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Economics correspondent Paul Solman visits Las Vegas, the global epicenter of sports gambling, to learn how research and analytics separates the sports betting pros from the average joes.
With only days left until the Super Bowl, we turn now to reporter Paul Solman, who visited Las Vegas recently to take a look at the multibillion-dollar world of sports betting.
It's part of our ongoing reporting Making Sense, which you can find every Thursday on the NewsHour.
An afternoon in Paris, a lovely, traditional setting for a cafe break, says Teddy Covers, if just a bit faux.
TEDDY "COVERS" SEVRANSKY, Professional Bettor: It's the real Las Vegas Paris. It might not be Paris in France.
TEDDY “COVERS” SEVRANSKY:
It's not a bad facsimile.
Teddy Covers, a professional sports gambler, knows how convincing illusions can be.
Directly above us, a half-scale Eiffel Tower dominates the Las Vegas Strip 541-feet high, down here below, the tower's sturdy feet, a grand illusion to buttress the dream harbored by most Vegas visitors, hitting it big.
They are recreational players, squares, average joes. Over the long term, they're not likely to return a profit from their sports betting investments.
Whereas Teddy Covers, ne Sevransky, says he is likely to profit, in large part, one assumes, by taking money from the squares.
We come to Vegas on one of its big money sports weekends, the pro football playoffs that determine the Super Bowl finalists.
JAY KORNEGAY, Vice President, Race & Sports Operations, Westgate Las Vegas Resort & Casino: This is the world's largest race and sports book, with over 30,000 square feet of action.
Jay Kornegay proudly runs sports betting at The Westgate, formerly the Las Vegas Hilton, when built in 1969, the biggest hotel in the world. But the stage Elvis once graced now features a 45-foot screen.
Sports betting has become the headliner here. And sports betting is huge for Nevada, a state which handled more than $100 million on the Super Bowl alone last year, no credit cards, cash only. How does the Westgate make the odds?
Back in the day, we used to just get in a room and argue for about five to 10 minutes on each and every game. But now analytics play a huge part of it.
Data, he means, computer algorithms.
Kornegay, who may be the most influential football bookie in the world, sets the point spread on, for example, the next day's Patriots-Colts game. He had the Pats, my team, favored by six-and-a-half points.
Most of these numbers are moving based on what the sharps are betting.
Who are the sharps?
The sharps are the professional bettors. They're the ones that play the big money. And the big money influences the line movements.
The Pats favored by six-and-a-half means they'd have to win by at least seven for me to cash a bet on them. Bet on the Colts? So long as they don't lose by more than six points, you're the winner. Six-and-a-half is the cutoff.
But Kornegay had had the Patriots as bigger favorites earlier in the week, setting the original point spread even higher, at seven-and-a-half. Why the change?
It's a cat-and-mouse game every single day in the sports book. We try to position ourselves to be on the same side as the big money that comes in. The public, the average joes, we will just let them play the game.
And is that because passionate fans like myself just aren't as rational as the sharps and you?
Rational is kind of a strong word, but what you look at is that these guys that are playing the big money have done their homework, the average joes, probably not so much. They probably read today's paper.
Teddy Covers agrees.
The recreational player is going to take five minutes, look at the point spread, and say, oh, I like this side, or I like that side. I'm spending all day, all week working on finding little edges, because all it is, is little edges over time.
Years ago, a finance professor explained the stock market to me with an image that stuck: a herd of investing sheep preyed upon by the wolves of Wall Street.
Sports gambling in Nevada recalled the metaphor, the public herd betting as one, forcing the bookies to change the odds or line. And then:
The sharps, or the wolves in your case, will take advantage of that, as they see value in line movement that's been adjusted by all the public money that's come in.
You don't look like a wolf, and I don't feel like a sheep.
But I'm getting a sense that our relationship might reduce to that.
I'm a good guy.
You know, I have a family. I went to college. I go to church. You know, I'm not here really to take your money.
But seeing as how he's a bookie in Las Vegas, Nevada, Kornegay admits:
Most likely, it's going to happen.
Tony Salinas is another Westgate habitue who also both sells picks, and bets. When he sees a game where the crowd loves a favorite:
TONY SALINAS, Professional Bettor:
I will bet $10,000 or $20,000 on it, yes.
Against the crowd, that is, because this Homo sapiens identifies with Canis lupus.
If you don't mind my asking, how are you in a position to bet $20,000 on an NFL playoff game?
I have been betting since 1978. In fact, I was sent out here by a federal judge in 1978 from San Antonio, Texas.
A federal judge said you have to get out of Texas because you're betting so much?
Yes. I had to move out here for five years, which I did. And I never did leave. I just stayed here.
Look, says Teddy Covers, most betting is illegal.
The estimates are that 1 percent of the actual handle occurs legally in the state of Nevada, which tells you that 99 out of every 100 dollars that are bet in the United States are either going offshore or going to a local bookie.
Nevada handled $3.6 billion in sports bets last year. Estimates of the U.S. total? As high at $380 billion, including all the illegal action, most of it taken online in other countries.
Costa Rica's probably the main one. And these people, they use their credit cards, log on to the computer. Boom. There you go.
A 29-year-old New York bookie was willing to meet us, so long as we made him unrecognizable.
Why do bettors patronize illegal bookies? Because you can't bet in Vegas unless you're there in person, he says, plus:
You know, a lot of folks don't have the money that they're betting. So, you know, in Vegas, you have got to go put up the cash to make the bet. Other people, they kind of like to make the bet and hope they win, and, if they lose, go and scramble and put the money together, you know?
As to wolves and sheep:
In general, the bookie wins, because, A, you're already losing $10 dollars on every $100 bucks you bet.
The bookie's commission.
B, most people have no self-control, and they're just going to keep betting and betting and betting on more nonsense.
Meanwhile, more nonsense back in Vegas on Sunday, the games were on. Eddie Ceballos, a die-hard Seattle fan, was dying hard as his favored Seahawks were failing to cover the eight-and-a-half point spread over the Green Bay Packers.
I did bet on the game. I went with my heart, not with my brain, on this one.
The thrill of his Seahawks coming back to win by six in overtime seemed to overshadow his gambling loss.
Fellow Seattle fan Mark Barrett and friends were also wearing Seahawks gear.
And you bet on Seattle?
Yes, of course.
Of course because?
Because I'm from Seattle.
JEROME KAGAN, Harvard University:
This is not rational. This is uniquely human. There's no chimpanzee who could have anything comparable.
Like me, Harvard psychology professor Jerome Kagan identifies with the New England Patriots. He said, days after this interview, that when the country branded them cheats for Deflategate, he felt anger and shame.
I belong to my family. I live in New England. And, therefore, anything good or bad that happens to those categories affects my emotional life. I have no control over it. We are symbolic beings, OK?
And your team, says the psychology professor, is your symbolic family.
You cannot help but feel that, if New England does well and I live here, then I'm enhanced in some way.
And, indeed, on playoff Sunday, I was enhanced, even tangibly, giving seven points to the Colts, cashing the bet after the Patriots won by 38.
We Patriots sheep were then diminished, however, by the slings and arrows of outrageous footballs.
And, so, your conflicted economics correspondent, Paul Solman, reporting for the PBS NewsHour.
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