Sports betting

Odds boards in a Las Vegas sportsbook

Sports betting is the activity of predicting sports results and placing a wager on the outcome. The frequency of sports bet upon varies by culture, with the vast majority of bets being placed on Association Football (Soccer), American Football, Basketball, Baseball, Hockey, Mixed Martial Arts, and Boxing at both the amateur and professional levels. Sports betting can also extend to non-athletic events, such as reality show contests and political elections, and non-human contests such as Horse Racing, Greyhound Racing and illegal, underground Dog Fighting.

Sports bettors place their wagers either legally, through a bookmaker/sportsbook, or illegally through privately run enterprises referred to as "bookies". The term "book" being a reference to the books used by wagebrokers to track wagers, payouts, and debts. The majority of legal sportsbooks are found online, operated over the internet from jurisdictions separate from the clients they serve, usually to get around various gambling laws (such as the Unlawful Internet Gambling Enforcement Act of 2006 in the United States) in select markets, such as Las Vegas, Nevada, or on gambling cruises through self-serve kiosks. They take bets "up-front", meaning the bettor must pay the sportsbook before placing the bet. Illegal bookies, due to the nature of their business, can operate literally anywhere but only require money from losing bettors and don't require the wagered money up front, creating the possibility of debt to the bookie from the bettor. This creates a number of other criminal elements, thus furthering their illegality.

Sportsbetting has resulted in a number of scandals in sport, affecting the integrity of sports events through various acts including point shaving (players affecting the score by missing shots), spot-fixing (a player action is fixed), bad calls from officials at key moments, and overall match fixing (the overall result of the event is fixed). Examples are the 1919 World Series, the alleged (and later admitted) illegal gambling of former MLB player Pete Rose, and former NBA referee Tim Donaghy.

Types of bets

United States of America

Betting on the Favorite, an 1870 engraving published in Harper's Weekly

• Moneyline bets do not have a spread or handicap, and require the chosen team to win the game outright. The favoured team pays lower odds than does the underdog, thus, it acts mainly as an enticement to take the underdog for a better payout. Sometimes a bettor may couple this type of bet on the favored team to increase the payout of a parlay.
• Spread betting are wagers that are made against the spread. The spread, or line, is a number assigned by the bookmakers which handicaps one team and favors another when two teams play each other and one is perceived as being more likely to win. The favorite "takes" points from the final score and the underdog "gives" points. This number can also be in increments of half-a-point (.5) even though very few sports have .5 point scoring (i.e., The Ryder Cup)

For example, before game 5 of the 2012 NBA Finals, the Miami Heat were expected to beat the Oklahoma City Thunder. The line read: Miami -3, Oklahoma City +3. To determine who wins against the spread, the line is either added or subtracted from a team's final score.

In the above example, if the bettor chose Miami, he would subtract 3 points from Miami's final score and compare that to Oklahoma City's final score. If taking Oklahoma City, he will add 3 points to Oklahoma City's final score.

For him to win his bet, Miami would have to win the game by 4 points or more.

And if a bettor took Oklahoma City, they would have to win outright or lose by less than 3 points.

If the final adjusted score is a tie, the bet is considered a push. This is the most common type of bet in sports.

• Total (Over/Under) bets are wagers made based on the total score between both teams. Example, if an MLB game has a total of 10.5, an over bettor will went the combined total to be greater, and the opposite for a bettor taking the under. If the combined total is the same as the proposed total, the bet is a push.
• Proposition bets are wagers made on a very specific outcome of a match not related to the final score, usually of a statistical nature. Examples include predicting the number of goals a star player scores in an Association Football match, betting whether a player will run for a certain number of yards in an American football game, or wagering that a baseball player on one team will accumulate more hits than another player on the opposing team.
• Parlays. A parlay involves multiple bets that rewards successful bettors with a greater payout only if all bets in the parlay win. A parlay is at least two bets, but can be as many as the bookmaker will allow.

The possible payout of the parlay is determined by the combined likelihood of all bets placed. A parlay of riskier bets (more underdogs) will pay greater than a parlay of more likely bets (more favorites).

• Teasers. A teaser is a parlay that gives the bettor an advantage at a lower, but still positive, payout if successful.

The bettor selects the sport(s), number of games, and number of points given.

If the bettor takes two NBA games at +6.5 it will adjust the individual bets at that rate. So a bet on a 3 point underdog at +3 will become a bet at +9.5 points, and for favorites, it will change a 3 point favorite at -3 to +3.5 points.

Although the rules to win his bet are the same as a parlay, he is payed less than a regular paylay due to the increased odds of winning.

• If bets. An if bet consists of at least two straight bets joined together by an if clause which determines the wager process. If the player’s first selection complies with the condition (clause), then the second selection will have action; if the second selection complies with the condition, then the third selection will have action and so on.
• Run line, puck line, or goal line bets. These are wagers offered as alternatives to moneyline wagers in baseball, hockey, or soccer, respectively. These bets feature a fixed point spread that adjusts payouts based on the handicap between both teams. The greater the underdog, the more a winning bet on the underdog will pay.
• Future wagers. While all sports wagers are by definition on future events, bets listed as "futures" generally have a long-term horizon measured in weeks or months; for example, a bet that a certain NFL team will win the Super Bowl for the upcoming season. Such a bet must be made before the season starts in September, and winning bets will not pay off until the conclusion of the Super Bowl in January or February (although many of the losing bets will be clear well before then and can be closed out by the book). Odds for such a bet generally are expressed in a ratio of units paid to unit wagered. The team wagered upon might be 50-1 to win the Super Bowl, which means that the bet will pay 50 times the amount wagered if the team does so. In general, most sportsbooks will prefer this type of wager due to the low win-probability, and also the longer period of time in which the house holds the player's money while the bet is pending.

A sports book may choose to buy in-play futures wagers at a price below the actual payout before a championship is decided if the potential payout is very high (and thus, damaging to the sports book due to the money that may be lost). The most recent example of this was when Leicester City persued (and went on to win) the 2015 English Premier League Championship.

• Head-to-Head. In these bets, bettor predicts competitors results against each other and not on the overall result of the event. One example are Formula One races, where you bet on two or three drivers and their placement among the others. Sometimes you can also bet a “tie”, in which one or both drivers either have the same time, drop out, or get disqualified.
• Totalizators. In totalizators (sometimes called flexible-rate bets) the odds are changing in real-time according to the share of total exchange each of the possible outcomes have received taking into account the return rate of the bookmaker offering the bet. For example: If the bookmakers return percentage is 90%, 90% of the amount placed on the winning result will be given back to bettors and 10% goes to the bookmaker. Naturally the more money bet on a certain result, the smaller the odds on that outcome become. This is similar to parimutuel wagering in horse racing and dog racing.
• Half bets. A half (halftime) bet applies only to the score of the first or second half. This bet can be placed on the spread (line) or over/under. This can also be applied to a specific quarter in American football or basketball, a fewer number of innings in baseball, or a specific period in hockey.
• In-play betting. In-play betting is a feature offered by some online sports books that enables bettors to place new bets while a sporting event is in progress, such as if a defense will force a field goal in the current drive or a baseball team will score a run in the current inning.

Bookmaking

The bookmaker functions as a market maker for sports wagers, most of which have a binary outcome: a team either wins or loses. The bookmaker accepts both wagers, and maintains a spread (the vigorish) which will ensure a profit regardless of the outcome of the wager. The Federal Wire Act of 1961 was an attempt by the US government to prevent illegal bookmaking.^[1] However, this Act does not apply to other types of online gambling.^[2] The Supreme Court has not ruled on the meaning of the Federal Wire Act as it pertains to online gambling.

Bookmakers usually hold an 11-10 advantage over their customers—for small wagers it is closer to a 6-5 advantage—so the bookmaker will most likely survive over the long term. Successful bookmakers must be able to withstand a large short term loss. (Boyd, 1981)

Many of the leading gambling bookmakers from the 1930s to the 1960s got their start during the prohibition era of the 1920s. They were often descendants of the influx of immigrants coming into the USA at this time. Although the common stereotype is that these bookies were of Italian descent, many leading bookies were of eastern European ancestry.^[3]

Odds

Odds for different outcomes in single bet are presented either in European format (decimal odds), UK format (fractional odds), or American format (moneyline odds). European format (decimal odds) are used in continental Europe, Canada, and Australia. They are the ratio of the full payout to the stake, in a decimal format. Decimal odds of 2.00 are an even bet. UK format (fractional odds) are used by British bookmakers. They are the ratio of the amount won to the stake - the solidus "/" is pronounced "to" for example 7/1 "seven to one". Fractional odds of 1/1 are an even bet. US format odds are the amount won on a 100 stake when positive and the stake needed to win 100 when negative. US odds of 100 are an even bet.

Decimal	Fractional	US	Hong Kong	Indo	Malay	Implied probability
1.50	1/2	-200	0.50	-2.00	0.50	1 in 1.5 = 67%
2.00	Evs (1/1)	+100	1.00	1.00	1.00	1 in 2 = 50%
2.50	6/4	+150	1.50	1.50	-0.67	1 in 2.5 = 40%
3.00	2/1	+200	2.00	2.00	-0.50	1 in 3 = 33%

Conversion formulas

x	To	Do this
Decimal	Fractional	x-1, then convert to fraction
Decimal	US	100*(x-1) if x>2; -100/(x-1) if x<2
Fractional	Decimal	divide fraction, then x+1
Fractional	US	divide fraction, then 100*x if x>=1; -100/x if x<1
US	Decimal	(x/100)+1 if x>0; (-100/x)+1 if x<0
US	Fractional	x/100, if x>0; -100/x, if x<0
Decimal	Hong Kong	x-1
Hong Kong	Indo	x if x>=1; (1/x)*-1 if x<1
Hong Kong	Malay	x if x<=1; (1/x)*-1 if x>1

In Asian betting markets, other frequently used formats for expressing odds include Hong Kong, Malaysian, and Indonesian-style odds formats. Odds are also quite often expressed in terms of implied probability, which corresponds to the probability with which the event in question would need to occur for the bet to be a break-even proposition (on the average).

Many on-line tools also exist for automated conversion between these odds formats.

In setting Odds, the bookmaker is subject to a number of limitations:^[4]

• The probability implied by the odds should be greater than the true probability for each possible outcome to guarantee positive expected profit.
• If the wagers on each outcome are made in ratio to the implied odds, then the bookmaker is guaranteed a profit (balanced book).

Legality

Sportsbook at Wynn Las Vegas, during Super Bowl XLII, February 2008

In the United States of America, it is illegal to operate a betting scheme, except in Nevada, Oregon, Delaware, and Montana.^[5] In many European nations, bookmaking (the profession of accepting sports wagers) is regulated but not criminalized. The NCAA has threatened to ban all playoff games in Delaware if the state allows betting on college sports.^[6] New Jersey, which is also interested, has been similarly threatened.^[7]

Interestingly for New Jersey, in a national poll released in December 2011, Fairleigh Dickinson University's PublicMind asked voters whether they “support or oppose changing the federal law to allow sports betting” in their respective states. Just as many voters approved (42%) as opposed (42%) allowing sports betting. However, voters who already live in households where family members (including themselves) engage in sports betting had a strongly favored legalization of sports betting (71%-23%), while voters in households where sports betting is not an activity, opposed legalization (46%-36%). Peter J. Woolley, professor of political science and director of the poll commented on the findings, “Gambling has become, for good or ill, a national industry, and you can bet that politicians and casinos all over the country are closely following New Jersey’s plans.”^[8] In a different study released by FDU’s PublicMind in October 2011, results showed that New Jersey voters thought legalizing sports betting in New Jersey was a good idea. Half of New Jersey voters (52%) said that they approved the idea of legalizing sports betting at Atlantic City casinos and racetracks, 31% opposed it. In addition, there was a significant gender split: a majority of men approved of the idea by a wide margin (65-21), while only 39% of women approved and 41% opposed.^[9] The October results were stable, reflecting an earlier poll in April 2011 where New Jersey voters approved the legalization of sports betting in the state by a margin of 53%-30%. However, nearly two-thirds (66%) of voters were not aware of the upcoming statewide referendum on the issue. Age proved to be a divide: Voters between the ages 18–34 were more likely to approve of sports betting than older voters. Dr. Woolley commented: “But...younger voters... are far less likely to vote than other voters... As always, a lot depends on who actually shows up to vote.”^[10] In February 2011 FDU’s PublicMind released a poll which showed that half (55%) of voters agreed “that people bet on sports games anyway, so government should allow it and tax it.” On the other hand, approximately (37%) of New Jersey voters concurred that betting on sports is “a bad idea because it promotes too much gambling and can corrupt sports.” Again, by a significant margin (70%-26%) that voters who already engage in sports betting in office pools tend to be more supportive of legal sports betting than other voters.^[11] Donald Hoover, FDU professor in International School of Hospitality and Tourism Management and former casino executive commented on the results; “Betting on sports is not an uncommon practice for many New Jerseyans, but for the most part, the state doesn’t supervise it, doesn’t tax it and doesn’t take any revenue from it.”^[12] In 2010 a national poll, results showed that voters opposed sports betting in all states by a margin of 53-39. Woolley commented on the results: “If some states allow sports betting and profit by it, other states will want to follow.”^[13] Yet by December 2011 after NJ passed its sports betting referendum the national measure shifted to 42-42.^[8] In January 2012, New Jersey Governor Chris Christie signed legislation allowing sports betting in New Jersey after it was approved in a nonbinding voter referendum in 2011 and he announced on May 24, 2012 that he plans to go ahead and set up a system of wagering at the state’s racetracks and casinos this fall, before the National Football League season ends.^[14]

In 2012, despite federal law preventions, the state legislature of New Jersey and Governor Chris Christie signed a law that would allow sports betting to take place in New Jersey race tracks and Atlantic City casinos.^[15] In August 2012, Fairleigh Dickinson University's PublicMind conducted a study on the issue. Voters were asked whether New Jersey should allow sports betting even if federal law prevents it from doing so, or wait to allow sports betting until federal law permits it. Results showed that nearly half (45%) of voters wanted to allow sports betting, while (38%) decided to wait and allow sports betting once Congress allows it. Krista Jenkins, director of the poll commented; "Although support is not overwhelming, these numbers suggest the public is cautiously behind the goal of moving forward with legalized sports betting."^[16]

In areas where sports betting is illegal, bettors usually make their sports wagers with illicit bookmakers (known colloquially as "bookies") and on the Internet, where thousands of online bookmakers accept wagers on sporting events around the world. The PublicMind's 2010 national survey found that 67% of Americans did not support the legalization of Internet betting websites in the United States whereas 21% said they would support legalization.^[17] The National Football League is fully against any sort of legalization of sports betting, strongly protesting it as to not bring corruption into the game. On the other hand, the CEO of the International Cricket Council believe sports betting, in particular in India, should be legalized to curb illegal bookies where match fixing has occurred from nontransparent bookmakers. Many of the illegal proceeds also allegedly go to fund terror, drugs and other illegal activities.^[18]

Famous betting scandals

Joseph J. "Sport" Sullivan was an American bookmaker and gambler from Boston, Massachusetts who helped to initiate the 1919 Black Sox Scandal.

In 1919, the Chicago White Sox faced the Cincinnati Reds in the World Series. This series would go down as one of the biggest sports scandals of all time. As the story goes, professional gambler Joseph Sullivan paid eight members of the White Sox (The players involved were Oscar Felsch, Arnold Gandil, Shoeless Joe Jackson, Fred McMullin, Charles Risberg, George Weaver, and Claude Williams) around 10,000 dollars each to fix the World Series. All eight players were banned from playing professional baseball for the rest of their lives.^[19] Pete Rose, the all-time MLB leader in hits, was similarly banned from baseball in 1989 for betting on games while he was a MLB manager.

The rule against gambling in baseball is known as "Rule 21," which is publicly posted on dugout walls and states: "Any player, umpire, or club or league official or employee, who shall bet any sum whatsoever on any baseball game in connection with which the bettor has a duty to perform shall be declared permanently ineligible." People permanently banned from Major League Baseball are also forever banned from entry into the Baseball Hall of Fame, although most such people have been reinstated a few years later by a later Commissioner of Baseball. (For instance, Mickey Mantle and Willie Mays were both banned from baseball in 1983 after taking jobs as casino greeters (which would have expelled them from the Hall of Fame had it been allowed to stand); they were reinstated two years later. Only Rose has yet to be reinstated.

A 1906 betting scandal between the Massillon Tigers and Canton Bulldogs, two of the top teams in professional American football in the early 1900s, led to the demise of "big-money" professional football for several years. Modern research has suggested that the claims of betting were unsubstantiated.

On December 7, 1980 the San Francisco 49ers overcame a halftime deficit of 28 points in what became the greatest regular season comeback victory in NFL regular season history. By the beginning of the third quarter, notorious Vegas bookmaker Frank Rosenthal received forfeiture notices from 246 San Francisco bettors totaling more than $25,000 in premature winnings. Rosenthal was able to retain these winnings despite the final outcome of the game due to gambling regulations previously established by the NAGRA.

The Cronje Affair was an India-South Africa Cricket match fixing scandal that went public in 2000.^[20] It began in 1996 when the-then captain of the South African national cricket team, Hansie Cronje, was convinced by Mukesh "John" Gupta, an Indian bookmaker, to throw a match during a Test in Kanpur, India. The scheme was discovered when Delhi police recorded illegal dealings between Indian bookmaker Sanjay Chawla and Cronje. According to the Telegraph in 2010, Cronje was paid off a total of £65,000 from Gupta.^[21]

Corruption in tennis has been long considered as issue.^[22] In 2011, the former world No. 55 Austrian tennis player, Daniel Koellerer, became the first tennis player to be banned for life for attempting to fix matches. The violations were outstanding between October 2009 and July 2010 after The Tennis Integrity Units had launched an investigation on behalf of the International Tennis Federation and the ATP and WTA tours. In 2004 and 2006, Koellerer was banned for six months due to his bad behavior. In addition, on August 2010, he facilitated betting by placing odds for matches and had links for placing bets.^[23]

See also

• Arbitrage betting
• Betting pool
• Financial betting
• Friendly political wager
• Parimutuel betting
• Point shaving
• Sports betting systems
• Statistical association football predictions

Sources

• Davies, Richard (2001). Betting the Line Columbus, Ohio: The Ohio State University Press ISBN 0-8142-0880-0
• Finley, Peter (2008). Sports Scandals Westport, Connecticut: Greenwood Press ISBN 978-0-313-34458-9
• Boyd, Kier (1981). Gambling Technology Washington, DC: FBI Laboratory
• Rose, Pete (2004). My Prison Without Bars St. Martin's Press ISBN 1-57954-927-6
• Thompson, William (2001). Gambling in America--An Encyclopedia of History, Issues, and Society Santa Barbara, CA: ABC-CLIO ISBN 1-57607-159-6

Notes

1. "18 USC Ch. 50: GAMBLING". house.gov.
2. Fifth Circuit ruling – PDF file
3. (Davies, 2001)
4. Cortis, Dominic (2015). Expected Values and variance in bookmaker payouts: A Theoretical Approach towards setting limits on odds. Journal of Prediction Markets. 1. 9.
5. "Sports Betting". American Gaming Association.
6. ABC News. "Sports News". ABC News.
7. PressofAtlanticCity.com
8. Fairleigh Dickinson University's PublicMind, (December 19, 2011). A Nation of Bettors? (press release)
9. Fairleigh Dickinson University's PublicMind, (October 10, 2011). NJ Voters Favor Sports Betting, but not Tax Credits for Meadowlands Developer (press release)
10. Fairleigh Dickinson University's PublicMind, (April 18, 2011) Odds Favor NJ Referendum on Sports Betting (press release)
11. Fairleigh Dickinson University's PublicMind, (February 21, 2011). Sports Betting, Sure Thing; Internet Betting, Nyet! (press release)
12. Fairleigh Dickinson University's PublicMind, (April 20, 2009). Legalized Sports Betting in New Jersey
13. Fairleigh Dickinson University's PublicMind, (March 11, 2010). US Public: Keep Las Vegas in Las Vegas (press release)
14. Coffey, Sarah (May 25, 2012). "N.J. Moves Towards Legal Sports Betting This Fall, in Time for NFL Season". The National Law Review. Retrieved May 27, 2012.
15. Rob Tornoe, for NewsWorks (17 August 2012). "Sports betting should be legal in the Garden State". Newsworks.org.
16. Fairleigh Dickinson University's PublicMind, (August 21, 2012). Opinion divided, but majority give the state the green light to allow sports betting in defiance of federal law (press release)
17. Fairleigh Dickinson University PublicMind Poll "US Public: Keep Las Vegas in Las Vegas" press release (March 2010)
18. Shriver, Roger. "NFL and ICC's Stance on Betting".
19. Finley, 2008
20. "Famous Cricket Spot-Fixing and Betting Scandals". 12 June 2013. Retrieved 22 June 2013.
21. "How Hansie Cronje became most infamous villain in cricket's fixing scandals". 26 May 2010. Retrieved 22 June 2013.
22. "No sport easier to fix than tennis". 19 June 2014. Retrieved 7 November 2014.
23. "Daniel Koellerer banned for life". 31 May 2011. Retrieved 20 October 2014.

External links

Media related to Sports betting at Wikimedia Commons