Investors in a casino business
April 28th, 2011 at 12:20:32 PM
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If you haven't lived under a rock, then you know that there are a lot of investment schemes out there that would be only possible with the internet. For instance 358 fans invested $160K to finance a band called Velvet Morning at My Major Company a British company. I once bought shares in a travel company which promised to include free trips as part of their compensation (it went bankrupt). I know of people who invest in lawsuits, who invest in race horses, and who invest in brew pubs.
Hypothetically would you invest $10,000 in 40,000 hands of Jacks or Better 9/6 video poker at 25 cents per hand? Here would be the terms. You must put up $10,000. At the end of the 40,000 hands you are e-mailed a table showing the number of hands the players won and the payout. Your expected value would probably $10,100 if the players play perfect. But if you are lucky and the players do not hit a royal flush you may get back $11,000 . If you are unlucky and the players hit a lot of hot hand your account is credited back the result subject to a minimum loss cap. For a loss of no more than $2000 you must pay $100 or for a loss of no more than $500 you must pay $300.
As an investor you could re-invest your $10K over and over again. Initially you would have to give your assent every time, but after a trial period you could authorize the company to re-invest up to a specified number of times.
With your winnings you would have the option of transferring back into your bank account, or of using the money to play a games yourself.
The operator of the business would make his revenue on the insurance money paid by the investors. They would optionally have the opportunity to invest shares themselves.
Hypothetically would you invest $10,000 in 40,000 hands of Jacks or Better 9/6 video poker at 25 cents per hand? Here would be the terms. You must put up $10,000. At the end of the 40,000 hands you are e-mailed a table showing the number of hands the players won and the payout. Your expected value would probably $10,100 if the players play perfect. But if you are lucky and the players do not hit a royal flush you may get back $11,000 . If you are unlucky and the players hit a lot of hot hand your account is credited back the result subject to a minimum loss cap. For a loss of no more than $2000 you must pay $100 or for a loss of no more than $500 you must pay $300.
As an investor you could re-invest your $10K over and over again. Initially you would have to give your assent every time, but after a trial period you could authorize the company to re-invest up to a specified number of times.
With your winnings you would have the option of transferring back into your bank account, or of using the money to play a games yourself.
The operator of the business would make his revenue on the insurance money paid by the investors. They would optionally have the opportunity to invest shares themselves.
April 28th, 2011 at 1:53:55 PM
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I would be reluctant to invest. The upside is capped at 40k hands (~$800), while the downside could see my entire 10k lost. How is the overhead handled? The bookkeeping would be heinous. I think I'd rather buy energy futures.
Simplicity is the ultimate sophistication - Leonardo da Vinci
April 28th, 2011 at 2:06:57 PM
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You would buy insurance against catastrophic loss.
April 28th, 2011 at 2:20:35 PM
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June 9th, 2011 at 3:29:12 AM
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For someone considering an investment in a casino business: Casino in San Diego home.
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