Saturday, October 25, 2008

Gambling Analyst Crunches Numbers To Cast Doubt On NBA Donaghy Claims

On October 2nd, NBA Commissioner David Stern had a press conference to discuss the Pedowitz Report, which supports the assertion from the NBA that referee Tim Donaghy was the only referee gambling on games, he did not affect the outcome of games and he acted alone.

Well, affecting the outcome of games, Mr. Stern was likely referring only to the official scoreboard outcome, not the gambling outcome. If a referee doesn't do anything that has one team win that shouldn't (e.g. the "Tuck Rule" NFL playoff game), but does do things that impact the point spread result, I suppose you could claim that the referee didn't affect the outcome as the actual winner of the game didn't change. Gamblers, however, may not see things the same way.

RJ Bell of did some analysis and found out some very interesting information. Here's a quote from his post:

"The first 15 games of the 2006-07 refereed by Tim Donaghy that had big enough betting to move the point spread by at least 1.5 points were UNDEFEATED against Las Vegas - meaning that the big-money gamblers won 15 of 15 times on his games. The odds of that happening randomly are 32,768 to 1."

For those not mathematically inclined, how did Mr. Bell come up with those odds? In spread betting, the theory is that the spread will be such that equal betting will occur on both teams. If that occurs, the assumption is that each team would have a 50% chance of prevailing, even if in real life one team may be much better than the other. The point spread tends to provide a positive handicap to the perceived weaker team. So, if each team has a 50% chance, then it is similar to a coin flip.

What are the odds of heads coming up on a single coin flip? 50% or 1/2. How about heads coming up on three straight coin flips? The probability is P = 1/2 * 1/2 * 1/2 or 1/8 or 1 out of 8. Another way to say this is that the odds of three straight heads is 8 to 1.

What Mr. Bell discovered is that for those 15 games refereed by Tim Donaghy that had such heavy betting on one of the teams, such that the spread actually had to be shifted by at least 1.5 points, the big-money gamblers were on the right side of the wager every single time. Think of it as you knowing heads will come up 15 straight times. What are the odds of that? P = 1/2 to the 15th power or 1/32,768. The odds of this are 32,768 to 1. The NBA Commissioner states that referees didn't impact the outcomes of games. That is not the same thing as not having an impact of any kind.

Tim Donaghy also made calls to another referee in this time period. RJ Bell looked into that and found 10 games refereed by that person had heavy betting on one of the teams such that the spread had to be shifted by at least 2 points. The big-money gamblers were on the right side of those wagers every time. The odds of that happening were P = 1/2 to the 10th power, or 1,024 to 1.

You really think that these gambling outcomes were random? What are the odds that 15 games by one referee went one way and 10 games by another referee went one way (in favor of the heavy betting action)? P = 1/32,768 * 1/1,024 or 33,554,432 to 1. What actually happened only had a 1 in 33 MILLION chance of happening randomly. know what I think? I don't think this was random chance. Do you?

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Saturday, October 18, 2008

New Legislation Introduced to Regulate Skill Games

Senator Robert Menendez of New Jersey introduced S 3616, the Internet Skill Game Licensing and Control Act. This bill aims to legalize skill games such as poker, bridge and mahjong. Since the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA), there has been calls for the relaxation of restrictions on games that have high skill elements, such as poker.

Although the hope would be that this bill is worked on during the lame duck session of Congress, after the November election but before the new year, my guess is that this bill will not be addressed, due to the seriousness of the recent turmoil in the financial markets and economy. Nonetheless, this does show that the desire is there by some in Congress to undo some of the draconian elements of UIGEA. has more details on this development, plus some quotes from the Poker Players Alliance. With governments looking for new revenue sources, it only makes sense to regulate these games, which now are being run from jurisdictions outside of easy US reach. Let US players play these skill games, which they enjoy, and allow them to be run in the US, via operators that are regulated and licensed. In this scenario, everyone "wins."

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Wednesday, October 15, 2008

Casino Robbed? Yes, But Not By Ocean's 11...

A bit of an old story, but yes, a Las Vegas casino did get robbed. Actually, it was the sports book at the Las Vegas Hilton. The Las Vegas Sun story talks about the heist in the early morning of Friday, September 26th.

If you've been to the Las Vegas Hilton sports book, you know it's located next to the buffet. The robbery happened at 6:15 am, which is before the buffet opens for breakfast. This buffet isn't a 24-hour operation, which was probably known to the criminals. It could have been much more dangerous if this had occurred while there was a big line of patrons just feet away waiting to get in.

With all the security, it does seem improbable that casinos can be victimized in this way, but it did indeed happen. Now the sports book is near an exit, whereas the casino cage tends to be in the middle of the property, which likely made it (sports book) more attractive as a target.

Let this be a reminder to always be aware of your surroundings. Even casinos, with large security staffs and systems, can still fall victim to thuggery.

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