An Off Shore Bet
With its advanced technical infrastructure, loose laws and beautiful women, Costa Rica has become a haven for hundreds of American sports-betting
From the Print Edition:
Tyson vs. King, Jan/Feb 04
It's about 12:30 p.m. Eastern standard time. At football stadiums from Detroit to Miami, kickoffs loom and excitement builds. But even in cities where the home team must win to ensure a playoff berth, the intensity level is nothing compared to what's going on in San José, Costa Rica -- a place where 10 years ago football could have only meant soccer.
From one end of the city to the other, in shiny office buildings and low-slung suburban developments, telephones ring incessantly. Digital pipelines overload with information. Computer screens grind through many megs of mathematical computations. All of this takes place within the walls of operations bearing names such as BoDog, Cascade, NASA and Hollywood, online sports books that take massive numbers of wagers from gamblers across the United States.
A guard holding an enormous rifle, its barrel poking up toward the overcast sky, stands outside the building owned by an enterprise called CRIS (Costa Rican International Sports). Inside, a fluorescent-lit, airy white-walled room is crowded with about 200 telephone clerks handling the incoming wagers. But many more bets arrive invisibly, via the Internet. A gray-haired, slender line-maker (the person who decides how many points each team should give up or receive) introduces himself as "Mac, just Mac, from southern California," before marveling at the flow of action. "If not for the Internet, we'd never be able to handle nearly this much," he says, keeping both eyes glued to a computer monitor that allows him to track the incoming wagers and manipulate his lines so that he doesn't get stuck with too much of a liability on one side of a game or the other. "If everything came in over the phone, there could be a thousand clerks in here and it wouldn't be enough."
Mac is one of hundreds of American sports-betting professionals (i.e. bookies, marketers, money movers and line-makers) who've found refuge in Costa Rica, the reigning world capital of sports betting. While there are gambling operations scattered around the Caribbean, Costa Rica currently ranks as the hub, housing anywhere from 200 to 300 sports books (depending on whom you ask) that combined generate at least tens of billions of dollars in wagers each year. It's no accident that hundreds of American bookies have settled in Costa Rica. This Central American nation boasts a good technical infrastructure, a reasonably friendly government (only in the last year have Costa Rican officials begun pressing the betting operations to buy licenses for $45,000 to $90,000), loose laws, close proximity to offshore banks (gambling money is not allowed to pass through Costa Rica, so the books do their banking in places like Curaçao, the Dominican Republic and Antigua), and so many beautiful, available women that one happily married sports-book manager comments, "If I didn't have a wife, I would lose my mind here." Another American, pointing out that cocaine is dirt cheap and plentiful, adds, "I've lost good guys to women and to coke. They get too involved with one or the other and stop coming to work."
Back at CRIS, with only 15 minutes until game time, the phone action escalates. Digital chirps ring out with the mounting intensity of a symphony reaching its crescendo. Sitting behind a raised dais-style table called the stage, Mac continually yells out changes to the lines, answers clerks who want to know whether or not particular gamblers can exceed their limits, and keeps an especially close eye on what he calls Wise Guy Row. It's a single table occupied by a small cadre of elite phone clerks who facilitate the bets of professional gamblers: players who are capable of moving lines at the last minute, then catching the other side of a wager and essentially risking no money while hoping that the final score will fall inside the point spread and result in a risk-free payday. Or else they simply are so smart about sports-betting that they're far more likely to win than they are to lose.
Told that a lot of his competitors eschew the wise guys, Mac says, "I happily take their action. Sharp players bring a lot of volume. Then we nudge the line to generate action on the other side."
He looks at his monitor and grimaces. "Right now I'd like to have a little more money on Cincinnati," he says, acknowledging an imbalance of $90,000 weighted toward the opposing team. Then, as chaos swirls around him, he calmly adds, "But I'd rather book an extra bet than give away a number I don't want to give away."
CRIS, founded by Ron "Cigar" Sacco, the godfather of offshore gambling, is run like an old-school operation. Bereft of gimmicks, technologically low-key, not at all caught up in marketing gambits, CRIS is philosophically similar to the small, independent sports books that once dotted the Vegas Strip. Just across the parking lot, however, resides BoDog, a successful operation that is CRIS's antithesis. Where CRIS is stripped down, BoDog is a flashy, swaggering beast of a company, taking 90 percent of its action over the Internet (as compared to 70 percent for CRIS) and even featuring its own mascot: a tooth-baring canine that looks ready to pounce. CRIS's name is obvious to the point of sounding generic; BoDog's was devised as strategically as a soft-drink's: it had to sound aggressive, bear fewer than six letters (a preference for Web surfers) and be available as a URL.
Unlike CRIS, BoDog discourages wise guys -- going so far as to have two separate point spreads, one for the wise guys and one for the squares or recreational bettors that it aggressively courts. The site gets mass-marketed as if it's trying to compete with Amazon or Orbitz. "We only market on the Internet -- not in print or broadcast -- and in two seasons we've become the dominant brand on the Web," maintains Cole Turner, BoDog's Chief Executive Officer and founder. "Companies here in Costa Rica are run by one of two types of people: a bookmaker who somehow managed to educate himself on e-commerce and technology, or a technology person, like myself, who came in from the other direction. I believe that the most powerful person is the one who's strong in technology. You can dominate this industry with an average bookmaker if your technology and marketing are world-class. But you will never dominate this industry with a world-class bookmaker and average technology. Make mistakes on the marketing side and you get lost in the chaff of the industry. Nobody will even know that you exist."
It's a headstrong sentiment that generates controversy among the hardworking bookies here. But, judging by the late-game activity in BoDog's phone room, the approach seems to work. Clerks are busy, line-makers frantically massage the numbers being offered to their square customers, and Cole Turner stands on the edge of the stage with a self-satisfied look as a second round of kickoffs nears.
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