WEEKEND READ: Games people play

In the first of a two part extract from his forthcoming book about what internet use can tell us about human behaviour, Bill Tancer examines the world of online gambling and reveals the gambling activity the wealthy prefer.

In the fall of 2005, I found myself in the basement of the Excalibur hotel in Las Vegas, wondering to myself, "What am I doing here? I speak regularly around the country at technology and travel conferences, leading universities – so how did I end up here?

This was my first online gambling conference. As I entered the exhibit hall, a woman with a strong cockney accent strode up "Allo, love”. I took the opportunity to inquire a little bit about the audience for this event. "Isn’t online gambling illegal in the US, and if so, isn’t it risky for businesses that work in this industry to gather in a public place?” My new friend leaned in a little with a sly smile and said, "The ones at risk here travel under an alias.”

To this day I don’t know if she was just pulling my leg, but I took her reply to be the truth as I headed toward the auditorium to take my place onstage. I was there to present the concept of online competitive intelligence to this group of online poker, blackjack, and casino game sites.

My modus operandi at trade conferences is to pick a random company from the attendee list and present slides showing exactly what I could discern about their specific site: where they receive their traffic from (search engines, email campaigns, affiliates), where they rank in relation to their competitors in visits, even the search terms that they’re purchasing to get traffic to the site. It didn’t dawn on me until mid-speech that it probably wasn’t a good idea to pick on anyone in this crowd as scenes from The Sopranos played in my head.

I decided to wrap things up quickly and get out of the room as swiftly as possible. Right before I made the exit, a gentleman running a poker site from Costa Rica stopped me in my path. "This data’s amazing,” he said. "I’ve always believed that there was a trade-off between online sports betting and poker, but I’ve never seen the data to prove it.” He was speaking about one of my slides, which used search behaviour to show that betting budgets were a zero sum game. I guess I was going to have to stick around and explain this one.

Within my research, we had noticed a pattern between searches for "online poker” and "sportsbook” over time. It appeared as though the two terms were negatively correlated, or in other words, when "online poker” searches increased, searches for "sportsbook” decreased, and vice versa. Before drawing the chart, we had a theory that online gamblers had a limited budget with which they wagered on the Internet. Since online poker is a year-round non-seasonal activity, if there was no interdependence between the two gambling activities, there should be no trade-off in traffic.

The chart, however, revealed that as "sportsbook” activity reaches its peak during football and basketball seasons, "online poker” action decreases. This is most likely explained as a trade-off: If there are no sports bets for me to place, I’ll gamble on online poker instead of waiting for the next sports season. My friend from Costa Rica had some trouble figuring out the seasonal swings of poker traffic. This chart offered a new explanation that made total sense.

In the realm of vice categories of traffic, online gambling is small compared to pornography. If you were to group all gambling sites (including sites that provide lottery information for all fifty states), visits to those sites would equal one-eighteenth the number of visits to adult sites.

Just as you might gather from walking around a casino floor in Vegas, Atlantic City, or Reno, the people most willing to wager online are not necessarily the ones who can afford it. Out of all visitors to the Gambling websites, 24.7 per cent had household incomes of less than $US30,000 per year, and 53.5 per cent of visitors earned $US60,000 or less per year. And, perhaps the reason that the VIP sections in casinos are so small, only 7 per cent of online gambling visitors were in the highest income bracket that we measured, those earning more than $US150,000 per year.

Examining the difference between online poker players and sports bettors (during the peak sports periods and the off periods) helps identify the swing bettor who trades off for poker during the off-season, as opposed to the die-hard poker player. When you compare sports bettors and poker players online, poker players are found to have the strongest representation in the $US60,000–$US100,000 bracket, while the one income segment that swings toward poker only during the off-season is the lower income segment of $30,000–$60,000, which demonstrates that on the Internet, gambling activities can differ by socioeconomic status.

As we will find all the time through looking at different examples, there are clear differences in how people of different ages, income levels, and geographic regions use the Internet. Yet there are other examples that transcend all demographic boundaries. Take the magic little blue pill, for example.

From CLICK by Bill Tancer. Copyright 2008 Bill Tancer. Published by Hyperion. All Rights Reserved.

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