The bookmaker functions as a market maker for sports wagers, most of which have a binary outcome: a team either wins or loses. The bookmaker accepts both wagers, and maintains a spread (the vigorish) which will ensure a profit regardless of the outcome of the wager. The "Federal Wire Act of 1961 was an attempt by the US government to prevent illegal bookmaking. However, this Act does not apply to other types of "online gambling. The "Supreme Court has not ruled on the meaning of the Federal Wire Act as it pertains to "online gambling.
Bookmakers usually hold an 11-10 advantage over their customers—for small wagers it is closer to a 6-5 advantage—so the bookmaker will most likely survive over the long term. Successful bookmakers must be able to withstand a large short term loss. (Boyd, 1981)
Many of the leading gambling bookmakers from the 1930s to the 1960s got their start during the prohibition era of the 1920s. They were often descendants of the influx of immigrants coming into the USA at this time. Although the common stereotype is that these bookies were of Italian descent, many leading bookies were of eastern European ancestry.
"Odds for different outcomes in single bet are presented either in European format (decimal odds), UK format (fractional odds), or American format (moneyline odds). European format (decimal odds) are used in continental Europe, Canada, and Australia. They are the ratio of the full payout to the stake, in a decimal format. Decimal odds of 2.00 are an even bet. UK format (fractional odds) are used by British "bookmakers. They are the ratio of the amount won to the stake - the solidus "/" is pronounced "to" for example 7/1 "seven to one". Fractional odds of 1/1 are an even bet. US format odds are the amount won on a 100 stake when positive and the stake needed to win 100 when negative. US odds of 100 are an even bet.
|Decimal||Fractional||US||Hong Kong||Indo||Malay||Implied probability|
|1.50||1/2||-200||0.50||-2.00||0.50||1 in 1.5 = 67%|
|2.00||Evs (1/1)||+100||1.00||1.00||1.00||1 in 2 = 50%|
|2.50||6/4||+150||1.50||1.50||-0.67||1 in 2.5 = 40%|
|3.00||2/1||+200||2.00||2.00||-0.50||1 in 3 = 33%|
|Decimal||Fractional||x-1, then convert to fraction|
|Decimal||US||100*(x-1) if x>2; -100/(x-1) if x<2|
|Fractional||Decimal||divide fraction, then x+1|
|Fractional||US||divide fraction, then 100*x if x>=1; -100/x if x<1|
|US||Decimal||(x/100)+1 if x>0; (-100/x)+1 if x<0|
|US||Fractional||x/100, if x>0; -100/x, if x<0|
|Hong Kong||Indo||x if x>=1; (1/x)*-1 if x<1|
|Hong Kong||Malay||x if x<=1; (1/x)*-1 if x>1|
In Asian betting markets, other frequently used formats for expressing odds include Hong Kong, Malaysian, and Indonesian-style odds formats. Odds are also quite often expressed in terms of implied probability, which corresponds to the probability with which the event in question would need to occur for the bet to be a break-even proposition (on the average).
Many on-line tools also exist for automated conversion between these odds formats.
In setting "Odds, the bookmaker is subject to a number of limitations:
- The probability implied by the odds should be greater than the true probability for each possible outcome to guarantee positive expected profit.
- If the wagers on each outcome are made in ratio to the implied odds, then the bookmaker is guaranteed a profit (balanced book).
In the United States of America, it is illegal to operate a betting scheme, except in Nevada, Oregon, Delaware, and Montana. In many European nations, "bookmaking (the profession of accepting sports wagers) is regulated but not criminalized. The "NCAA has threatened to ban all playoff games in Delaware if the state allows betting on college sports. New Jersey, which is also interested, has been similarly threatened.
Interestingly for New Jersey, in a national poll released in December 2011, "Fairleigh Dickinson University's PublicMind asked voters whether they “support or oppose changing the federal law to allow sports betting” in their respective states. Just as many voters approved (42%) as opposed (42%) allowing sports betting. However, voters who already live in households where family members (including themselves) engage in sports betting had a strongly favored legalization of sports betting (71%-23%), while voters in households where sports betting is not an activity, opposed legalization (46%-36%). Peter J. Woolley, professor of political science and director of the poll commented on the findings, “Gambling has become, for good or ill, a national industry, and you can bet that politicians and casinos all over the country are closely following New Jersey’s plans.” In a different study released by FDU’s PublicMind in October 2011, results showed that New Jersey voters thought legalizing sports betting in New Jersey was a good idea. Half of New Jersey voters (52%) said that they approved the idea of legalizing sports betting at Atlantic City casinos and racetracks, 31% opposed it. In addition, there was a significant gender split: a majority of men approved of the idea by a wide margin (65-21), while only 39% of women approved and 41% opposed. The October results were stable, reflecting an earlier poll in April 2011 where New Jersey voters approved the legalization of sports betting in the state by a margin of 53%-30%. However, nearly two-thirds (66%) of voters were not aware of the upcoming statewide referendum on the issue. Age proved to be a divide: Voters between the ages 18–34 were more likely to approve of sports betting than older voters. Dr. Woolley commented: “But...younger voters... are far less likely to vote than other voters... As always, a lot depends on who actually shows up to vote.” In February 2011 FDU’s PublicMind released a poll which showed that half (55%) of voters agreed “that people bet on sports games anyway, so government should allow it and tax it.” On the other hand, approximately (37%) of New Jersey voters concurred that betting on sports is “a bad idea because it promotes too much gambling and can corrupt sports.” Again, by a significant margin (70%-26%) that voters who already engage in sports betting in office pools tend to be more supportive of legal sports betting than other voters. Donald Hoover, FDU professor in International School of Hospitality and Tourism Management and former casino executive commented on the results; “Betting on sports is not an uncommon practice for many New Jerseyans, but for the most part, the state doesn’t supervise it, doesn’t tax it and doesn’t take any revenue from it.” In 2010 a national poll, results showed that voters opposed sports betting in all states by a margin of 53-39. Woolley commented on the results: “If some states allow sports betting and profit by it, other states will want to follow.” Yet by December 2011 after NJ passed its sports betting referendum the national measure shifted to 42-42. In January 2012, New Jersey Governor "Chris Christie signed legislation allowing sports betting in New Jersey after it was approved in a nonbinding voter referendum in 2011 and he announced on May 24, 2012 that he plans to go ahead and set up a system of wagering at the state’s racetracks and casinos this fall, before the National Football League season ends.
In 2012, despite federal law preventions, the state legislature of New Jersey and Governor Chris Christie signed a law that would allow sports betting to take place in New Jersey race tracks and Atlantic City casinos. In August 2012, Fairleigh Dickinson University's PublicMind conducted a study on the issue. Voters were asked whether New Jersey should allow sports betting even if federal law prevents it from doing so, or wait to allow sports betting until federal law permits it. Results showed that nearly half (45%) of voters wanted to allow sports betting, while (38%) decided to wait and allow sports betting once Congress allows it. Krista Jenkins, director of the poll commented; "Although support is not overwhelming, these numbers suggest the public is cautiously behind the goal of moving forward with legalized sports betting."
In areas where sports betting is illegal, bettors usually make their sports wagers with illicit bookmakers (known colloquially as "bookies") and on the "Internet, where thousands of online bookmakers accept wagers on sporting events around the world. The PublicMind's 2010 national survey found that 67% of Americans did not support the legalization of Internet betting websites in the United States whereas 21% said they would support legalization. The National Football League is fully against any sort of legalization of sports betting, strongly protesting it as to not bring corruption into the game. On the other hand, the CEO of the International Cricket Council believe sports betting, in particular in India, should be legalized to curb illegal bookies where match fixing has occurred from nontransparent bookmakers. Many of the illegal proceeds also allegedly go to fund terror, drugs and other illegal activities.
Famous betting scandals
In 1919, the "Chicago White Sox faced the "Cincinnati Reds in the "World Series. This series would go down as one of the "biggest sports scandals of all time. As the story goes, professional gambler Joseph Sullivan paid eight members of the White Sox (The players involved were Oscar Felsch, Arnold Gandil, "Shoeless Joe Jackson, Fred McMullin, Charles Risberg, George Weaver, and Claude Williams) around 10,000 dollars each to fix the World Series. All eight players were banned from playing professional baseball for the rest of their lives. "Pete Rose, the all-time MLB leader in hits, was similarly banned from baseball in 1989 for betting on games while he was a MLB manager.
The rule against gambling in baseball is known as "Rule 21," which is publicly posted on dugout walls and states: "Any player, umpire, or club or league official or employee, who shall bet any sum whatsoever on any baseball game in connection with which the bettor has a duty to perform shall be declared permanently ineligible." "People permanently banned from Major League Baseball are also forever banned from entry into the "Baseball Hall of Fame, although most such people have been reinstated a few years later by a later "Commissioner of Baseball. For instance, "Mickey Mantle and "Willie Mays were both banned from baseball in 1983 after taking jobs as casino greeters (which would have expelled them from the Hall of Fame had it been allowed to stand); they were reinstated two years later. Only Rose has yet to be reinstated.
"A 1906 betting scandal between the "Massillon Tigers and "Canton Bulldogs, two of the top teams in "professional American football in the early 1900s, led to the demise of "big-money" professional football for several years. Modern research has suggested that the claims of betting were unsubstantiated.
On December 7, 1980 the San Francisco 49ers overcame a halftime deficit of 28 points in what became the greatest regular season comeback victory in NFL regular season history. By the beginning of the third quarter, notorious Vegas bookmaker Frank Rosenthal received forfeiture notices from 246 San Francisco bettors totaling more than $25,000 in premature winnings. Rosenthal was able to retain these winnings despite the final outcome of the game due to gambling regulations previously established by the NAGRA.
The Cronje Affair was an "India-South Africa Cricket match fixing scandal that went public in 2000. It began in 1996 when the-then captain of the South African national cricket team, "Hansie Cronje, was convinced by Mukesh "John" Gupta, an Indian bookmaker, to throw a match during a Test in "Kanpur, India. The scheme was discovered when Delhi police recorded illegal dealings between Indian bookmaker Sanjay Chawla and Cronje. According to the "Telegraph in 2010, Cronje was paid off a total of £65,000 from Gupta.
Corruption in tennis has been long considered as issue. In 2011, the former world No. 55 Austrian tennis player, "Daniel Koellerer, became the first tennis player to be banned for life for attempting to "fix matches. The violations were outstanding between October 2009 and July 2010 after The Tennis Integrity Units had launched an investigation on behalf of the International Tennis Federation and the "ATP and "WTA tours. In 2004 and 2006, Koellerer was banned for six months due to his bad behavior. In addition, on August 2010, he facilitated betting by placing odds for matches and had links for placing bets.
- Davies, Richard (2001). Betting the Line Columbus, Ohio: The Ohio State University Press "ISBN 0-8142-0880-0
- Finley, Peter (2008). Sports Scandals Westport, Connecticut: Greenwood Press "ISBN 978-0-313-34458-9
- Boyd, Kier (1981). Gambling Technology Washington, DC: FBI Laboratory
- Rose, Pete (2004). My Prison Without Bars St. Martin's Press "ISBN 1-57954-927-6
- Thompson, William (2001). Gambling in America--An Encyclopedia of History, Issues, and Society Santa Barbara, CA: ABC-CLIO "ISBN 1-57607-159-6
- "18 USC Ch. 50: GAMBLING". house.gov.
- Fifth Circuit ruling – PDF file
- (Davies, 2001)
- Cortis, Dominic (2015). Expected Values and variance in bookmaker payouts: A Theoretical Approach towards setting limits on odds. Journal of Prediction Markets. 1. 9.
- "Sports Betting". American Gaming Association.
- ABC News. "Sports News". ABC News.
- Fairleigh Dickinson University's PublicMind, (December 19, 2011). A Nation of Bettors? (press release)
- Fairleigh Dickinson University's PublicMind, (October 10, 2011). NJ Voters Favor Sports Betting, but not Tax Credits for Meadowlands Developer (press release)
- Fairleigh Dickinson University's PublicMind, (April 18, 2011) Odds Favor NJ Referendum on Sports Betting (press release)
- Fairleigh Dickinson University's PublicMind, (February 21, 2011). Sports Betting, Sure Thing; Internet Betting, Nyet! (press release)
- Fairleigh Dickinson University's PublicMind, (April 20, 2009). Legalized Sports Betting in New Jersey
- Fairleigh Dickinson University's PublicMind, (March 11, 2010). US Public: Keep Las Vegas in Las Vegas (press release)
- Coffey, Sarah (May 25, 2012). "N.J. Moves Towards Legal Sports Betting This Fall, in Time for NFL Season". The National Law Review. Retrieved May 27, 2012.
- Rob Tornoe, for NewsWorks (17 August 2012). "Sports betting should be legal in the Garden State". Newsworks.org.
- Fairleigh Dickinson University's PublicMind, (August 21, 2012). Opinion divided, but majority give the state the green light to allow sports betting in defiance of federal law (press release)
- "Fairleigh Dickinson University PublicMind Poll "US Public: Keep Las Vegas in Las Vegas" press release (March 2010)
- Shriver, Roger. "NFL and ICC's Stance on Betting".
- Finley, 2008
- "Famous Cricket Spot-Fixing and Betting Scandals". 12 June 2013. Retrieved 22 June 2013.
- "How Hansie Cronje became most infamous villain in cricket's fixing scandals". 26 May 2010. Retrieved 22 June 2013.
- "No sport easier to fix than tennis". 19 June 2014. Retrieved 7 November 2014.
- "Daniel Koellerer banned for life". 31 May 2011. Retrieved 20 October 2014.
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