Sportsbook Industry: View from the Inside

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Sportsbook Industry: View from the Inside

 

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Whether sharp, square or somewhere in between a theme I sometimes read on the forums is:

"BetUS sucks"

"Bodog is horrible"

I hear it from people who are pretty sharp on not only betting, but in their understanding of the industry. I hear it from the squarest of the square. I hear it from those who sound sharp, but are actually clueless on how everything works. But I wonder how this guy feels about these rants

Accept Transaction Reset    Edit Player

Transaction Information

Method of Payment:    [or credit card charge back]

Transaction Type:       

Amount:  

Action Breakdown

Total Action        $113,935.00 ††(includes pending wagers)

Risk to Player    $113,935.00 ††(all resolved wagers)

Risk To House    $103,410.00 ††(all resolved wagers)

Net To Player     ($1,075.00) ††(all resolved wagers)

Hold:         0.94352042831439

Current Balance $25445.00

Notes About This Transaction:

Personal Information

Player Name:     XXX XXXX

Address:    XXXX

Encino

CA

91436

US

Phone:       XXXXX

Referred By:      XXXX

Initials:     XX

Password: 5656

E-Mail:       XXXX@aol.com

 

See that amount of $25,000+ in his current balance? That WAS the amount in his account when Camelot Sportsbook closed up shop and stiffed everyone who was owed money. To understand why a place like Camelot went "busto" and why a place like Bodog and BetUS have been raking in tons of money over the years you need to go back 10 years or so. Our story begins with a young fellow named Johnny Detroit and his launching of a site based off one of his favorite movies "Let It Ride". Originally, I had a site on a "free" web-hosting service called GEOCITIES and talked sports and handicapped games (which usually lost). As the site grew in popularity,  I registered the domain LetItRideSports.com in 1999 and bought a copy of Microsoft Frontpage. In May of 2000, the new site went live (LINK) and along with some of the popular forum posters of the day we hit the web. At this time it was only a hobby. I was booking some small time action and betting at the same time. Most of the knowledge I had came from an old school book from the 60's/70's who was now in the twilight of his career. "Bookstore Eddie" died a few years back, but was "old school" and was involved during the glory years of the The Detroit Partnership/Combination. Obviously if he was still alive I would never say his name or be sharing this, but this is how old school he was> LINK (from 1974 when Ed (Edmond Burdziak) was caught up in a small bust) We would meet at a place called 3 Nicks on Warren Avenue in Detroit. Total dive bar that was packed with bikers, bookies and other scoundrels. So with my love of gambling, knowledge from "Ed" and being in the infant stages of the business I was off.

This was the boom time for the industry as sportsbooks and portals were popping up left and right. There were no issues with sending or getting money and you could even use PAYPAL to deposit/withdraw funds! Since the web site was more of a hobby, my full time gig was an investigator at Ford Motor Company making good money. A friend of mine from the forums (Nittany Lion/Betting Prophets) one day goes you should ask a sportsbook to advertise on the site since you have good traffic. Having no clue what to expect or ask for, I called my friend who owned Grand Central Sports. (Quick note: At this time, all the books did not have these massive marketing machines as "marketing" was handled by the owner. If the book had a marketing department, it basically was one other person who was responsible to send you a banner and promo information). I am sitting at my desk and talking to Peter (everyone offshore used fake names) and brought up to him potentially advertising for the upcoming football season. Mind you, I have ZERO clue on what to expect. So Pete pauses for a second, takes a deep breathe and goes, "JD, I like you and you have a nice site, how about $8000.00 for football?". Remember, I was doing this for fun, had a full time gig and was hoping to get like $500.00 or something to put up some banners. To this day, I recall hitting mute on my office phone, taking a deep breathe and going "Holy F***ing S**t....". I went back to the call cool as could be, closed the deal and called back my friend telling him what happened and asking what the hell an insertion order was because Pete needed one. I called a few other books and quickly learned it was a land grab for these sprouting sportsbooks and all you had to do was say Sportsbook X is on the site and they were fighting to write checks and get their banners up on your site.

It was a glorious time. Wise guys were all over the place.-Henry Hill


As I mentioned, during this time you dealt either with the owner himself or someone who sat 10 feet away from them. Since there were tons of ways to send money (including PAYPAL), money was flowing back and forth to everyone and the industry exploded. Being lucky enough to be around in the beginning, I built relationships with some of the sharpest people in the business. Almost like the infant stages of Las Vegas (pre-corporation), it was street guys who ran the show. Bookies who were tired of getting doors kicked in, picked up shop and went offshore to set up a web site to take bets. Unlike now where EVERY book moves at the same time regardless of their in-house action and across the board the lines are the exact same, these guys had "balls" and took stands and moved when and how they wanted. This was a scalpers and middlers paradise. Since everyone was trying to do a land grab, the funds were endless for advertising and bonuses. Literally you could toss up a bunch of sites and the books would send you a check to be on each one. You could fund a few books with PAYPAL, get a CRAZY bonus from each and in a few days scalp and middle the money out with no risk and pocket the cash. The sky was raining money and everyone was living the dream. But like with anything in life, what goes up, must come down.


Like sharks to blood, the wiseguys flocked to get into the money falling from above. People like Billy Walters (LINK to a great story on him and the Computer Group) did not have to focus only on locals around the country using beards to move money around. With everything offshore, not only could they open up tons of accounts, they were getting 100% bonuses to do so! Now, these guys offshore running things were sharp, but outside of people like Spiro at Olympic, Henry at Pinnacle and a few others, these "internet bookies" stood no chance against the "internet wiseguys" like Billy, Kosher Boys, Tiger, etc. The once friendly sportsbook owners now started to coin phrases like "bonus whores". Even people offshore I was "super cool" with would make comments that scalpers and middlers were "lowlifes" (including the ones who taught me how to do it). The slippery slope was becoming more slippery each passing month.

The first signs that began the downfall was sportsbooks not making good on transfers. See, in the beginning almost all of the books knew each other and you could move money book to book with a simple phone call or email request. So for example, say you hammered BetUS for a ton of money. In those days you could call BetUS and say I want to transfer X amount to Bodog, Y amount to JustBet, etc. In a few hours the money would be credited and business went on. Each sportsbook kept a running tab on who owed who and everyone was one big happy family. Since most owners of the sportsbook were available on IM or phone, industry rumors, gossip and back-room stories were everyday discussion. It slowly seemed more common to hear book X was no longer planning to do transfer with book Y. Even worse some of the rumblings were about past due amounts and tabs getting close to six figures.

When New England Patriot's kicker Adam Vinatieri kicked a 48 yard field goal in Super Bowl XXXVI to upset the 14-point favorite St. Louis Rams it shocked the sports world and started a chain reaction that would change the sportsbook industry forever.

Charlie Therwhanger was a bookie from Texas who went offshore in the mid 90's to run his phone operation and by the late 90's had an online site that was considered one of the industry leaders; Aces Gold. Aces offered low juice and was known to take a stand on a game and was a "bookmaker's bookie". If you middled or scalped during this time, Aces Gold was a "must out" and everyone who was anyone played there. This not only included the grinders, but "wiseguy bettors" and other offshore bookmakers. Behind the scenes Charlie was slowly running up debts and trying to go "toe to toe" with the sharpest betting minds was starting not to be such a solid business model. Whether urban myth or fact (I have talked to many people offshore who claim 100% fact), Charlie decided that based on his opinion and the opinion of some respected "sharps", the St. Louis Rams would destroy the New England Patriots. The line on the game was -14.0 at 99.9% of the betting world. The lone hold-out was Aces Gold who proudly put up a -14.5, thus getting everyone who wanted Patriot action (teaser, spread and (cough) moneyline) to bet with him. Toss in all the middlers who did not mind a free +14.5 and -14.0 on the Super Bowl he was essentially ALL Patriots action. Around 6:40pm EST on February 3, 2002 the Super Bowl was over and the New England Patriots defeated the St. Louis Rams by a final score of 20-17. Within two weeks the unthinkable happened and the house of cards started to fall.

February 15, 2002 is the official date Aces Gold closed up shop and Charlie fled Curacao. The aftermath was over $5 million owed to players and sportsbook owners. With close to a million of the five owed directly to other bookmakers either from betting accounts or credit transfers, nothing would ever be the same in this business.

Despite the crash of Aces Gold, most of the operators continued to offer crazy bonuses and have an open door policy to the very people that helped destroy Aces. Even though the claim for the bonuses was to gain customers, many people will not admit it was to keep money coming in to try and pay the money that needed to go out. Everyone was treading water and all the sportsbook ran by "street bookies" started to drown.

The next big thing was Bet Pan Am. They had great minds from various sportsbooks working there and the forums were going crazy hyping up the "next" Pinnacle. Reduced juice, not moving on air (IE, taking a stand on games) and not fearing middlers/wiseguys, they were going to align the stars again and all would be well in the betting universe. Close your eyes and count to ten. That is about how long Bet Pan Am survived (actually was only four months!) before they had to close their doors and it was one of the last attempts by "street guys" to open and run a new offshore on a major level using the "take all comers" business model.

But in the end, we fucked it all up. It should have been so sweet, too. But it turned out to be the last time that street guys like us were ever given anything that fuckin' valuable again.-CASINO

I can't remember the exact order of when they fell, but it seemed every few months a new book was having money troubles out of the gate or a "respected" shop was slow paying or offering 100% bonuses to try and get an influx of cash. Just off the top of my head, here is a short list of places that I played at on post-up or credit that never survived the evolution of this industry:

Aces Golds
Alladins
Bet Camelot
Bet Pan Am
Blue Marlin
Bookie Joint
Dunes
New Age Bets
Premier League
Sports International
Sportsbook Paradise


The writing was on the wall, unless you were Cris, Greek, Pinnacle or a handful or sharper outfits (even many of them were gobbled up or bailed out by other sportsbooks), trying to book like you did back in New York or Texas was not going to work offshore. Even though some smaller places were already trying to change their model, the new industry leaders decided to focus on "marketing" and leave the "lines/odds" to the people like CRIS and Greek. Why try to outsmart the professional bettors when you could just follow Henry and Spiro, not cater to the sharp bettors and spend all your resources on marketing? Enter Bodog and Sportsbook.com.

Unlike the founders of the industry who did the marketing themselves or pawned it off on a lackey sitting 10 feet away, people like Bodog took it to not just another level, but another universe. An industry friend of mine was in the room when Calvin decided "The Big Book" was not the brand to market. He wanted something unique, creative and that could not be associated or confused with something else. Thus, the name Bodog was born. I can still remember being in a standard room at the Mirage with Calvin and some other industry friends listening to him talk about banging a waitress in Amsterdam and in the matter of a few years he is on the cover of Forbes being called a billionaire with a "B". Unlike the old way of doing business, they created marketing machines that tracked and audited every little detail. They created content, learned SEO and sent out teams of smoking hot girls to events around the country. In the matter of years Bodog could buy places like CRIS or Greek with the money found between the cushion on their couch.

Using this new model of "bookmaking", places like BetUS came on the scene and a new generation of sportsbooks started to make their mark in the industry. Unlike the old days of the marketing plan of a sportsbook consisting of just having a banner somewhere, the "new school" have entire teams of marketing experts and brainy types who run everything like a well oiled business. BetUS or Bodog have a building full of marketing people, where when I dealt with Olympic or Pinnacle there was a marketing "person". You literally called and dealt with that one person. Pinnacle at one point had three people you could deal with.

When you watch the lines now, CRIS or Greek sneeze and every sportsbook (including Las Vegas) jump. If they have 90% of their action on Team A -7.0, but CRIS goes to -6.5, they move to -6.5. There is no more taking stands by the large offshores. All the new major players in the offshore industry are of the Bodog mold. The "street guys" are still around but confined to online "credit only" shops with wacky names like Bet Kodiak or Fat Moe. Outside of the ones who weathered the storm, all the major players now are not "Vito the Bookie" but "Chip the Businessman".

Today it looks like Disneyland. And while the kids play cardboard pirates, Mommy and Daddy drop the house payments and Junior's college money on the poker slots. In the old days, dealers knew your name, what you drank, what you played. Today, it's like checkin' into an airport. And if you order room service, you're lucky if you get it by Thursday. Today, it's all gone. You get a whale show up with four million in a suitcase, and some twenty-five-year-old hotel school kid is gonna want his Social Security Number. After the Teamsters got knocked out of the box, the corporations tore down practically every one of the old casinos. -CASINO

Personally, I can't stand the way the industry is now. Just like "Vegas Wiseguy" Frank mentions in the interview I did with him at the Pregame offices, there is no gamble left. They want donations. At the same time, for 95%+ of the betting public who do it for recreation and not grinding out middles or moves, places like Bodog and BetUS are the best option possible. There was a run where every few months a major offshore was closing up and stiffing, but since the switch to the "no wiseguys allowed" policy when is the last offshore you can name who closed for lack of funds? Bueller? Bueller? Anyone. Sure, us grinders hate getting a dual line or a delay before our bets are confirmed. But for the average bettor the current selection of sportsbooks have endless funds and in the end the most basic concept of bookmaking is followed: you win, you get paid. you lose, you pay. Simple as that. I lost count over the years of all the claims about BetUS or Bodog stiffing or having money trouble. Fact is, ANY issues on payment delays have been the result of a processor or the government putting pressure on a bank. People can say what they want about the policies or rules of the new school books, but BetUS, Bodog, Sportsbook.com are 100% safe in regards to your funds. They protect themselves from betting syndicates and "bonus whores (that one is for your Peter)". All these decisions that people complain about are decisions that books in the past failed to make and in the end cost players millions of dollars in money never paid out.

Instead of bitching about profiling and restrictions, be happy someone like Billy Walters is not allowed to play at a Bodog or BetUS. BetUS is not going to be CRIS or Greek, but at the same time, they also will not end up like Aces Gold.

Would love to hear feedback and comments from everyone. Especially those who remember the run of book after book have issues and the word "slow pay" becoming part of a bettors vocabulary.

Props to Cheech who motivated me to recap my time in the sportsbook industry. Plan on turning these into a video series with actual interviews with people offshore who were involved during this time.

Regards,

Johnny Detroit's Personal Selections | Follow JD on Twitter

Johnny Detroit, Co-Founder and Vice-President
Bettors get ready at Pregame.com

1-800-PREGAME | johnny@pregame.com
AOL/YAHOO IM: johnnypregame
MSN Messenger: jd@pregame.com


 
  • Here is a great listen for those interested in the topic: www.blogtalkradio.com/.../johnny-detroit-show-state-of-the-offshore-industry

  • Johnny, just saw your question, I came back to read your write-up again.  To answer your question, my primary residence is in Ft. Lauderdale, but love Vegas.  That is why I had asked you about that other thing a few weeks ago.  I am going back to the strip again June 10 for a week.  Still interested in that topic though.  You have my email.  Best to you and the family.

  • No worries. I actually have the customer list of when Aces went bust. Some of the amounts are INSANE people were stiffed on.

  • JD I thought I already commented on this last week but n e ways just wanted to say great read and I commend you for retaining all this info throughout the years to share with each of us.  Keep the great stories coming my man!!

  • Thanks guys. Fish you live in Nevada?

  • just as informative on the 2nd read ;)

  • Always look forward to your dialogues, I find them a wealth of information and value to someone like me.  Would love to personally meet with you someday.

  • Good read for all the offshore newbies.

  • sqaure1: that avatar should be edited ASAP :)

  • Thanks.  I am lining up guests to talk about the "old days".

  • Good stuff JD.  Look forward to the video series.

  • jd=brainer

  • jd=brainer

  • The far Christian Right are not fans of "sports gambling" and the senators/house with those people in their voting base have no choice but to listen.Not a fan of Barney Frank, but he is 100% for legalizing.

  • Johnny why do you think they don't legalize it all over the US it seems so stone age now