Betting revolution sweeps Vegas' gaming industry
LAS VEGAS – Deep in the musty corners of the old fashioned sports book things are changing. This may be the last Super Bowl gambled in the traditional way of walking to a window, placing a bet before kickoff and watching the game to see what happened. A revolution appears to be coming, one started as an experiment two springs ago at a new casino resort miles from the strip. There, Cantor-Fitzgerald – perhaps more known to most Americans as the company that was nearly destroyed in the World Trade Center – opened the sports book at the M Resort Spa Casino with a most untraditional question:
What if you could place bets during games, as they have done for years in Europe?
The only way to properly do this, however, is not with a window or a line of bookies but rather a handheld electronic tablet, almost like a heavy iPad. And the key to this is a computer network tucked away in a small one-story building not far from an interstate off-ramp. Here the computer churns through 30 years of statistics and trends and situations from every team and every player in every sport, running them though a series of algorithms to determine possibilities.
Here the computer instantly decides what the chances are that a football team will have to punt or a baseball player can steal second base, then it spits those odds onto the tablet and the betting is on.
In a city where every new casino is seemingly outdated in a year, where trends rise and fall with the daily sun, this is the first great new change in sports betting in decades. And so it is moving rapidly across the city. Cantor now has deals with several other casinos including the new Cosmopolitan, the Hard Rock, Tropicana, The Venetian and The Palazzo.
By the NCAA tournament, Cantor Gaming's CEO Lee Amaitis hopes to have state approval for an application that can be downloaded onto most smart phones at one of his books but can be used anywhere in Nevada. This means a fan can not only bet on games but on single plays at the pool, out hanging with the wife or in front of the television in the living room.
"I'm trying, I'm really trying," he says about the mid-March timeline.
When that happens, legal betting on football – or any sport – will change forever.
"The 8,000 feet of whatever this room is will become irrelevant," says Andrew Garrood, a one-time mathematician who is responsible for the algorithms that churn inside the computer.
Cleaning up the image
Sports gambling in this country has always had this tawdry image; run by scruffy men with nicotine-drenched voices. For so long the Vegas sports book has been a dreary place, shoved to the corner of most casinos, away from the happy dings and jangles of slots and the showy excess of the high-stakes card tables. It's the place where men in dirty sweatpants pick food off their shirts while locking eyes on any number of giant screens flashing horse races in front of empty stands.
It is the domain of the degenerate and therefore unappealing to the shiny Las Vegas.
And while betting on the final score of a football game next to a man frantically circling pages in the Racing Forum, grumbling about the fifth at Aqueduct, might not seem like investing in the stock market, it is – of course – the same thing. Each is a calculated wager on a yet-to-be-determined result.
However, sports betting just looks dirtier because you either have to do it illegally over the computer or walk up to a desk at a sports book and make the bet in-person. Either way, it doesn't feel tidy.
The tablet changes this. The tablet is private. The tablet is clean. With the tablet you are instantly presented with a menu of wagers that have nothing to do with the final outcome but something so seemingly controllable and predictable as a team's ability to move a football 10 yards in three plays. A couple taps of the screen, a quick confirmation and if a minute later the quarterback throws a 25-yard completion a new, richer account balance flickers on the top corner of the screen.
"You have a computer, you have an account, you're betting all day," says Amaitis a one-time Wall Street bond trader. "That's Wall Street."
It's so simple, so clean, you don't even realize you've just been charged a little less than 2 percent of your bet.
In Vegas terms this is the vigorish, or the vig – the small sum taken by the bookmaker for accepting your bet.
In online stock trading this is simply known as a transaction fee.
In both cases it is how the companies make money. Cantor figures it can.
The difference, too, is the computer. The computer has no emotion. The computer has no soul. The computer is not moved by silly human reactions to how teams looked in the last couple of games. It doesn't care what a bookmaker across town thinks of the Green Bay Packers. It makes its own calculations and spits out its own line that often differs from everyone else's. And at the same time it holds the probabilities of thousands of in-game possibilities, ready to process them in a time shorter than the referee can blow his whistle.
"We know that the last two minutes of a half in football are very lively and you get more points scored in those last two minutes," Garrood says. "Those last two minutes are quite point-happy. Therefore the distribution of points in a game isn't equal. The 12th minute isn't as valuable as the 30th minute."
The computer knows this, even if the average fan does not.
Garrood seems, in some ways, out of place here. He is well-dressed in a light jacket and slacks on a football playoff Sunday. He is also British and his elegant descriptions of his gaming device contrast with the guttural hum of the bettors around him. As he speaks, the AFC divisional playoff game between the New York Jets and New England Patriots comes on the screen. This is the game everyone in the room has come to see. The buzz is measurable.
And as the game plays on the giant screens in the front of the room, Garrood sits in the back patiently explaining how betting on the tablet he holds is like trading stocks. He says that while there are algorithms for all sports, football does seem to be the best sport for in-game betting. The flow of the game is perfect, the situations ideal for quick bets.
"The computer knows trends," he says. "The computer knows where teams are strong and weak."
As Garrood explains this, the Jets score a touchdown just before halftime to go up 14-3. There are shouts of surprise from the bettors around. Shock fills the room. Garrood smiles and says:
"Well, the Jets should win this now."
He says it with great certainty, the way any football fan sensing a shift in momentum says such things. The only difference, as he walks away, was the assuredness with which he said it – as if he had already absorbed the statistical probabilities and understood a truth the rest of us could not yet comprehend.
But then the computer has devoured piles of statistical information and trends and has examined every tendency it could of the Jets and the Patriots. There is a history of these teams, there is data that says how they handle such situations. And regardless of the brilliance of Tom Brady(notes) or the wizardry of Bill Belichick, the raw numbers gave a strong advantage to New York regardless of where the game was being played.
"The system doesn't get beat," Garrood said.
It will predict games incorrectly. It might not account for a 21-point surge in five minutes of a football game or an 18-0 run in an NBA arena or five home runs on a foggy night at Yankee Stadium, but more often than not it is right which is all Cantor needs.
Especially while the vig keeps rolling in.
Keeping up with the action
But how well does the system work? To test the tablet I handed it to a friend visiting from Los Angeles, pointed to the fake account set up by Garrood ($577) and watched him bet as the second half started.
Immediately you could see the challenge to in-game betting. Everything happened so fast. As soon as a play ended, the index of current betting options popped up on the screen. Would the Patriots get a first down on this drive? A couple of taps on the screen eventually revealed we could win $11.53 with a $40 bet saying yes. My friend confirmed the bet just before the ball was snapped. A couple of plays later, Brady hit Wes Welker(notes) with a pass. First down.
And our balance didn't move.
In fact it took several minutes to move and by then my friend was frantically moving his fingers trying to get down more bets before the ball was snapped.
Will the Jets get a touchdown on this drive?
What's the chance the Patriots will get a first down?
Will New York have to punt?
After a time it seemed we were betting the same possibilities over and over. Touchdown, first down, punt, field goal.
First-half options, such as Will Tom Brady throw for 300 yards? disappeared in the second half. The in-game options became more generic.
Sometimes we couldn't get the bets down in time. The play came too fast, the screen cleared and the $40 we would have thrown down on a Patriots first down never left the account – just as well when a third-down pass was broken up. Maybe the computer does have a soul.
Eventually the tablet froze. We could have walked up and asked for it to be reset but the game was nearly over and still close and the fact is, when you are betting in-game you are watching a completely different game. Less is it about who might win or who has momentum, but rather the seemingly controllable and yet maddeningly unpredictable guess that a team can get a first down.
But it is fun. There is something strangely addictive to watching the balance number on the top of the device rise and fall. The more you win the more you want to keep going. The more you lose, the more you want to keep going. Your heart beats faster, you are maneuvering so fast to place a bet the down time between plays disappears. In what seems like five minutes you realize an entire quarter of the game has passed.
And that's what Cantor wants. Because every one of those taps on the screen is another vig that will offset any small gains you might make on the computer.
"We're going for the core gambler and the guy who's coming in to watch a game," says Amaitis.
All will do the same thing: pick up the tablet, move their fingers around, trying to beat a computer that hums in a building they would never notice among the glowing spires of the new Las Vegas.
A place where sports betting is finally changing forever.
