Gambling in American History

The National Collegiate Athletic Association, along with the professional leagues, has been a critic of betting on sports games. The NCAA is currently lobbying Congress for a national law that would ban all legal betting on college sports contests. Bills were introduced in Congress in both 2000 and 2001 to effectuate the ban. The college sports regulatory group cautions that gambling activities are now widespread on campuses throughout the country. Cedric Dempsey, who serves as the executive director of the NCAA, asserted that “every campus has student bookies. We are also seeing an increase in the involvement of organized crime on sports wagering”.
Gambling rings were exposed in recent years at many colleges, including Michigan State University, Boston College, and the universities of Maine and Rhode Island. The betting did not have to be confined to local bookies, as college students have ready access to Internet services. There are over 400 sports betting services on the web. Most are operating illegally, but some are sanctioned and licensed by foreign governments.
A University of Michigan study reported by the National Gambling Impact Study Commission indicated that 45 percent of male college athletes admitted to betting on sports events. Five percent indicated that they furnished information about team activities to others for gambling purposes and also may have gambled on games in which they participated.
During the late 1990s, a series of scandals involving student athletes’ altering their performance in games in exchange for bribes from gamblers rocked college sports. The scandals involved basketball players at high profile schools such as Northwestern University and Arizona State and football players at Boston College. All of the college scandals involved illegal gambling, but in some cases, college gambling rings used Las Vegas sports books for lay-off services when they found that their student gamblers were betting too heavily for one team against another. Las Vegas casinos helped the Federal Bureau of Investigation (FBI) and the NCAA in exposing the sports betting scandals as they discovered unusual betting patterns that prompted investigations.
The NCAA bylaw 10.3 prohibits any student athlete from sports gambling involving any team, professional or collegiate. The organization’s literature explains:
In clear, simple language, here’s what the rule means: You may not place any bet of any sort on any college or professional sports event. You may not give information to anyone who does place bets on college or professional sports. That means … NO wagers … even those that don’t involve your college. NO sports “pools,” …NO Internet gambling on sports events… NO sports wagering using “800” numbers. NO exchange of information about your team with ANYONE who gambles. In other words, no information about injuries, new plays, team morale, discipline problems, or anything else.
The penalty for violations of the rule was put bluntly: “You are declared ineligible to compete in college sports. You are off the team”.
U.S. senator Bill Bradley, himself a former professional basketball player, commented on the need to ban legalized betting on sports. “Based upon what I know about the dangers of sports betting, I am not prepared to risk the values that sports instill in youth just to add a few more dollars to state coffers… sports gambling raises people’s suspicions about point-shaving and game fixing”.
Spokesmen of the American Gaming Association, representing Nevada casinos and sportsbooks, accept that the integrity of games is extremely important.  Indeed, they realize that without honest games, the sports book function of the casino would collapse. For this reason, they point out that the Las Vegas casinos work closely with the NCAA, the professional leagues, and the FBI in any investigation of corruption of sports by gamblers or gambling. In fact, they have been the source of much information that has led to investigations. On the other hand, they can easily point out that almost all of the situations mentioned above involved gambling that was illegal. They question whether making sports gambling in Las Vegas illegal would markedly improve the integrity of games. It would take the eyes of the Las Vegas establishment – including those of the Nevada Gaming Commission – off the intricacies of play inside each game covered on the boards of the casinos. There was no Las Vegas betting on the UNLV-Baylor football game. There was no central betting place where wagers could be monitored to observe if the play on the field was just “stupid” play or if it was motivated by something else.
When the professional leagues oppose legal betting on games, questions have to be raised about possible hypocrisy, as almost every league allows gambling behaviors by owners and also works with media that spread betting information to the public. Every league also recognizes that public betting adds to the television interest and revenues that come to the team owners through television contracts.

Baylor, the home team, had fought hard, sometimes uphill, but now it had the game in the proverbial bag. Five points ahead. Just kneel down, and it is over. Baylor had the ball on the opponent’s eight-yard line. Second and goal. Ten seconds remaining in the game. University of Nevada, Las Vegas, (UNLV) had no time outs. But wait, the Baylor quarterback takes the snap and hands it off, the runner swings to the outside, but he bobbles the ball.  A UNLV linebacker somehow grabs the ball in the air, and ninety-five yards later, with no time left on the clock, the linebacker runs into the Baylor end zone. UNLV wins. This incident really happened in the fall of the 1999 season. It cannot be explained. Or could it be explained? Could a coach or quarterback be so foolish as to try to score points after the game is all wrapped up in their favor? Players take intelligence tests to assure that they are qualified to be students at the college they are attending. Could the coach or player that made the call have been able to pass a simple intelligence test? Should such tests be given to coaches? Perhaps the following could have happened. Could a point spread of nine or ten points with Baylor being favored represent a motivation to try to score not just a victory, but a victory of eleven or twelve points – not five points? Could a team risk victory in order to win by a big enough margin to satisfy all their fans that might have bet on the game?
That is precisely the kind of rationale that is used by the National Collegiate Athletic Association (NCAA) as well as professional sports leagues when they urge that there be no legalized betting on their games. More worrisome to the leagues is the notion that players could try to manipulate the score (called shaving points) so that professional gamblers could be assured of winning their bets while at the same time the players’ team could still win the game.
Scandals have followed sports throughout the past century. The scandals are single episodes, but they are also ongoing; they date back to the first decade of the twentieth century, and they occurred in the last century of the twentieth century. The scandals have in almost all cases involved betting and wagering on contests – usually illegal wagering.
Early boxing matches of the twentieth century were held in Nevada towns such as Goldfield, as the contests were illegal in most states. The matches were used to draw players to casinos, but betting was also very heavy on the contests. Boxing promoters such as Tex Rickard had close ties with members of organized crime, and it was generally accepted that matches were often rigged in order to favor certain gamblers. At the end of the century, the reputation of the sport had not been fully cleansed, as promoters such as Don King and fighters such as Mike Tyson have records of legal problems.
Early baseball leagues also had problems with gambling. The National League began in 1876, and attempts to control bribery and gambling passed to team owners. The owners instituted the “reserve clause” that prohibited players from freely leaving one team and negotiating to play for another team. In turn, the owners lowered salaries for players and made many working conditions intolerable. Players responded by selling favors to gamblers – favors including fixing game results. There were attempts to fix the World Series games in 1903 and 1904, and rumors spread that the 1912 and 1914 series were “thrown” by the losing teams. The game was put into major disrepute when it was revealed in 1920 that eight members of the Chicago White Sox team had accepted bribes that were passed by professional gambler Arnold Rothstein (who controlled bookies in many major cities) through an intermediary and had purposely lost the championship to the Cincinnati Reds. Their purported motivation was a salary dispute with an owner reputed to be “one of baseball’s biggest skinflints,” Charles Comiskey.
As a reaction to the “Black Sox” scandal of 1919, the eight players implicated were banned for life from the sport, although no legal action was ever taken against Rothstein and his organized crime cohorts. A new commissioner of baseball was appointed and given extreme powers to clean up the image of baseball. He was a federal judge named Kenesaw Mountain Landis. Landis proclaimed that “no player that throws a game, no player that entertains proposals or promises to throw a game, no player that sits in a conference with a bunch of crooks where the ways and means of throwing games are discussed, and does not promptly tell his club about it, will ever play professional baseball”.
Landis came down hard on players who were accused of fixing games, but he was not so strict with others who merely gambled on games. Gambling and baseball were never far apart.  In the 1940s Brooklyn Dodger manager Leo Durocher was a close friend of gambling gangster Bugsy Seigel and was perhaps a compulsive gambler. Durocher was suspended from the game for the 1947 season for activities related to his gambling. As late as 1969, there were suggestions that he may have manipulated games, as he was the manager of the league leading the Chicago Cubs while they let an almost sure championship slip out of their hands with a end-of-the-season losing streak. The next year, a leading pitcher, Dennis McClain, who had led the Detroit Tigers to a championship in 1968, was suspended from the league for his own gambling activities and associations with mobsters. Contemporaneously, two of the most outstanding players of the century – Mickey Mantle and Willy Mays – were banned from having official associations with baseball for a period of time in the late 1970s because of their employment by Atlantic City casinos in public relations positions. The ban was lifted when the stars ended their casino employment.
One of the most notable sports gambling scandals became public in 1989 and its effects have carried over into the twenty-first century. Pete Rose, one of the greatest players of all time, was accused of betting on his own team while he served as the manager of the Cincinnati Reds. As a player, Rose had set the major league all-time hits record. He led the league in hitting three times, and he held the longest hitting streak in the National League history – forty-four games. He had been an All Star team member over a dozen times, and he wore a World Series championship ring. Rose admitted that he had been a relatively heavy gambler, but he also insisted that he had never bet on baseball games. The Rose episode was exposed when he and some compadres won a pick-six race ticket at Turfway track in northern Kentucky. His gambling habit was exposed, although the proof of his betting on baseball, especially betting on his own team, was not definitively revealed in a public way to the satisfaction of all observers—but certainly to some. Even his harshest critics have never in one single case accused him of betting against his team or in any specific way changing his coaching strategy in order to favor bets that he made. I noted earlier that baseball is bet on an odds bases and not on a handicapped runs (point spread) method. Rose acquiesced in a commissioner decision that he be banned from baseball for life, with the status of the ban open to review after one year. Because Rose had many of his winning bets recorded, but did not keep recorded proof of his losing, the Internal Revenue Bureau made a claim that he had not paid sufficient income taxes. He was without a defense, and because of his losses, he was without the funds necessary to pay the back taxes, penalties, and fines. He was sentenced to prison and served six months because of these tax problems. Rose’s lifetime suspension has not been fully reviewed by league officials. He has been banned from consideration for membership in the Hall of Fame, a body filled with many old-time players and managers who regularly gambled – even on their own teams.
Basketball scandals have touched college basketball and professional basketball; however, the latter cases have not received close public attention. Professional basketball did not have a widespread public following until race barriers were broken down and the tempo of the games increased to make them more exciting. Professional league expansion and television exposures have also increased support. Very high salaries have made the prospects of bribing players unlikely.  On the other hand, many players have succumbed to temptations of illicit drug use. College players often have financial needs. Bribes are always available to key major teams if they leave themselves open to the possibility – if they do not purposely decide to avoid certain contacts. In 1951, everything “hit the fan” with revelations that thirty-three players on seven top national college teams had “shaved” points in exchange for money from gamblers. It was suggested that eighty-six games had been influenced – and that in some, players threw victories. Colleges such as Columbia, City College of New York, Manhattan, and Long Island University were never able to regain their reputations as nationally competitive teams. Kentucky fans did not give up, and that team has remained solid. In the 1980s, a hint that difficulties existed returned, as a former Boston College player admitted to taking bribes, and a Tulane player revealed that he had traded point-shaving activities for cocaine.
In December 1999, a former defensive back on Northwestern University’s football team pleaded guilty to lying to a grand jury about his role in betting on college games. Ten other players on both the football and basketball teams had already been charged, and all had pleaded guilty to offenses related to betting and point-shaving activities. The century was ending with a cloud over sports activity – much as the century had begun.
Early football games must have been important for someone beyond local supporters or campuses, as games became very violent, and quite often “ringers” (noneligible players) were put into lineups. The initial owners of professional football teams had ties to organized crime confidants. George Hallas, founder of the Chicago Bears, was backed by a “crony” of Al Capone. Art Rooney was a prominent Pittsburgh gambler before he was owner of the Steelers. So was Baltimore Colt (and later Los Angeles Rams) owner Carroll Rosenbloom, also a very high stakes gambler in the 1950s. In fact, he was close to Mob leader Meyer Lansky and others who owned Havana and later Bahamas casinos. In contemporary times, Philadelphia Eagles owner Leonard Tose lost the team because of his compulsive gambling activity.
Players were in a different situation. Two New York Giant players were approached by gamblers prior to the 1946 championship game and offered a bribe to shave points. They refused; however, because they did not disclose the bribe offer, they were suspended. They went to play in the Canadian Football League. One of the players, Frank Filchok, was later the head coach of the Denver Broncos. In 1963, Detroit Lions star Alex Karras and Green Bay Packer Paul Hornung were forced to sit out a year because they had bet on their own teams.
The famous 1958 championship game was celebrated for making football the number-one spectator sport in the United States, but the game was never officially investigated for obvious manipulations. Baltimore Colts owner Carroll Rosenbloom reportedly had made a very large wager on his own team – the Colts. In fact, his betting caused the original line (Colts favored by 3.5) to move up two points (Colts favored by 5.5 points). The game ended with a tie score of seventeen to seventeen and was decided in a sudden-death overtime period. After holding the Giants on their first series, the Colts marched eighty yards down the field toward the Giants’ goal line. They reached the eight-yard line with a second down. They did not try a “sure thing” field goal. Rather they passed the ball. They were lucky; the ball was caught and run to the one-yard line. On third down, they did not try a field goal. Instead, halfback Alan Ameche ran the ball over the goal line. It was a risky way to win the game, but then it was the best strategy to follow if you had to win by more than 3.5 or 5.5 points and cover the owner’s bets. Moldea reported that rumors circulated around the National Football League that the Colts were playing to make sure they covered the point spread.
There was a league investigation of Leonard Tose’s gambling problem. Officials found that as long as he had the money to make his wagers, there was no problem. The problem was that he was a compulsive gambler, and he did not have enough money to cover his losses. He supposedly would bet as much as $70,000 a hand at blackjack. The league had a rule against owners’ borrowing money from each other, but Tose was allowed to break the rule. The owner of the Tampa Bay Buccaneers loaned him $400,000 so he could pay off casino debts. Then Tose turned to William Clay Ford (of the Ford Motor Company family), who owned the Detroit Lions. Ford arranged for a bank he controlled to make more loans to Tose. The league’s commissioner Pete Rozelle, commented that he would be “a hell of a lot more concerned if he knew that a player had bet at the casinos …”.
There is a reason why the league had a rule against inside financial deals among owners. One of the consequences of the Ford-arranged loan to Tose was that Tose – who had a winning personality, a common trait among many compulsive gamblers – lobbied hard among all the owners to have the 1985 Superbowl game played in January 1985 in the frozen tundra of Pontiac, Michigan – albeit inside the Silverdome stadium.

Boxing is one of the few sporting contests bet upon in which judges of performance may determine the results. The Nevada Gaming Commission does not otherwise permit bets on noncontests in which victory is not determined in some arena or field of action. Although sports books in England often list political election contests (even election contests in the United States), this is not permitted in Nevada casinos and sportsbooks. Las Vegas bettors are not allowed to wager on Academy Award winners, winners of contests such as the Miss America pageant, or Time magazine’s Person of the Year. A decade ago a famous television series ended its run with a revelation about who shot the star of the series (“Who Shot J. R.”). One casino put odds up on the list of television characters that might have done the terrible deed, but the odds were listed only in jest – or as a publicity stunt. No bets were taken.
Five years ago, however, the Palace Station casino did post odds and took bets at the beginning of a baseball season on just who would be named the most valuable player in each league. One bettor, Howard Schwartz, who just happens to run the Gambler’s Book Club in downtown Las Vegas – the largest gambling specialty bookstore in the world – decided he liked the twenty-five to one odds on Andre Dawson, a player with the Chicago Cubs. Schwartz wagered a modest ten dollars. When at the end of the season Dawson was named as the most valuable player; Schwartz retrieved his “winning” ticket and marched to the Palace Station. There he was cheerfully greeted and handed back ten dollars. He was told that the Nevada Gaming Commission had heard about the contest (it was advertised in the local newspapers); the commission had determined that the contest violated gaming rules, and it ordered the casino to stop the contest – to close it down. It was, of course, a stupid move on the part of the commission. They could have warned the casino never to do it again and fined it a sufficient amount of money to assure it they would never do it again and that others similarly inclined to have such contests would never do it again. Had they known the names of all persons who entered the contests, they could have returned all the entry money. But such names were not known, as bets (unless over $10,000 in cash) are made anonymously. Instead, they voided bets already taken. Schwartz was, to say the least, irate. Schwartz had a bona fide bet. He had put his money at risk. He had won. When told he could have his money back, he inquired if the casino had a plan to return money to all players including losers – including losers who quite naturally would not come to the casino expecting to cash in their tickets. They had no plan outside of some minimal signage. All the casinos were put on notice not to be put into such a position in the future, as Schwartz used his critically central location among serious bettors – his bookstore, as well as all the talk radio shows of Las Vegas – to inform the public that one casino would not pay off its winners. Of course, the Palace Station would have liked to pay off the winning ticket, but the gaming commission told it that it could not do so. Considerable public relations damage was done to the casino and all sports books in Las Vegas over the incident, but the point was made clear – it must be a legitimate sporting event determined on the field of play, or no bets can be taken.

In futures contests, the sportsbook or bookie offers odds on future results of contests – such as who will win next year’s Superbowl, World Series, the Stanley Cup for professional hockey, the NBA basketball championship, or the National Collegiate Athletic Association basketball championship playoffs. Most of these odds are offered as inducements for players to put a wager on their favorite or home team.  The futures betting produces little serious wagering action.

In hockey contests, both goals and odds are used in the betting. In some cases there is a split line, with one team receiving 1.5 goals and the other team giving up 2 goals. Such a bet will be started at even odds. The house would be guaranteed a win of half the money bet if the game ended on the whole goal total – the plus-2 bettor would have his or her money returned, and the minus 1.5-bettor would lose his or her wager.
Most hockey betting does not use the split line approach. Rather an advantage of 1.5, 2.5, or 3.5 goals (or more in very rare cases) is assigned to one team, and on top of this there is a money line – usually set as a forty-cents line.
Parlay bets are figured the same way as in baseball. The hockey games also offer over and under bets on total goals scored.

Baseball is bet on an odds basis. For instance, a bet on a game between the Detroit Tigers and the Chicago White Sox may be listed as Tigers plus 110 and White Sox minus 120. This means that the person making the wager who bets on Detroit puts up $10 and wins $11 (collects $21) if Detroit is victorious. One betting on Chicago wagers $12 for the chance to win $10 (and collect $22). This “dime” line (so called in recognition that there would be a dime difference if bets were expressed as single dollar amounts rather than in terms of 100) produces the theoretical win of $10 per $220 wagered or 4.55 percent. As the bet odds increase, more money is bet, but the house edge remains at $10, hence the percentage edge falls. If the favored team demands a $200 wager to win $100, and the underdog a $100 bet to win $190, the house theoretically wins $10 on action of $590 (both player and house money), for a win of only 1.7%. For this reason casinos will abandon the dime line and move to fifteen-cents or twenty-cents lines on longer odds games. Hence, a bet may read Detroit plus 150, Chicago minus 170.
It is rare for the game to have a run differential – that is, a point spread, – but if the casino feels such is necessary, it awards 1.5 runs or more to one side, and then keeps the odds line (dime, twenty cents, etc.) the same.
Most baseball bets are made with pitchers for both teams listed on the betting proposition. The pitchers are usually listed a few days before a game. If by circumstances, a pitcher is withdrawn, and the pitcher listed was part of the bet, there is no action and all money is returned. For the bet to be effective, the listed pitchers must each make at least one pitch in the game as a starter.
Bettors are also able to bet on total runs, usually with a plus 110 and minus 120 edge. If the total runs are expressed in whole numbers, and the number is the actual game result, the bets are returned. Extra innings do not affect bet results.
Parlay bets are figured on the basis of the lines offered, with payoffs of each game multiplied.

Basketball betting for both professional and college games follows the general structure of football betting, with straight bets utilizing a point spread and with bets on total scores also being popular. Parlay bets with and without cards are also wagered quite often. As margins of victory vary considerably and do not come together on specific numbers – such as three in football – the threat of middling is less for the sports book. Most sports books also offer teaser bets.
The general condition of basketball betting would seem to suggest that theoretical hold percentages would be more likely achieved than with football games; however, another factor makes this achievement more difficult. There are many more basketball games than football games, and the results of basketball games are much more dependent upon individual players. One player or two can dominate a team’s performance much more than in football – with the general exception of the quarterback. There is a need for greater information about players in order to more accurately predict the outcomes of games. Yet with the number of games all over the country, bettors may have more information than the sports books – information about players’ health, emotional disposition, disputes within teams with accuracy, distractions based upon player life circumstances (perhaps examination schedules and class performance for college players). The college basketball betting public is also the most sophisticated of those making sports wagers. The most sports betting scandals have hit the college basketball ranks. Professional gamblers sense that they can compromise players who can more easily affect the points of victory (shave points) in college basketball. Many major league professional players make $1 million or more per season and hence are not vulnerable to offers of money or other favors to shave points. It must be noted, however, that the sports books (and illegal bookies as well) will probably be very cooperative with authorities in exposing players or teams that may be willing to compromise their point spread lines, because as the line is compromised, the sports books not only lose customers who feel that games are not honest but also find it more difficult to balance their books, hence realizing their theoretical profit margins. Dishonest games hurt the bookies and sports book the most – in a financial sense, anyway.

Football

Football did not carry much interest among bettors until the National Football League gained television contracts and displayed its special kind of action for the public. A critical event was the climax of the championship playoffs of 1957, as the Baltimore Colts defeated the New York Giants in a sudden-death overtime game viewed by the largest television audience for a sports event up to the time. The game marked a critical point at which national interest in football exceeded interest in baseball, a game that did not translate well to the public over television, as it had too many breaks in action.
Football sports betting received an extra boost as a new professional league began operations in the 1960s and then merged with the National Football League, bringing teams and games to each major city in the United States.

The Point Spread

The growing interest in football was tied to betting on the games. Betting increased considerably among bookies when a handicap system of point spreads was developed. Prior to the use of point spreads for football wagering, the bookies only offered odds on winners and losers of games. As many games were predictable, odds became very long. Players realized that they had little chance to win with the underdog, but at the same time, the bookies did not want to accept bets of sure-thing favorite teams, and they were reluctant to accept the possibilities of an underdog winning with odds of twenty to one or more. Therefore, many games simply were not available for the betting public. There is a dispute over just who invented the point spread. A Chicago stock market adviser, Charles McNeil, was credited by some for inventing the spread in the 1930s; two other bookies, Ed Curd of Lexington, Kentucky, and Bill Hecht of Minneapolis, are also cited for creating the spread decades later.
Bookies and the few legal sports books in operation in the 1950s and 1960s loved the spread for football and certain other games, as it greatly reduced their risks. Bookies do not want risks. They are businesspeople who want stability in their investments. The essential feature of the point spread was a guaranteed profit for the bookies – if the books could be balanced. Points are set for games with the goal of having an equal (nearly equal) amount of money bet on either side.
The point spread is called the line. The point spread refers to the betting handicap or extra point given to those persons making wagers on the underdog in a contest. Those betting on the favorite to win must subtract points from their team before the contest begins. The point spread is used most often for bets on basketball or football games. As an example, the New York Giants may be a seven-point underdog against the Green Bay Packers. Thus the line is Green Bay minus seven. Those betting on Green Bay will lost their bets unless Green Bay wins by more than seven points. Those betting on the New York Giants will win unless the Giants lose by more than seven points. The bet is a tie (called a push) if Green Bay wins by exactly seven points (Thompson 1997).
In 1969 the New York Jets were double digit underdogs against the Baltimore Colts in the Superbowl football game. The point spread was as high as eighteen points. Yet New York, under the guiding leadership of quarterback Joe Namath, defeated the Colts sixteen to seven. Although some considered that the point setters failed miserably on that game, they did anything but fail at all. Money books were balanced, and the bookies won their transaction fees. Although players bet on one side of the line, they must put up $11 in order to win $10. This means that if the books are perfectly balanced, with $11,000 bet on one side, and $11,000 bet on another, the bookie pays back $21,000 to the winning bettor, and keeps $1,000 out of the $22,000 that has been bet – for a 4.55% advantage over the bettors.
In actuality, this theoretical advantage is seldom realized. Bettors do not line up evenly on either side of the point spread, and some bettors have knowledge about the games superior to that of the point setters, taking advantage of the spread numbers. The bookies often find that they have to adjust lines in order to get more even betting on each side. In certain cases, a line may move two or three points, resulting in a situation called “middling,” whereby bettors on both sides—early bettors on one side, later bettors on the other side – can be winners. This happened with betting on the Superbowl in 1989. The three-point line, with San Francisco favored over Cincinnati, was moved to five or more points, as the bettors clearly favored the San Francisco 49ers (they were not only a California team – that is, near Las Vegas – but also they had won the Superbowl twice in the previous seven years). The game finished with a four-point San Francisco victory.  Early San Francisco bettors won; later Cincinnati bettors won. Many of the bettors won both ways. The bettor gets the point spread that is listed at the time the bet is made, unlike the pari-mutuel situation in which odds are based upon the cumulative bets of the players.
Then there is the case in which the point setters do what some might consider their “job” perfectly. In the 1997 Superbowl game between Green Bay and New England, the Green Bay Packers were favored by fourteen points. The point setters were on target; they were perfect. The Packers won with a fourteen-point margin. The bookies and legal sportsbooks won exactly 0 percent on the game. They had to give all the money bet back to the bettors. The bets were a tie, a “wash.” Because ties on point spreads are bad for the sports books, there is a tendency to use half points in spreads, although these are moved when betting behavior demands that the points be changed. Also, bookies realize that certain spreads will lead to ties more often than others will. More games end with a three-point victory than any other specific point margin. Moving points up or down around the three-point margin is also dangerous because of the “middling” factor.

The Structure of Football Bets

The standard bet on football results has a player wagering that a favored team will either win by so many points or, conversely, that an underdog team will either win or will not lose by more than a determined number of points. If a game is considered to be an even match, no points are given either way. Such an even-match bet, with no points either way, is called a “pick-’em” by bettors. If the point spread is expressed as a full number, and the favorite team wins by that many points (or an even match ends in a tie), the bet is considered a tie (or “wash”), and the money wagered is returned to the player. There is no bet.
There are many betting opportunities other than a straight-up bet on which team will win and whether it will win by so many points. A very popular bet made on professional football games and many college games as well is the over-under. Here the point setters indicate a score that is simply the total number of points scored in the game. Bettors wager $11 to win $10 that the total score of the game will be more or less than the set number. There are also teaser bets that may be used either with one game or usually with bets on several teams. The bettor is given extra points for a game in exchange for having the odds on the bet changed against him.
Parlay bets are combination bets whereby the bettor wagers that several games (with point spreads) will be won or lost. For instance, on a two-team parlay, a bettor wagering $10 will win $26 (for a payback of $36) if both picks are correct. At even odds, the player should receive 3 to 1 for such a bet, or a return of $40. This means that the house edge on the bet is theoretically 10% – again assuming that bets on all sides of the parlay action are even amounts of money. A three-team parlay pays 6 to 1, and the even odds of such a parlay would be 7 to 1. The theoretical edge in favor of the sports book would be 12.5%. There are two kinds of parlay bets: ones made based upon the point spreads of the moment, and others made on a card where the point spread is fixed until the game is played. The latter type of cards may have a theoretical edge as high as 25% or more. For a three-bet parlay, cards usually payoff at a 5 to 1 rate. Sometimes cards allow tie bets to be winners; other times they are figured as “no-bets”; some cards may treat ties as losers.
There is also a wide array of proposition bets that are usually reserved for special occasions. Bettors may wager on many situations for the Superbowl game each year. For instance, the bettor is allowed to wager on which team will win the coin toss, have the most passes completed, score first; on how the first score will be made (touchdown, field goal, etc.); on which player will score first, how many fumbles there will be in the game, which team will lead at halftime, and many other situations. In the 1986 Superbowl, a Las Vegas casino offered a wager on whether Chicago Bear William “the Refrigerator” Perry – a 300-plus-pound offensive lineman would score a touchdown in the game against New England. He had been used as a back on gimmick plays during the season.  The betting started with odds at thirteen to one but quickly came down as the betting public wagered that Perry would score a touchdown. Late in the game, which had become a rout (Chicago won forty-six to ten), coach Mike Ditka called Perry’s number. He lined up in the backfield and was given the ball. He scored a Superbowl touchdown.
There are possibilities for odds betting for some football games, although the sports books put the players at a considerable disadvantage for any games where the point spread betting exceeds seven points. One can wager on the “sure thing” but only at considerable risk. For instance, on an even, no-points, “pick-’em” game, players betting either side advance $11 in order to win $10. With a three-point spread, those wagering on the favorite bet $15 to win $10, and those wagering on the underdog wager $10 to win $13. For a 7.5 point game, those betting on the favorite might be asked to wager $40 to win $10, while those betting on the underdog would wager $10 to win $30. The theoretical house edge thereby moves from 4.55 percent for the even game, to 8 percent for the three-point spread game, to 20 percent for the 7.5-point game.
The biggest bet on a football game was made by maverick casino owner Bob Stupak, the owner of Vegas World and the creator of and an initial investor in the Stratosphere Tower. In 1995 he bet more than $1 million on a Superbowl game. He wagered $1,100,000 to win $1,000,000. And he won. It was great publicity all the way around. The Little Caesar’s Casino and Sports Book basked in the glow of publicity as it happily paid the $2,100,000 check (for winnings and original bet) to Stupak. He basked in the light of publicity, as he was seen as the ultimate “macho-man.” He put it all on the line for his team, and he had won.
One newspaperman was rather suspicious about the deal, as it seemed too good to be true for both the casino and the bettor. The newspaperman made an official inquiry of the Nevada Gaming Commission as to the veracity of the bet. The commission confirmed that Stupak had bet $1,100,000 on the game and that his win was legitimate. The commission reported no fact other than it was a legitimate bet. Sometime later, news media personnel uncovered “the rest of the story.” Stupak may have bet on both teams. He may have been a $100,000 loser for the day – but it was worth it to gain the desired publicity, if he had won $1 million on one bet and lost $1.1 million on the other. The Nevada Gaming Commission has absolutely no obligation to report information on losing bets—indeed, that information is rightfully considered to be very private. Publicly, that information certainly would harm the industry, as Las Vegas seeks to portray itself as a place where “winners” play. There was nothing illegal about playing both sides of a sports bet.

Sports betting occurs when gamblers make wagers on the results of games and contests played by other persons. The results of the games and contests are completely independent from the wagering activity of the gamblers. In other words, the gamblers have no control over the outcome of the games – that is, as long as the wagering is honest. Whether it is legal or not is another matter.
There are sports betting opportunities with a wide variety of games and contests. Although in a generic sense sports betting includes wagers made on the results of horse races and dog races, these games (contests) are usually considered to be different than other contests. In this encyclopedia, they are discussed separately, as are jai alai contests and betting on dog fights (pit bull fights) and cockfighting.
Sports betting in North America involves many kinds of games. It may be suggested that making wagers on the results of games is the most popular form of gambling in North America. It is certainly the most popular form of illegal betting in the United States.
In Nevada, there are 142 places, almost all within casinos, that accept bets on professional and amateur sports contests. Nearly $2.3 billion was wagered in these sports books in 1998. The casinos kept $77.4 million of this money; that is, they “held” 3.3% of the wagers, owing to the fact that the players bet on the wrong team and also that the casino structures odds in its favor. The sports wagers constituted just over 1% of all the betting in the Nevada casinos. About two-thirds of the wagers were on professional games and the rest on college games (National Gambling Impact Study Commission 1999, 2–14). Although the profits casinos realize directly from sports bets seem to be low, sports betting is very important in Las Vegas and Reno. The major gamblers like to follow sports, and the wagering possibilities draw them to the casinos. Also, the casinos sponsor championship boxing matches and give the best seats to their favorite gamblers. Superbowl weekend is the biggest gambling weekend in Las Vegas each year, as the casinos have special parties, usually inviting sports celebrities (retired) as well as other noted personalities to come and mingle with their gamblers. Of course, many of these invited celebrities turn out to also be heavy gamblers.
In 1998, the Oregon sports lottery sold $8.5 million worth of parlay cards on professional football and basketball games, and the state retained over $4.2 million (50 percent) as its win. This is less than 1 percent of total lottery winnings, but 4 percent of the winnings on non-video lottery terminal lottery games. The sports lottery is structured to produce a return of 50 percent to the players on a pari-mutuel basis.
The National Gambling Impact Study Commission suggested in its 1999 Final Report that illegal gambling activities draw wagers of several hundreds of billions of dollars each year, perhaps as much as $380 billion (National Gambling Impact Study Commission 1999, 2–14). It is likely that the operators of these games hold 3 to 5 percent of the wagers as profits. The illegal sector commands considerably more activity than the few legal outlets for sports gambling in the United States.
Betting has developed rapidly in recent decades. In 1982, the Nevada sports books attracted $415.2 million in wagers and kept only $7.7 million (less than a 2 percent hold). The hold increased an average of 16.6% every year until 1998, after which it leveled off. Only California card rooms and Native American gambling operations had greater annual increases. In comparison, casinos increased 10.4 percent each year and lotteries 13.5% (Christiansen 1999). The added interest in sports betting has been affected by an added interest in sports in the United States. Although individual sports have different experiences with their growth, one factor that has affected all sports has been television access to games and news media on odds and points spreads. Most Nevada sports betting was confined to small parlors outside of the major casinos until the late 1970s. The gambling activity was discouraged by the fact that the federal government imposed a 10 percent tax on each sports wager; however, this was lowered to 2% by 1975. In that year, the amount wagered in Nevada quadrupled. The state of Nevada changed laws in 1976, making it easier for casinos to have sports books. Then, a final breakthrough came in 1982 when Congress lowered the federal betting tax on sports contests to 0.25%, which is where it is today.  Major sports betting areas were constructed in many casinos, the largest books (in physical size) being found today in the Las Vegas Hilton and Caesars Palace.
Ironically, given the widespread nature of sports betting, the gambling is also very controversial. Popular opinion on betting is very mixed, and indeed, opinion is more strongly against legalizing this particular form of gambling than are negative factors on any other type of gambling. The survey taken for the Commission on the Review of the National Policy toward Gambling in 1974 found majority acceptance of several forms of gambling – bingo, horse racing, lotteries – whereas fewer than half of the respondents supported legalization of casinos (40%) and offtrack betting (38%), and the fewest supported legalized sports betting (32 percent) (Commission on the Review of the National Policy toward Gambling 1976, App. II). A 1982 Gallup poll found majority support for all other forms of gambling but only 48% approval for betting on professional sports events (Klein and Selesner 1982). Opponents of sports betting suggest that the activity may have a tendency to corrupt the integrity of games, as those making wagers could try to influence the activity of the players in the contests.
Sports betting is authorized in Canada, Mexico, and other parts of Central America and the Caribbean region; however, sports betting is very limited in the US. Actually only in Nevada can a gambler legally make a wager on an individual contest or game. In Oregon the lottery runs a sports game in which the player must select several professional teams playing basketball or football on the same day or weekend. Nonetheless, sports betting is very pervasive in the United States, as bets on almost all sports events take place among friends or fellow workers or among social acquaintances in private settings. Almost all of these wagers, as already discussed, are illegal, as are wagers made through betting agents known as bookies. The appearance of the Internet and the worldwide web, which provide services in a form available to most residents, has led to a substantial increase in the amount of sports betting by Americans, most of which is also clearly illegal. There is some debate, however, as to whether Internet gambling, which is controlled by an operator in a jurisdiction where it is licensed and legal, is always illegal if the player is in another jurisdiction.
The greatest amount of sports betting – both legal and illegal – in the United States consists of wagers made on American football games. The National Football League (professional) games attract the most action, with the championship game (the Superbowl) being the initial attraction, the most wagering “action”. The Superbowl attracts wagers approaching $100 million in the casinos of Nevada, and perhaps fifty times that amount or more is gambled on the game illegally. Most of the illegal gambling on the Superbowl consists of private bets among close friends or participation in office “pools” in which the participants pick squares representing the last digit of scores for each of the two teams. Following the Superbowl in importance for the gambling public are the college basketball championship series, the World Series for professional baseball, and the National Basketball Association (NBA) championship series.
Each kind of game has different structures for gambling. Basically, wagers are made on an odds basis, on a basis involving handicapped points for or against one of the contestants (teams), or on a combination of odds and handicapped points.

The voters of South Dakota made the state the nation’s third commercial casino jurisdiction at the ballot box in November 1988. The voters in effect amended the state constitution to permit limited stakes gambling, but only in the town of Deadwood. In 1989 the legislature passed an enabling act, and the voters of Deadwood ratified the decision to have casinos in their town. Several casinos opened in November 1989, and there are now over sixty casinos in Deadwood. The ostensible purpose of casino gaming was to generate revenues for tourist promotion and for historical preservation projects in Deadwood. Wild Bill Hickok had been shot in the back while playing poker in Deadwood in 1876, but the town was a decaying relic from that time. The town’s main block of buildings had burned in the mid-1980s.
Prior to casino gaming, the state had permitted dog- and horse-race wagering. The state had instituted a lottery in 1987, and in 1989 the lottery had also began operation of video lottery terminals in age-restricted locations. Each location was allowed twenty machines that awarded, on average, 80 percent of the money played as prizes given back to the players. In the 1990s, nine Native American casinos compacted with the state to operate facilities. The casinos are located at Sisseton, Hankinson, Watertown, Wagner, Lower Brule, Mobridge, Fort Thompson, Pine Ridge, and Flandreau.
The commercial casinos in Deadwood were originally allowed to have thirty games (machines or tables), but as facilities were built together, the state changed the limitation to ninety games each for a single retail location. In addition to machines, which guaranteed prizes equaling 90% of the money played, the only games permitted were blackjack and poker. Bets were limited to five dollars per play. In the poker games the casino could rake-off as much as 10% of the money wagered. The casinos pay 8% of their winnings to the state in taxes; of this, 40% goes to tourist promotions, 10% to the local government, and 50 percent to the state for regulatory purposes. If regulatory costs fall below this amount, the remaining money is dedicated to historical preservation projects.
In 1989, the lottery began using video machines located in restaurants and bars around the state. In 2000, antigambling interests made attempts to stop the lottery machines, but according to the New York Times of 9 November 2000 (B-10), the voters decided to keep them.