Sports Betting Ring Arrested

This week, authorities arrested 25 people across the country, accusing them of participating in an illegal sports-betting ring.  Of those, one of them was currently a sports book director for Cantor Gaming, a leading sports book operator in Nevada.  This person also holds a Nevada gaming license.

According to the story in the Las Vegas Sun, this conduct apparently was limited to this person's individual activity and did not involve Cantor Gaming.  If it did, that could be quite damaging to Cantor, as this activity easily can be foreseen to jeopardize Nevada gaming licenses, if a license holder is actually found guilty of this conduct.

The key lesson to be learned is that although the gaming legal environment in the US is becoming more friendly, it is not totally friendly yet.  With regard to sports betting activity that crosses state or national boundaries, it is still quite unfriendly and illegal.

Those US operators that might want to get ready for legalized online gambling should use this event as another sobering example that extreme care should be undertaken with regard to having any activities in concert with non-US online gambling interests.  With regard to sports betting, US interests would be safe and wise to steer clear of non-US online sports books, regardless of where they are licensed outside the US.

New Jersey Moving Ahead with Sports Betting

The Associated Press is reporting that New Jersey plans to begin issuing licenses for sports betting as early as January of next year, even though the lawsuit attempting to block this expansion of betting is still in process.  New Jersey continues to be aggressive, putting more pressure on the legal process to concede that historically the conduct of gambling within a state's borders has historically been up to the states due to the states' plenary police power, not given to the federal government under the Constitution.

New Jersey, if it prevails, will have shown its methodical attack on the legality of PASPA was well crafted and executed, both on a legal and political basis.  It is my view that New Jersey will ultimately prevail and each state will decide for themselves if they desire to have sports betting within their borders.

Sports betting is desired by the voters of New Jersey, as shown in this year's poll.  Also, Californians are also in favor of sports betting, with a bill to authorize getting just a step away from making it to the governor's desk for signature.  I expect that bill to be revived next spring.  You can read the blog posts on these polls here and here.

For online operators, don't expect any opportunities in the short-term as this betting will be done at physical locations, not online.  Only online pari-mutuel horse race betting will be the only authorized online sports-related gambling in the USA for quite some time.

Can You Really Beat Craps?

There is a school of thought (albeit a minority) that thinks you can turn the house odds on craps to the player's advantage.  I won't go into the various schemes in detail, but the concepts deal with betting systems and patterns, counting the number of rolls a shooter has while still not making their point, setting the dice before throwing and how you throw the dice.

There hasn't been any solid research that proves that craps can be beaten or in other words, no research that shows how the house advantage can be swung to the player's advantage like in blackjack.  Yet these theories continue to exist.  Proponents may be able to show evidence that using their techniques, some positive results have occurred, but that is more explained by short-term variability and low number of trials observed.  These techniques will be unreliable as the long-term mathematical advantage takes over.

For example, let's say I have a craps theory that says you need to blow on the dice and say "no seven" before throwing.  I do that for five throws.  The first four throws indeed are not seven, but the fifth throw is a seven.  Can I say that my system gives an 80% chance of preventing a seven from being rolled?  Sure.  Would you be willing to risk your money at a crap table using that advice?  I certainly hope not.

What got me on this topic was an article in the October 2012 Casino Player magazine.  The article described various techniques of throwing the dice to obtain an advantage.  For a legal throw, the dice need to hit the far wall, so they hit the wall and bounce off the rubberized surface.  The wall of the crap table is lined with rows of pyramid-shaped spongy material, which when the dice hit, tend to have the dice bounce back and in a slightly different direction.  The intent is to keep the dice throws random.  If no such rule existed, players might just line up the dice the way they want and simply drop them on the table or do things that don't really qualify as a roll.  Given this rule, dice rolls are random enough that the game still keeps its mathematical house edge.

Players that desire to use dice control to help their chances try and throw the dice so that the dice get all the way to the far wall, touch it, but just barely.   Their desire is to roll the dice so that their number is up and it is up right at the far end, but not have enough energy to actually bounce off the far wall.  Ahem...  Like that happens with any regularity.  Also, at a busy table, how does the shooter avoid hitting other betting tokens on the table before hitting the far wall, thwarting their efforts?

This article goes in a different direction.  This article states you need to throw the dice so that the dice hit the tips of the rubberized pyramids in such a way that the dice bounce back directly in the line of throw.  I laughed so hard when I read that I was crying.  The author even states that it would be doubtful for even the most expert of "dice controllers" to acquire this ability with any degree of consistency.  Regardless, the author introduces the reader to such phrases of Newtonian physics such as "double point hit," "single-point pop," and "stoopball effect."

I have two degrees in electrical engineering, which require a certain amount of courses in physics, statistics and materials science and I've never heard of such terms.  I'll need to go back to my university and request a refund of my tuition.

So why does the author put this on paper?  Well at the end of the article, it is disclosed that the author has books which you can buy to learn all about beating craps, to include a DVD showing how to throw the dice.  Also the author has a book on how to beat slot machines...riiiiight.

Seattle / Green Bay Disaster - Incompetence or Worse?

The horrible call that ruled a Green Bay interception was actually a Seattle touchdown, giving the game to Seattle, was probably one of the most horrible calls ever in the history of the NFL.  Since it was committed by the replacement officials, it puts even more pressure on the league to settle the labor dispute before any more damage has occurred.  The story on this game and the video of the play can be found here.  But the officiating appeared to be very weird in that Seattle was the ultimate beneficiary.

Many people were unhappy about the result, but in the stories and other aftermath, do you know which group of people were happy with the result?  Bookies.  According to BeyondTheBets, 77% of the money wagered was on Green Bay, favored by 3 points.  The final score was 14-12 Seattle, so with the point spread, 14-9 Seattle.  Remember for this to happen, the referee had to rule a Green Bay interception was a Seattle touchdown.  If ruled correctly the final score would have been 12-7 Green Bay, or with the point spread, 9-7 Green Bay.

So let's take a look at how a bookie's economics look assuming 77% of the money is bet on Green Bay if Green Bay beats the spread or doesn't beat the spread, assuming a total amount bet of $1,000,000.  Also, we're assuming straight bets, where you need to bet $11 to win $10.

In this scenario, $847,000 ($770,000 + (.1)*($770,000)) is bet on Green Bay - 3 and $253,000 ($230,000 + (.1)*($230,000)) is bet on Seattle +3.  If the call was made properly, Green Bay wins the game outright and against the spread.  The bookie needs to pay the Green Bay bettors their $847,000 in wagers, plus their winnings of $770,000 - a total of $1,617,000.  The bookie can offset this with the Seattle wagers of $253,000, but that's not enough.  If Green Bay won, the bookie would lose $517,000 on every $1,000,000 in baseline wagers (not including the 11/10 vigorish) if 77% of the money was bet on the side that actually prevailed against the spread.  Ouch.

But that didn't happen here.  Since the officials ruled an interception was actually a touchdown for the other team, Seattle wins the game against the point spread.  The bookie does much better!  For every $1,000,000 wagered in this scenario, the bookie only needs to pay the winning Seattle bettors their $253,000 plus their winnings of $230,000 - a total of $483,000.  The bookie offsets this with the losing Green Bay wagers of $847,000, giving the bookie a profit of $364,000.  Big difference between losing $517,000 and profiting $364,000.

Assuming $100 million was bet on this game, with the weighting of bets and spread, that call turned a bookie LOSS of $51,700,000 to a bookie PROFIT of $36,400,000.  Don't let the stories in the news fool you to make you think that the money just went from one group of bettors to the other.  It indeed do that but you must take into account WHERE that money came from.  If to Green Bay, money would have to have been PAID by bookies out of their pocket but since Seattle won, no money had to come out of their pocket as the Green Bay bets ensured a big bookie profit.  If a book is balanced with equal bets on both sides, the bookie gets a 4.5% profit.  On $100 million wagered, that would be a profit of 4,500,000.  Not bad.  They got in this case about 8 TIMES as much profit.  Think about that...

So, you may say, $#!+ happens, right?  Well if you watched the game, this wasn't the only interception Green Bay had that was wiped out.  Also, it appeared the calls were very much in favor of Seattle whenever the game outcome against the spread was in doubt for Seattle.

When Green Bay took the lead, they intercepted Seattle on their first play after the Green Bay kickoff, deep in Seattle territory.  An official, however, called Green Bay for roughing the passer, negating the interception.  I saw the play - no roughing.  The Seattle QB was throwing and the Green Bay player was actually at the QB's feet trying to tackle him by grabbing the legs as opposed to a hit up high which can lead to typical roughing activity like contact with the helmet.  Didn't happen and it wasn't a late hit.

But Seattle apparently needed more help.  Later in this series, Seattle had a 1st and 25 (due to their miscues) and threw a deep pass.  The Seattle receiver actually interfered with the Green Bay defender, who had good position, was looking back at the ball and was trying to make a play himself.  The Seattle receiver grabbed the defender at the shoulder, twisting him and even appeared to grab his facemask.  The result?  The Green Bay defender was called for pass interference, a 32 yard penalty.

Now this series ended up at the Green Bay 7 yard line, where Seattle went on 4th down and didn't try a field goal.  If they had and made it, but didn't recover the onside kick, Green Bay would have won the game 12-10, but would have lost against the spread 13-12.  For the bookies to make money on this game, Seattle needed every single break that came their way.

One more thing, but just a conjecture.  Given the side of the field where the pass interference penalty and where the touchdown call was made, it's possible the same official made both calls.  Would have to see the games over again to try and find out the official's number for both of these calls. 

Do I think the game was fixed so Seattle would beat the spread?  I certainly hope not.  These replacement officials are bad.  Remember Hanlon's Razor:

   "Never attribute to malice that which is adequately explained by stupidity."

That being said, I don't think the NFL had the time to properly vet each of these officials from a security standpoint.  Recall the story a couple of weeks back where the NFL scheduled a big Saints fan to officiate a Saints game?  The story can be found here.  Given the money in professional sports here in the US, the players aren't the weak link - it's the officials.  Aren't paid that much and are fairly anonymous, not like players and coaches.  The NBA had a bona fide gambling scandal with officials a couple of years back.  You can read that post here.