The Offshore Edge
Avid sports bettors look to offshore gambling sites for fast-paced, though unregulated, wagers with less risk and more reward
From the Print Edition:
Adrien Brody, September/October 2010
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Any day of the week, any hour, really, you can be sure that the world's online sports betting sites are humming. No doubt, computers are tallying dollars, parsing risk and earning boatloads of profits. Estimated to be a $30-billion industry, offshore gambling operations generate action and commissions at a pace that Nevada casinos just can't match. Bets are placed over the phone and gamblers get routed via affiliates online and off, but mostly, money and positions pour in the new-fangled way: from the Internet.
It seems likely that Americans who utilize offshore sports betting sites are not breaking federal laws by wagering, though entities facilitating financial transactions and the books' directors appear to be another story. Legalities aside, betting online is generally a good thing for gamblers. But that doesn't necessarily make said gamblers comfortable about discussing their offshore activities. "Online is where it's at," acknowledges a professional bettor of basketball who's asked to remain unidentified. "The good deals [i.e., low commissions or vigorish] tend to be on the Internet and the weakest lines tend to be there as well. Everything is headed toward online. It's easier, it's faster, you don't need to dial a telephone number to make a bet."
Indeed for gamblers who fall within certain demographics, using a computer feels more natural than calling some guy and verbally negotiating a wager. More importantly, offshore books provide variety that just doesn't exist in Las Vegas or with your corner bookie. It's like shopping at Staples instead of a mom-and-pop stationary store.
To discuss this reality, I check in with single-monikered Edward, owner of a handicapping service called Right Angle Sports. With a documented win rate of 60 percent on college basketball totals (that is, betting on whether the total score will be above or below a certain number), Edward ranks among the sharpest of the sharp. He goes offshore for the same reason that a globe-trotting surfer would: a bigger and better selection of risks and thrills. "You find more options offshore, more opportunities to make half-time and total bets," says Edward, who specializes in those sorts of wagers. "The sites are willing to gamble more. They maintain higher volume and have more incentive to be customer friendly. In Vegas, most of the sports books are just amenities." As such, they aren't exactly enthusiastic about mixing it up with winners like Edward, on Edward's terms.
For many offshore gambling entities, sports betting is the raison d'être for being in business. Considering that offshore operators are naturally computer savvy, it's hardly surprising that the folks behind the sites would invest heavily in technology. That makes it easier for them to offer smorgasbords of proposition bets and even to provide continually changing lines once a sporting event is in progress. There are sites for peer-to-peer betting, which work as an exchange and facilitate wagers between individuals. Elsewhere, novelty lines get posted for betting on everything from the Academy Awards to who will win the World Series of Poker. Want to bet on who's going to score the next touchdown when the Giants vs. Dallas game is six minutes from completion? Get online and lay down a bet!
More surprising is how adroitly the newest software can interact with guys like Edward and also exploit them. To that end, rather than shunning the Edwards of this world (as Vegas sports books tend to do), some sites court him. While every sports book moves its lines based on incoming bets to reduce risk and exposure, the offshores go a step further. They use information gleaned from the plays of sharp bettors to take positions, manage risk and reap rewards.
As far as the owners of offshore books are concerned, their counterparts in Vegas are missing out on big opportunities. "Watch the line of a successful site and you'll see it make dramatic moves right before the start of a game," says one of the sharpies. "That's because their software is moving the number based not on the amount of money coming in but on the quality of bettor who's putting in the money. They go to 4 1/2 on a spread when the whole world is 5 1/2 and you know that they're taking a side. Usually it's because a winning bettor has made moves that influenced the offshore book."
This does not go unnoticed by some gamblers who earn money by betting sports without knowing the first thing about teams and stats. "Right around the tip-off of a basketball game, you can track the offshore lines and wait until some slip out of whack with what's being offered elsewhere on the Internet or in the casinos," says a card-counting blackjack pro who's profited handsomely by tracking offshore action. "Right there, you get a good indication of what the smart money is doing. Then, before the other sites have a chance to adjust, get your money in at the right price." He hesitates for a beat and brags, "In my life, I've never made a sports bet with my own information."
The edges, opportunities and conveniences that come with gambling online are nice, but there are downsides as well. As an example, Edward acknowledges that it can be inconvenient to collect winnings. Due to American banking regulations and legal issues designed to stop banks from processing gambling-site payments in the United States, retrieving hard-won dollars is rarely as easy as requesting an instant direct deposit into your account at Chase.
And it can be worse. Rather than getting paid slowly, you may not get paid at all. While Edward is sharp enough to avoid sites that have a high probability of failing-owing money and not being able to pay-he also makes it a point to keep from allowing greed to override common sense. Less seasoned sports bettors buy into financially impossible promotions and offerings of rock-bottom vig. Edward focuses on the bigger picture and sticks with reliable wagering outlets that charge reasonable fees.
Considering that the site holds onto a piece of your bankroll-patrons of sports betting sites make deposits in much the same way that online poker players do-you need to trust that management is reputable.
Edward suggests sticking with credible sports betting outlets that are clearly in it for the long haul. Of those that accept American action (some do not do business with Stateside gamblers, for fear of rankling U.S. law enforcers who've been known to arrest offshore bookies) sites such as The Greek Sportsbook (thegreek.com) and Bookmaker (bookmaker.com) have good reputations for paying. To see how many trend in the opposite direction, check out sportsbookreview.com, a Web site that rates sites based on their legitimacy.
Take note that there are many more with F ratings than there are with A ratings.
A man we'll call B.P., a professional handicapper who used to bet offshore, knows how bad it can get. While retrieving a take-out dinner from a Middle Eastern joint near his home in Vegas, B.P. recalls the one time he got, in his words, "screwed." It was for a series of bets, some straightforward and others exotic, made on a recent Super Bowl. They were placed with a site offering a deal that seemed too good to be true: no vigorish on either side. "What was the point?" asks B.P., explaining that he had been working with partners and was unaware that the site volunteered this arrangement. "We got down $80,000 and won, but it turns out that they were moving the line so that they could bet all the hot sides." And not with an eye toward managing risk. "They were gambling and they lost. Had they beaten the Super Bowl they might still be in business, but they lost and they skidaddled." With B.P. and company's cash.
B.P. never got his money, and he developed a serious distrust for making bets on the Internet with offshore operators. Emphasizing that all sites are not crooked, Steve Fezzik, an astute bettor (he won the esteemed Hilton SuperContest, an NFL handicapping tournament, for two years running) and online moderator at lvasports.com, acknowledges that whether or not to patronize the offshore books is a personal decision. But he also opines, "You have to recognize that many offshore sports books are like junk bonds. They have questionable legality, along with questionable financial solvency and questionable management. Broadly speaking, is your money safe in the offshore world? My answer would be no."
Even if you believe that your money is safe, beware of sites offering lines that are god-awfully out of whack. I've heard about a Kentucky Derby wager that was 30-to-1 via Churchill Downs and only 8-to-1 online. These outrageous disparities come about for one of two reasons: Either the site is hoping to take advantage of inexperienced bettors or else it just took a lot of wagers on a particular side and is essentially shutting it down-unless the price is too good to refuse. Either way, the site is not seriously courting action and buyers must beware.
The good news is that it's easy to avoid this sort of situation. Simply shop around online for the best price. If you want to visit just one site and establish a baseline, Edward from Right Angle Sports suggests checking into pinnacle.com. "They usually have the most competitive prices on the Internet," he says, pointing out that another option is to go to matchbook.com, a peer-to-peer site where you can put up the line that you're willing to offer and, if you find a taker, the site extracts a small cut for facilitating action between two individuals. "People don't realize how essential it is to shop for the best number. They think half-a-point doesn't matter, but, long-term, it's important." Massive spreads from reality, of course, can be deadly.
Soon, though, you may have the government looking out for you. New Jersey state senator Raymond Lesniak, a dedicated cigar smoker, wants multiple forms of online wagering regulated and taxed in his state. I ask him if there will be sports betting and he replies, "You bet. The World Cup would be huge in New Jersey." Then, with a bit of brio in his voice, he adds, "The World Cup will be huge in New Jersey."
The fine points of the plan have yet to be ironed out; for instance, it's unclear who will provide infrastructure and how the new online gaming laws will be enforced. Then there are legal hurdles. For example, before online sports betting can be presented to voters, a federal law banning the practice (which Lesniak views as unconstitutional) needs to be overturned. Lesniak estimates billions of dollars for the entities that run Jersey's online gambling, which, he believes, will include casino games as well as sports (though casino games will be put forward as one bill and sports betting as another bill). Very soon, Lesniak predicts, "we will be able to [gamble online legally]."
Lesniak's last statement is most certainly true-at least if your public lives and dies with every half-point nudge in the spread. One insider claims, "Most every professional sports bettor uses the online sites." Sports-betting veteran Alan Boston succinctly states, "Anything that gives you a better chance to earn money helps. Anything that gives you a wider variety of lines helps."
Opportunities on the Web clearly aid the sharp professionals who recognize every angle and capitalize on every advantage. But there are aspects of online betting that can help the rest of us as well. The newest opportunity is a relatively fresh gambit called in-running wagering. This is a high-tech form of sports betting that allows gamblers to place a plethora of bets as a sporting event progresses. You can wager on anything from the outcome of a game-obviously with odds and point spreads that continuously evolve-to which side will be next to score. The format is being offered at M Resort in Las Vegas, inside a sports book run by Cantor Gaming, a division of the Wall Street firm Cantor Fitzgerald. Cantor's involvement is appropriate, as in-running is a lot like day-trading, complete with hedges, selling out of positions profitably and then jumping back in when the price is right.
James Hipwell, the London-based sports betting editor for betrepublic.com, and a successful punter in his own right, suggests that succeeding at in-running requires lightning fast reflexes, a good Internet connection and a clear understanding of what makes a bet profitable from one second to the next. "For example, when it comes to betting on a sprint-a horse race of five furloughs or 1,000 yards-you look for a horse that comes slow out of the starting gate and immediately lay it [that is, bet on the horse to lose]," says Hipwell. "If it's a favorite with a bad jump, you'll see the odds go from 1-to-2 to 10-to-1 in two seconds." Of course, though, if you know something about the horse that a lot of other people do not-like that it has a tendency to recover from weak starts-you might want to take the long odds and bet on it to win.
A great example of an opportunity for sharp bettors to cleanup came in the 2009 Kentucky Derby. Mine That Bird went off as a 50-to-1 longshot and its price got even longer via in-running wagering. The horse spent most of the race at the back of the pack and then came through in the last 16th of a mile to win. As Hipwell puts it, "A lot of in-running punters were shitting themselves."
If the fast and furious pace of in-running is not for you, you can use an old fashioned approach to exploit opportunities offshore. Think like a pro, remove all emotions, study teams and understand what makes one a favorite over another. Armed with that knowledge at game time, you'll be betting into lines that have already been picked apart by other gamblers and made efficient by the books. But right at the beginning of an NFL week, when what Edward refers to as "the virgin line" gets posted by the offshores, you have a shot at discovering advantages. You can capitalize on the shortfalls of odds-makers who find themselves pressed to handicap way more games than you, as a gambler, need to consider.
Offshore sports books are usually first to post the lines for a weekend of games. By the time Las Vegas casinos follow suit, they are already reacting to what happened in the backrooms of Costa Rica, Antigua and other bookie-friendly spots in Central America and the Caribbean-via many millions of dollars worth of opinions. "For the NFL, real value is offshore on Sunday night when sites put up their virgin lines," says Edward, explaining that the biggest professional bettors are limited in what they can get down at that point (because the lines are vulnerable) and they don't bother much with them. "Immediately, the semi-sharp people"-smart bettors with smaller bankrolls who probably do not gamble full-time- "start hammering the weak lines into place. It's worth remembering that the most efficient line is right before the game begins and the least efficient line is when it's first introduced."
Asked for an example of this, Edward recounts a WNBA game from the night before. "Candace Parker is the top female basketball player in the world," begins Edward, referring to the forward for the L.A. Sparks who sustained a side-lining injury that had not been widely reported when the opening point spread came out offshore. "The Sparks were favored by 1 1/2 over the Connecticut Suns. So, overnight you could have gotten Connecticut at plus 1 1/2. By the time Vegas opened it was Connecticut at minus 1 1/2, and it closed at minus 4. The Vegas bookies wake up in the morning and adjust, based on what happened offshore."
Illustrating the offshore advantage, Connecticut won by three points. "So," continues Edward, "that is a perfect example of why it is easier to beat the opening line and the benefit of hitting it early."
It also illustrates why sharp gamblers flock to the offshore books, riskily pouring billions of dollars into betting pools there, regardless of what some American lawmakers and elected officials think is best for us.
Michael Kaplan is a Cigar Aficionado contributing editor.
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