Bad Influence: Latest Drake/Stake Controversy Only Adds To Online Gambling Trust Issues

Two people does not a sufficient sample size make. Still, I was struck by how, in back-to-back conversations about online gambling, two people who should be among the target audience for regulated online casino and online poker told me they don’t play because they can’t trust it.

The first half of this tiny sampling is a middle-aged, upper-middle-class guy who lives in New Jersey, a state with more than two dozen regulated online casino apps, five regulated online poker sites, and 14 active licensed mobile sportsbooks. He plays in poker home games. He enjoys table games at casinos. He has disposable income to spend on gambling. And he does engage in online sports betting. But as for the other stuff?

“I can’t imagine ever risking money on those games,” he said over dinner recently, once the conversation turned to my line of work. “Maybe the games where you see live video of the dealer and the cards. But if it’s not real cards, if it’s just graphics, how do you know it’s not rigged?”

Days later, I was out for drinks with another middle-aged, middle-class guy, squarely in the demo to at least do some low-stakes online gambling in his home state of Pennsylvania — where there are 19 regulated iCasinos, four legal online poker sites, and 11 active mobile sportsbook apps. The topic of online poker came up.

“I made a deposit on PokerStars a while back, during COVID,” he told me. “But I barely played. I haven’t touched the money in years. How can you trust it? Aren’t the opponents all bots?”

Again, a sample size of two suburban East Coast dudes is not representative of the full iGaming target audience — as evidenced by the monthly revenue numbers in Pennsylvania, New Jersey, and elsewhere, which suggest millions of people are not so hesitant to use these sites. But those two conversations make you wonder: How many people are not participating strictly because they don’t trust the product, regardless of whether there’s a regulatory oversight body to answer to?

Bloomberg’s deep dive into Stake and Drake

Bloomberg published a 7,000-word exposé this past Friday morning headlined “How to Win Slots and Influence People” that dug deeply into crypto casinos and online casino influencers, with a particular focus on the unregulated Stake casino, the streaming channel Kick, and highly recognizable Stake players Adin Ross and Drake.

Yes, that Drake, the Canadian rapper with an estimated net worth of $400 million who presumably doesn’t need to be engaging with controversial online gambling sites and getting sued in multiple class-action filings.

The crux of the article is an analysis that found that when Drake played slots from the Easygo Entertainment line, games created in-house by Stake’s parent company, “he won big four times as frequently as the average rate — the equivalent of once every 2,500 spins, compared with every 10,000 spins, according to [Bloomberg] Businessweek’s investigation. Yet on games operated by third parties, his win rate was average. And Drake wasn’t the only influencer getting very, very lucky while broadcasting Easygo games on Kick.”

The article cited a specific occurrence when Drake was struggling, communicated with Stake’s “billionaire co-founder” Ed Craven, changed games at Craven’s direction, and soon started winning big.

Coincidence? Possibly. But the Bloomberg analytics showed overall results that push the limits of what one can accept as coincidence.

The numbers indicated that on Easygo games, Drake “won big twice as frequently as the next-luckiest gambler Businessweek analyzed. Four people who played a comparable number of rounds to his never won big at all.” 

Bloomberg does note, however, that Stake denied the article’s claims that influencers have greater success than non-influencers, and that Craven has written in past blog posts that their games are not in any way rigged.

The regulation angle

Can anyone take Craven and Stake’s word for it? This key line in the Bloomberg piece sums up that situation: “There’s no international enforcer to ensure Stake’s odds are fair.”

Stake is based in Australia and registered in Curaçao. Business is booming — the site and its affiliated sites reportedly get 127 million monthly visits and attract 10 billion bets per month.

Stake’s crypto casino is blocked in the U.S., but the company also operates a social casino using sweepstakes-style prizing — commonly referred to as “sweepstakes casinos,” while the sweeps industry prefers the label “social plus” — that is available in many U.S. jurisdictions.

And it’s through those sweepstakes casinos that Drake, Ross, and others have found themselves on the receiving end of those class-action lawsuits.

It must be noted that regulated online casinos get sued plenty, too. There was the wife of a DraftKings customer alleging exploitative VIP-program practices, and a similar long-running case against BetMGM, among others.

Still, there are far fewer guardrails in unregulated spaces. The Bloomberg article cited several sources with inside knowledge saying that Stake streamers and influencers often gamble with funds provided for them by Stake — seemingly a perfectly legal practice, but a deceiving one to those watching along, believing the streamers are risking their own money.

The article also told the tale of one player who wanted to use responsible gambling tools and self-exclude from play on Stake but was unable to.

With state-regulated sites, rules are in place requiring certain RG tools and messages. And there is always an oversight body to mediate disputes and hold bad actors accountable, one that can ensure all customers play with the same odds and all games have properly randomized results.

If it is found that some iCasino legally available to New Jersey customers is dealing rigged blackjack hands, with the random number generator programmed to lower the player’s chance of receiving a natural blackjack or to increase the dealer’s probability of drawing to 21, the Division of Gaming Enforcement can investigate and potentially take away an operator’s license.

There is a price to pay for shady practices in a regulated environment, which logic dictates makes those shady practices a risk a regulated operator would elect not to take. And it follows that players in New Jersey, Pennsylvania, Michigan, and other regulated states should feel the odds at these iCasinos are precisely as presented.

You can look up the exact return-to-player of a slots game at a regulated iCasino, and if it the site says it’s 95.4%, there is every reason to trust that, over the long haul, that game will return 95.4% of the money you risk while keeping the other 4.6%.

And over the very, very long haul, that game will probably eventually take all of your money. That’s casino gambling. As they say, “The house always wins.”

But some potential customers just can’t bring themselves to trust a game without physical cards. And the average person doesn’t know the difference between an unregulated crypto casino and the most tightly regulated iCasino on the planet.

So when Bloomberg blows the lid off a story suggesting famous influencers are playing online casino games and getting not just preferential treatment but downright preferential game odds, all that does is further the sense among some that online casino apps cannot be trusted.

The report should serve to steer those who want to play online poker and online casino toward regulated sites. But to most people outside the industry, Stake is the same as FanDuel is the same as Bovada is the same as Hard Rock is the same as Luckyland.

The “Drake Curse” is a popular superstition that if Drake bets on an athlete or team, that side will lose — such is his reportedly lousy track record in sports betting.

There may now be a new Drake Curse to consider. If Bloomberg’s article about the rap superstar playing allegedly/seemingly/possibly rigged online casino games gains enough traction, a whole regulated industry he has nothing to do with could suffer from guilt by association.