Gambling across borders

A blog about the productive life of risk

Posts Tagged ‘casino

Through Macedonian Casinoland

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When a door closes, a window opens.

One of the main problems with researching gambling is access to the field. Casino environment, for example, is usually off the limits for an inquisitive photographer or a film-maker. Gambling industry operators are not keen on talking to researchers. Not that we are a threat to them, several colleagues told me while sharing a similar experience, but merely a nuisance. Gambling industry is fast-growing, fast-changing and competitive. Hanging out with researchers is not the best use of these people’s time, I am told. Knocking on these closed doors seems like a big limitation, but it can also become a source of creativity.  So it’s true: when a door closes, a window opens.

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I recently came back from a field trip on the border between Macedonia and Greece. I visited a small town of Gevgelija which has become a favourite gambling and leisure destination for the Greeks from Thessaloniki. A fellow researcher, originally from Macedonia, joined me on the trip. We thought that approaching the local gambling managers in Macedonian would open these particular doors. We were very wrong. So wrong we couldn’t even get them to have an informal coffee with us; and so wrong that they wouldn’t even let her into the casino with her Macedonian passport. Our window out of there was to speak to the local people and find out how the town has changed in the last decade.

In one of the must-go-to restaurants, we sharpened our pencils and eagerly waited for the opportunity to write down the local tales. The waiter who served us spoke only to my husband: what can I get you, you should try our local brandy, so you’re from Croatia, I have many friends in Croatia. We, the she-anthropologists, interrupted him: excuse me, how do you feel about the casino industry dominating your town, do you get many Greek gamblers in your restaurant, do many young people from Gevgelija work in a casino… The waiter ignored us. Ours was not only the problem of accessing the gambling industry, but accessing the male world in general.

We stayed in this restaurant until closing time. My husband agreed to play a role: he was our spokesperson, because as women, we were either invisible or too dangerous to speak to. He visited the toilet often only to pass by the bar and chit chat with the waiter, who, as it turned out, was the owner’s son. My dear husband agreed to get drunk on the Macedonian home-made brandy, play a tough macho, neglect even us, only to open up a window of opportunity. By the end of the evening, the owner came to our table, obviously intrigued by this strange party of three. It was then that my husband told him we were important academics from European universities, writing a book about Gevgelija: you should speak to them, not me, he said. This was that moment of serendipity, never planned and always crucial for where the fieldwork takes us: and it always takes us somewhere.


Written by Andrea Pisac

September 20, 2013 at 5:41 pm

Borders overheating

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Our team has been working on pin-pointing the ‘gambling heat’ around the world: for example, which are the most studied field sites, which academic centres produce most knowledge on gambling and where most gambling conferences take place. The term heat indicates something fairly simple: where the gambling action is. And by this, we mean both the production and consumption of gambling as well as the ‘thinking’ about it.

Three ‘heated’ places, for anyone following the news on gambling, would be Las Vegas, Nova Gorica (Slovenian gambling Mecca but also dubbed ‘European Las Vegas) and from recently Macau. Both in the language of natural sciences and, metaphorically, in the social sciences as well, heat easily moves around, ripples out and affects the surrounding area. Gambling heat is no different: it is ever-changing and it changes the environment from which it emerges. On a map, it would show in red circles around certain areas, but it would also change over time.

As I was exploring the visual representation of gambling heat in the former Yugoslavia (the case study I am working on), I noticed the following: the places with gambling heat now were heated in other ways a few decades ago. These were the borders: national and legislative in particular.


Gambling heat in the region of ex-Yugoslavia

Nova Gorica, a small town on the border between Slovenia and Italy used to be a heated place of dispute over the national borders after the WW2. Through the international arbitrage, the socialist Yugoslavia lost claim to the area in which the leading economic centre was Gorizia, now an Italian town. Its sister settlement – Nova (new) Gorica was built right on the border as a statement of perseverance. The border between these two towns was until 1989 the border between the West and the East. Any flow of people and goods was strictly monitored and controlled. It was the kind of border with barbed wires and an empty strip in-between, where many Yugoslavs were prevented from leaving their country.

And today, this very border is enabling the flow of Italian customers into Slovenian casinos. With the fall of socialism and Slovenia joining the EU, the border, it is said, is no more. Yet, the differences in fiscal and gambling regulation between Slovenia and Italy at once make and unmake it. The money and people travel freely but the motivation to do so stems from the regulatory boundary between the two countries.

The heat spreads further, and it retraces its own steps. If once Yugoslavia was turning up the heat at its international borders, committed to protect itself from ‘evil’ outside enemies, now the same areas are hot from the amount of people and money travelling across. The old-new hot border is between FYRM and Greece, a small town of Gevgelija where two large casinos attract Greek gamblers.

The seasons may change but the climate remains fairly constant…

Written by Andrea Pisac

June 14, 2013 at 1:49 pm

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Taking a Chance on Data

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In December 2012 I set out to explore the site of what once was a Penthouse casino on the Croatian island of Krk. I had only one piece of information: in 1972 an American-run casino operated for a couple of years in a luxurious hotel on the Croatian coast. Then it was closed. My search through archives and historical records provided little further insight. Counting on word of mouth as the best strategy to learn things in this part of the world, I decided on a different route: I started asking around.

A good friend of mine whose family originates from the island of Krk offered a helping hand. He too has heard of the infamous but long forgotten casino. It was part of the prestigious Hotel Palace in Haludovo, today known mostly for being in the state of utter dilapidation. We set out to look for more friends – the locals – who would navigate us in this inquiry.

Once we told people what we were looking for, a peculiar thing happened: many remembered the days of American gamblers being flown on junkets to Haludovo, but most of them wouldn’t say much more than that.

Our local guide arranged meetings with several women who worked as waitresses in the hotel. They greeted us into their houses and offered coffee and cake. I listened to the stories of how people lost jobs once the nationalisation of money and property begin after the fall of socialism. They were sad stories: people felt they had lost more than just a regular pay-cheque. When the steam was let out, I gently asked: ‘and what about the time before, when the Penthouse casino was running?’

In each house my question grew more ominous: it produced no insights, only silence. The lack of words and the lowered looks were the only information I gathered on my trip to Krk. The absence of memories spoke more loudly of the Penthouse casino significance than the anger the locals had for todays market-based economy challenges. As we left the last house we visited, the woman set us off with a warning: ‘you won’t get any of the Penthouse Pets (girls who worked as croupiers) talk to you, they are grandmas now, ashamed of what they did in those days.’

With nothing but silence as data, I went to the crumbling Palace Hotel. Just like people, the building offered only traces of the times past: broken windows, destroyed hotel rooms, wrecked piano bar. I transformed from being an anthropologist into being an archeologist. I walked through this sinister place, left with no one to talk to, only with my own impressions of what things were like in the golden days of the Penthouse casino.

Can no data still be data? I look for the answer in the film I made while strolling around the hotel ruins.

The film has been selected for the ‘Totally Lost’ exhibition, held in Forlì, 4-16 June 2013 in the ex deposito delle corriere ATR, in Piazzetta Savonarola 2.

Written by Andrea Pisac

June 5, 2013 at 3:55 pm

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Will the house win again?

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In a casino, the house always wins and players are bound to lose in the long run, unless they’re cheating or counting cards at blackjacks. I was repeatedly told this by gamblers since I did fieldwork research in London’s casinos in 2007 and 2008. Spending hours in their company and watching them play I could see by myself that winnings indeed never lasted long and were most of the time spent frivolously or recycled as stakes . So evidently any gambler who strikes unusually lucky, like winning £7.3 million in one night at Punto Banco, becomes the object of suspicion. Luck in a casino is not meant to make the punter walk away with the house revenue and make the casino bankrupt. When Phil Ivey a famous poker player hit such a jackpot at the high-end London casino Crockfords in August 2012, they would not, of course, let him disappear with the money. So far the casino is still winning. But Phil Ivey is determined to challenge this status quo and has filed a lawsuit against Crockfords, which is owned by the Malaysian Genting group. Phil Ivey is motivated by an unfair reciprocity: why did the casino not honour its commitments to him when he always did, losing many times huge amounts of cash to the casinos? The question is: will the house still win even in court?

Written by Claire Loussouarn

May 15, 2013 at 11:42 am

Beat the algorithms, the casino and the spread betting company

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As I wrote in an earlier post in April, High Frequency Trading (HFT) is perceived as making financial markets even more inhuman and evil than they already are. HFT has truly become the black beast of financial markets. Condemnations of HFT under such metaphors as that of an ‘hyper-speed casino’ bring to the table an interesting question: Is HFT making the market a more unfair game where a few players have a considerable technical advantage over the majority?

It is true that HFT is about working out gaps in the market and grabbing those opportunities to make profit. Being faster and being able to make many more trades than other traders is an obvious advantage since not everyone can afford it: keeping in the game of HFT is costly in investment and expertise.

It would be a mistake though to ascribe too much importance to those ‘supposedly smart machines’, a point that Michael Stothard raises in a recent FT article. After all, HFT and the algorithms behind it are not infallible. In the same manner that the dealer can be beaten by counting cards at blackjack, the algorithm can be beaten by spotting its failures.

Stothard tells us the story of how in 2007, a Norwegian trader, Svend Egil Larsen spotted a weakness in the computer system of Timber Hill, a unit of Interactive Broker. He found out that their algorithm reacted to trades in certain illiquid stocks and that he could take advantage of this by moving the price to his advantage to buy low and then sell  at a profit. Larsen made $50,000 in a few months but he was not the only trader to be operating in this way. Another trader, Peder Veiby, was also playing the ‘system’. Both Veiby and Larsen have since been charged with market manipulation. The most interesting point of this case is not so much that they beat the algorithm or were charged for it but that the courts has ‘found them not guilty, concluding that they were making the market more efficient by exposing a flaw in the system’.

This reminds me of the case of a spread better Barnett Alexander who was charged by the FSA last year for market manipulation for similar reason of price manipulation based on flaws in the spread betting companies. However, despite the case of Larsen and Veiby and the fact that they were cleared, Barnett Alexander preferred to avoid court. Instead he decided to settle with the FSA for £1.3m, a compromise, bearing in mind the potential costs of a lengthy court case were he to lose. Despite this however Alexander still believes that he could have won and as he rightly pointed out to me in an interview, technically he was not manipulating the market but the spread betting company’s prices. The distinction he makes is an important one and indeed, it makes the Swedish case even more interesting.

Barnett Alexander’s case is actually more similar to Larsen/Veiby than one might first imagine. Although Interactive Broker doesn’t call itself a spread betting company, it offers Contract For Differences which work on a similar principle to spread betting. In short, Interactive Broker offers a similar trading experience to Swedish traders than spread betting companies to British customers based on prices indexed to those of the market. This means that although traders have the feel of trading in the market they’re actually trading in another market: that the prices offered by spread betting companies and other financial institutions offering spread betting and CFDs. What those traders have found is that despite the fact that buying and selling stocks as spread betting or CFDs doesn’t affect the movement of share prices in the market (since no actual share is actually bought or sold), the reverse is certainly true: share prices in the market affect the prices offered by spread betting companies.

It seems, after all, that the comparison of HFT, or rather algorithms, to the casino has more to offer than merely a reference to unspecified evils. It’s important to underline here that the gambling industry also uses algorithms to facilitate random conditions and make prices for bets. Like spread betting companies, bookmakers, casinos and other gambling businesses are market makers, and although the house, in principle, will always win, it doesn’t mean that it cannot be beaten.

Written by Claire Loussouarn

May 28, 2012 at 7:06 pm

Are the Borders Falling Down?

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In a recent article in FT, Guy Dinmore has argued that ‘the Italians gamble through austerity’. The article states that Italians spent an estimated €80bn on legal gaming last year – more than €1,300 each. Since 2006, the Italian government has both liberalised and regulated the sector. The outcome of such strategy is more licences being issued for new segments such as slot machines, bingo, online poker and live poker rooms. In 2011, Italian gambling industry had a gross earning of €18.5bn, which is more than 50 per cent in five years.

For the past eight months, I have been living in Nova Gorica, a ‘casino town’ on the border between Italy and Slovenia. The above mentioned numbers are a constant cause for concern for the gaming industry people on the Slovenian side. Since the golden age of casinoland (mid 1990’s), Italian players have made up to 95 per cent of the overall visitors. The specific economic and symbolic exchanges in this area have actually been sustained by the border itself. First as a dividing line between socialism and capitalism, later as an outcome of different gaming laws in the two neighbouring countries.

Italy has very few land based casinos so the majority of Italians prefer to travel across to Slovenia. Some travel even from as far as Rome. However, with this massive change in Italian gaming licences, Slovenian casinos have suffered a great deal. I am told by people in Nova Gorica that casinos will have to think hard to beat the new competition in the form of a more liberalised Italian gambling outputs. What else can they offer their Italian gusts to win them over once again? With all the travel expenses to Slovenia and from recently easy access to gambling at home, what would keep an Italian player loyal to their old routine of border-crossing?

A very similar phenomenon is happening in the USA – the decision of the State of Massachusetts to allow gambling will seriously affect the neighbouring casinos built on the Native American land. Those were also sustained by the border dynamics between inside and outside of the American national territory.

It will indeed be interesting to watch how the life of these borderlands will change due to new gaming laws. And will they remain borderlands?

Written by Andrea Pisac

May 10, 2012 at 3:57 pm

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Online mahjong is surging

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I remember how, when I was doing fieldwork in London among Chinese casino players, Ahmei, a Chinese woman from the North of Mainland China, liked to play mahjong online to kill time. She had come to the UK to work and finance her daughter studies. Once her daughter graduated this meant her mission was accomplished and she didn’t need to work so hard anymore. She found herself utterly bored and didn’t know how to occupy her time in this country she didn’t belong to. When she didn’t go to the casinos near London’s Chinatown, she would play mahjong online which was a convenient and familiar way to fight her boredom.

It was thus no surprise to me to read in an article posted by BGBC that online mahjong is surging with an estimated 700 millions of players. Let’s not forget though that the remote gambling industry is not just quick and ‘agile’ at picking up on those cultural trends, it also participates to their creation. Land-based casinos near London’s Chinatown have long understood this as clearly illustrates the new entrant operator in that vicinity, the Hippodrome, which is due to open sometime this year. The Hippodrome will offer mahjong table games and is building a room specifically dedicated to Chinese customers, in the like of a community centre, to make them feel more at home.

The popularity of mahjong in China, which has an estimated 500 millions players, and beyond in Asia will certainly make it a serious contender to online poker.

Written by Claire Loussouarn

April 19, 2012 at 3:12 pm