Internet Betting Gains Popularity in Vegas - Monday 27th of March 2006

by Liz Benston

By Our Partners at the Las Vegas Sun

LAS VEGAS Before Steve Fezzik put money on today's Texas-West Virginia game in the national men's college basketball championship, the Las Vegas man did some comparison shopping online.

A quick search of Internet sports books revealed average offers for bets that the total points made during the game would fall under 132. But Fezzik, a handicapper and frequent sports bettor, already knew that a couple of Vegas casinos had better odds.

On Sunday, he bet $2,000 on the game to go under 134 at the Palms and put another $500 to go under 134.5 at the Las Vegas Hilton.

Online, or "offshore" sports books might seem irrelevant in a town with dozens of sports books and more than 35 on the Strip alone.

That couldn't be further from the truth.

Online sports betting sites aren't just flourishing in the rest of the country, where sports books are illegal everywhere except Nevada. Internet sites have found a hot spot in Nevada and especially in Las Vegas, home to one of the biggest concentration of gamblers and a place where bettors come from all over the world to hone their skills.

No one knows how much of this year's estimated $118 billion in online sports book bets will be made by Nevadans.

But experts say it's a large and growing number of people that includes many pros and even more amateurs who follow sports. Analysts expect the NCAA playoffs to attract at least $300 million in online bets, a 20 percent hike from last year. Some say the event is closing the gap on the Super Bowl, the No. 1 betting event in the country, which generated an estimated $500 million in online wagers this year.

"Anyone who really knows what they're doing is going to consider betting offshore as well as in Vegas," Fezzik said.

While pros have largely gravitated online, Internet sports books, like the multitude of online poker sites that have sprung up in recent years, are largely the realm of occasional bettors.

Amateurs come out in force during March Madness, a 65-team, 64-game event that attracts hordes of fans who make sentimental bets that their college team will win - or at least beat the point spread.

"They make their picks for their office pool, and now that they've thought about it, they think Boston College will beat Pacific by eight points," said Alex Czajkowski, marketing director for the U.S. division of Sportingbet, the world's largest online sports book.

Sports books have become brand-conscious giants of Internet commerce. Some of the biggest are traded on the London Stock Exchange, where that country is in the process of legalizing online gambling. There's now a sports book for every taste. Costa Rican site uses ads with leggy models to market to casual sports and poker players, while Pinnacle Sports is heavy on numbers rather than art, attracting regulars or "sharpies."

Like other major Internet companies, Sportingbet has a full-fledged advertising campaign that consists of billboards and television ads in the United States. The company has a billboard in New York's Times Square and in several other major cities, including Las Vegas.

"Vegas is where all our customers go," Czajkowski said. "But you can't just jump on a plane to Vegas every time you want to place a bet."

Sportingbet, which is headquartered in London and operates its computer servers from the Caribbean island of Antigua, isn't a law-abiding company, according to the Justice Department. Online sports betting also is considered illegal in Nevada, which prevents the transmission and placement of wagers by entities that aren't licensed by the state Gaming Control Board and Nevada Gaming Commission.

The Justice Department says Internet gambling is illegal in the United States based on a law known as the Wire Act. Some legal experts say the law, intended to combat illegal bookmaking by the Mafia in the 1960s, is outdated and doesn't apply to traditional casino games and poker games played online. But they generally agree that sports books are on much shakier legal ground.

"I think the law is fairly clear that if you're accepting (sports wagers) from the U.S., you're probably violating the Wire Act," Las Vegas attorney and Internet gambling expert Tony Cabot said.

The law was clarified in 2000 when Jay Cohen became the first person to be convicted for running an offshore gambling operation that accepted bets from Americans. That case determined that the bets occurred both in the United States and Antigua, and that Cohen violated U.S. law.

That hasn't deterred Internet operators, who say they are licensed in foreign countries where the wagers are accepted.

After the Cohen case, the Justice Department began sending out letters to media companies that took Internet gambling ads saying they could be "aiding and abetting" illegal activity. The feds took it one step further with The Sporting News Internet and print publications. In January, the company agreed to a $7.2 million settlement with the government for advertising online gambling sites. The settlement requires the Sporting News to run public service radio ads telling listeners that online gambling is illegal. Those spots have run nationwide, including in Las Vegas.

Sportingbet and other operators have found creative ways to promote their wares in the United States, particularly around events like March Madness. The company has still had difficulty running television ads, even ads for the company's educational sports tips Web site, called

"The Department of Justice has scared media owners into submission," Czajkowski said. "That was a few years ago, and every now and then (the DOJ) will send a letter around or make a few calls. Everyone is still pretty jittery about it."

The company's preferred marketing method is billboards, which are grabbing the attention of potential customers while appearing to fall under the government's radar screen.

BetOnSports, another top sports book, also has an aggressive ad campaign that includes billboards as well as taxicab signs, public transit posters and radio spots.

"It's been a struggle" to advertise under the Justice Department's watch, spokesman Kevin Smith said. The company, also traded on the London Stock Exchange, is based in Costa Rica but is licensed in Antigua, where its computer servers take bets.

Instead of promoting a nongambling ".net" site like other Internet sites have done, the company's radio ads simply mention the "Betonsports" brand and an 800 number where callers can learn sports lingo and betting tips. That number is different from the number customers call to make a bet, Smith said.

Like any maturing industry, online books are aiming to grow by diversifying their businesses beyond just sports. Many now offer other casino games and have been particularly successful capitalizing on poker, which attracts many people who also bet sports.

"There's a great synergy between the two," Czajowski said. "People come online to play poker, and they're comfortable going and making a sports bet on the side."

Last year Sportingbet reconfigured its various Web brands so that customers can jump from one game or bet to another without registering all over again. Within seconds, customers can take their poker winnings and use that to bet on basketball, for example. Sites also are looking to expand beyond the United States, where business is expected to grow more slowly than other parts of the world in the years to come in part because of regulatory uncertainty. recently acquired an Asian sports book and is heating up its marketing efforts in Asia, one of the fastest-growing markets for gamblers, Smith said.

Meanwhile, sports fans across the United States are becoming more comfortable with online books in large part because of widespread televised broadcasts of poker tournaments and the mainstream appeal of online poker. Professional gamblers are abandoning longtime relationships with illegal bookies and gravitating online, experts say.

Illegal bookies maintain one key advantage: most accept bets without requiring the cash up front.

While bettors often pride themselves on their in-depth knowledge of a particular sport or even buy recommendations at hefty prices, a successful sports bet often turns on the difference between a point or even a half a point.

For bettors like Fezzik, that means refining their search for the best line - a search that's far easier to do online.

"You can drive around to 10 sports books in town and it'll take you three hours or you can look at 10 sports books online in three minutes," said Ted Sevransky, a local sports handicapper and radio personality known as "Teddy Covers."

Like the search for an undervalued stock, more sports bettors are approaching their bets like investments. Sports bettors now use sophisticated tools such as computer software that can post lines for more than 50 online sports books on one screen, allowing the bettor to find the best offer in seconds.

"The more sports books you visit the more chance you have of finding a game that's slightly misspriced," Sevransky said.

Searching for the best line most often separates the winners from the losers, Fezzik said. Online books will have better lines some of the time but not always, as in the case of the Texas-West Virginia game, he said.

"The most important aspect of sports betting is to get the best number," he said.

There's other advantages to betting online, gamblers say. Besides a shot at better odds, online sports books sometimes offer a reduced vigorish, or the fee bettors pay the casino to place a bet. While Las Vegas casinos typically offer $100 for every winning bet of $110, some Internet sites offer $100 on a $105 bet - a big difference for gamblers wagering hundreds or thousands of dollars at a pop.

Then there are other special offers, like million-dollar contests that are similar to casino contests but may offer bigger prizes because of the greater number of potential customers online promotions can attract.

Las Vegas casinos ultimately will benefit from the growth of online sports books, experts say.

"Ultimately it's good for the casinos," said Anthony Curtis, publisher of the Las Vegas Advisor consumer newsletter. "They'll get more players, more of them will come to Vegas, and when they're in Vegas, they'll make sports bets."

Czajkowski, a frequent visitor to Las Vegas, said online betting will never replace the real thing.

"Online gamblers love coming to Vegas - you haven't lived until you've been to Vegas."

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