Managing the Point Spread

With casinos behind us, adding texture to the nation's gambling picture takes us to America's favorite — and most costly — indulgence: betting on the outcome of sports events. Whether through friendly "betcha 10 bucks" wagers, office sports pools or full-fledged bookie operations — sports betting far outdistances casinos, lotteries and even bingo in terms of gambling dollars changing hands. Americans appear obsessed with the idea of predicting winners in games and races. "Which team beats which team or which horse beats which horse is what our business is all about," a bookmaker described his profession.

He Believes He Helps His Team Win

   Sports enthusiasts develop remarkable loyalty for their favorite teams. Psychologists say this loyalty can result in the perception that when a fan bets on his team he is actually helping it to win. He is demonstrating his loyalty in a tangible way he feels may even intimidate

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the opposition. His bet is an effective challenge to those who do not share his faith in his team, and the more reckless his wager the more intimidating to them is his gesture of loyalty. "Put your money where your mouth is!" and "Put up or shut up!" have silenced many sports enthusiasts less confident of their cause. There is no clinical evidence, however, that such loyalty ever has turned a loser into a winner.

   Predictably, the sports activities that get the most press notice also get the most action from betting enthusiasts. Before a new team franchise has earned widespread name recognition, it will inspire only minimal action in the betting arena. Even then, it takes major seasonal sports — at professional and college levels — to attract the big betting bucks. "Football or baseball, basketball and hockey are my bread and butter," a big-city bookie acknowledged. "They give us a year-round schedule to work with, and we like steady income as well as the next guy. Before one seasonal sport shuts down, another has started up, and that means there's very little break in the action — or the income."

The Surest and Easiest Way to Turn a Fast Buck

   But the uninterrupted action and steady income are not the only benefits the bookmaker derives from betting based on the outcome of major sports events. The potential for greater profits in sports betting also is what motivates him to specialize. He theorizes that, for whatever reasons, sports enthusiasts have more money to bet than those who prefer other types of gambling. Bookies aren't overly concerned about why that phenomenon exists;

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they just see sports wagering as a gaming indulgence patronized more by the affluent than by nickle-and-dime gamblers, and that means greater return on the time and effort they invest in soliciting and processing the bets. After all, they're in the business not because they are sportsmen but because for them this is the surest and easiest way to turn a fast buck.

   In spite of his illicit profession, the bookmaker often commands a certain professional respect among his clients. They wouldn't invite him over for dinner or be seen with him at a charity ball, but they tend to regard him as a broker of sorts. He brings together money on both sides of an athletic contest, and he probably feels a fiduciary responsibility to his clients. If he hopes to stay in business, however, he must arrange it so that the money pumped in by his losers will more than cover the money he pays out to his winners. That means he must skillfully manipulate the figures to keep the betting odds in his favor.

   Managing to keep that odds-on advantage is, in fact, the most significant challenge of his trade. These odds must not be great enough to discourage his customers from putting money on the line and dreaming of the big win, yet they must be tilted sufficiently in the bookie's favor to guarantee a generous return on his investment. The bookie can't afford to gamble; his income must be a sure thing.

$10,000 Profit in a Good Week

   Most sports bookmakers live well above the poverty level — and this fact is confirmed by the consistency of organized crime involvement in sports betting. The keys

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to big bucks for the bookie include (1) the affluence of sports wagerers as a class, (2) the skill of the bookmaker in "balancing" his wagers and (3) the regularity with which his choice customers risk large sums of money on the outcome of athletic events. Some well-established bookies would decline a bet of less than $100, and some boast regular clients who would not stoop to a wager of less than $5000.

   The bookie's net income is likely to approach 5 percent of the gross amount wagered with him in both directions, even after runners, salesmen, clerks, telephone relayers, watchmen, collectors and other team members have been paid off. Enterprising bookies can net $10,000 in clear profit in a good week with properly managed point spreads, and it is doubtful that they tithe that income to support the work of the Lord.

   It might be noted, in passing, that — since accounts payable as well as accounts receivable are all handled in cash transactions — bookmaking as a profession is not noted for its compliance with income tax laws.

   The more his customers bet, the more money remains in the pockets of the bookmaker. The three sources from which he generates that income are (1) the point spread or handicap, (2) the "vigorish"¹ surrendered by the losers and (3) the tips he can count on receiving from grateful winners.

Determining the Point Spread

   Handicapping, for the bookie, is a relatively simple process, accomplished primarily by applying to win/lose wagers the point spread — however speculative — established by recognized experts in the sports field.

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Jimmy "the Greek" Snyder probably is the best known among these entrepreneurs, though others like the Churchill Downs Sports Book in Las Vegas and J.K. Sports with several offices in California also help dictate what is known as the "line" or the "spot" for sports betting. In spite of the fact that bookmaking is illegal, these point spreads are published in the sports sections of hundreds of newspapers across the country. Since they are quoted always in whole points, however — as, for example, the Redskins are favored over the Jets by 14 points — the published point spreads are classified as "nonwagering" lines. Thus newspapers that print them remain unchallenged by officials charged with enforcing antigambling laws.

   What makes whole point spreads impractical where wagering is involved is that if Washington at +14 beats New York by exactly two touchdowns, the result is the same as a tie or "push." All bets are off. And ties offer neither excitement for the gambler nor profit for the bookie. If the score is tied when the handicap is factored in, no money changes hands — and money, not team competition, is the real name of the game.

   Point spreads represent the experts' calculation of the theoretical difference in strength between opposing teams. These point spreads are based on detailed comparisons of past team or individual performances, and on any special circumstances that might influence the outcome of the game — like an injured star unable to start, a pass receiver caught in a distracting marital conflict or a quarterback known to be struggling with a pass release problem. The element of chance still is there, however, and the experts have been known to be spectacularly strong in their posting of the odds.

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   In some cases the circumstances of a team or of a contest are considered so unpredictable that the game is declared "off the board," with no wagers accepted on either side. An "in the circle" classification warns that wagers are accepted at a calculated risk. In other cases, bookmakers may accept bets on certain games only with definite stipulations — for example, it's all off if Bronco Sullivan doesn't start at nose guard.

Making Money Is the Bookie's Goal

   The most important criterion for a wagering line is, of course, that it make money for the bookie. To accomplish this, it must attract balanced amounts of betting money on each side in the contest and assure a payoff, whatever the final score. With that purpose in mind, the bookie works from say, Jimmy the Greek's line of two touchdowns but hikes up his own odds on the Redskins to 14 1/2 points. That means that a bet placed on the underdog Jets gets the benefit of being spotted 14 1/2 points, and a bet on the favored Redskins gives up the same number of points. There is no way a team can score that extra one-half point, so there can be no ties.

   Customers who bet on Washington are losers if it outscores New York by only two touchdowns. Anyone who bet on the Redskins is poorer by the amount of his wager — plus a 10 percent vigorish. That add-on percentage represents, in effect, the bookmaker's "brokerage fee." If the Washington rooter bet $5,000 and lost, he owes his bookie $5,000, plus the $500 vigorish. If he won, he doubtless expressed his gratitude with a generous tip.

   One tricky problem with point spreads is that they

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often are changed unexpectedly — and sometimes at the last minute. This means the bookie must keep a careful record of the exact amounts of all his bets with the precise point spread at the times the bets were taken. If he gets heavily committed at unfavorable spreads, he must offset that potential loss by at least an equal number of bets with a more favorable handicap. Or he must "lay off" the unbalanced side of the wager by placing balancing bets with other bookies. His daily routine is a constant juggling act, handling mathematical formulas of sometimes challenging complexity. In the end, the bookmakers divide among themselves the dollars sports wagerers funnel into their carefully organized cash flow system.

Juggling the Books

   Bookmakers do sometimes pay off winners, by the way. Sports bettors win now and then — though not often enough, on the average, to keep them on the profit side of the ledger. That is why bookies must develop the ability to keep separate "balanced books" that determine how many wagers they will accept on each sporting event — and even from whom they will accept them.

   If some of the bookie's customers bet a total of $40,000 on the Redskins at that + 14 1/2 point spread, and others bet only $23,000 on the Jets, he is in a vulnerable position he probably considers unacceptable. For one thing, that out-of-balance book means the general consensus among his street-smart customers is that the Redskins are going to win by more than two touchdowns. If the customers are right, he will have to pay off $40,000 while collecting $23,000 — plus, of

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course, the 10 percent vigorish charged the losers. That is not the way to stay solvent. He urgently needs more bets on the New York team.

   The bookmaker accomplishes this by increasing the point spread for all new bets to, say, 17 1/2. That means wagers on New York made after that increase will pay off even if Washington leads by two touchdowns plus an extra point at the closing whistle. Now more of his clients will get interested in backing New York with "a dollar" ($100), "a nickel" ($500) or even "a dime" ($1,000). His new odds encourage more Jets bets, and the assets and liabilities that hinge on that particular contest move back in the direction of an acceptable balance.

   Obviously the bookie who develops a few reliable mathematical formulas and a keen sensitivity to favorable point spreads is far more likely to succeed in this shady business than the one who depends on chance or instinct alone. He can count on his vigorish, and he will get those gratuities from grateful winners, but if he allows his book spread he may find himself in serious financial difficulty. A couple of sizeable losses could catapult him — however unwillingly — into some less risky profession with the impossible requirement of regular office hours. That unique occupational hazard called "point spread," is why the turnover in bookies tends to be more rapid than in more stable lines of work.

Underworld Backing Balances the Books

   Our nation is generously populated, however, with well-established bookmakers whose financial resources are sufficient to let them ride out the occasional risk of

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unbalanced books. Thanks to that vigorish, to the customary gratuities, to underworld backing and to their professional know-how, the odds are solidly on their side in the long run. Veteran bookies can analyze point spreads and manipulate betting odds in their favor, and they understand much better than their clients the working of the law of averages.

   Because the big bucks of organized crime are behind most big-time bookies, a strict balance in the bets they book on any single event is not as crucial to their survival as it might be in the case of a less adequately subsidized competitor. These big-timers are the bookies who remain on the job year in and year out. They develop expanding lists of trusting and trusted followers who place with them bets totaling hundreds of thousands of dollars each week. They also generate incredibly large sums of money for controlling mob figures.

Anonymity Is a Necessity

   Most of bookie transactions are handled by telephone. Wins and losses are paid off later, usually through runners or collectors. Bookmakers maintain as much distance as possible from their clients. They take on new customers slowly and cautiously. They keep records that, of necessity, are coded, vague, anonymous and ambiguous.

   Bookies live and function in a world of almost exaggerated secrecy — and for good reasons. They live in constant danger of detection and apprehension. They know that people charged with enforcing the laws — unless paid to look the other way — are eager to penetrate

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into their inner circle and gather evidence to convict them of law violations. They also know that their betting customers live in potentially explosive emotional environments.

   Losers' attitudes can be dramatically different from those of winners. A winning client who is enthusiastic about the bookmaking operation today could become a disgruntled loser tomorrow — and therefore a threat. A drastic change of heart for whatever reasons could tempt even a once-loyal friend to turn state's evidence and lower the boom on the illicit bookmaking operation.

Bookies Are Hard to Catch

   Yet, the truth is, law enforcement officers consider bookies singularly difficult to apprehend and prosecute. The industry is prosperous enough to provide a generous unaudited cash reserve out of which protection money can be designated for corruptible members of the enforcement community. The backing of organized crime ensures swift bond-out and delayed prosecution if an arrest does happen to be made. The paraphernalia the bookmaking industry uses, combined with the process by which it functions, is designed to drag a host of "herrings" across the trail for any crusader setting out to break up an illicit operation.

   Take "Backstraps," for example. These are ubiquitous devices that enable bookies to move their telephones to new locations without the knowledge of the telephone company. "Cheeseboxes" are installed between the two telephone lines so the customer's call on the number given him is automatically transferred to

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another number only the bookmaker knows. Some bookmakers employ answering services — anonymously or under fictitious names — which they query periodically to collect the coded names or numbers of betting customers they are to call. Recording devices are popular — especially those that can be queried anonymously with a coded beeper from another telephone to pick up the names or numbers of clients who want to place a bet.

   Automatic call-forwarding services provided by telephone companies have proven professionally helpful to thousands of bookies. Through this relatively inexpensive service they can provide customers with a number to call, yet maintain secrecy concerning the number or the location of the telephone where the bet actually is placed.

The Elderly and Tradesmen Are Made Accessories

   Some bookmakers employ third parties — frequently elderly individuals with no criminal records who need a little income to stretch their Social Security stipend — to take the names and numbers of wagerers who call. Periodically, from a location known only to himself, the bookmaker checks in to pick up the names or numbers.

   The function of the bookmaking system usually depends upon a network of people at various levels who bring together the client and the bookie, generate and pass along information about point spreads and wagers and then transport often large sums of money between losers and winners. The best sources of such "middle-man" help are the trades with ready access to the

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public — people like bartenders, waitresses, taxi drivers, doormen, parking valets and newspaper vendors.

   Of equal importance to the system are the loan sharks and the enforcers who are called into action when collection problems arise. The interest charged by the shylocks may be blatantly userous — 1 percent a day, 5 percent a week or sometimes more. Where the operation involves organized crime, the interest — and this, too, is referred to as "vigorish" — can double each month that the amount is owed. Not to pay as promised is to risk missing teeth, a broken leg or a threat against the safety of loved ones. In "hopeless" collection cases, a gang-style execution might set an example for others tempted to deal irresponsibly with those offbeat lending institutions.

Dangerous to Your Health

   Bookmakers often are considered knowledgeable professionals, trusted confidants and understanding friends, but clients do well not to forget that the primary interest of bookies is easy money — with as few scruples involved as possible. They have been known to undergo swift and unexpected character changes. The operators who make book can become both dangerous to health and a threat to longevity when clients forget that they are in it for the big bucks.

   The Achilles' heel most common to bookies is the necessity to keep careful accounts of all their wagers. Without these accounts the system could not function; yet with them the bookmaker is vulnerable to detection by the vice squad. These records can become convincing evidence for judges and juries when arrests have

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been made and alleged violators of criminal codes brought to trial.

   Elaborate coded systems of recording wagers, point spreads, accounts payable and accounts receivable, therefore, are among the professional accoutrements of a successful bookie. These records must tell him all he needs to know to keep his affairs in order, yet not reveal to a possible arresting officer, an FBI agent or the IRS what can be used to convict him on illegal bookmaking or income tax evasion charges. It is especially important that his records not reveal the identity of his customers. They could be charged with misdemeanors themselves; that would prove very bad indeed for them — and for business.

   So be warned: Doing business with a bookie can damage your health and reputation; it is even more likely to injure your bank account, and it most certainly will not enhance your walk with the Lord.

Points to Ponder

1. Psychologists say some wagerers actually feel they are helping their team win when they place a bet. The more reckless the wager, the greater the loyalty and the more intimidating the gesture — or so it is thought. Have you ever felt you should defend the reputation of your favorite team when someone offered to bet against it? Was that the reason you bet?

2. "Put your money where your mouth is" is a time-worn challenge for someone to bet money instead of

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bragging or making claims. Why do you think humans feel so strongly the need to relate their being right — or superior — with the winning or losing of money?

3. What does "point spread" mean in the bookie's vocabulary? Who decides by how many points the Dolphins, say, are supposed to win over the Patriots? Why is it important to bookies that the spread be quoted in terms of 1/2 a point?

4. Why must a bookie keep what he calls "balanced books"? If he finds himself vulnerable to a possibly costly loss, what are the two strategies he can use to get back in balance again? Do these strategies affect the chances to win of those who already have placed bets with him?

5. Suppose you were a law enforcement officer attempting to get evidence on someone you believed was engaged in bookmaking. How would you penetrate the curtain of secrecy that shrouds his operation? How would you persuade the people you felt would be effective witnesses to testify against him?

Note

1. "Vigorish" is probably of Yiddish origin, in turn coming from the Russian word vyigrysh meaning "winnings" or "profit." In the language of the betting world, vigorish is the charge made on bets by, say, a bookie or a gambling house. The term can also refer to the interest a borrower pays a moneylender. Webster's Ninth New Dictionary (New York: Merriam-Webster Inc., Publishers, 1985), p. 1315.

Chapter Twelve  ||  Table of Contents