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Mckiev 🔸4
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I appreciate your take @Ozzie Gooen. 

I agree that casinos are an evil business, and I would be extremely wary of making people worse off in a hope to "make it up" by charitable contributions. 

 @Brad West🔸 have already answered point by point, so I'll just add that I believe it's better to think of my proposal as a charity, that also provides games to it's customers, rather than casino that donates it's profits. 

I'd argue that regular casinos are net positive for people without a gambling addiction, who treat is as an evening entertainment with an almost guaranteed loss. The industry preys on people who lost more then they could afford and are trying to get even, and it is not possible case. 

I struggle to imagine someone, who would donate more to their DAF that they feel comfortable with because they felt devastated that money went to the charity of not their choice. 

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by Mckiev 🔸
2 min read 18

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Effective givingBuilding effective altruismCharity evaluationEntrepreneurshipMarkets for altruismMechanism design
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I want to share an idea to invite feedback.
So far, I have only considered it for a few hours.

I'm pitching to create a casino where one can only play with money from their Donor Advised Fund.

The primary motivation is that the casino's profits would be donated to effective charities instead of their default non-EA destinations.
As a second benefit, I hope that it could incentivize people to donate more by allowing them to channel their love of gambling (euphemism for addiction :D) to a good cause.

Some supporting arguments

  • Daffy, a modern, cheap, and convenient DAF provider, has an API. It should be possible to let people gamble using their Daffy account funds, so there is no need to solve this whole messy part of the equation (after the gambling session, the balance would be settled between the user-owned DAF and the DAF of the house)
  • There are countless online casino software providers, so there is no need to develop much on that side as well
  • Unlike regular casinos, our's would be able to operate in all states (because legally it's not gambling)
  • User deposits would be tax deductible
  • Upwards of 90% of wealthy Americans donate to charity, and about 60% of Americans gamble at least once a year so maybe the user base for this charity is substantial
  • The online gambling market in the US is enormous (on the order of 20bn of revenue per year) and is growing.
  • Daffy had over ~130M USD of user's funds at the end of 2023 (up from 30M in 2022), so they may have substantially more by now
    One way to market this charity is: If you don't have enough money to solve some charitable problem close to your heart, try spinning it up in Roulette/Black Jack/etc. Some people would succeed and brag about it.
  • Unlike regular casinos, there are no moral qualms about it, in my opinion: every player parts with their money at the outset, and there is no way to "win it back," so I expect no one will lose irresponsible amounts. Furthermore, there is no actual loss - all money ends up in charities anyway
  • This would allow people to brag about their charitable contributions in disguise by talking about them as gambling instead. Letting people earn some status points without feeling obnoxious is important: charity auctions are one way to do this. A charity casino could be, too.

  •  This casino could be a platform to teach people about the concept of effective giving

     

     

Arguments against:

 

  •  Some charities could refuse to accept donations from the casino's proceeds since they would perceive it as somehow harmful to their reputation


 I was both a professional gambler and somewhat of a gambling addict, and I think that a more significant part of a thrill comes from account balance fluctuations and the screen blinking in just the right way. The promise of being able to win money for your local school (or wherever most people donate) could provide a comparable thrill

  • The vibes of gambling and charitable institutions are very different. Maybe it will be problematic to combine the two worlds, e.g., hard to find a working marketing angle
  • Traditional media might misrepresent or criticize the concept (and EA)
  • Could damage the credibility of the EA movement if perceived negatively


It sounds a little edgy, but should it be a stopper? I believe not. I kind of enjoy a contrarian stance—it could be good for marketing.

I would appreciate any feedback on the idea, and please reach out if you are thrilled to make it happen. 

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Brad West🔸19
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Another idea would just be a normal casino that was owned by a charitable foundation or trust -a "Profit for Good" casino. People could get the exact same value proposition they get from other normal casinos, but by patronizing the Profit for Good Casino, they (in expectation)would be helping save lives or otherwise better the world.

You could have a great night in which you win hundreds or thousands of dollars, but even if you lose, they know that your losses are helping to dramatically better the world. 

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David T6
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You could have a great night in which you win hundreds or thousands of dollars, but even if you lose, they know that your losses are helping to dramatically better the world. 

A cynic reads this as "you could have a great night in which you deprive a few hundred people of malaria nets, but at least in the long run they and also random unrelated and typically obnoxious corporations might stand to benefit from the gambling addiction this has instilled in you....". Possibly the first part of the proposition is slightly less icky if the house is simply taking a rake from a competitors in a game of skill, but still.

Maybe I just know too many people broken by gambling.

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Brad West🔸2
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I think the same amount of healthy and problem gambling would take place in aggregate regardless of whether there was a PFG casino among a set of casinos. But maybe some people would choose to migrate that activity toward the PFG casino, so that more good could happen (they're offering the same odds as competitors).

It comes down to whether you're OK with getting involved in something icky if the net harm you cause to gamblers is zero and you can produce significant good in doing so. For me, this doesn't really pose a problem.

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David T2
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I don't see any reason to believe that the same amount of gambling would take place in aggregate. Most entertainment businesses grow the market and this one is promoting new motivations for potentially different people to participate in an activity which is often addictive. And if you're running a bricks and mortar casino you're facing the same high operating costs as the competition: I don't see any reason to believe you'd reach profitability without putting in similar amounts of effort to entice new players, encourage people to return on days they weren't planning to gamble and encouraging people to shovel more money into machines after they've already lost more than they planned. 

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Mckiev 🔸1
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I think you pointed out the ickiest part of this proposal very well, though: I’d be motivated to encourage people to donate (gamble) more then they were planning to.

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Mckiev 🔸1
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I don’t find brick and mortar casino of this type compelling, for this reason. In the online case expenses should be relatively low given the existing infrastructure

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Vasco Grilo🔸4
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Hi Brad,

There is already Great.com, "the world’s first casino affiliate that donates 100% of its profits to charity", which was started by Erik Bergman. Founders Pledge has a profile on Eric, and this interview also seems relevant.

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Brad West🔸4
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Yes Thisj Jacobs mentioned below, but thanks for bringing to my attention.

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Ozzie Gooen9
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I am in favor of people considering unconventional approaches to charity.

At the same time, I find it pretty easy to argue against this. Some immediate things that come to mind:
1. My impression is that gambling is typically net-negative to participants, often highly so. I generally don't like seeing work go towards projects that are net-negative to their main customers (among others).
2. Out of all the "do business X, but it goes to charity", why not pick something itself beneficial? There are many business areas to choose from. Insurance can be pretty great - I think Lemonade Insurance did something clever with charity.
3. I think it's easy to start out altruistic with something like this, then become a worse person as you respond to incentives. In the casino business, the corporation is highly incentivized to do increasingly sleazy tactics to find, bait, and often bankrupt whales. If you don't do this, your competitors will, and they'll have more money to advertise.
4. I don't like making this the main thing, but I'd expect the PR to be really bad for anything this touches. "EAs don't really care about helping people, they just use that as an excuse to open sleazy casinos." There are few worse things to be associate with. A lot of charities are highly protective of their brands (and often with good reason).
5. It's very easy for me to imagine something like this creating worse epistemics. In order to grow revenue, it will be very "convenient" if you downplayed the harms caused by the casino. If such a thing does catch on in a certain charitable cluster, very soon that charitable cluster will be encouraged to lie and self-deceive. We saw some of this with the FTX incident. 
6. The casino industry attracts and feeds off clients with poor epistemics. I'd imagine they (as in, the people the casino actually makes money from) wouldn't be the type who would care much about reasonable effective charities.

When I personally imagine a world where, "A significant part of the effective giving community is tied to high-rolling casinos", it's hard for me to imagine this not being highly distopic. 

By all this, I hope the author doesn't treat this at all on an attack on them specifically. But I would consider it an attack on specific future project proposals that suggest advancing manipulative and harmful industries and tying such work to the topics of effective giving or effective philanthropy. I very much do not want to see more work done here. I'm spending some time on this comment, mainly to use this as an opportunity to hopefully dissuade others considering this sort of thing in the future. 

On this note, I'd flag that I think a lot of the crypto industry has been full of scams and other manipulative and harmful behavior. Some of this got very close to EA (i.e. with FTX), and I'm sure with a long tail of much smaller projects. I consider much of this (the bad parts) a black mark on all connected+responsible participants and very much do not want to see more of it. 

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Brad West🔸8
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Re #1 - the customers in OPs contemplation would have already committed the funds to be donated and prospective wins would inure to the benefit of charities. So it isn't clear to me that the same typical harm applies (if you buy the premise that gamblers are net harmed by gambling). There wouldn't be the circumstance where the gambler feels they need to win it back - because they've already lost the money when they committed it to the DAF.

Re #2 - this could produce a good experience for customers - donating money to charities while playing games. And with how OP set it up, they know what they are losing (unlike with a typical casino there's that hope of winning it big).

Re #3 - for the reasons discussed above, the predatory and deceptive implications are less significant here. Unlike when someone takes money to a slot machine in a typical casino, when they put the money in the DAF they no longer have a chance of "getting it back"

Re #4 - yeah there might be some bad pr. But if people liked this and substituted it for normal gambling, it probably would be less morally problematic for the reasons discussed above.

Re #5 - I'm not really sure that this business is as morally corrosive as you suggest... It's potentially disadvantaging the gambler's preferred charity to the casino's, but not by much, and not without the gambler's knowledge.

Re #6 - the gamblers could choose the charities that are the beneficiaries of their DAF. And I don't know that enjoying gambling means that you wouldn't like to see kids saved from malaria and such.

I think your criticisms would better apply to a straight Profit for Good casino (normal casino with charities as shareholder). The concerns you bring up are some reasons I think a PFG casino, though an interesting idea, would not be a place I'd be looking to do as an early, strategic PFG (also big capital requirements).

OP's proposal is much more wholesome and actually addresses a lot more of the ethical concerns. I just think people may not be interested in gambling as much if there was not the prospect of winning money for themselves.

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Jason5
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At least in the US, charity bingo, raffles, etc. are a fairly common thing in some segments of society. I don't think these are generally seen as controversial or problematic, although I also get the impression that they don't raise huge amounts of money per individual event. So I don't think all of the downsides you describe are inherent to the charity-gambling mashup. Whether there is some middle path that brings in significantly more money than bingo at a VFW (Veterans of Foreign Wars) post without bringing in the pathologies of for-profit gambling is an interesting question. My guess is that the relatively low stakes and occasional nature of extant charity bingo & raffles go a long way to explaining why those efforts seem unobjectionable.

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Mckiev 🔸4
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I appreciate your take @Ozzie Gooen. 

I agree that casinos are an evil business, and I would be extremely wary of making people worse off in a hope to "make it up" by charitable contributions. 

 @Brad West🔸 have already answered point by point, so I'll just add that I believe it's better to think of my proposal as a charity, that also provides games to it's customers, rather than casino that donates it's profits. 

I'd argue that regular casinos are net positive for people without a gambling addiction, who treat is as an evening entertainment with an almost guaranteed loss. The industry preys on people who lost more then they could afford and are trying to get even, and it is not possible case. 

I struggle to imagine someone, who would donate more to their DAF that they feel comfortable with because they felt devastated that money went to the charity of not their choice. 

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Mckiev 🔸3
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@Brad West🔸 , thanks for sharing your thoughts! This is what I thought of initially, but then "pivoted to" the complete non-profit framing, mainly because winning in the actual casino would mean that you are in effect taking money from charities. Probably even more important is the legal advantage of my proposal 

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Brad West🔸2
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Thanks for your proposal. I have actually thought a Profit for Good casino would be a good idea (high capital requirements, but I think it could provide a  competitive edge in the Vegas strip, for instance). I find your take on it pretty interesting

I think a casino that did not limit the funds that could be gambled to charitable accounts of some sort would have a much larger market than one that did. There is a lot of friction in requiring the set up of charitable accounts even for people who were interested in charitable giving and enjoyed gambling. I also think that you are going into a narrower subset of prospective clients that have these overlapping qualities. In the meantime, there are millions of people who consistently demonstrate demand for gambling at casinos.
 

I think a lot of people would feel fine about playing at the casino and winning, because they know that there are winners and losers in casinos, but the house (in the end) always wins. Winners and losers would both be participating in a process that would be helping dramatically better the world. 

Could you explain the legal advantage of your proposal vis-a-vis a normal casino either owned by a charitable foundation or being a nonprofit itself (Humanitix, for instance is a ticketing company that is structured as a nonprofit itself)? Is it that people's chips would essentially be tax-deductible (because contributing to their DAF is tax-deductible)? 

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Mckiev 🔸3
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I meant that my version of casino could operate in all states legally (vs 8 states for regular casinos)

Also: have you used Daffy? It's really easy to set up (to your point about friction of setting up accounts)

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Thijs Jacobs1
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It's already being done, and seems to be pretty succesful. See this Founders Pledge profile and this interview with Erik Bergman.  
 

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Mckiev 🔸2
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Oh, cool, interesting. This is however the for-profit casino affiliate business, that donates it's commission to charity. Closer to what @Brad West🔸 described

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Brad West🔸2
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Thank you for sharing this. I was not aware of this Profit for Good casino.

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