2. I used to work in the gaming industry too (not slots). If you're on the other side you just realize in the long run gambling is a losing proposition so you won't be pursuing the activity as hard. Also that job is a consistent stream of income.
3. Yes, but they are designed to be as addictive as possible. I'm quite appalled by online slots (Android, iPhone) where no money is at stake, but coins can be purchased, and the amount of coins purchasable is adjusted based on how much you play. I'm thinking Zynga based games primarily.
5. That's fair but a weak argument. 100% of people who go to the theatre or eat out spend money, but the amount is fixed and known up front. I guess you can say the same for slots when the payout percentage is up front, but still, Vegas wasn't built by giving away money.
Pretty much this. This story is a bit click-baity with the details summarized as a comedy of errors. I love Matier and Ross as much as anyone else, but they really should have dove into this more. It's absurdly silly if SF had no contact with any of the residents of 30 years and just out of the blue decided to auction the rights to the street.
As for the winner, kudos to him. Now he'll either settle for a significant amount of court, or mired in years of civil trial.
Is there anytime similar about the 1-2.5% fee merchants have to pay to utilize this service? I'd bet Visa, MasterCard, and AMEX are making a fortune off all these transactions.
> Is there anytime similar about the 1-2.5% fee merchants have to pay to utilize this service? I'd bet Visa, MasterCard, and AMEX are making a fortune off all these transactions.
My current primary credit card (Alliant's CashBack card) gives me 2.5% cashback on each credit card transaction (3% cashback in the first year).
I'd assume that Alliant makes money from customers who aren't paying the complete balance off each month, but with 2.5% cashback there's not a lot of room to make money from transaction fees.
This comment shows how little people really understand about the business model of credit card companies and their relationships with merchant banks.
> but with 2.5% cashback there's not a lot of room to make money from transaction fees.
The cash back is not instantaneous. It does not happen in the cycle in which the consumer buys something; it is pushed out as a short-term liability by the banks, contingent upon Visa/MC doing all the math and allocating the pieces from the top-down.
In the short term, all these microaccounts of customers "cashback savings" are accumulated as points or whatever to the consumer, but they are real cash assets for the holders. Taken in aggregate they equal huge long-term cash assets (for Visa/MC). Just like everything else in the credit card world, it adds up quickly across hundreds of millions of customers.
That leverage is why Visa has been untouchable and why MC has virtually no incentive to make it compete. Merchant banks are already so fragmented (and in many instances actually competing with each other) that the lockin is something they just accept.
This is why the collusion to set fees at 2.9 percent (or whatever) among payments processors is so evil: Visa and MC ransom the full fees for the short term to make the banks/merchants beholden to their terms in perpetuity. Cash back rewards are not a necessary part of a credit transaction, but they're being baked in to hike the "commissions" of the middlemen.
This industry is just like the Realtor industry: full of corrupt and exploitative groups of individuals implicitly colluding with each other to maximize their collective rapaciousness.
you wrote:
>> This comment shows how little people really understand about the business model of credit card companies and their relationships with merchant banks.
They may have to pay you 2.5% cash back (but through the usage of their card), however the neighbor next door is paying up to 25% on their rolling balance.
Multiply that by everyone else in your neighborhood with a balance.
Why does the government even pay companies to manage and rehabilitate student loans? Even if a student defaults on said debt, that debt is practically impossible to discharge even if you file for bankruptcy.
The biggest problem I have seen is people can get into situations that instead of just owing the government the debt starts getting passed around like a hot potato and it becomes increasingly difficult to get a hold of who owns your debt right now.
What's the long play then? Surely Robin Hood isn't absorbing the the transaction fees as a loss leader just to increase it's user base? If that's the play, any other company can emulate that.. The incentive seems to be this may cause a price war with existing brokerages.
The long play is that it actually doesn't cost significant money per trade at an institutional level. The only reason the other major brokers charge you money is because it covers their brick and mortar retail costs (e.g. Scottrade) and it adds to the bottomline (e.g. Etrade). So Robin Hood is actually just giving this surplus to the consumer instead of keeping it for themselves, and building a user base / brand in the process. Eventually once they have enough users, they will start to up sell you for other services (e.g. checking/savings, margin trading, options trading, check writing etc).
So majority of the brokers have brick and mortar operations that can't afford to compete on price. That leaves only the online brokers. Then the next step is to build a brand that attracts customer trust/loyalty, which is what Robinhood seems to be doing and to build a really nice experience which they do with their slick apps. Once customers (generally young ppl who are first time investors) are invested in the Robinhood platform, then Robinhood can up sell them on additional features/services (margin, options, API access etc). So sure Etrade could compete on price (I doubt they would want to since it would immediately hit the bottom line vs a new company not depending on broker fees), but if you look at it from a long term perspective eliminating broker fees is just step 1.
The long play seems to be deliver retail stock trading at the lowest possible price. There's a lot of money to be made even if they don't try to maximize profits.
Plus, I bet they are banking on the existing brokerages not responding until things are too late for them. Most brokerages offer free trades and other perks, but limited to "high-value" customers. They won't drop trading fees until they absolutely have to, but by that time, their low-value customers will all be gone.
There aren't actually any transactions fees to absorb. Wholesale brokers (think Citadel) pay retail brokers (think Robin Hood) for the privilege of executing their orders.
Because, for the most part, retail investors are not well-informed investors and are willing to cross the bid-ask spread. To simplify dramatically, suppose Citadel thinks the fair value of a stock is 25.185, the market is 25.18-25.19, and a Robin Hood customer wants to pay 25.19 to buy 1 share of the stock. If they buy from Citadel, Citadel makes $0.0050 on average. Given those basic economics, it makes sense for Citadel to pay, say $0.0018, to make sure that the Robin Hood customer buys from them instead of from Knight.
Oh damn, then it's just opening short/long term trading to a new segment of people that wouldn't otherwise do it. That's like 100% casino/poker bonuses during the poker boom.
A friend of mine accidentally pushed his Heroku or New Relic API key to a toy repo which was public and that information was immediately scraped and used. He was billed a non trivial about which he disputed but cost some time and headache.
Enforce best practices and don't do that even if it's for something trivial and won't have real world consequences.
This makes no sense. Are you telling me high school teachers and counselors are telling students to go to colleges without factoring in costs/financial aid packages/ROI?
They are saying that teachers/counselors are viewing it from their baked-in perspective formed 30 years ago...back when you could graduate with a bachelor's degree, end up in a school job that gave you a life-long pension and healthcare.
I think it is difficult for someone from my parent's generation, who had so many benefits (no offshore competition, defined benefits pensions, lifetime pensions, etc) to understand how tough life is now. You hear about it, but until you struggle with it it is difficult to know.
3. Yes, but they are designed to be as addictive as possible. I'm quite appalled by online slots (Android, iPhone) where no money is at stake, but coins can be purchased, and the amount of coins purchasable is adjusted based on how much you play. I'm thinking Zynga based games primarily.
5. That's fair but a weak argument. 100% of people who go to the theatre or eat out spend money, but the amount is fixed and known up front. I guess you can say the same for slots when the payout percentage is up front, but still, Vegas wasn't built by giving away money.