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."

Comments

There was a show about college bookie

[Anonymous Coward]

It was a couple years ago, I think. Anyway, they were showing these college students at places like Ohio State and wherever making $10k a week. I always thought it would be awesome to be a bookie, but you gotta have enough capital upfront to get started.

Or you can make it legal...

[akiaki007]

TraderSport is an online exchange based out of Ireland that basically creates a market on Future Contracts. Very cool because you can buy and sell contracts on a LOT of different things, ranging from Index (DJIA, SPX, etc) to Superbowl winners.

The beauty of it being a true exchange is that you can sell your contract at some point if you don't want to hold on to it anymore. Example: You buy Giants win 2004 Superbowl today which is valued very low, and say the Giants win their first game and the value goes up, you sell it make a couple of bucks and invest it elsewhere.

So...legalized gamling?

Re:why illegal?

[jaredmauch]

Here in Michigan the lottery funds the public schools. What they didn't make clear when selling this to the public was that it would not augment the school budgets, just take an equal amount of money away and put it back into the general fund.

Here are a few links.

Re:why illegal?

[jonathan_ingram]

Online gambling isn't illegal if you live in a country which believes in personal freedom, such as the UK. And being legal doesn't make it any less profitable.

Will answer questions

[yamla]

I worked for a company in 2000 and 2001 that wrote and sold the software to run these companies (well, some of these companies... BetOnSports was using our software at least for a while, several others were as well).

The software isn't particularly interesting but it means I have direct knowledge of a number of items... whether Wise Guys actually exist, how you really can regularly make money as an informed gambler (and why the gambling houses don't care), whether there's any back doors in the software, what language the software was written in, etc. etc. etc.

Ask away if you wish, I'll try to answer any question to the best of my ability. I'm well outside of the NDA now.

Re:Will answer questions

[yamla]

I'll probably post a more detailed message later as a reply to my initial post, going in to a bit more detail.

As to why accounts get closed down, that is entirely up to the specific gambling house. Our software provided them only ways to help determine if the account was a wise guy or not. The only real explanation I can come up with for a legit house to close you down is that they are finding it hard to keep both sides of the line equal. That is, they need about as much money on X-to-win as on Y-to-win. You have to remember, though, that many (most?) gambling houses are run by organised crime so sometimes they're just going to be bastards.

Gambling houses are not generally interested in the true probabilities (which is why some people can continue to make profit). So long as they can collect their juice, they are happy. That way, the house wins regardless of which side of a line wins. Now, NOT every house runs like this... some try to get closer to the true probabilities. However, this is much more risky if the house is wrong. If they instead just try to balance the money bet on each side of the line, they are guaranteed to make a profit.

You wouldn't want the code, trust me. I don't have the code any more, of course, but when I was still working for the company, we had roughly a third of a million lines of code. In Visual Basic 6. Now, I don't like VB at the best of times but I acknowledge that it has its place. Also, VB.Net is meant to be much better. But there's no way you should have that many lines of code in VB6. Maintenance was a nightmare. Although we did put an effort into using a decent design, nowhere near enough effort had gone in at the beginning. That we could maintain it at all (while continuing to add features) was impressive, to be honest.

At least we did use a bug tracking system.

That said, there are no known backdoors. I'm not saying the software was secure because I know full well that it wasn't. But there were no backdoors that we knew about and we minimised the potential security issues for the web-enabled version as much as was reasonable.

What's the problem?

[ajs318]

Gambling at the racetrack is legal. Gambling in licenced betting shops is legal. Gambling in casinos is legal. What's the problem with gambling on the Internet?

Maybe some jurisdictions don't have the same rules of fair play or something ..... I can understand someone might want to limit offshore betting, but surely the proper way to do it is to use a domain name over which you have jurisdiction. EG. William Hill use a secure server with a .uk domain name. They could have that domain name withdrawn if they get a bad reputation.

I certainly can't see anything wrong with gambling per se ..... it's only a problem if someone starts spending more money than they could afford to lose, but you can do that in any number of ways ..... drink ..... fags ..... having kids ..... all of which are perfectly legal!

A proper bet at a bookie's is about one thing: can you weigh up the odds more accurately than the bookmaker? If you believe the probability of an outcome is greater than the odds would suggest, then the bet is justified. On the other hand, if the probability is worse than the odds would suggest {UK Lottery: 1 chance in [49*48*47*46*45*44*43]/[6*5*4*3*2*1] = about 14 million, as opposed to a payout of about 3.5M to 1} then you should steer clear.

And it ain't the government's job to stop people from doing stuff that might be bad for them ..... let 'em learn the hard way .....

Re:What's the problem?

[wmajik]

There are many reasons, but a main one is money laundering. I'm an relatively big online poker player and I can tell you that many of the online casinos are very shady operations. Not all, but a good deal.

To launder money, you need to keep it out of the financial system that is the US banking network. Have a bank account? Credit card? Debit card? Took out a loan? When the IRS comes to audit you, they have immediate and full access to all of this. So if Mr. White sells a ten-kilos of cocaine to Mr. Pink and wires $100,000 to his bank account, that's going to show up on the IRS' radar.

However, let's say Mr. White sits down at an online gambling table and 'loses' $100,000 to Mr. Pink. That transaction is stored in the private database of an off-shore casino and is out of the eye of the IRS and the US Government. Washing the money after you withdraw from the casino involves more processes, but the most important thing is that money does not go through the proper, established channels, and the government does not like this.

I think the saying went: You can cheat the people as long as you remember to pay your taxes.

Lastly, I hope they go the route of regulation instead of outright banning.. otherwise my website is moot.
--
MJ
(actually wrote this for an earlier post, but still relevant and everoyne hates 'go to this link' replies)

Internet Gambling = Any other "Good" Idea...

[hipster_doofus]

As far as I can tell, the Internet Casino/Bookmaking business is one that is well past its prime - unless you got into the business several years ago.

Once these casinos started generating large sums of cash, anyone able to raise the capital decided it would be a great idea to start their own Internet Casino. Consequently, the market has become extremely diluted. If you don't believe me, just go to Google or Yahoo and look at the number of Internet Casinos available.

Another side effect of these large numbers is an overall lower quality - as well as lack of any originality. Most sites use pre-packaged software, which is then "customized" with some different graphics for each casino. So I could go to ten different casinos and I would basically feel like I was playing in the same place.

As far as cheating goes, I've never suspected that I've been cheated, but I was stiffed for $50 once by a casino that is now out of business. That is another risk you take when playing offshore, as opposed to a land-based casino.

I do still feel that there is a good opportunity for someone in the market who can be original and market themselves well.

If you're looking for a good Internet Casino, I would recommend the following:

Casino-On-Net
Global Player
InterCasino
UltimateBet (Poker only)

Wheres the cost

[StillNeedMoreCoffee]

Several lines of logic show up here.

1. Gambling is a personal choice and should not be restricted.

2. Governments should get a percentage.

Prohibition showed us that some moral (religious) judgements go against the will of the people and that opens up an industry for gangsters. This has been shown to be true.

One of the benefits of legalizing alchohol was to make those gangsters find other businesses go to into. Drugs for example and gambling. Not sure that there was a long term benifit here.

The cost of course for readily available alcohol is alcoholism and all the assocaited trama and cost to the individual and society. Some of that spills over into lost lives and higher crime rates.

We have the same problem with drug addiction as it can ruin lives (especially when the addiction is so expensive because of being illegal) and the increase in crime, and with some drugs violence.

Gambling has the a similar associated cost of gambling addiction which has shown up in states that have legalized gambing with the associated cost to individuals, society and increase in crime.

We have as a population (here in the States) decided that the cost to the individual and society for tabacco smoking is such that we have decided to restrict its use. Mainly because the effects of second hand smoke and the increase in health problems raise everybodies insurance cost. Essentially we all pay for the habits of a few.

I think this is generally true but not generally perceived.

So there is a cost to allowing gambling. I have a problem with the government getting a vested interest in what could be viewed as also having a negitive societal cost. Seems like dirty money to me.

Re:Wheres the cost

[JimBobJoe]

So there is a cost to allowing gambling. I have a problem with the government getting a vested interest in what could be viewed as also having a negitive societal cost. Seems like dirty money to me.

It's interesting to note here that, while Nevada has had legalized prostitution (in some counties) since 1955, the government has chosen to regulate but not tax that industry--which is amazingly lucrative. I suspect that they were indeed bothered by the idea of making money off of it (apparently Nevada's current fiscal shape is making them rethink their no-tax stance.)

Re:how silly is the government?

[bogie]

"I know there's sweet little old ladies out there that need our help. I just don't think the government should play a role and force others to help"

Sorry, but that's the price you pay for living in America. We as a nation have decided that helping those in need is a worthy goal. If you don't like it you'll have to find someplace to live. It's not just "little old ladies" who help help either.

"Give that money back to the people it belongs to, they'll spend it on something besides alchohol, drugs, crap foods, and such."

Sad that you actually believe that.

"If adults acted more like adults, we wouldn't be in this situation. Invest in your future now, don't leech on society later."

Hmm. Hope you never become disabled in a car accident from someone with no insurance. I guess maybe you've made enough money to be able to afford medical expenses and basic things like housing and food for the rest of your life? How about your childern? They set for life as well? Must be nice to be you and be so rich.

"but I'd suggest that we begin sterilizing anyone that applies."

Why not tatoo their forehead as well so we know who to shun?

Life is not a black and white as you think it is and the people who recieve assitance aren't all just "lazy". Also forcing an "Every man for himself" doctrine upon our Nation would be a disaster of epic proportions. Thank God most people don't think like you do.