Fantasy Betting

Betting on one week football fantasy leagues has become big business.  We now get a advertising tab every day or two encouraging us to join a one week fantasy football league for real money (and another to take all of our money out at the ATM.  We don’t think they are connected).  If we don’t love it after our first league we can get our money back.  Steve Malanga has a good summary over at City Journal except for this:

Websites like DraftKings and FanDuel have benefited from the widespread perception that betting on fantasy sports isn’t gambling.

The confusion might come from this:

The fantasy leagues say they can operate in ways that traditional betting sites can’t thanks to an exclusion written into the 2006 Unlawful Internet Gaming Enforcement Act. The author of that act, former Iowa congressman Jim Leach, told ThinkProgress earlier this year that the industry lobbied him to make an exception for fantasy sports. He went along, he says, because he expected fantasy sports’ role in the gaming world would be “de minimus.” No one, Leach explained, imagined fantasy betting would evolve into what it’s become today.

There is little confusion on DraftKings and FanDuel being gambling sites.  There is a legal exception for them but it does not change the meaning of the word gambling.  The significant issues are that they have an exception that allows them to be legal gambling sites and they have created a new, successful gambling product, the one week league.

Two points: First Leach is wrong.  The folks that lobbied for the exception thought it was important enough to convince him to grant them an exception.  Second, we see the knowledge problem again.  The folks making the rules and decisions cannot be as clever as everyone.  The law put what seemed to be a reasonable exception for fantasy sports because they were “de minimus” at the time.  The Congress did not want to have friends that put up a few bucks on a season long fantasy league be put in jail because it was run, as most are, on the Internet.  Now that the gambling sites have driven a tank through the exception it is a little difficult to undo it.

A separate point is should we protect folks from the dangers of gambling?  We are pro-gambling with some regulation.  Really, MWG will be pro-regulation in at least one instance.  Internet gambling is a problem because of the difficulty or regulation.  More later.

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Economic Growth and Deficit Reduction

Economic growth advocates and deficit reduction fans should be fast friends.  When the economy grows tax receipts go up.  There can be conflicts over the details of tax plans but growth is a crucial element of deficit reduction.  Both also have a long-term impact.  Continuing deficits matter because of the long-term impact.  Growth matters because of the miracle of compound interest.  We don’t want to be Argentina.

Yet the two groups seem to be in mortal combat as shown by recent posts by Kevin Williamson and Larry Kudlow at NRO.  Kevin has the question that nobody ever asks:

Here’s my question, which nobody ever really asks: “Given that a small number of federal expenditures — Social Security, Medicare, Medicaid, national security, and interest on the debt — typically constitute about 80 percent of all federal spending, and given that we are not going to cut non-defense discretionary spending to zero, there is no mathematically plausible way to balance the budget without: 1) cutting spending on Social Security, Medicare, Medicaid, and/or national security; and/or 2) raising taxes. So, what’s it going to be: spending cuts in popular programs, higher taxes, or deficits forever? And before you give your answer, I’d like you all to know that standing behind each of you is a man with a Taser and instructions to use it on the first person whose answer relies on the Growth Fairy — lookin’ at you, Jeb — or the Waste, Fraud, and Abuse Fairy. Go.”  Emphasis added.

Growth must be part of the answer.  On the other side is Larry:

Meanwhile, Governor Christie spent his economic time on a plea for reducing Social Security benefits. Ugh.  Emphasis added.

We are entirely in agreement with the Governor that means-testing is a great solution to the impending bankruptcy of Social Security.  We think his proposal needs a few tweaks but it would be a vast improvement over the current.  Time is running out to fix the deficit, Social Security, and Medicare/Medicaid.  Social Security is easy (numerically but not politically) to fix.  Fix that first and help the deficit.  Reducing regulations can help the reduce the deficit by increasing growth.  Fixing the Obamacare/Medicare/Medicaid (OMM) monster is more of a challenge.

In slaying the OMM monster, James Capretta makes the obvious point that the Cadillac Tax will change behavior:

CBO and others [like MWG] say that, as employers cut back on what they provide in health benefits, they will provide roughly commensurate increases in salaries and wages. But since salaries and wages are taxable, while the health insurance they will replace is not, CBO believes that the Cadillac tax will increase federal revenue far beyond the small amount collected through the tax itself, which most employers will avoid.

He comes up with an interesting suggestion of limiting the tax preference and making the excess taxable income.  It is half a loaf but the notion that the excess would be taxed at different rates depending on income might make it a winner politically.  It might also lead to some growth opportunities.

The point is that there are lots of problems that we now have a reduced margin of error to fix.  We need to work at growth, deficit reduction and a few other things.  The are some conflicts but mostly economic growth and deficit reduction work together.  We should look for progress rather than perfection.

Duh

Even Foreign Ministers have insight:

Germany’s former Foreign Minister Joschka Fischer makes a tacit link between America’s reticence and Germany’s flight from confrontation. He spoke to me of a “tragic moment in early 21st century American history when there had not only been a bad U.S. Iraqi intervention, but in 2013 a bad U.S. nonintervention in Syria.” The situation, Mr. Fischer told a German reporter, involved “an American president drawing a red line but letting Syria get away with crossing it.”

Sports report

It has been a fun extended weekend on the sports front.  Big Papi hit home run number 500 joining an elite group of 27 in that club.  The champs beat the Steelers to start the season.  Arsenal won.  Then there is the schadenfreude side of it.  The Yanks lost three of four to Blue Jays to give the Blue Jays a nice 3.5 game lead.  Chelsea has only earned four of fifteen points.  In fact, if Newcastle wins tomorrow Chelsea will be in the relegation group of the Premiership.  The bad news is Chelsea plays Arsenal next week.  Chelsea is in close to a must-win situation.  We expect them to play much better.

Big Papi’s 500 starts the Hall of Fame discussion for him.  If he was not primarily a DH he might be elected on the first vote.   At age 39 he has 34 homers with 20 games left, a .917 OPS, and leads the AL in intentional walks.  If he plays next at 40 and can match (include the last 20 games of 2015) this year then it would be only the DH issue that would deny him.  It will be interesting to see what Papi does with the rest of his career and what the voters do with those results.

Kevin Williamson at NRO has another example of expertise confusion.  To recapitulate, experts are experts in their field.  They may have expertise in related areas or they may develop expertise in a few limited areas.  Expertise is also a relative thing.  We could be expert on tax issues depending upon the group we are compared to.

Sidebar one: All writers fall into the expertise trap from time to time.  We’re sure we have been guilty.  We hope it was a five yard penalty.  That is, everyone wanders outside their field into something they understand less well.  The penalty for such transgressions should depend on how far afield and how certain their conclusions.  It appears that the transgressor in Williamson’s article would get the full 15 yards.  End sidebar one.

The problem is that the transgressor in the story is a PhD.  Earning a PhD is a study in expertise.  You are technically an expert in physics, accounting, or English but you understand that you are really an expert in a sub-discipline of one of those areas.  It is astounding that PhDs seem so oblivious to the expertise problem.  They are part of the tiny fraction of the population that knows what true expertise is yet they seem to be a large portion of the transgressors.

Sidebar two: You may notice all, what many academics call weasel words in the previous paragraph.  We are wandering away from expertise, an area of expertise, to the empirical data on this phenomena.  We recognize that we have made no serious study of the phenomena.  End sidebar two.

Our opinion is that the experts confuse their hard-earned expertise with general ability.  Their ability to master X (over years of study) means that they can master relatively simple Y almost immediately.  To move to a slightly different context, “doctors are gods” gets 9.5 million hits on Google including this.  Perhaps the difference between MDs and PhDs is that the latter put their thoughts in writing more often.  Perhaps overconfidence outside of one’s area of expertise is a condition of expertise.  You are welcome to the thesis topic.  Experts in A and experts in B do tasks in both A and B.  Measure accuracy and confidence.  It almost writes itself.

Markets and Monopolies

As we headed off on a trip (retirement means an end to vacations) we wanted an electric cooler for our car.  They are neat for traveling.  You can plug them in the car and the hotel room and spend the trip without ice.  We ordered it on Tuesday and it arrived on Wednesday.

Traveling east means lots of tolls.  Without the toll transponder, traveling is slower and more expensive.  Ohio had them for sale.  First point they make is that you cannot use them for two days after you register them.  OK, we will buy it and use it on the way back.  It is still worth it.  We buy it and register it that night.  We await a response.  We use our PIN as our password to try to log into our account.  We email them.  We wait a day.  Yes we are in.

Why does it take longer to greenlight an electronic device then it does to ship a good size cooler?  As we know, it all depends on who does it.