One of the prevailing ideas in the conversation about expanded legal sports betting in the United States is that the illegal sports betting market — consisting of local bookies and offshore bookmakers — will go out of business. What we don’t hear about is how illegal bookies actually operate, advantages some may offer, and how they view the possibility of legal sports betting in numerous states, pending the outcome of the Supreme Court sports betting case.
“The big question we’re asking: Is 2018 finally the year when governments, sporting bodies and the gaming industry work together to put the illegal sports betting market out of business?” asked American Gaming Association president Geoff Freeman last month. Last week Missouri State Senator Denny Hoskins and Rep. Dean Plocher echoed the same sentiment about local (and yes, not legal) bookies in proposing a piece of legislation dubbed the “Comprehensive Missouri Sport Betting and Sports Protection Act.”
How much do any of these players really know about the local bookie and his/her operation? Let’s explore. This is the the first of two installments of SportsHandle’s conversation with a real bookie — we’ll call him “John” — who has a clientele of 250 bettors. Part I focuses on operations while Part II (to be published next week) looks more closely at how a legal U.S. market with state-licensed casinos/sportsbooks might impact the illegal market, and how ill-advised state legislation and the NBA and MLB’s “integrity fee” might be the best thing to ever happen to local bookies and offshores.
Inside the Mind of a Local Bookie: How It Works, Misconceptions, Potential Impact of Legal Sports Betting in U.S., Human Touch, Credit, Challenges and More
SportsHandle (SH): How did you first get started in bookmaking?
John: Pretty much in college. I was a terrible player and the guy I was betting with told me ‘Why don’t you ever think about being on this side?’ Basically, a 75-year-old Italian guy who said I’ll give you some advice. ‘You’re never going to win.’ The only side that wins is this side. So in college, there’s always kids who wanted to get a couple bets down on the game, so I just started as the guy who could help you get the bets down. And it went from there. After college I took a few years off and didn’t do it. Thought I’d go into the real world and see what I could do. And somehow I just always got back to it.
SH: How do you typically acquire new clients?
John: As we went to the Internet it became tougher to find new clients so basically there’s a lot of what we call ‘agents’, basically a person might bring you 10 or 20 players, and you’re the main guy and he gets a commission as a partner, whatever you want to call it. Probably the easiest way right now is by acquiring agents and that form.
SH: What’s the average length of time your clients have been with you?
John: We have guys up to 10-15 years. Most of the clients stay with us unless they go broke, which happens a lot, or realize they can’t win. But our average client has probably been with us 10 years.
SH: How do you service your customers? Are you constantly on the phone and meeting them in bars? Are you sometimes hard to find?
John: No. There is very little human interaction. We provide our customers access to sports betting platform from Europe, and they all set up an account under an alias. They can access their account 24 hours per day from their mobile devices or computers. It’s a user-friendly site and we provide more sports betting options than Nevada sports books because we provide all the European sports and worldwide soccer games. I manage the betting lines from a master dashboard. We set unique betting limits for each individual customer so that they avoid crippling losses.
SH: Prior to or after accepting a client, do you vet them at all– look into their backgrounds, occupations, public profiles available online?
John: Pretty much at the beginning I’ll vet them. There’s some guys out there that’ll take a guy he meets having a cup of coffee and right away gives him $500 [line of credit] a game or $10,000 a week. I was always one to vet ‘em and move slow. Even when I met someone, I didn’t always tell them this is what I do. Maybe we’d talk about sports for a while. I was always cautious when getting a good client. I always want to know what they do and if you’re working at a Starbucks, you shouldn’t be betting $1,000 per game. It’s just easier to vet ‘em up front so you have less problems down the road.
SH: What’s the profile of some of your clients? Blue collar guys, lawyers, small-business owners, politicians?
John: All of the above. Sports betting interests the guy making minimum wage to the guy making $5 million a year.
SH: How do you handle the guys with huge bankrolls?
John: You know, I’d rather a guy betting $100 or $200 betting a game. Less problems, the numbers don’t get out of control. I pretty much don’t have any big, big players anymore. It’s too many issues when I’ve got a $50,000 exchange. He’s a businessman, he has money in a bank, and banks don’t typically want to give a person fifty grand cash anymore. So the transaction becomes tougher and tougher and truthfully, give me a guy who does $200 to $500 a game and that’s my ideal customer.
SH: Well speaking of cash, how do you pay out your clients — cash, some kind of check, Bitcoin?
John: I haven’t gotten into the bitcoin, though I do have some friends who have. I’m pretty much old school and just deal with cash. Going forward there’s lots of different ways and these cryptocurrencies are becoming more popular at offshores. BETCRIS is accepting Bitcoin.
SH: Are most of your guys casual bettors, seasonal, most-days-of-the-week kind of guys?
John: The breakdown would be 50% pretty much NFL only. The day after the Super Bowl you pretty much don’t hear from them until the third preseason game of next season. Then there’s probably another 25% who play through March Madness, maybe NBA, and then you have just 25% who no matter what game you put up on the board, they’re going to play. Any game, any time of the year. They’re the guys you worry about — any sport, any time. Because everybody needs a break at some point. To play 365 days a year, there’s very few people who can even hold their own under any circumstances.
SH: How much are you concerned about your customers’ welfare?
John: I sure am. I have only 250 customers. From them, I make a very comfortable living. To some extent, we have personal relationships. We don’t want our customers to burn out in the course of a football season. We want a lifetime relationship. Hence, we establish a profile for each individual customer with limits that they can handle. The casinos like to display a lot of responsible gaming literature at their sports books, websites and mobile apps. But in the end, they don’t care. We have a behavioral counselor available to speak to our players if they are willing to accept our concerns about their betting behavior. It has worked out very well for me.
SH: But in the end, you’re in business because people lose money. Is the process of settling up complicated?
John: It is definitely the hardest part of the business, but we handle it professionally. Although I have 250 customers, I employ eight hosts who deal with most of them. These hosts earn a 30% commission of the theoretical hold of each customer. They have a personal relationship. We do our best to have our customers bring their account balance up to date every few weeks. If they are in a crunch, we develop a payment plan. We sometimes offer discounts to show our good faith. In the end, in exceptional cases, we have customers who just stop paying. It’s the cost of doing business. Overall, we enjoy a great degree of loyalty because of our personal service. The issue of credit is huge. The casinos cannot compete with that!
SH: Why do you think your clients prefer placing wagers through you as opposed to an offshore book?
John: I just think that they feel there’s part of a human touch, even though it’s all through the Internet now. If a guy calls me up I answer the phone and talk to him. Whereas with an offshore book you’re talking to a teller in another country. So I think we’ve built relationships and people like to call and rant about how they lost on a last second field goal. Just more of a personal touch.
SH: What do you tell people when they ask what you do for a living?
John: Well, I do have some regular business as well. So I’m not 100% in this. I guess it depends on the person.
SH: What’s your reaction when you hear for example the NBA or politicians saying that a legal market will eliminate illegal wagering with offshores and local bookies?
John: The way the states are setting up, that will not happen. I mean if you look at some of these states, I don’t see how anybody will be able to book it -110. Unless they change the laws as written. And if it goes above -110, now you’ll be creating an even bigger secondary market. The biggest reason why there’ll always be a guy at the bar or an offshore book is because of one thing: credit. Casinos aren’t going to give you credit. Sometimes a guy gets paid on Friday and wants to bet on Sunday, the casino’s not going to let him bet $220 on the Eagles. So I’ve always said that credit is the biggest thing sustaining it.