Tess Vigeland: When you gamble, you are just throwing money to the wind. Right? Well at least in places like, say, Las Vegas, there's a chance, the ever-so-slightest chance, that you will win some of it back. Outside of places like Vegas, no, um, dice. But what if I told you, you could use real money to place bets and never win -- ever? You'd say, "Why on earth would I do that?" right?
Here's Sean Cole.
Sean Cole: It's called Doubledown Casino. It's a video game application on Facebook. It makes noise.
DoubleDown Casino clicks and bells
Cole, at computer: There's a very flashy platform. It says you can play blackjack, slots or roulette.
Slots are the most popular game.
Cole, at computer: And there are different ones there's Wild Safari, Sunken Treasure.
I went with Sunken Treasure. It has a pirate theme.
Sound of ocean ambiance
And it works just like a video slot machine in a real casino. Hit the button?
Dramatic music and slots ringing on Sunken Treasure game
Cole, at computer: Augh!
Skull and crossbones. Cannon. Skull and Crossbones. Pirate ship. Pirate ship. Spin!
Dramatic music and slots ringing
Cole, at computer: Augh! I won! I won $20!
Now, initially you can play for free. You get a complimentary pot of virtual chips. But if you run out? You have to either wait until they top you off the next day, or you can put more virtual chips on your actual credit card. It's five bucks for 600,000 chips. Thirty-nine bucks for 75 million, which may seem like an absurd mountain of chips. But since they aren't real, some players will bet 20,000 virtual chips on one spin. And you may ask yourself...
Cole, at computer: How do I cash out?
Greg Enell: Well that's the interesting thing is that you do not cash out in our game.
Greg Enell is the founder and CEO of Doubledown Interactive -- and he knows the law. Again you can't run a gambling site in the U.S. And gambling, legally, has three aspects to it: Consideration (that is, betting), chance and prize.
Enell: And what we've done is we have removed the prize element. So any money that you win in our game you can never redeem that for any sort of monetary value.
Cole: So it's a bit like Hotel California. I mean, you can cash out any time you like but you can never collect.
Enell: Yeah. Yeah.
Nonetheless, DoubleDown Casino is a Facebook hit. It launched last June and already has almost 300,000 players a day. Only 7 or 8 percent of them are buying chips, but Greg Enell says that's a lot in the online video game world. The company's profitable; in fact, it's hiring. And all because of what amounts to a giant one-armed bandit from which no money comes.
Enell: A lot of people are amazed by the fact that people will pay to play a casino game when they have really no opportunity to win.
Cole: I'm amazed by that fact.
Enell: Well, I think there's something to be said for the thrill of gambling.
Cole: But it isn't gambling!
Enell: But it is! What we've found is whether you're playing for real money or fake money, that same tension still builds. So for example, I'm playing blackjack. When I'm playing the game, I feel my blood pressure go up a little bit, I sit up straight in my chair. And if I do win $1.8 million in one hand, I will fist pump and I'll be excited.
Cole: Do you think this sort of satisfies the same desire that gambling satisfies?
Enell: I do.
Sue Schneider: But you know, somebody who really loves to gamble is not gonna be happy unless they have the chance of cashing out a lot of money.
Sue Schneider runs egamingbrokerage.com. She's been monitoring the online gambling industry since 1995. And while this kind of prize-less play is relatively new, she says it isn't exactly rare. Even some actual gaming sites offer a free-play section where you can practice.
Schneider: And without that factor of the money, people play differently. They're gonna risk more, they're gonna make decisions that they wouldn't make if they had $20 on the game.
Sound of phone dialing
People like Jim Prewitt in Columbus, Ind.
Jim Prewitt: Hello?
Cole: Mr. Prewitt.
Prewitt: How are you?
...who plays the slots on DoubleDown Casino every day after his night shift at an aluminum tube factory. So far, he's spent about $150 on virtual chips.
Prewitt: The more chips you play on a line, the more you win. So it makes you feel like you're winnin' more, you know.
Cole: And so that makes you feel like a high roller.
Prewitt: Sure, sure. Yeah.
Cole: ...In a way that you wouldn't be able to feel like a high roller in real life.
Prewitt: Right. Right.
And why not just play with the daily allotment of free chips?
Prewitt: They don't give you enough to sustain that high or the thrill or whatever you would call it.
Cole: So it's like a drug in a way when you describe it like that.
Prewitt: Oh, yeah. I guess it could be, yeah.
But it's really more like non-alcoholic beer.
Prewitt: That's a good analogy for it. It really is.
Thank you. You get a similar flavor, but you don't wind up all stumbly. That said, a few DoubleDown players -- just a few -- get out of hand with it, spending thousands of dollars on virtual chips. And when they do that, Greg Enell's company sends them a message.
Enell: And we essentially tell them that you are now a formal VIP. And any time you need chips, just request them directly from our customer support group. And they will provide you chips at no cost. So that you can continue to play the game.
Sound of dramatic music
Cole, at computer: One more spin!
I'm Sean Cole for Marketplace Money.
Vigeland: Go to Marketplace Money and check out what personal finance blogger Barbara Friedberg thinks about gambling.