Saturday, January 20, 2007

The Taboo of Sports Betting

The world of internet gambling has been shaken up quite a bit over the last several months. Chris Masse over at Midas Oracle has been doing a bang up job of covering it. He is mostly interested in real money prediction markets but those, of course, intertwine with sports betting.

Without getting into too much detail (Chris has it all covered if you are interested) the basic thrust of what is happening is that the CEO's and other primaries of these companies are getting arrested when they step on US soil. They aren't doing anything illegal in the countries they reside in, but in the US these types of activities (internet gambling in general for that matter) are prohibited. I am not sure if it is legal for me as a US citizen to bet on one of these sites, but I am not going to find out because...if I were to place a bet on a football game, and I am not saying that I would, because that would be illegal...I would just go to the bar right down the street.

That last run on sentence was pretty messy so I think I will back up a bit.

Billions and billions of dollars are wagered on sporting events every year in the United States and most estimates put about 1 (ONE!) percent of these bets are done "legally", that is, in a properly regulated and taxed casino. The remaining 99 percent are done either online or the old fashioned way, through a bookie, typically at a bar.

With the Super Bowl coming up, you will no doubt be seeing those charts coming around that look like this:



The idea here is that you sign your name to a square and place your bet for that square, typically $10. Then after all the squares are filled, the numbers on the side and top are drawn at random. As you can see this chart represents the AFC team on the left and the NFC team on the top row. Those numbers represent the last digit of the scores that you hope will come out. For example the square in the very top left - he hopes that the AFC team ends up with a score ending in 2 and the NFC team score ending in 8. It doesn't matter who wins the game. So if the AFC team has 32 and the NFC team has 28, he is a winner. Typically there are payouts after the end of each quarter and the end of the game. I have never participated in this type of illegal gambling activity so am going off of what other people (criminals!) have told me about the Super Bowl squares.

Here in Madison, you can go to practically any bar and simply ask for a parlay card. Here is a good explanation of what a parlay card is and they have a link to a picture of one so you can see what they look like. By the way, I found this site by google and the parlay card they took a picture of is EXACTLY like the ones you find here in Madison. Not that I would know what one looks like, as they are illegal to place bets with, but people who have seen them before tell me that it does, in fact, look identical to the local ones produced here.

From what I have heard all you have to do is enter any bar, request a parlay card, place your bet and give the bartender your cash and selections. You may come back the next week to collect your winnings. Typically there will be a central bookie that runs the parlay cards for many bars - you can also get in touch with him to place straight up bets, or simply attach your straight up bet (Bears plus three for example) to the parlay card if you like to place your bet that way. The bars typically don't profit from this activity, merely provide it as a service to their normal patrons. In all my years I have never heard of a bar getting busted for offering parlay cards.

For the more serious gambler, of course, there is always the option of going online to place bets or contacting a bookie directly to participate in this action. Since I have never used a bookie to place a bet on sports since it is very illegal I have been asking others how they do it. To my surprise I have found out that there are many bookies in town that would be willing to help me place a bet if I were to so choose.

The purpose of this essay, I suppose, is basically to say that by not opening up gambling options to those that would like to engage in them (not me, for it is illegal) the government has encouraged - more like created - an immense illegal gambling enterprise. Certainly organized crime is involved somewhere down the line.

So why not open the damn thing up and let market forces work their magic? The "invisible hand" as Friedman used to call it. Imagine the tax money the states could rake in if they had a legit sports betting system. I know the casinos and their parent companies have pull, but this much?

The market would certainly choose which internet gambling platforms are the best - very quickly - if allowed to.

It is bizarre to me to think about this statement. In England, any person can sit down at their computer and place a bet on any game, political market, weather event or just about anything else. In the United States, we have to fly to Vegas or Reno or some other gambling mecca to do the same thing. And we are limited to sporting events for the most part.

I hope that the US government is happy that all of those who choose to place wagers on sporting events are supporting organized crime. Not me though, those activities are illegal and I would never do anything like that.

2 comments:

STICKYBOI - said...

i agree with the legislation which aims to ban credit cards as a payment method for online gambling of any sort... i mean its a no brainer when you consider you are placing somebody else’s money on an uncertain event happening with the aim to recoup more than you invested. Chance and credit do not mix well in my opinion, and continuing to allow it would only contribute further to negatively affecting the high levels of personal debt many citizens today find themselves in. I agree however, in a sense that it won't work - i mean whats the point in banning credit card payments for online poker, for example, but not online sports betting? slightly hipocritical no? I mean how can you allow someone to participate in online horse racing betting, but not have a gamble on a hand of cards? both activities involve a large degree of chance, and neither are guaranteed to yield financial return.
It also infuriates me that the minority of irresponsible gamblers [those paying with someone elses money!] have now ruined the fun of online betting for everyone else - those like me who pay with money they actually have in their bank!! boooo

chris said...

Super Bowl squares and office pools are not illegal so long as they are not conducted for a profit. I am not sure about your state, but it is legal in Ohio. Check it out ORC 2915.01.