“I was gratified to be able to answer promptly, and I did. I said I didn’t know.”― Mark Twain
In the 1980s I was the executive vice president for casino operations for a Las Vegas Strip property. The property was essentially a standard hotel casino operation on the Strip offering the normal gambling verticals, plus it had a race and sports book.
While working there I was called into the president’s office and informed by the president and several corporate officers that the property was in the process of being sold. One of the issues discussed was they wanted me to stick around until the closing of the sale, for they saw me as a critical actor in keeping the property up and running, as well as helping to protect the asset(s). They made a most attractive financial offer to retain me, and so I was in it until the end of it.
Transferring a hotel casino operation from one owner to another is a fascinating experience, and I truly learned a ton of interesting things about the business I was in. First of all, for legal and regulatory reasons, it is not a quick process. Secondly, there are number of actors involved in the process beyond the buyer and the seller; including regulators, the banks, auditors, and the like—and they all travel with a fleet of lawyers. Moreover, this transfer was designed to be seamless in that the property was not planning on closing. The transfer was done on the fly, albeit having hundreds of lawyers, managers, owners, auditors, regulators and others—all in suits at midnight—counting down cages, slots, table games and other such things—while there was a small number of very confused casino patrons who were drinking and gambling was anything but seamless. Only in Las Vegas.
One of the first things one learns about these sales processes is that there are one million and one details to address, and many of these involve pricing. And one of the funniest of these episodes involved pricing the futures wagers within the race and sports book.
Throughout the course of our operations we had been booking future wagers on the World Series (and other things), and this was a popular wager for many of our tourist guests. We had already received the amount of the wager from the customer, and we were holding the liability to those folks who were going to be fortunate enough to have their team win.
The last detail of this story was that the forecast closing date of the casino sale was scheduled to occur before the World Series took place. Our company needed to transfer this asset or liability to the new owner because we were no longer going to have a gaming license after the sale, for we would not have a casino, and additionally, it just made sense for the bettor to be able to collect his or her winnings from the casino location where they initially transacted the wager. Plus, the Nevada Gaming Control Board takes a dim view of gaming patrons not being able to find someone to pay their winning wagers. We therefore needed to develop a model to fairly transfer these wagers from us to the new owner.
Our proposal was that we would just turn over to the new owners the monies we had collected, and they would stand in our shoes with the bettors. We presented this plan with a spreadsheet of the array of all possible outcomes by team, and the financial implications of each team winning. First of all, the worst possible scenario for them was highly unlikely, and furthermore, was very small money in the scheme of things. Moreover, they were a huge favorite to make money on this plan, and had it been legal, I would have taken this deal for myself. It was very fair and reasonable. We thought our solution was quite simple, it got one of the one million things off of our “To Do List” and there really was not much money involved.
What I did not plan for in this deal was that the new owners had never been involved with a sports book, nor had their advisors, accountants, lawyers and the rest of their posse. This reality meant that the discussion of this transaction got totally confused (their first proposal had the futures process backwards), took much more time than it should have, and was hilarious. This was my first professional experience dealing with people who had no earthly idea as to what the sports wagering business was about.
Lately, I have been involved in my second experience in life where it seems I am in a sea of people that have no earthly idea as to what the sports wagering business is about, and it is the whole post-Murphy v. NCAA world that now occupies our conferences, Twitter, LinkedIn and other thought distribution channels. Moreover, many of these “90-Day Wonders” sharing their supposed knowledge with the world seem to have no problem getting an audience regularly, and many are monetizing their nonsensical expertise. I find it wonderfully funny, especially now for I am not paying the bills for these people.
In November 2017, there was a conference on sports wagering that took place in New York City. One of the people who was organizing the conference is one of my favorite people in the world, and after she had posted the first 18 speakers on the conference website, I called her and told her that not one of the initial speakers had ever taken a bet, or regulated a bet-taking entity.
Now mind you, I am not suggesting that you have to have been involved in the betting business to participate, but, by God, you should have someone at the conference that has taken a bet to keep it from becoming way too silly. My dear friend clearly knew this, and it was in her plans to secure people who could not only talk the talk, but had walked the walk, and it had been something of a fluke that the initial 18 speakers lacked real operational or regulatory experience. The list of speakers then grew to include people with many years of bet taking experience from Nevada, and a few betting experienced regulators, obviously from Nevada.
Since May 14, the world has become subjected to some of the funniest statements I have ever heard about sports wagering, and they are often uttered by the new regime of “experts” who seem to be everywhere. I am writing this screed on a cross-country plane trip returning to Florida from Las Vegas where I attended G2E, and I fear that I was often inundated with more nonsensical comments about sports wagering than my poor soul can handle. If God truly loves drunks and fools, he had to find several of the wagering discussions at G2E to be His greatest glory.
One of the things that drives me up the wall is the fact that many of the experts do not have anything close to fluency in the language of betting, even with simple terms like handle and win, or how a financial statement is constructed for a booking business. I could begin to list many examples, but the publisher asked that I keep this article somewhat smaller than an old Russian novel. The point is that the U.S. has a material absence of people who know what they are talking about in sports betting, and that is only natural for a new product introduction. Unfortunately, there is a whole array of posers who do not have a hint about betting who are clogging the airways with nonsense. There are just too many people running around, it seems to me, who have never regulated or worked around a betting business, and that gets scary when they have decided to stake a claim as a guru.
Beyond these people, I am even seeing a few scary signs where it seems that our colleges and universities are working to monetize this space, which is cool, as long as they realize they are a college or university, and not a lobbying or advocacy firm. They need to remember their roots as teaching and research entities, and not be tempted to become agents of advocacy hoping to serve some funding master. And pity the poor institutions of higher education that are used in an educational endeavor to sell a particular product or service, for they become willful participants in the destruction of their own brand.
My point here is that we might want to slow down a bit from the rush to introduce a product that a great many in the U.S. do not understand, or have wrong. It is important for a variety of reasons to get this right, and this is a very complicated product to deliver. In my life I have seen much of what can go right and what can go wrong in a book, and this modern era of sports betting has set sail in the U.S. with a crew that is somewhat unprepared to navigate many of these waters. I just really think that it might be in the best interests of many of the participants to just slow this down a bit and work to get it right. But then I am just a Vegas dinosaur—and what do I know?