Slashdot Mirror
Profile of An Internet Bookie
prostoalex writes "The New York Times Magazine has a story about one of Internet's most lucrative businesses - online bookmaking. Writer William Berlind travels to San Jose, Costa Rica, where the offices of such online powerhouses as BetOnSports and SkyBook are located. Quite an interesting story about numerous Americans traveling to Costa Rica with the grand business plan of online gambling, US government trying to shut down the offshore gambling operations, and how the bookies operate."
Number one reason sports betting is nog going to be legalized in the US:
It will kill the state lotteries.
Why? Look at the vig on sports betting versus lotteries (the vig is the amount the bettor can expect to lose and is the difference between the money returned by a winning bet and the actual probability of winning). For a typical Vegas-style bet on football against the spread or on an over-under, here's basically the way it works:
The house will thus (if an equal amount of money is bet on both sides) make a $1 profit on every $22 bet (ie 4.5%).
Now, contrast this with a state lottery. In Massachusetts, 50% of the bet is the state tax on lotteries. An additional 10% of what's left is taken by the lottery as their share, for administrative expenses. Thus only 40% of the money bet on any given game will be returned to bettors in the form of winnings. These figures are not significantly different from state to state.
The end-result of this is that you only need to be right (or lucky) 53% of the time to make a profit betting on sports (when, picking totally randomly, you would be right 50% of the time), but you need to be right 2.5 times as often as random selections would be in order to reasonably expect to break even in a lottery.
One of the great appeals of sports betting is the better odds of making a profit doing it. Indeed, Oregon tried a few years ago to create a "sports lottery", which was sports betting but with payout rates similar to the lottery. No one bet with it.
Thanks for offering, but I already have an unbeatable roulette betting system. You know how you are allowed to bet on colors in addition to numbers? Bet on one, at the minimum bet. If you lose, double your bet to make up your loss. Every time you lose, just keep doubling your bet. Once you win back your loss, return to making the minimum bet.
Yeah, it's a joke. But a serious-faced business major explained this to me. He actually asked to write some stuff down; I thought this meant he had a really complicated system. So I give him the paper, and he starts writing:
5
10
20
40
etc.
Of course the obvious problem with the system is that the probability of winning by betting on a main color is slightly less than 50%, because there are two main colors and then one or two thingies (don't know the technical term) with a third one. Also, while if you win you gain money slowly, if you lose, you lose it very quickly. I wrote a little program to use this method. It would stop once the doubling of the bet would take away more money than it had if it lost (otherwise it would really lose spectacularly). After many runs of this system, the result I expected became apparent. It made money with the same probability as a single bet. The amounts were widely different - but with no change in the likelihood, betting everything you had on one throw was just as legitimate a strategy. This was faster, too.
I never bothered trying to correct the guy. I was so flabbergasted when he showed me initially that I really could say nothing, especially since it was obvious he wouldn't understand me. I suppose the problem was he was having trouble imagining the probability of losing eight or nine times in a row, which, while unlikely, is not that unlikely. It happened every simulated time, of course, usually within a hundred throws, frequently in far fewer, once in the initial eight!
If you are interested in making easy money, I think running a casino to cater to people like this would be much easier than 'informed gambling', whatever the hell that is. Let them think they are gaining some sort of advantage when all they are doing is moving risk around.
You're right, of course---but if you want examples of (in most cases fairly minor) transgressions, there's a list of recent ones. Looking at that list makes me glad that things aren't nearly as bad as they could be. Still, having to try not to look odd sitting through a teacher-led prayer at a public high school graduation (personal experience, two years ago) is not pleasant. And niether is hearing the president talk about the "bridge between church and state".