Basic guide for monitoring a sportsbook
June 19, 2018 3:00 AM
by The Analyst
As sport betting fever continues to roll through the country with many a state legislature adopting or considering the adoption of laws and regulations to permit sports wagering, regulators and enforcement agents are starting to question what they need to do to audit and monitor sports betting operations.
Under that motivation, a few former associates of mine who moved to the regulatory side of the gaming business separately called and asked similar questions:
What are the most common problems you have seen in sportsbook operations? What weaknesses are there in the control of book operations? Can a sportsbook be cheated?
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These questions triggered a flood of memories and brought to mind a few things new operators and regulators should be mindful of as they get into the world of sports wagering.
First off, the motivations of a good sportsbook vs. the betting public are very different. The job of a good book operation is to try and achieve a balance of wagers on an event such that regardless of the outcome of the event the book makes money, whereas the betting public wants to win their bet.
So fundamentally while the bet is made with the book, it is really being made against other members of the betting public. So on a winning bet, while you collect from the book you are winning another bettor’s money.
The process for all books starts the same way: set an opening line; then as bets come in make decisions as to adjusting the points or odds to attract wagers on both sides of the event. However, as time marches from the opening line to the start of the wagering event, information as well as size of wagers made can cause dramatic movements in the lines such that “middles” or advantage positions can be obtained.
Shrewd, sharp or wise guy bettors will often use their wagering power to try and push lines around and effectively manipulate the betting lines to create edges or middles such that they too can have positions such that they don’t care which side wins.
While a good book operator should be mindful of these efforts, they should not worry so much about the sharps that they leave the book out of balance and thereby exposed to a potential loss.
Linemaking at a book is a very powerful position, it is the only place in the casino where the odds are not set by pure math but an opinion based on stats and continually updating information. Under the efforts to balance the book the linemakers or risk managers are also allowed to use their opinions to move the lines around. And hopefully they will be right much more often than wrong.
Unfortunately, sometimes the people in those positions manipulate lines for their own personal gain. As an example, many years ago one of the book operations within my scope of authority, while performing well overall, seemed to always book a loser on a certain set of teams. So, I cranked up the surveillance attention on the sportsbook and had the auditors track the detailed line movements.
To make a long story short, one of the linemakers would set a line, use a runner to make bets for himself, then adjust the line as business warranted and just before game time make a very sudden and short-lived line movement just long enough to get another bet down through a runner such that he had a no-lose position on the wagers.
If he had kept the wagers small, we probably never would have caught him, but greed took over and he bet his favorites a little too often.
Speed of information is also an important component for the regulators and operators to keep an eye on. How would you as a bettor like to know an hour before the sportsbooks if a starting quarterback for a coming game was going to be benched or out on an injury?
There are a number of information services available to sportsbooks and the service providers are usually fast and accurate with the info they deliver. But occasionally they make mistakes and sometimes the delivery of information comes questionably late, after sizeable bets have been made at the book.
No different than in the stock market, good insider information is worth serious gold. Why the information service providers and some line providers are not always required to be licensed remains a mystery to me, but a smart book operator will engage and monitor multiple sports information service providers to assure they get the best information as fast as possible.
There are plenty of other things to watch out for, like ticket writers betting out of their drawer, but overall the same old gaming management rules of thumb apply. If someone can touch the cash or touch the equipment used to make a wager or determine an outcome, they may try and find a way to cheat the system.