Sports book directors are fuming over an across-the-board rate hike from Las Vegas Sports Consultants, which provides betting lines and sports updates to Nevada sports books.
But because of narrowly-defined Nevada gaming regulations, they have little recourse but to pay the increases — which reach 100% in some instances — or create their own lines and odds.
"We’re stuck between a rock and a hard place," said one sports director who asked to speak anonymously. "Having to pay a rate increase is one thing, but to double your monthly payments is pretty excessive."
A survey of sports directors reveals that rates would double for some of the Strip resorts, increasing from about $1,400 a month to $2,800 a month.
Hardest hit are sports betting operations that run "satellite" books such as Leroy’s and Station Casinos. Those operations would have to pay a flat sum for each satellite.
Most casinos contacted by GamingToday said they were resigned to paying the rate hike.
"We don’t really have any choice but to pay, otherwise we go out of business," said Eric St. Clair, sports book manager at the Rampart and Cannery casinos. "We won’t hit the gamblers for the money. I could charge a 30-cent spread in baseball instead of 15 cents, but then consumers would go somewhere else."
St. Clair added that setting up an odds-making operation similar to LVSC would be "a logistic nightmare."
"Supplying odds and every bit of information that LVSC compiles requires a staff that has to work seven days a week, 365 days a year," St. Clair said. "LVSC to us is a lifesaver. It is the sports bible."
Bob Smith, manager of Leroy’s, which operates more than 40 sports books in Nevada, said some of its smaller sports books may not earn enough to cover the new rates.
"We get doubly screwed because all our books are satellites," Smith said. "It’s never good when expenses go up. We’re talking to them and working it out. We could do our own lines, but we’re just too busy."
One organization that is not too busy is Coast Casinos, which sets its own lines and doesn’t use LVSC.
According to Nevada regulators, a company or individual that wants to supply lines and betting information to licensed sports books must be licensed by the state.
But sports books aren’t required to use a licensed service such as LVSC. Indeed, some books rely on information obtained from other services, including a Nevada line service operated by Eugene Buonantony, or unlicensed Internet services such as Don Best Sports.
Indeed, one director who runs a locals-oriented sports book, said he preferred the Don Best service to the one provided by LVSC.
The new management at LVSC, which was sold by CBS Sportsline last November, said the rate hikes are justified.
Ken White, who took over as LVSC president six months ago, said that some properties have not had a rate increase since 1992, and that hikes, which will go into effect on July 1, are based on "location and volume."
"Each client is on the rate card," White said. "Five of our clients are major. Some had their rates barely go up ($5,000 a year or $400 a month). Some took a huge jump."
White said rates depend on the casino’s location and volume. "The Strip hotels are naturally the larger customers," he said. "Ones off-Strip, downtown, and Reno/Tahoe are not as high. Those in Mesquite and Laughlin are even less."
White said that part of the need to raise rates has been the diminishing number of licensed sports books.
"We are not able to service anyone outside the state, other than a couple of lotteries and a few offshore books," he said. "We once had 120 clients. Now, with mega hotels and casino mergers, it’s down to 31.
"Our staff hasn’t had a raise in more than two years," White continued. "We’re a business just like everyone else. If we were able to charge for our service to customers around the country, we would give it away to Nevada casinos for free."
White added that his company is essential to the Nevada gaming industry.
"Gaming Control wants to make sure that a bookmaker in Mississippi is not using the same screen that we supply to Vegas and our other clients," White said. "We are losing hundreds of billions of dollars to the Caribbean. It’s ridiculous to lose that much money offshore. It should be coming to the state of Nevada."