet any time soon, but mid and lower-level cheaters using poker bots, collusion and other outside cheating techniques will increase their raids on online poker rooms.

Why am I saying this? Well, actually I am only using real world history to predict the immediate future of online gaming. Since the Great Depression of the late ’20s and ’30s, whenever there are economic struggles and hardships, financial scams proliferate. That’s because in these times people are desperate to earn money—and cheaters and scammers know how to find the ponds these people navigate in search of making money. Throughout history, one of those biggest ponds has been the gambling world, which nowadays makes the online gambling world prime territory for Internet savvy casino thieves.

In addition to outright cheating incidents, there may be other, more severe, problems plaguing the online gaming world if economic conditions don’t improve relatively quickly. That is, we could see (if online gaming revenues continue to fall) a dejá vu of Internet gambling’s early days when a number of online casinos disappeared from the cyberworld without returning funds players had on deposit with their sites. This is not likely but could certainly happen if there is a major failure in the online gaming industry.

So, what’s my advice to you online gamblers during these times of financial crisis? It’s not to panic but to be vigilant when you’re gambling online, especially in the poker rooms. If you suspect cheaters at your table, whether you think they might be “botting” or playing in collusion, your best choice is to move to another game or another site. If you find that you’re continually losing even without suspecting you’re a victim of cheating, still do the same. It could equally be a spell of bad luck or some new online poker scam we haven’t heard about yet. And most important, remember: if you are suffering non-gambling financial woes due to the fiscal crisis, and surely lots of you are, don’t look to gambling, either brick and mortar or online, to bail you out!