One of the things about gambling is that the odds and the expectations (on the literal, not mathematical sense) balance out so well, that even a minor tweak can be very profitable.
When I was a young kid, growing up in Montreal, illegal sports gambling was centered (not surprisingly) on the Canadiens. One of the bets you could make was "the time of the first goal". A hockey game has three periods of 20 minutes each, so there are 20x60 possibilities for "the time of the first goal" (the period wasn't considered - IIRC). The bet was similar to a low stakes, reasonably high probability lottery.
At some point, however, the authorities figured out that the time of first goal in a Canadiens game was nearly always on an odd number of seconds (possibly 5:01, but almost never 5:02). The timekeeper in the old Montreal Forum was carted off to jail. I can remember my dad explaining this all to me when I was in the (maybe) 6th grade.
While I am fully aware of the horrific violence and corruption of organized crime, there were some good aspects to mob-run Las Vegas in the 1970s. The end of Prohibition and University of Chicago mathematician Charles McNeil's invention of the point spread led to the mob enforcing a monopoly on sports betting in the US, with everything run through the Vegas line.
The mob took its 4%+ edge on all sports bets. It didn't want more, it's profits were limited by what bettors were willing to lose, it was in no hurry to collect. If bettors lost too fast, they would stop betting. But insiders and cheaters extracting extra profits came out of mob pockets, and fixes risked killing the business from bettor reactions and investigations (although the FBI insisted there was no Mafia). Fixes were by gamblers trying to cheat the mob--and often sleeping with the fishes instead--not the mob cheating individual bettors (low and mid-level organized crime figures sometimes got involved in fixes, but were punished for it).
The mob did not try the impossible task of preventing insiders from betting. Instead they funneled all insider action through specific bookies it employed. This was good for the insiders since they were paid promptly and the bookie was not going to break omerta to sell a locker room janitor or referee or coach out to the Feds. It allowed the mob to have exclusive access to the insider betting for line-setting purposes.
But the main reason to segregate insider betting was to discourage bettors from taking any obvious action to help their bet. A referee could bet on the game, and make some marginal calls to help his bet, but nothing obvious. A basketball player could be a step slow or miss a jumper, but he shouldn't throw the ball into his own basket at the end of the game to change the result against the spread (as actually happened once).
As a result, games were not flagrantly fixed, and the Vegas line reflected the insider intentions. While it was certainly a good thing that organized crime was broken--at least as a national monopoly--at the end of the 1970s, that event did open the door for disorganized crime, such as we're seeing in these stories.
I wrote from personal experience. I was a professional poker player in the 1970s and dabbled in casino advantage gambling and sports betting. I was offered, along with some other winning sports bettors--mainly quants--the opportunity to bet $2,500 per NFL game at the pre-opening line. We didn't have to put up the cash, but were immediately paid winnings in cash on Sunday night or Monday for that game.
In those days, the pre-pre-opening line was set after the last Sunday night game (there were Monday night games, but they were treated as an afterthought with a separate schedule for those two teams). It was shown to the mob bookies who handled insider bets, and their action determined the pre-opening line. All of this was more or less public, at least if you were involved.
The pre-opening line was shown to the advantage bettors, and our action led to the adjusted opening line, announced on Monday (except for the games involving the Monday Night game). We not only got to see the pre-pre-opening line and the adjustments, we got color on those adjustments. Usually it was nothing like a fix, just insider knowledge of injuries, morale and other factors. Insiders talked to each other, because they wanted everyone betting--players, coaches and staff on both teams, referees--betting the same way. The insiders got their money down at the pre-pre-opening line, so they didn't care that the line moved to reflect their information.
I got out of the business when my models started misbehaving and I stopped betting for a couple of weeks while I worked on them. They guy who paid me told me they valued my action, and wiped out the recent losses. Then I realized I wasn't beating the dealer, I was working for the mob. I only got back into sports betting when the mob monopoly was broken.
A lot of people knew what was going on in those days, but I don't know of any good books on the subject. I've written about it a little, but I was on the fringes, as were the people I knew. It was essential in those days to protect your civilian status. If you got too close to mob guys, the rules changed.
Very nice article, Nate. Interesting throughout. A question: do you think it would be feasible to just ban all unders on player props? Or would that force the books to set the lines on props at ridiculous one-sided sucker prices, in order to avoid taking on too much risk?
Also, FN6 has, I think, a typo. Pretty sure you mean “the *later* you bet…”
Going to be an interesting world if Polymarket/Kalshi prevail in their argument that states *can't* regulate sports "predicting"(gambling). At least cftc futures markets presumably won't be able to ban/limit traders who are too good
Those who argue that gambling ruins sports always ignore that professional sports (including college, which is run by well-paid professionals using amateur athletes) exists solely for bettors. Baseball games, for example, before radio could only be watched live during the workday. Attendance largely consisted of degenerates who needed gamble on.
This seems possibly ahistorical to me. Baseball was invented when many people still farmed and farmers do not work 8 hours a day 52 weeks a year. College sports used to not conflict with classes mostly, so students could go watch them. Horse-racing certainly seems like it's mostly about gambling, but I think most sports fans primarily wanted to watch sports and gambling is a side benefit.
In fact, my biggest problem with the legalization of sports gambling is that it has ruined conversation about sports. Watching football with my in-laws now involves people discussing what bets they've placed and how those bets are doing as well as TV commentary discussing betting. I want to talk about the game, not the gambling!
The NBA is incredibly frustrating about injuries, which is why I don't wager on it much. It also makes fantasy kind of a frustrating slog, especially if you aren't a hard-core player who isn't constantly monitoring it
I think at the very least college prop bets should be banned based on what you were saying.
if I remember correctly, in the U.K. gambing is so widespread and legal that one can bet on pretty much anything. Hence how does the UK deal with such potential issues? (though clearly soccer not as dependent on superstars as the NBA)
Anyone still betting tennis other than semis and finals is nuts. Any individual sport frankly. And the NBA is as close to an individual sport as there is.
Why can't bottom-ranked teams just be relegated (with salary bands), like in European football? It seems like it would lessen tanking and make the final games actually interesting for the bottom-ranked teams.
American sports leagues are extremely top heavy. There aren't skilled enough teams lined up to take the mantle of getting promoted to the NBA. The G-League is the level of competition directly below, and it's full of players that will never be good enough to make the jump up. The salaries are poor which means the best non-NBA players rather opt to play overseas than stick around in the G. It wouldn't be impossible, but it would mean the NBA would have to invest a bunch of money over the course of decades just so bad teams can be less bad. There's no reason to rock the boat, basically.
The other thing that they could do is divide the NBA into its own ranks, but they won't do that because the owners would hate to be in anything but thr top tier.
One of the things about gambling is that the odds and the expectations (on the literal, not mathematical sense) balance out so well, that even a minor tweak can be very profitable.
When I was a young kid, growing up in Montreal, illegal sports gambling was centered (not surprisingly) on the Canadiens. One of the bets you could make was "the time of the first goal". A hockey game has three periods of 20 minutes each, so there are 20x60 possibilities for "the time of the first goal" (the period wasn't considered - IIRC). The bet was similar to a low stakes, reasonably high probability lottery.
At some point, however, the authorities figured out that the time of first goal in a Canadiens game was nearly always on an odd number of seconds (possibly 5:01, but almost never 5:02). The timekeeper in the old Montreal Forum was carted off to jail. I can remember my dad explaining this all to me when I was in the (maybe) 6th grade.
The internet is amazing - everything is there. I was in 6th grade, it seems
https://m.facebook.com/groups/nhl6079/posts/1646787989061000/
Wow that’s really interesting, thanks for the story
While I am fully aware of the horrific violence and corruption of organized crime, there were some good aspects to mob-run Las Vegas in the 1970s. The end of Prohibition and University of Chicago mathematician Charles McNeil's invention of the point spread led to the mob enforcing a monopoly on sports betting in the US, with everything run through the Vegas line.
The mob took its 4%+ edge on all sports bets. It didn't want more, it's profits were limited by what bettors were willing to lose, it was in no hurry to collect. If bettors lost too fast, they would stop betting. But insiders and cheaters extracting extra profits came out of mob pockets, and fixes risked killing the business from bettor reactions and investigations (although the FBI insisted there was no Mafia). Fixes were by gamblers trying to cheat the mob--and often sleeping with the fishes instead--not the mob cheating individual bettors (low and mid-level organized crime figures sometimes got involved in fixes, but were punished for it).
The mob did not try the impossible task of preventing insiders from betting. Instead they funneled all insider action through specific bookies it employed. This was good for the insiders since they were paid promptly and the bookie was not going to break omerta to sell a locker room janitor or referee or coach out to the Feds. It allowed the mob to have exclusive access to the insider betting for line-setting purposes.
But the main reason to segregate insider betting was to discourage bettors from taking any obvious action to help their bet. A referee could bet on the game, and make some marginal calls to help his bet, but nothing obvious. A basketball player could be a step slow or miss a jumper, but he shouldn't throw the ball into his own basket at the end of the game to change the result against the spread (as actually happened once).
As a result, games were not flagrantly fixed, and the Vegas line reflected the insider intentions. While it was certainly a good thing that organized crime was broken--at least as a national monopoly--at the end of the 1970s, that event did open the door for disorganized crime, such as we're seeing in these stories.
Great note. Thank you. How did you learn so much about the way the Mafia handled sports bets? Is there a book or resource you could point me to?
I wrote from personal experience. I was a professional poker player in the 1970s and dabbled in casino advantage gambling and sports betting. I was offered, along with some other winning sports bettors--mainly quants--the opportunity to bet $2,500 per NFL game at the pre-opening line. We didn't have to put up the cash, but were immediately paid winnings in cash on Sunday night or Monday for that game.
In those days, the pre-pre-opening line was set after the last Sunday night game (there were Monday night games, but they were treated as an afterthought with a separate schedule for those two teams). It was shown to the mob bookies who handled insider bets, and their action determined the pre-opening line. All of this was more or less public, at least if you were involved.
The pre-opening line was shown to the advantage bettors, and our action led to the adjusted opening line, announced on Monday (except for the games involving the Monday Night game). We not only got to see the pre-pre-opening line and the adjustments, we got color on those adjustments. Usually it was nothing like a fix, just insider knowledge of injuries, morale and other factors. Insiders talked to each other, because they wanted everyone betting--players, coaches and staff on both teams, referees--betting the same way. The insiders got their money down at the pre-pre-opening line, so they didn't care that the line moved to reflect their information.
I got out of the business when my models started misbehaving and I stopped betting for a couple of weeks while I worked on them. They guy who paid me told me they valued my action, and wiped out the recent losses. Then I realized I wasn't beating the dealer, I was working for the mob. I only got back into sports betting when the mob monopoly was broken.
A lot of people knew what was going on in those days, but I don't know of any good books on the subject. I've written about it a little, but I was on the fringes, as were the people I knew. It was essential in those days to protect your civilian status. If you got too close to mob guys, the rules changed.
Very nice article, Nate. Interesting throughout. A question: do you think it would be feasible to just ban all unders on player props? Or would that force the books to set the lines on props at ridiculous one-sided sucker prices, in order to avoid taking on too much risk?
Also, FN6 has, I think, a typo. Pretty sure you mean “the *later* you bet…”
Going to be an interesting world if Polymarket/Kalshi prevail in their argument that states *can't* regulate sports "predicting"(gambling). At least cftc futures markets presumably won't be able to ban/limit traders who are too good
"...let people who have the misfortune of watching the Hornets..."
Harsh, but true.
Those who argue that gambling ruins sports always ignore that professional sports (including college, which is run by well-paid professionals using amateur athletes) exists solely for bettors. Baseball games, for example, before radio could only be watched live during the workday. Attendance largely consisted of degenerates who needed gamble on.
This seems possibly ahistorical to me. Baseball was invented when many people still farmed and farmers do not work 8 hours a day 52 weeks a year. College sports used to not conflict with classes mostly, so students could go watch them. Horse-racing certainly seems like it's mostly about gambling, but I think most sports fans primarily wanted to watch sports and gambling is a side benefit.
In fact, my biggest problem with the legalization of sports gambling is that it has ruined conversation about sports. Watching football with my in-laws now involves people discussing what bets they've placed and how those bets are doing as well as TV commentary discussing betting. I want to talk about the game, not the gambling!
I would separate the origins of the games with the professionalization of these sports.
The NBA is incredibly frustrating about injuries, which is why I don't wager on it much. It also makes fantasy kind of a frustrating slog, especially if you aren't a hard-core player who isn't constantly monitoring it
I think at the very least college prop bets should be banned based on what you were saying.
We could just pass a federal law banning use of interstate communications for gambling of any sort.
In the 22-23 season Gill Alexander had been promoting Tank a Palooza that whole later part of the season on VSIN.
Risk or Ruin pod has an excellent and entertaining take on sports betting and whales.
if I remember correctly, in the U.K. gambing is so widespread and legal that one can bet on pretty much anything. Hence how does the UK deal with such potential issues? (though clearly soccer not as dependent on superstars as the NBA)
Anyone still betting tennis other than semis and finals is nuts. Any individual sport frankly. And the NBA is as close to an individual sport as there is.
Might the recent weird provision in the BBB also have its roots in #2?
Why can't bottom-ranked teams just be relegated (with salary bands), like in European football? It seems like it would lessen tanking and make the final games actually interesting for the bottom-ranked teams.
American sports leagues are extremely top heavy. There aren't skilled enough teams lined up to take the mantle of getting promoted to the NBA. The G-League is the level of competition directly below, and it's full of players that will never be good enough to make the jump up. The salaries are poor which means the best non-NBA players rather opt to play overseas than stick around in the G. It wouldn't be impossible, but it would mean the NBA would have to invest a bunch of money over the course of decades just so bad teams can be less bad. There's no reason to rock the boat, basically.
The other thing that they could do is divide the NBA into its own ranks, but they won't do that because the owners would hate to be in anything but thr top tier.