Top 10 Basic Facts About Internet Gambling Everyone Should Know

By Randy Ray in General
| March 24, 2019 12:00 am PDT

Online gambling is hardly new. The first online casino launched in 1996, over two decades ago.

But I still run into people who are interested in gambling online but don’t know the first thing about it.

I had a conversation with a relative of mine a couple of years ago. She’s older, but not so old that she doesn’t understand how the world works. She told me she wanted to place a bet on the Super Bowl on the internet.

But then she was surprised that the book wanted her to deposit money into an account before making the wager.

She thought she could just make the wager and then pay only if she lost.

That defies common sense, but it’s a good example of how ignorant the general public can be about internet gambling.

This post is an opportunity to explain some of the basics to the layman who’s ready to give online gambling a try — or who’s at least considering it.

1. Online Gambling Laws Depend on Where You Live

You can find plenty of online articles about the legality of online gambling. A lot of them are aimed at United States players, but they’re not exclusive to USA readers. Most of them offer a more-or-less definitive answer to a general question.

Is online gambling legal?

But you can’t offer a definitive answer to that question. It’s too general. The only appropriate response is another question.

Where do you live?

If you live in the United States, federal law prohibits betting on sports over phone lines. That’s called the Wire Act. Legal opinions have varied over the last couple of decades about whether it applies to online poker or online casinos.

But federal law isn’t the only consideration when you live in the United States. You also need to account for state laws.

Some states have minimal, vague laws on the books about gambling in general — least of all about gambling on the internet.

Other states have specific laws that make it a felony just to play poker on the internet (I’m talking about the state of Washington here).

As far as I know, no one in the United States has ever been arrested or prosecuted for placing a bet on a casino game over the internet.

No one’s been arrested or prosecuted for playing poker, either.

Only two or three people have been arrested and/or prosecuted for betting on sports, and they were probably doing so as a business.

If you’re the consumer on the other end of the gambling transaction, you’re probably in a safe zone.

I’m not a lawyer, and even if I were, I wouldn’t give general gambling advice on the internet.

But use some common sense when worrying about the legality of online gambling, please.

2. Most Online Casinos Offer “Fair” Games

Another concern that a lot of new internet gamblers have is whether the casino games online are “fair.” They worry that the games are rigged or impossible to win.

In a sense, all casino games, even those in reputable Las Vegas casinos, ARE rigged. They’re just not rigged in the way that you think.

Casinos and game inventors use math to rig these games so that they have a long-term mathematical edge for the house. They do this by paying off bets at lower odds than the odds of winning.

The easiest example to understand is American roulette. You have 38 numbers on a roulette wheel, and 18 of them are black. 18 of them are red. And two of them are green.

A bet on black pays off at even money. Risk $100 to win $100.

If you did that 38 times in a row, though, and if you saw statistically predictable results, you’d see $2,000 in losses and only $1,800 in wins. The casino makes a $200 profit.

That’s how ALL casino bets work, more or less.

So online casinos don’t NEED to cheat. The games are already rigged because of the math behind the payouts and how it relates to the probability of winning.

You will find an occasional rogue operator. You’ll even sometimes find misleading games. I read about one casino company which offered video poker games where a player literally never got a win in hundreds of hands.

If you’re going to cheat, don’t be so obvious about it, right?

I’m also reminded of a casino that offers a game that looks like blackjack, but the probabilities for the game don’t resemble those of a card game. They’re just random, like a slot machine. That’s not right, either.

But those are the exceptions, not the rule.

You’re more likely to run into a problem with a casino making it hard for you to cash out your winnings than you are at getting fair odds of winning.

I’ll have more to say about that in the next section, but it can be avoided if you stick to safe and reputable online casinos, anyway.

3. Some Online Gambling Sites Make It Hard for You to Cash Out

When you’re deciding on a gambling site, spend some time in some forums looking for discussion of their payouts. Many sites make it hard for you to cash out. Their hope is that by encouraging you to keep your money in the site, they’re going to make it more likely that you’ll continue to play and lose money.

This kind of behavior doesn’t go unnoticed by the average player, either. If a gambling site behaves this way online, you can count on someone complaining about it on one of the players’ forums. It’s your job to research this kind of feedback.

You won’t find a lot of talk about trouble getting paid in most online gambling site reviews, though. That’s because many reviews are nothing more than sales pieces for the casinos. The sites pay big commissions to webmasters who refer paying customers.

This incentivizes webmasters to write positive reviews.

These reviews are obviously just shills in a lot of cases, but gambling sites are getting better about putting together reviews which seem more like reviews all the time.

Look for reviews that mention both pros and cons, like we do in our gambling site reviews. Also look for reviews on a website that features both negative and positive reviews. If all the reviews on a site are generally positive, that’s a red flag.

But don’t treat everything you read in a forum as gospel, either. Disgruntled players sometimes complain just because they’re sore losers.

Discernment is the quality you want to develop in yourself so that you choose a reputable online casino to do business with.

4. Some Signup Bonuses Aren’t Nearly as Great as They Seem

Here’s how a typical signup bonus works at an online casino.

You deposit a certain amount of money (between $10 and $1000, for example). You get a bonus equal to a percentage of that deposit amount — maybe 100%.

If you deposit $1,000, the casino gives you an additional $1,000 in chips to play with.

This seems like a no-brainer to the uneducated, but how likely are you to have any money left over when you finish playing at the casino?

Online casinos attach wagering requirements and restrictions to offers like this. For example, the casino might require you to wager the deposit plus bonus 30x before cashing out. They might also limit the games that count toward these wagering requirements to the slot machines, the keno games, the bingo, and the scratch and win tickets.

Of these, the slot machine games probably have the lowest house edge.

And even at a generous online casino, the house edge for a slot machine is probably at least 6%.

With a 30x wagering requirement on the deposit plus the bonus, you must make $60,000 in wagers before cashing out.

With a 6% house edge, your predicted loss is $3,600.

Since your starting bankroll is only $2,000, you’re going to go broke before you ever meet your wagering requirements.

That’s not a guarantee, though. Some players do get lucky and win.

But the math with these signup bonuses is firmly on the casinos’ side.

5. You Can’t Count Cards in Online Blackjack

Online blackjack is played in one of two ways on the internet. You can play versus a computer using a random number generator program. This looks more like a video game than anything else. You can also play with a live dealer via a webcam, using a real deck of cards.

Either way, the odds are the same. It’s a simple matter to program a random number generator to duplicate the probabilities found in a deck of 52 cards.

But you can’t count cards in either situation, for one simple reason — the games shuffle the decks after every hand.

Counting cards works by tracking the ratio of high cards to low cards left in the deck. If you shuffle the cards that have been dealt back into the deck, it makes the count meaningless.

Online casinos are masterful at coming up with ways to thwart would-be advantage players on the internet. This is one example. The way they handle signup bonuses (which I already covered) is just another example.

6. Basic Strategy Is Still Effective at Online Casinos

Card counting might not work, but basic strategy still matters. The odds in blackjack are still based on a 52-card deck, so the correct hitting or standing move is the same regardless.

With perfect basic strategy, you can get the house edge at online blackjack down to less than 1% in most cases. If you just use “common sense” or “play your hunches,” you’re giving the casino another 2% edge on top of their already existing edge.

Luckily for you, learning basic strategy isn’t that hard to do. Visual learners can just memorize a basic strategy table. I suggest creating a blank basic strategy table where you can fill in the blanks until you have all the strategies memorized.

Other people (like me) learn better by reading words on paper. For them, multiple writers have written down the entirety of basic strategy in prose format. The best version that I’ve ever read was in Sklansky Talks Blackjack by David Sklansky.

Don’t ever deviate from basic strategy when playing online.

You’ll still lose in the long run, but you’ll get a lot more entertainment for your money.

7. You Can’t Calculate the Payback Percentage for an Online Slot Machine

The payback percentage for a slot machine is a function of two things.

  • The probability of winning the various payouts
  • The size of those payouts

The problem is that you have no way of ascertaining the probability of hitting any given winning combination. Some of those symbols might be programmed to come up 1/10 of the time, while others might be programmed to come up 1/20 of the time. You have no way of knowing.

The payback percentage might be as low as 75% in some instances or as high as 94% in other instances.

Contrast that with every other game in the casino. You can calculate the house edge and the expected payback for any other game because you know the probabilities involved and the prize amounts.

In American roulette, you know that the probability of getting an individual number is 1/38. You also know that a bet on a single number pays off at 35 to 1. You can compare the two to find the house edge of 5.26%.

In video poker, which is the closest thing to a slot machine without being a slot machine, the winning combinations are all based on poker hands. Since the game simulates a 52-card deck, the probability of getting a pair or a flush is a known quantity. And the pay table tells you how much those hands pay out, so it’s just a matter of doing the arithmetic.

I should note, however, that many of the best online gambling sites do publish the payback percentages for their slot games.

8. Online Gambling Addiction Is a Real (And Serious) Phenomenon

I used to think you couldn’t become addicted to online gambling because no mind-altering substance was involved.

I was so wrong.

If you do even a little bit of research, you’ll find out quickly that the brain responds in a specific way to gambling — especially to slot machine gambling, which is probably at least 80% of the gambling done on the internet.

The circuits in the brain work in a specific way when you get intermittent rewards from a gambling game. This reaction is the same kind of reaction you get when you’re using alcohol or chemicals to get drunk or high.

Most people don’t become addicted to gambling.

This doesn’t mean you should ignore the dangers of online gambling addiction, though.

It’s unusual, but it’s not THAT unusual.

If you find yourself gambling with money you can’t afford to lose, and if you find that you’re not enjoying the experience anymore, you’re showing symptoms of gambling addiction.

Absolute abstinence is probably the appropriate way to handle such a compulsion.

Get help earlier rather than later, though.

9. You Can Find All Kinds of Free Online Gambling Games

Okay, so you can play slot machines or video poker games for free and not risk any money. These “play money” games are used by online casinos to get you used to the idea of playing casino games online. If you enjoy it enough, you’ll eventually play for real money.

Some people might think that these kinds of games are an improvement of some kind over playing for real money. I contend that they’re not an improvement at all.

Not only can you not win any money, but you’re often deceived into thinking that winning real money playing these games is easier than it actually is.

I don’t drink decaffeinated coffee. I don’t drink alcohol-free beer.

And I don’t play “free” gambling games.

If I’m going to gamble, I want money involved.

10. Most Online Gambling Sites Allow You to Ban Yourself

This relates to #8. Many gambling sites offer self-exclusion programs. Those that don’t, should.

This means you can contact the site, explain to them that you have a gambling problem, and have them block your access to their site.

Any legitimate site approached in this manner should be willing to help you protect yourself from yourself.

I worked with a degenerate online blackjack player who blew his rent multiple times on internet casino sites. We were acquainted a decade ago. I suspect he’s dealt with his gambling problem since then, but at the time, I remember his frustration with a couple of casinos.

He’d asked them to ban him from placing more wagers there, and they told him they couldn’t do that.

He shouldn’t have ever been gambling in the first place, but the casinos don’t do anyone any favors by exploiting such mentally ill people.

Conclusion

The online gambling niche isn’t that hard to understand, but it’s still new enough that some people have no clue about the basic facts behind it.

You could probably write a series of top 10 questions and answers on the subject that would answer over 100 questions. The industry is that big and complicated.

But I think this post was as good a starting point as any.

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