Sports books thrive amid gaming decline

[clevfan]

Sports books thrive amid gaming decline

By Chris Murray • rgj.com • August 26, 2008

Weaving through the Atlantis’ casino floor, Joe Medina’s eyes lit up as he caught a glimpse of the new race and sports book near the east entrance.

Medina entered the 4,000-square-foot book, where he was surrounded by 43 high-definition televisions — including two 7 foot by 13 foot big screens — and looked up at the glittering electronic board displaying the day’s odds.
“Wow,” he mumbled to nobody in particular. “This is awesome.”

Medina, from Aptos, Calif., in Northern California, remembers the Atlantis’ sport book as a “hole in the wall” earlier this year.

“It was a counter tucked between a bar and some stairs,” Medina said. “There was no place to sit and no board. This is so spacious, so clean. The design with the TVs all around is beautiful. The old one was terrible. This is awesome.”

The sports book, which opened last month as part of a $50 million casino renovation, is a symbol of the steady rise in sports betting over the last decade, despite the nation’s economic downturn. The numbers tell the story.
In the 1998 fiscal year, Nevada sports books (minus race pari-mutuel betting) had a win total of $87 million. In 2008, that figured nearly doubled to $166.3 million. And with the busy college and pro football seasons about to begin, books can expect profits to continue to increase.

The reasons for the recent sports betting boom are many.

Increasing the win percent

While the sports books’ profit margin has skyrocketed over the last decade, the handle — or amount bet — has risen modestly. The real secret behind the books’ success has been their increased win percent (or percent of handle won).

In 1998, the sports books’ win percent was 3.7; in 2008, it was 6.3.
Why has this happened? Depends on who you ask.

There are many guesses, from the proliferation of parlay bets to better line setting to a rise in less-educated bettors to just plain luck.
Peppermill’s veteran sports book manager, Terry Cox, thinks it might be the latter of those options.

“The win percent is going to fluctuate,” Cox said. “The books have simply had a couple of good seasons. We’ve held particularly well, especially in parlay cards. But that will even out over time.”

Nonetheless, Cox says the heavy foot traffic he sees daily can only be a good sign.

“We’re writing as many tickets as we ever did,” Cox said. “People are still coming in and they are still excited to bet, and that is the really good sign.”

More parlay bets

Sports books are also offering more types of bets, especially of the parlay variety. And no bet is more lucrative to a sports book than a parlay card.
The average casino win percent on a parlay card over the last year is about 32 percent; the average win percent on a single-game bet is about 6 percent. So, the more parlay bets, the bigger the sports book win. And there are more and more parlay cards to bet upon.

“We have a number of different types of wagers now that we never had before,” Silver Legacy sports book manager John Pinto said. “We offer seven different parlay cards. We have super teasers, big teasers, reverse teasers.
“We have offered the customers a number of different propositions that maybe the customer can’t handicap as well as a regular game, but they enjoy betting it more.”

Bill Eadington, the director of the Institute for the Study of Gambling and Commercial Gaming, offered an apt analogy to describe parlay bettors.
“Parlay cards are like college students who drink beer, whereas straight bets are like wine connoisseurs who drink fine wine,” said Eadington, who is also a UNR economics professor. “It’s the quick hit, but the riskier bet.”

Online betting outlawed

Another key factor in the increased profitability of sports betting locally is the death of online wagering nationally.

In 2006, the Unlawful Internet Gaming Enforcement Act outlawed online sports betting. Many looking for an outlet to continue betting turned to Nevada.

“I think the Internet really had a dampening effect on Nevada sports books in the late-1990s,” Eadington said. “After that market got closed down, a lot of betting came back to Nevada because it is the only legal market in the U.S.”
Nick Bogdanovich, the director of the Club Cal Neva race and sports book, has noticed the difference.

“I think we have seen a noticeable difference since that law passed,” Bogdanovich said. “It has clearly helped us.”

And casinos have continued to find innovative ways to draw people to their sports books. For example:

o The Atlantis built its state-of-the-art facility.
o The Silver Legacy is offering two Super Bowl tickets as part of its free “Beat the Bookie” contest.
o The Peppermill is giving away a trip to the Pro Bowl based on a “Parlay Points” promotion.
o In March, the Cal Neva became the first Nevada book to offer in-game betting (“It’s like playing prop bets throughout an entire game,” Bogdanovich said).

All of these decisions are aimed at creating foot traffic, which leads to increased betting and increased profitability.

The busy season

Foot traffic, in the near future, shouldn’t be a problem. The college and pro football seasons open in the next few days.

“These next six months are when we make our money,” Bogdanovich said.
Ask any sports book manager how important the football season and the answer will be the same.

“Football is king,” Atlantis race and sports book manager John Falenski said. “It has always been king and will always be king. The World Series and the Triple Crown horse races are nice and create some excitement, but everybody loves football.”

Eadington said football accounts for 40 percent of a book’s gross win.
“It’s no secret that football season is our bread and butter,” Pinto said. “Just to see the look on people’s face the first week of the football season, it’s like playing a round of golf when you eagled every single hole.”

And although the sports books are thriving, that doesn’t mean casinos as a whole are on the rise. Only an estimated 1.2-1.3 percent of a casino’s revenue comes from its sports book, and revenue from slot and card games both declined over the past year.

Nonetheless, betting on games appears as popular as ever among sports fans. Richard Biniek lives in Reno and likes to put down the minimum bet of $2 on a parlay card throughout the season.

“It’s all entertainment,” Biniek said. “At two bucks a pop, I’m not losing that much, but it is more entertaining with a bet on the line.”

Even at $2 a pop, those bets continue to pile up big profits for Nevada’s books.

[sylf]

Another key factor in the increased profitability of sports betting locally is the death of online wagering nationally.


really?

[Mr Falcone]

Eadington said football accounts for 40 percent of a book’s gross win.
“It’s no secret that football season is our bread and butter,” Pinto said. “Just to see the look on people’s face the first week of the football season, it’s like playing a round of golf when you eagled every single hole.”

Holy fuck now thats exciting