Corona Del Mar, CA (PRWEB) January 13, 2007
Paul Bovi and Panorama Sports comment on Pinnacle Sport's internet sports betting website and their decision to pull out of the US market.
It's a dark day for many sports bettors throughout the land, for the great Oz has spoken, in this case Pinnacle Sports.
Like a roulette dealer that bellows 'no more bets', Pinnacle's decision to voluntarily exit the US market abruptly ceases wagering action for thousands of bettors throughout the country. Candy stores meets may be replaced by coffee house sit downs, but rest assured the corner bookmaker is about to be resurrected.
But for many sports bettors, life may never be the same, at least for now. Over the past 5 years, Pinnacle has built its' reputation as the premier sports book in the world by extending their betting limits to accommodate wagers that were previously unthinkable, along with offering 'reduced juice', or what is commonly known in the industry as vigorish. Along with that, Pinnacle's betting options covered not only the world of sports and a vast array of proposition wagers, but also encompassed events such as the Golden Globes, Dancing with the Stars, and American Idol. You could even wager on the box office take of a movie premier
What happens in Vegas may stay in Vegas, but those bettors that reside in the city of lights do their business elsewhere. As Las Vegas casinos have gone the way of corporate ownership, the sports book is viewed by management along the lines of a loss leader rather than a profit center. From the prospective of adding to the bottom line, a typical sports book generates less than 1/3 of the revenue per square foot as that of the same real estate that is dedicated to slot machines and table games.
With that, the 'I am doing you a favor attitude' has taken hold, and the house operates from the prospective of preventing losses in an area of the casino that many of them would just as soon as do away with if they could without alienating their customer base. The presence of a book is a necessary ingredient to the retention and attraction of the green felt player and slot machine junkie, and in the eyes of many senior executives, little more.
The result is that Sin City's wagering limits have gotten skinnier and the odds have deteriorated sending the sophisticated bettor offshore, where they are actually allowed to place a sizable wager without getting thrown a cross eyed stare over the counter, or have the betting line change as they are counting their money out. Yes, that does happen.
Pinnacle revolutionized the betting world by offering -04 'juice', which broke tradition from the 60 year old format of laying 110 to win 100, or 10 cent 'vig'. Vegas books, except in rare instances, never tried to compete, preferring instead to exploit the captive nature of their audience that makes their way through town for business or pleasure, or in many cases a little of both.
'Exploit' may define the Las Vegas' attitude with respect to offering odds on a future proposition. A future wager involves betting on a team or person to win a particular event, such as the Super Bowl, World Series, or a Nascar race. While the difference between laying .04 versus laying .10 is quantifiable, those odds offered on a future payoff are not. The hold is transparent unless you happen to be a mathematician or scored 800 on the math portion of your SAT. Las Vegas is well aware of that fact which affords them the opportunity to write their own ticket and post odds that are designed to put the customer at a huge disadvantage
In many cases, the retention factor on a future wager placed in Las Vegas ranges upwards of 40 to 50%. In other words, unlike a horse race in which the retention is regulated by the state, usually at between 16 to 18 percent on a straight wager, the future payoffs are set so that the house reaps a windfall from those patrons who are often looking for an economic rooting interest in their favorite team
Las Vegas may argue that they assume a great deal of risk in offering these types of wagers, thus they are entitled to protect themselves. After all, their case may be that one sizable future bet on an underdog may put them at great degree of risk which in theory is correct, except for that fact that books will limit a wager of this type, and promptly reduce the odds which would effectively dissuade further action on that team. There have been select instances, though rare, in which a casino has left future odds up of a team that has been mathematically eliminated.
Aside from offering -04, holds on future wagers at Pinnacle came in at what could be estimated at 20%, which was extremely fair given industry norms. Like Vegas, action was limited so as to avoid a catastrophic occurrence, as odds were continually reset in accordance with money that came in on a particular team, person, or event.
Sports bettors that have been accustomed to using Pinnacle are today mourning the loss of an industry icon, a direct result of The Unlawful Internet Gambling Enforcement Act of 2006, a bill that made its' way through Congress late last year, immediately prior to the then forthcoming election recess. It is specifically geared towards prosecuting those responsible for providing 'designated payment systems' and/or 'money transfer systems', which include providers such as 'Neteller', and other mechanisms that facilitate the transfer of funds that promote internet gambling.
Pinnacles' decision to exit the US market comes on the heels of several recent and well publicized closings of offshore sports books, notably Bet on Sports, who ceased operations after the Department of Justice placed a restraining order against the Costa Rican based company. Those with remaining balances at BOS have, to this point, not been paid, unlike Pinnacle who has given their American clients assurances that their funds are readily available for withdrawal and that any pending plays, including futures bets, will be honored
Well placed sources estimate that of Pinnacle's approximately 250 million dollars in profits last year, 60% was derived from the US market. Pinnacle's decision to opt out can only leave one with the distinct impression that the government will be vigilant in the enforcement of the law targeted specifically at eliminating Internet gambling.
All said, the governments' exertion of pressure on offshore gambling establishments appears to taking place without a back up plan in place. Common sense would have the government licensing a handful of these organizations in allowing them to continue operations while imposing a fee for the granting of that privilege while capturing a percentage of the handle. Bettors will seek out other alternatives in their quest for a fix, and as prohibition has already proved, man will not live without his vices, no matter where he has to go to get it, which in this case will no doubt send us down a path that leads us to those Tuesday morning meetings at the coffee shop.
In the meantime, let the mourning period begin, and may the weekend pass quickly.
It's a sad day for sports bettors.
Reproduction of this article in whole or part may be used provided credit is given to the author Paul Bovi and/or Paul Bovi/PanormaSports.com