Las Vegas Sun
Before Steve Fezzik put money on today's Texas-West Virginia game in
the national men's college basketball championship, the Las Vegas man
did some comparison shopping online.
A quick search of Internet sports books revealed average offers for
bets that the total points made during the game would fall under 132.
But Fezzik, a handicapper and frequent sports bettor, already knew that
a couple of Vegas casinos had better odds.
On Sunday, he bet $2,000 on the game to go under 134 at the Palms and
put another $500 to go under 134.5 at the Las Vegas Hilton.
Online, or "offshore" sports books might seem irrelevant in a town with
dozens of sports books and more than 35 on the Strip alone.
That couldn't be further from the truth.
Online sports betting sites aren't just flourishing in the rest of the
country, where sports books are illegal everywhere except Nevada.
Internet sites have found a hot spot in Nevada and especially in Las
Vegas, home to one of the biggest concentration of gamblers and a place
where bettors come from all over the world to hone their skills.
No one knows how much of this year's estimated $118 billion in online sports book bets will be made by Nevadans.
But experts say it's a large and growing number of people that includes
many pros and even more amateurs who follow sports. Analysts expect the
NCAA playoffs to attract at least $300 million in online bets, a 20
percent hike from last year. Some say the event is closing the gap on
the Super Bowl, the No. 1 betting event in the country, which generated
an estimated $500 million in online wagers this year.
"Anyone who really knows what they're doing is going to consider betting offshore as well as in Vegas," Fezzik said.
While pros have largely gravitated online, Internet sports books, like
the multitude of online poker sites that have sprung up in recent
years, are largely the realm of occasional bettors.
Amateurs come out in force during March Madness, a 65-team, 64-game
event that attracts hordes of fans who make sentimental bets that their
college team will win - or at least beat the point spread.
"They make their picks for their office pool, and now that they've
thought about it, they think Boston College will beat Pacific by eight
points," said Alex Czajkowski, marketing director for the U.S. division
of Sportingbet, the world's largest online sports book.
Sports books have become brand-conscious giants of Internet commerce.
Some of the biggest are traded on the London Stock Exchange, where that
country is in the process of legalizing online gambling. There's now a
sports book for every taste. Costa Rican site Bodog.com uses ads with
leggy models to market to casual sports and poker players, while
Pinnacle Sports is heavy on numbers rather than art, attracting
regulars or "sharpies."
Like other major Internet companies, Sportingbet has a full-fledged
advertising campaign that consists of billboards and television ads in
the United States. The company has a billboard in New York's Times
Square and in several other major cities, including Las Vegas.
"Vegas is where all our customers go," Czajkowski said. "But you can't
just jump on a plane to Vegas every time you want to place a bet."
Sportingbet, which is headquartered in London and operates its computer
servers from the Caribbean island of Antigua, isn't a law-abiding
company, according to the Justice Department. Online sports betting
also is considered illegal in Nevada, which prevents the transmission
and placement of wagers by entities that aren't licensed by the state
Gaming Control Board and Nevada Gaming Commission.
The Justice Department says Internet gambling is illegal in the United
States based on a law known as the Wire Act. Some legal experts say the
law, intended to combat illegal bookmaking by the Mafia in the 1960s,
is outdated and doesn't apply to traditional casino games and poker
games played online. But they generally agree that sports books are on
much shakier legal ground.
"I think the law is fairly clear that if you're accepting (sports
wagers) from the U.S., you're probably violating the Wire Act," Las
Vegas attorney and Internet gambling expert Tony Cabot said.
The law was clarified in 2000 when Jay Cohen became the first person to
be convicted for running an offshore gambling operation that accepted
bets from Americans. That case determined that the bets occurred both
in the United States and Antigua, and that Cohen violated U.S. law.
That hasn't deterred Internet operators, who say they are licensed in foreign countries where the wagers are accepted.
After the Cohen case, the Justice Department began sending out letters
to media companies that took Internet gambling ads saying they could be
"aiding and abetting" illegal activity. The feds took it one step
further with The Sporting News Internet and print publications. In
January, the company agreed to a $7.2 million settlement with the
government for advertising online gambling sites. The settlement
requires the Sporting News to run public service radio ads telling
listeners that online gambling is illegal. Those spots have run
nationwide, including in Las Vegas.
Sportingbet and other operators have found creative ways to promote
their wares in the United States, particularly around events like March
Madness. The company has still had difficulty running television ads,
even ads for the company's educational sports tips Web site, called
sportsbook.net.
"The Department of Justice has scared media owners into submission,"
Czajkowski said. "That was a few years ago, and every now and then (the
DOJ) will send a letter around or make a few calls. Everyone is still
pretty jittery about it."
The company's preferred marketing method is billboards, which are
grabbing the attention of potential customers while appearing to fall
under the government's radar screen.
BetOnSports, another top sports book, also has an aggressive ad
campaign that includes billboards as well as taxicab signs, public
transit posters and radio spots.
"It's been a struggle" to advertise under the Justice Department's
watch, Betonsports.com spokesman Kevin Smith said. The company, also
traded on the London Stock Exchange, is based in Costa Rica but is
licensed in Antigua, where its computer servers take bets.
Instead of promoting a nongambling ".net" site like other Internet
sites have done, the company's radio ads simply mention the
"Betonsports" brand and an 800 number where callers can learn sports
lingo and betting tips. That number is different from the number
customers call to make a bet, Smith said.
Like any maturing industry, online books are aiming to grow by
diversifying their businesses beyond just sports. Many now offer other
casino games and have been particularly successful capitalizing on
poker, which attracts many people who also bet sports.
"There's a great synergy between the two," Czajowski said. "People come
online to play poker, and they're comfortable going and making a sports
bet on the side."
Last year Sportingbet reconfigured its various Web brands so that
customers can jump from one game or bet to another without registering
all over again. Within seconds, customers can take their poker winnings
and use that to bet on basketball, for example. Sites also are looking
to expand beyond the United States, where business is expected to grow
more slowly than other parts of the world in the years to come in part
because of regulatory uncertainty.
Betonsports.com recently acquired an Asian sports book and is heating
up its marketing efforts in Asia, one of the fastest-growing markets
for gamblers, Smith said.
Meanwhile, sports fans across the United States are becoming more
comfortable with online books in large part because of widespread
televised broadcasts of poker tournaments and the mainstream appeal of
online poker. Professional gamblers are abandoning longtime
relationships with illegal bookies and gravitating online, experts say.
Illegal bookies maintain one key advantage: most accept bets without requiring the cash up front.
While bettors often pride themselves on their in-depth knowledge of a
particular sport or even buy recommendations at hefty prices, a
successful sports bet often turns on the difference between a point or
even a half a point.
For bettors like Fezzik, that means refining their search for the best line - a search that's far easier to do online.
"You can drive around to 10 sports books in town and it'll take you
three hours or you can look at 10 sports books online in three
minutes," said Ted Sevransky, a local sports handicapper and radio
personality known as "Teddy Covers."
Like the search for an undervalued stock, more sports bettors are
approaching their bets like investments. Sports bettors now use
sophisticated tools such as computer software that can post lines for
more than 50 online sports books on one screen, allowing the bettor to
find the best offer in seconds.
"The more sports books you visit the more chance you have of finding a game that's slightly misspriced," Sevransky said.
Searching for the best line most often separates the winners from the
losers, Fezzik said. Online books will have better lines some of the
time but not always, as in the case of the Texas-West Virginia game, he
said.
"The most important aspect of sports betting is to get the best number," he said.
Theres other advantages to betting online, gamblers say. Besides a
shot at better odds, online sports books sometimes offer a reduced
vigorish, or the fee bettors pay the casino to place a bet. While Las
Vegas casinos typically offer $100 for every winning bet of $110, some
Internet sites offer $100 on a $105 bet - a big difference for gamblers
wagering hundreds or thousands of dollars at a pop.
Then there are other special offers, like million-dollar contests that
are similar to casino contests but may offer bigger prizes because of
the greater number of potential customers online promotions can attract.
Las Vegas casinos ultimately will benefit from the growth of online sports books, experts say.
"Ultimately it's good for the casinos," said Anthony Curtis, publisher
of the Las Vegas Advisor consumer newsletter. "They'll get more
players, more of them will come to Vegas, and when they're in Vegas,
they'll make sports bets."
Czajkowski, a frequent visitor to Las Vegas, said online betting will never replace the real thing.
"Online gamblers love coming to Vegas - you haven't lived until you've been to Vegas."
