Legal Gambling In the United States Is Coming or Is It?
When I think about gambling three topics come to mind, illegal March Madness pools, legalized marijuana and the crazy notion that the jury is still out on global warming facts. There are well-funded groups in the U.S. opposed to legal sports betting, weed rights and the facts surrounding the earth heating up at unprecedented levels. Although outside of the US Gambling is widely accepted online, just take a look at sites such as the one at this link.
Sportsbooks will soon be part of an American lifestyle as it is already in Europe and Asia. As a result, sports betting will become a new source of tax revenue for all fifty 50 states and possibly the federal government if recent legislation passes an appeal. The Sports Techie community blog spoke to Peter Loshak, Content Provider at Sportsbook Review, located in Costa Rica about March Madness spreads, the space as it was in the past and what the future holds for companies, clients and customers thanks to advances in technology.
I was supposed to discuss NCAA Division I men’s college basketball tournament analytics of picking teams, creating spreads and tech, etc. but before our 45 minute conversation on Saturday night was over we covered the gambit of sport betting and chatting about their sports odds community and betting news site for all the major sports. Without a doubt, “Tech is the big equalizer and companies that take advantage of it have an enormous edge,” says Loshak.
His job description for the past seven years involves making videos and being a presenter, analyst, article producer and betting expert. He’s worked for Sportsbook Review for the past seven years covering the industry and has been professionally involved with sports books for eleven years. Loshak began betting recreationally after high school because of the last Internet boom in the 1990’s. The non-Spanish speaker works out of their Costa Rican establishment that employs some 50 gambling experts including consultants.
SportsbookReview.com generates expert recommendations for bettors that range from ratings to recommending web based sportsbooks and betting sites. Other online services they offer include in-depth reports on sportsbook customer service, incentives and the prices of wagering. The International online business prides itself on staying neutral with their published assessments of sportsbook ratings and recommendations. Users have access to daily reports, five years of searchable news and ratings archives, thorough decision guides, participation with player discussions, player reviews, a knowledgeable seven day a week staff and free dispute resolution service.
The America Gaming Association estimates that a staggering nine billion dollars will be spent betting on the 2015 NCAA March Madness men’s D1 basketball tournament. Yes, your office pools are considered illegal outside of Nevada so if President Obama’s bracket had a financial payoff for the winner it would be considered criminal as the law stands right now.
The second biggest handle in Las Vegas history was the first day of round one of the Big Dance when five underdogs won by one point over the favored teams. Fans love to root for the underdog but bettors lay down money on favorites about two thirds of the time.
Historically in the NCAA tournament, balanced betting made significant profits for sportsbooks but as the market matured, new models were developed to keep up with increased amounts of spending and new factors such as social media. The market tightened up due to the influx of predictive info and reasoning creating more efficient sportsbooks that are the new standard.
Power ratings and statistical models are now the norm which is roughly the same approach bookies used in the past. The lines are still based on betting action. Sportsbooks use computer software to run numbers and make fast adjustments to get an edge. If the market did not adjust that fast, mathematical geniuses and stat crunchers would probably win at alarming rates but they don’t. Insider information gathered from social media hubs tips is perhaps the one criteria left that can help gamblers to beat the odds.
The heavily favored and undefeated Kentucky Wildcats lines and money began as a plus 130 meaning the risk of betting $100 to win $30 was high. Georgia State from here in Atlanta was undervalued against Xavier and versus Baylor. UAB huge upset over Iowa State that was only picked by 5 percent of brackets nationwide but gamblers also stayed away from the huge 14 point underdog.
Gonzaga is notorious for losing in the early rounds yet Loshak leaned on Heritage data to pick them all the way to the final in his bracket. He also consulted power ratings, past history and strength of schedule records and saw that two-thirds of fans rated Duke as Final Four caliber so he decided to not pick who everyone else picked because bracketology winners normally select teams that few other people make. Arizona is the other team to think about wagering on.
Betting Juice and Computer/Software History Sportsbooks used to be all about the juice. Traditional bet making made profits based on balanced betting. During Super Bowl 49 the line was virtually a pick’em. For this example the line gamblers established is 110 where the house keeps 10 percent, 50 percent is bet on the Seahawks side and 50 percent is bet on the Patriots. Regardless of who wins, the house always made their ten percent profit or juice. Now the juice is relatively out and the race is to the sharpest, most accurate line. Unbalanced action by sport books increases risk and exposure. Exposure for rights amount of money is fine though because of the use of technology so gamblers don’t get burned on ever changing lines. Leading companies like Pinnacle, CRIS and Bookmaker are okay with partial juice and partial exposure. The Internet changed everything beginning with online betting. In the past most bets ran through illegal means and criminal elements like the mob. With the boom and explosion of the web, offshore sportsbook businesses were launched and mob people that were not suited to the Internet began to fall to the wayside as the cream of sportsbooks rose to the top. The new age sportsbook is reputable and well-run odds making and book making machines, moderating their risk management with modern computers. Computer usage in the mid-80s’ and early 90s’ by the computer group in Vegas was profitable and they initially took advantage of spreads and made big money. That edge is no longer there for the most part. Old school bettors do compete against statistical and Big Data crunching sportsbooks and unless the fix is on, they lose on wagering like most everyone else in the long term. Betting in Las Vegas is legal yet most sports bets, Super Bowl pools and NCAA tournament brackets are done on the black market and off shore to the tune of $80 to $300 billion dollars of untaxed money, according to the PBS Newshour report video. More and more federal, state and local taxes are being raised to pay for medical care, infrastructure improvements and increasing longevity so why not consider regulating gambling so the government can tax the revenues like marijuana and use the profits to fund desperate programs such as education. Is legalizing sports gambling a mad idea? Video by PBS Newshour New Jersey Atlantic City is home to casinos and race tracks but since online betting became popular, gaming has suffered resulting in the closure of once thriving hotels, sportsbooks and the elimination of jobs. New Jersey wants to bring in $100 million a year in new state gambling tax revenue and after four year of referendums and legislation, it just might happen if all goes according to plan. New Jersey Republican Congressman, Frank LoBiondo, is trying to pass a bill to opt out of the Federal law known as PASPA or Professional Amateur Sports Protection Act. It was instigated in 1992-93 by N.J. Senator Bill Bradley, American Hall of Fame member and former NBA All-Star, and created to make sports betting illegal at federal levels. Five states including New York, Indiana and South Carolina have tried similar motions. Arizona Republican Senator, John McCain, even flipped his stance on sports betting and now wants the Senate to hold hearings and debate it. Monmouth Park in NJ built a first of its kind sportsbook outside of Vegas with the hopes that betters will come and place legal bets. The reason it is not operating is because the NBA, NFL, MLB, NHL and NCAA sued NJ stating that by allowing betting, it would jeopardize sports and make fans think rampant cheating is ongoing. Stories about the mob getting to players are true. One example was the fix in 1994 by a NCAA tournament point shaving scheme. NBA commissioner Adam Silver is against the state-by-state plan and wants a federal plan to take precedence. NJ is presently arguing at the Third Circuit Court of Appeals in Philadelphian and if it passes, legalized gambling will happen within weeks of passage. The key issue being decided is whether it is better to have criminal groups run illegal gambling as is happening now or implement state run regulated groups. If people gamble online, via lottery or inside a casino, they often become addicted and end up not being able to afford it or worse. Legalizing gambling will indeed create easier access resulting in more sickness but is it really that much different than a neighborhood poker game or Super Bowl pools? In the end, losing money is inevitable for virtually all gamblers. Fantasy Sports Fantasy sports are free and legal resulting in a huge boom because players are used to the formats and love the fun factor. This recreational approach is not considered a game of skill since NFL, NBA, MLB and NHL fantasy leagues are put together by owners who draft, trade and pick up free agent players on many different pro teams, not just one, making the weekly, weekend or daily results unpredictable in essence. Even though many leagues use free or pay services provided by the likes of ESPN, CBS Sports and Yahoo, league winners are often paid cash provided by entry, trade and free agent fees collected by commissioners and tallied online by the providers. The latest rage is daily fantasy sports because users have chances to win $1 million in prize money from industry pioneers such as FanDual and DraftKings. MLB has a 162 game season, NBA and NHL have 82 games and the NFL has only 16 games but it is stretched out over five months. The newer daily fantasy format rose to fill the need for quicker outcomes and payouts. Again, these are not considered a game of skill so it does not constitute gambling. Sportsbook Culture in Europe and Asia The European and Asian betting culture has been morphed into daily life. The problem faced by professional and amateur sports overseas is the ongoing match fixing worldwide with football and tennis. In order to protect the integrity of game, match and game fixing at pro and college level in the US must not be allowed to reach what has happened throughout Europe, Asia and Africa. Players, refs and even coaches are fixing or shaving game points because of bribes. Three years ago when I was invited to be an official blogger at the Global Sports Forum Barcelona, discussion were held about match fixing and then 300 matches in Europe were fixed two years ago, including World Cup and European Soccer Championships qualifying. In 2007, the FBI investigated NBA official Tim Donaghy and found him guilty of affecting the point spreads of games he bet on. Look for UK based, William Hill betting parlors to eventually make their way to cities across the US should gambling become legal outside Vegas. Social Media Believe it or not, social media affects the line and bets. Loshak shared with me his knowledge of syndicates and pro betters who target the NFL preseason, not so much for hard stats like wins versus not winning preseason games, but rather how one person reads twitter feeds for 60 hours a week just to try and gain an edge. Social media is an extremely valuable source and tool for both sportsbooks and bettors. The amount of inside information distributed on Facebook, Twitter and other social platforms is astronomical. Intangible info such as subtle injuries, starters that may sit or new offensive formations and alignments that might be used all cause the line to move allowing aggressive bettors to jump on the line movement. Gathering this information during the regular season is not a good long term way to make money on betting but sourcing news over social media is indeed a valuable asset whenever applied to rational, sportsbook decision making. [caption id="attachment_7188" align="alignnone" width="700"] Sportsbook Review March Madness[/caption] Sports Techie, I asked Loshak what a startup sportsbook business needed to launch. He replied, “A large bank roll, no matter if bets are cheap or big you need to be able to cover wins and losses. Software and an office are a must as is labor good. They are popping up in Panama and the Philippines now. Hire people who know marketing. It is a saturated market so try Europe and Asia.” Sheldon Adelson is chairman and CEO of the Las Vegas Sands Corporation and Loshak said his gaming influence is well known. Vegas has a clear monopoly on the sportsbook industry, something the leagues and NCAA are in agreement with Adelson, needs to stay the same. The feds are just starting to get politically active but there is no pro gambling lobby like there is a pro weed force in the US. This too will need to be overcome if sportsbooks are to become legalized. I wondered whether savvy one percent bettors like boxing great Floyd Mayweather, could change lines by laying down millions of dollars at the last seconds. Loshak said with handicapped bets, advanced statistics and mathematical models create big losers and not long term winners so not even sharks have any edge. We talked about about Olympic sport betting, something the IOC frowns upon. He agreed and says sports’ betting is now mainstream. Betting on MMA and the UFC began with a bang and has since plateaued but Americans seem to have interest in soccer, particularly the Premier League and MLS. The bottom line is this, get ready for legalized gaming because resistance is futile just as it was for marijuana and will be for those idiots who say global warming is not real. Sports tech has truly evened the playing field so if you need March Madness betting advice, give SportsBook Review a chance to perform for you. See y’all later in Seattle and here in Atlanta. 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