Summary of the Key Points
This article reveals the operational logic of online gambling through in-depth conversations with industry insiders and gamblers. Online gambling is not a one-time scam but a long-term business model that aims to build trust and then harvest profits over time. Legal platforms use seemingly fair methods such as “fees” and “matchmaking” to make money, creating the illusion that players can win. Gamblers often start by using their savings but gradually fall into a cycle of debt. The platforms use the players’ success to attract new users and identify those who are most likely to become regular customers. The article also warns East Asians about their tendency to be obsessed with the idea of achieving success through gambling, which can easily lead them to fall into the trap.
1. Online Gambling is Not a One-Time Scam, but a Long-Term Business Model
Traditional scams involve immediate fraud, such as stealing money and then blocking the victim. Online gambling platforms, on the other hand, work by building a relationship with users, allowing them to experience the thrill of winning and thus gaining their trust before gradually extracting profits. For example, gambling operations in northern Myanmar once focused mainly on online gaming but switched to fraud because it was more profitable. Many overseas platforms have legal licenses and operate from abroad, making it difficult for authorities in China to regulate them. Gamblers who lose see their losses as a matter of bad luck and are less likely to report the crimes, allowing these platforms to operate for years.
2. Platforms Make Money Through “Fair” Methods
Smaller, unregulated platforms may prevent withdrawals to limit customer losses, but legitimate platforms allow withdrawals, which makes them seem trustworthy and encourages players to continue playing. There are two main ways platforms make money:
- Fees: A 5% fee is charged from winners (similar to a table fee in mahjong), while losers do not pay anything, creating an illusion of fairness.
- Matchmaking: Platforms calculate the overall odds and profit regardless of the outcome, ensuring a steady income stream.
Platforms treat gamblers as customers who pay a “rent” each month, without causing them to go bankrupt too quickly. This strategy allows them to extract profits over the long term.
3. The Path to Debt for Gamblers
Gamblers typically lose their money in the following order:
1. Spending Savings: They first spend all their savings.
2. Cashing Out Credit Cards: They believe they can afford to repay the loans within the interest-free period, only to end up owing more.
3. Taking Out Small Loans: They tolerate high interest rates in the hope of recovering their losses.
4. Taking Out High-Interest Loans: These loans, such as those with a 1000-to-1300 return (where you borrow 1000 and pay back 1300), are extremely costly.
5. Borrowing from Relatives and Friends: People they have just met are often the last resort, and the money is unlikely to be recovered.
The most dangerous group are those who have already made money; they believe they can win back their losses and continue gambling, often ending up losing everything.
4. Platforms Attract New Users by Showoffing Success and Identifying “Ideal Customers”
Gamblers who win money may show off their purchases (such as luxury goods or cars), which encourages others to join. Platforms also target individuals with a predisposition to gamble, as they become regular customers. Most new users quit after a few sessions, but those who stay become a steady source of revenue for the platforms.
5. The Illusion of Progress in Gambling is a Trap
Many gamblers think they are becoming more skilled and can turn their losses into profits, but this is an illusion. East Asians have a strong desire to achieve success quickly, but gambling often leads to financial ruin. They later often miss the simpler days of earning a stable income without debt.
Final Warning: Stay away from gambling and don’t let the dream of turning things around turn into a nightmare.
(The entire article is written in plain language, making it easy for non-financial professionals to understand.)