So you want to open a sportsbook…
June 05, 2018 3:00 AM
by The Analyst
Ever since the Supreme Court opened the door for other states to take advantage of sports wagering, interested gaming operators have been faced with a series of decisions: Operate their own book, partner with an existing sportsbook operator or outsource sportsbook operations.
What type of sportsbook do they want? A simple customer convenience, low betting limit book, a super book taking a wide range bet types and limits or something in between that takes a little bit higher betting limits for casino customers but keeps their bet types among the more conventional and traditional norms?
If they choose to operate their own book, what betting systems should they use? If they choose to outsource their book, who should they contract or partner with?
As these gaming operators explore their options, old timers such as me and a few other compadres have become popular people to talk to as gaming operators look for advice and insights as to which way they should go with their prospective sportsbook opportunities. Oddly, most of these calls include the question: “What would you do?” This is generally met with, “What do you want the sportsbook to do for your casino operations?”
In earlier days, here in Las Vegas, there were standalone book operations focused completely on race and sports wagering, there were early forms of super books that loomed so large they outshined the resorts they were in, and there were the amenity books that, while true sportsbooks, were there to help keep the regular customers from going somewhere else to put a sports bet down and forgetting to come back to their preferred casino.
The second question is usually: “How much risk do you want to take?” Small book operations often find themselves risk adverse and usually declining large bets, while sometimes gouging their customers on odds, point lines and money lines. Conversely super books usually take larger bets, keep the lines a bit tighter between the sides and have enough volume to often come close to balancing their book’s risk position.
However, the amenity book will try and make good lines, balance the book’s risk where possible but is willing to take a larger bet from known preferred casino customers knowing the loss in the book will be covered by the action in the casino from the same customer.
A good example of the latter: There was a great casino customer who would come into the property I was with at the time (some thirty plus years ago) and want to bet in the range of $100,000 to $300,000 on his desired team of the day or week. He was good with his picks and usually won those sports bets. Sadly for him and good for the casino was that when he came in to make the bet and when he came to collect on the bet he would generally lose between one and two million dollars on his favorite casino game.
While not everyone will gamble that kind of money, it reflects one of the purposes of a good sportsbook in supporting the menu of action in the casino and being another reason to come to the property.
Ultimately after firing off a number of questions at my callers, I generally leave them with the advice that if they are a small operation with no expansion plans, cut a deal with a national book operator and use the book as a customer retention and amenity tool.
On the other hand, if they are a large operator with desires of gaming expansion in multiple jurisdictions, then go after a larger book operation, hire a bone fide experienced director of sportsbook operations, don’t skimp on quality staff and system software, and make it a true destination feature of the casino(s) to be proud of.
For those that will either outsource or partner in the operation of their sportsbook, I strongly suggest picking a partner or book operator that is willing to put the casino’s preferred method of operation and customer service in the contract. And don’t be shy about calling their existing casino partners and visiting their operations incognito to see how they are as operators and how they treat their customers.
A good month
On a separate topic, the Nevada gaming results of April were released last week. Though missing the billion-dollar target by roughly $50 million, the results were positive across a number of categories and not dependent on baccarat as the singular make or break number for the month as it was in March.
Results were broad enough to suggest an expectation of similar results for May – Good Times seem to be staying around for a while.