Longtime Las Vegas sports bettor Billy Walters was convicted of insider stock trading activities in April and sentenced to 5 years in prison last month, beginning in October. But what will his departure really mean for Las Vegas sportbooks?
Mr. Walters was one of the first professional gamblers to recognize the usefulness of computer analysis to model the potential outcome of sporting events. He bought into, supported and built a team to get information, analyze it and get bets down on games their analysis suggested the books had a bad betting line on.
His bets often move a book’s lines and more than one bookmaker in town prizes any information they can get as to which way Mr. Walters would bet on a game. Over the years he became and probably remains the single largest continuous sports bettor in Las Vegas.
With Mr. Walters’ pending departure for prison, more than one head of sportsbook operations is now wondering if Billy’s organization will continue on while he is on his “federal vacation.” Will it go on hold? Will they start selling their analytics? Will they have free reign to keep making bets or will they be pulled back just enough to keep things going till he is out?
While only Mr. Walters knows for sure, as he has reputedly been the final decision maker as to how much money he will put at risk, it is likely there will be a few years break in his action. I say, a few years break in his action, as most folk sent to prison and who behave as model prisoners either have their time reduced or get released on early parole. An example is the recent paroling of OJ Simpson.
Assuming Mr. Walters does suspend his betting action while a guest of the Feds, what is the likely impact on Las Vegas book wagers and win? By Mr. Walters’ own admission through past interviews, he has on more than one occasion used his betting and bankroll power to push a line around then bet a larger position once he gets it where he wants, getting the opportunity to score the occasional middle.
Betting both sides of a game at different lines can easily find a gambler in position of looking like having huge wagers when their net exposure is actually much less.
So based on collective conversations with book directors, past comments from Mr. Walters and some good old math, it is likely Mr. Walters has accounted for something north of ten percent and probably closer to twenty percent of the straight wagers made on football and basketball. Assuming further that Mr. Walters was telling the truth that while he has had ups and downs he has always had winning years and assuming he has achieved results that justify the risk and cost of operations he is probably earning around 20% on his money.
If reasonably close in assumptions and presuming there is not another Billy Walters type character ready to step into his shoes while he is out of circulation, Las Vegas books will on average probably see around a 15% decrease in straight wagers on football and basketball, and a counter intuitive increase in their win in those categories somewhere in the range between 15% and 20%.
One might think with that level of probable impact on Las Vegas sportsbooks all the operators would be happy to get a break from Mr. Walters’ shark hits. Not in all cases, while some will breathe a bit of a sigh of relief, there are those that like the game with Mr. Walters and there are those that try and offload some of their excess risk in his direction, so a very mixed bag of attitudes.
In asking one very long time bookmaker what he thought the impact on the pending departure of Mr. Walters from sports wagering for a few years. His simple reply was “One less shark to worry about, three hours less a week in phones calls from people asking what Billy is betting on”.
Mr. Walters is set to report to prison mid-October. Look for the gross sports wagers in Nevada to go down, percentage win to go up and things being a bit less exciting and nerve wracking in more than one sportsbook director’s office. I for one hope he gets an early parole; after all, things are more interesting with him in the mix.