A Few Words Regarding the Relationship Between Players, MtG Finance & Vendors In An Unregulated Investment Market
Editor’s note: this informal essay about was originally published in February of 2016 on Medium.com and concerns Magic the Gathering, Mtg Finance and unregulated investment markets. Warning: some adult language – NI
As some of you are no doubt aware, a recent MtG Vendor’s scandal involving a leaked Eternal Masters list has resolved itself sometime in the last hour. As it turns out, there actually was no list but instead the entire scandal was the work of one Vendor attempting to use a well meaning soul within Magic’s byzantine “official” community to take out his competition.
Let’s be honest with ourselves for a moment — this entire situation is a massive clusterfuck of staggering proportions. Reputations have been damaged needlessly, WotC itself has been forced to respond to rumors about a leak that never happened and it would be fair to say that customer confidence in the secondary MtG market has likely been shaken yet again; at a time when that seems to be happening far too often for most people’s liking.
To that I say, quite frankly — good. Oh, excuse me, did I stutter? Let me elaborate; while it is genuinely unfortunate that innocent vendors were blamed for running what would essentially be an insider trading ring on the Magic singles market, I believe the resulting look into the inner workings of the uglier side of MtG is actually a net positive experience for our community.
Why? Because to put it quite simply, the growth of Magic as a multi-faceted hobby that borders on a lifestyle, has turned the buying, selling and trading of MtG singles into a completely unregulated investment market. While this in and of itself is not necessarily a bad thing, when combined with the unprecedented amount of money working it’s way through the singles economy, you have a situation ripe for exploitation by less than scrupulous actors. In other words folks, this isn’t your older brother’s trade binder anymore; this is open warfare on the high seas, where giant whales devour hundreds of tasty minnows daily by leveraging the most important asset in Magic the Gathering today — knowledge.
Now, odds are that if you’re reading this article, you’re a minnow. You probably don’t run a shop, online card store or profitable MtG Finance website and the closest you’ll ever come to swaying the MtG singles market is posting a Vine of yourself dabbing with a playset of Snapcasters in your hand. I don’t say this to insult you because frankly I’m a minnow too and in fact the vast majority of the people you know in the world of Magic are probably also minnows. Yeah, I manage the website for a game store that sells MtG singles but please believe me when I say that I haven’t had anything to do with that part of the business in multiple years. As far as Magic is concerned, I’m strictly small time at this point and I guarantee you my entire collection of Magic cards is worth less than the front quarter of your trade binder today.
The good news is, the Magic singles market revolves around the minnow and WotC is hyper-aware of this. No matter what anyone tells you, the minnow is in fact the end user of the product Wizards makes and while both secondary retailers and speculators factor into their decisions- the company itself is never going to choose to prioritize them over the end user; you the player. This is important to remember the next time you’re wondering why WotC is coming down so hard on someone suspecting of leaking cards or when reading some silly Reddit rumor about the company purposely leaking cards to retailers they like. Magic itself can not and in fact will not survive without the consumer confidence of customers who buy cards simply to own or play with them — WotC would rather burn a hundred vendors than risk losing the confidence of their most important market; you.
The bad news is that WotC’s unwavering commitment to the lowly player is pretty much the only protection afforded to you as a customer if you’re buying MtG singles. While the company can and does exert a tremendous amount of influence over sealed product sales, accessories and organized Magic tournaments — WotC has virtually no overt control over how and by whom Magic cards are sold once they hit the wild as single cards.
There are virtually no laws governing the sale or trade of Magic singles that I am aware of and even if there were, I strongly suspect you’d have trouble getting the authorities to take the issue seriously enough to enforce them. Judges, policemen and government regulators are simply not tuned in to the idea that tiny pieces of cardboard used to play a nerdy as fuck card game can potentially be worth thousands of dollars and therefore represent an actual financial investment in the way that one might purchase stocks or bonds. If you don’t believe me, ask anyone who’s ever tried to frantically explain to a cop that they were just holding a trade binder worth over 10 grand and it would be a good idea for the authorities to act quickly before the thief escaped with his/her life savings. If they don’t stare at you like your speaking in tongues, they’ll probably want you to describe every single card in the binder and explain how you can tell that a given Underground Sea is the one that belongs to you in a legal sense.
Things get worse when you factor in that the MtG singles market is by and large a cash business. Absolutely tremendous amounts of physical, nearly untraceable currency exchanges hands on the floor of every Grand Prix and the amount of money involved has only continued to grow in staggering leaps and bounds as MtG has become more popular. This may come as a shock to you gentle reader, but all of that glorious liquid capital has a habit of both attracting less than trustworthy people and causing otherwise normal individuals to act ruthlessly as they succumb to greed over time.
What exactly does all this mean to you, the minnow? It means that every trick, scam and crooked practice you can possibly imagine in the MtG singles market (along with several you haven’t even thought of yet) is happening somewhere, right now, in the global Magic community.
Price fixing, price gouging and profiteering? Yes.
Collusion, Insider Trading and the direct sale of illegally obtained information? Yes.
Buyouts, Pump and Dump scams and finance cabals working to manipulate the price on specific cards? Absolutely.
Counterfeiting, theft/robbery rings and physical violence? Of course; a simple google search or glance through the WotC archives confirms it. Wait till you read about the guy who was murdered and buried under a concrete slab in the yard once his new buddies realized how much his Magic cards were worth; really made my morning when I heard about it I’ll tell you.
Money laundering, tax evasion and ties to organized criminal elements? Um, you did read the part where I said it was a primarily cash business right? So that would be a yes.
Did your favorite MtG financial adviser just slip a card he speculated heavily on into his “hot picks” this week? Do the prices offered by sellers change depending on how much they think that individual buyer knows about the cards he’s selling? Did that dealer just outright lie about how much your cards are worth or enter in the wrong percentage before he showed you the calcuator? Yes, yes and yes — at least probably; after all there really isn’t anything going on in the MtG singles market to stop them. Maybe your favorite dealer is one of the good ones, maybe your favorite finance podcast always shoots from the hip; but only a naive child would believe that there isn’t someone out there running these incredibly simple games on unsuspecting minnows and frankly it’s probably a lot more someones than you’re prepared to believe right now.
So if there are no rules and a tremendous number of people involved in the MtG singles market track somewhere between “self-serving” and “a completely amoral criminal;” what exactly can minnows like us do to protect ourselves? I’m glad you asked:
1. Participate In & Develop Trading Communities — look, we’ve already established that knowledge is power in the MtG singles business and you were taught that there’s safety in numbers from the time you entered preschool. Participate in trade discussions, pool your knowledge with other players and establish trusted spaces where you and your fellow customers can speak freely; whether they be physical meet ups, internet chats or simply password protected forums. Once you do establish these spaces, be extremely careful about allowing those motivated by profit to participate. The idea here is to facilitate a kind of trading “wiki-leaks” and it’s going to be a whole lot easier to get shy Johnny to rat out the vendor who ripped him off if that vendor isn’t watching/participating in the discussion. This also works the opposite way, you want people to be able to share information on which vendors/dealers operate in an honest manner and can therefore be trusted by other members of the collective — that isn’t going to work if you’re allowing sellers to declare themselves or their buddies reliable now is it? While it is an unfortunate truth that communities without gatekeepers will eventually be co-opted (usually for profit), it is still in fact a truth; be careful who you invite into your working groups. Note: this idea can also be applied well beyond simply identifying crooked dealers and recommending straight shooting finance writers to the collective; are you about to take a $5,000 binder in to sell? Bring along a couple members of the group to help facilitate the trade — after all, it’s much harder to rob three players than one; whether with a fist or with a calculator. In short, once you stop seeing your fellow players as competition for cards and start to organize your efforts, it becomes significantly harder for scam artists to operate in the MtG singles market.
2. Reward Trust With Loyalty — while I’m quite certain that some of you aren’t going to want to hear this, one of the reasons it’s so easy to pull the kind of dirty tricks we’ve talked about here on the MtG community is because we’ve become so bottom line orientated. Our never ending quest to grind maximum value out of virtually every single aspect of Magic the Gathering causes the vast majority of MtG customers to chase the lowest price or the highest offer like blind, bloated guppies — right into the waiting nets of unscrupulous market actors with a significant knowledge advantage. This impulse to obtain value is so strong in our community that it has literally given rise to a whole new cottage industry; including articles, podcasts, websites and an entirely new way to “win” at the game of Magic — by speculating on MtG singles in an activity commonly referred to as MtG Finance. This isn’t a bad thing in and of itself, but when you toss overtly-competitive nerds and the previously mentioned lack of oversight in the market, you get the exact same toxic mix that lead to the real financial market meltdowns just a few years ago; except on a smaller scale of course. The only way to truly protect yourself from this environment is to learn to value trust, familiarity and physical evidence on some sort of monetary level. This certainly doesn’t mean you should massively overpay or undersell just so you can deal with a familiar face but in a real fundamental sense trust, reliability and clear physical evidence (like examining the card in your hand) have some value and you need to be able to put an actual number on that if you don’t want to be at a disadvantage in an unregulated market. Can you obtain the cards you need from a member of your trading group or a store recommended by people in that group? If not, can the vendor your collective prefers recommend a vendor they trust that you could talk to? Make sure you use the word trust; you’ll be surprised at how many more people will open up with the honest truth if you make it clear you’re expecting to be lied to without accusing them of lying. How much is it worth to you to deal with someone you know and trust? Right now, maybe the answer to these questions is no, no and nothing; that’s certainly fine — so long as you understand the inherent risks that position exposes you to.
3. Stop Being A Scumbag — oh, I’m sorry; did I hurt your feelings? Surely I don’t mean poor ole innocent you? Well, let’s see; do you open the conversation on every trade you make with “what do you value it at?” Then I meant you. Did you wake up at the crack of dawn after the last banned/restricted announcement or card preview so you could call every shop in town and try to take advantage of whichever ones hadn’t seen the news yet? Then, I mean you. Have you ever purposely chosen to ignore damage on cards you’re sending out or become unreasonably anal-retentive about the condition of the cards you’re bringing in to lower their price? Then I mean you. Do you purposely drag Pre-Releases to stock up on all the good cards while casual players still have no goddamn clue what the cards are worth? Then I mean you. Have you ever lied about the value of a card to complete a deal or accepted a transaction more than 20% in your favor without warning the other party of the discrepancy? Then I mean you. Have you ever sold cards for money on the sly to another player at a store or an environment where vendors have paid cash for the right to sell MtG singles? Then I mean you. Have you ever stolen a Magic card or knowingly bought a stolen Magic card? You guessed it then, of course I mean you. Have you ever knowingly bought or sold a counterfeit Magic card? How about selling a proxy for money? Bingo, I mean you. Taken on their own, many of these activities don’t seem so nefarious but as an aggregate whole, they very much contribute to the environment of paranoia, lawlessness and greed that make this MtG singles market so perilous.
4. Report Leaks and Call Out General Fuckery — look, I know this is an uncomfortable subject for the vast majority of the people reading this article. For starters, nobody likes a rat and it’s often incredibly hard to call out wrongdoing in a community as tightly knit and focused on having a good time as the one we enjoy in Magic. Nerds as a whole aren’t exactly well known for our ability to handle confrontations and delicate social situations after all, are we? Unfortunately however, the simple truth is the only rules and regulations that can affect the MtG singles market are the ones customers themselves are prepared to maintain and enforce. That means fostering a fundamental shift in attitude amongst our fellow minnows to a mindset where malfeasance is regarded not as Wizard’s problem, but as our problem. Is your buddy bragging to you about all the one sided trades he made today? Tell him off! Let him know that ripping other players off only hurts us all in the long run and sacrificing the community for his own greed makes him a pretty shitty person. Are you watching a vendor savagely lowball a little kid? Politely say “are you sure there isn’t some mistake? There’s no way those cards are that cheap is there?” If the vendor continues to lie, let him have the truth bomb right there in front of the customers — it’s not like you didn’t give him a chance to save face and stop being a goddamn leech right? Basically, just take pretty much every question I asked you in “Stop Being a Scumbag” and apply it to your friends, vendors and other members of the community — if they cross the line, pull them aside and quietly explain that you don’t want to interfere in their business but you can’t in all good conscience let them fuck up your gaming community like that. If they don’t listen, say something much louder! Finally, in regard to leaks, I’ve found the best policy is to simply report them; between WotC’s recent notice that you can get in trouble for not reporting leaks when you see them and the fact that people who obtain leaked card lists have a significant, if temporary financial advantage in an unregulated MtG singles market, I can no longer find a good excuse to protect even “harmless” leakers on the internet from WotC’s wrath.
5. Plan Ahead, Invest Your Money Wisely and Don’t Bet the Farm — whether it’s magic cards, Bitcoins or Peruvian cocaine, the simple truth is that unregulated markets thrive on devouring unprepared, uninformed and/or impatient investors to fatten the profit lines of the big bad wolves in the know. Furthermore, the hunt for fresh meat moves in real time and if you’re going to play around in the MtG singles market, you’re eventually going to have to make a number of potentially costly decisions with imperfect information. The key to dealing with this problem is to never put yourself in a position where you feel obligated to make a transaction even if it might not be very good for you. Don’t buy your cards at the last minute, save some money for real life emergencies so you don’t have to dump cardboard for paper even if the offer sucks and learn to walk away from the table if the price is simply too high, or too low for you. Don’t ever let someone else pressure you into making a deal; if her flight is leaving in 10 minutes then she probably didn’t have time to complete a trade for 3 pieces of Power with you anyway — let it go, there will be another deal, another day. Finally and perhaps most importantly; do not under any circumstances bet the rest of your life or your entire financial well being on the MtG single cards market. We are all sailors on a turbulent ocean that might only exist inside the hearts of a very specific group of people, at a very specific time. We’re baseball card moguls, pog mongers and tulip bulb merchants; a whole generation’s worth of beanie baby herders. Trading and selling Magic cards might one day put you through college, buy your first car or help you put a down-payment on a house; but it might just as easily not. Nobody can say for sure if the MtG Singles market is caught up in a bubble; but nobody can really say it isn’t either. That, after all is the trouble with unregulated markets; caveat emptor, indeed.
- Nina Illingworth
