Superbowl Wagering

Success With Price Per Head (Small Sportsbook Success)

2005-06-22T07:53:00.000-07:00

Case Study in Small Sportsbook Success via Use of Price Per Head (PPH) Software Written and Owned by V.O. Group, S.A., the most successful offshore sportsbook in Costa Rica.

Price Per Head vs. Small Sportsbook Operation

Featuring Dalton Wagner, Founder V.O. Group, S.A.

As Founder and Proprietor of V.O. Group, S.A., Dalton Wagner has the reputation of being the most innovative operator in offshore gaming. His most recent innovation has allowed small sportsbooks to outsource their complete operation to V.O. Group, S.A. while focusing completely on marketing. With formidable competition, Mr. Wagner founded V.O. Group, S.A. in 1998. While most companies formed that late failed, V.O. Group, S.A. has become one of the top 10 operators offshore (as measured by AnteUp; Gambling Online Magazine; Poker Player Magazine; and Many other Publications).

Playing Poker Online Magazine: Recently we have been told that V.O. Group, S.A. is now allowing small sportsbook operations to outsource the complete writing of their business to your organization. How is this possible?
Wagner: The situation you speak about is 100% true. However, has only happened one time in our history.

Playing Poker Online Magazine: Can you be more specific?
Wagner: When an offshore sportsbook starts, in 99% of all cases it will fail in the first 24 months of operations given the current market conditions. Examples are everywhere from The Dunes, Platinum, Super Sports Book, etc. It happens every single year. In the past, large sportsbooks like MVP Sportsbook or V-Wager.com would swoop in and try to save the books via financial help or simply buy them at a low price. Well, V.O. Group, S.A. now offers another more innovative solution.

Playing Poker Online Magazine: OK. You’ve got me, explain!
Wagner: We write business for onshore bookmakers and agents charging them a simple price per head per week. This price takes into consideration our considerable economies of scale and a small profit margin. In the case you are speaking of, instead of buying the sportsbook for a low cost that basically sent the owners home broken hearted and with empty pockets, we cut them a deal where they could focus on marketing and leverage off of our economies of scale. Simply put, we took over writing their business for them, and they now focus their limited resources on marketing 100% of the time.

Playing Poker Online Magazine: That sounds like snake oil. How exactly would that work?
Wagner: We don’t sell snake oil. The facts speak for themselves. When V.O. Group, S.A. opened it’s doors in 1998 the market was different. You could recruit players, write their business, and make a profit in years one, two and three. With the current market conditions, there is NO WAY a start up credit or post-up book can be profitable in year one, two or three without 2,000 head a week in business. That is the theoretical breakeven point. If you are writing less than 2,000 head a week, you can double or triple your net earn by letting V.O. Group, S.A. write your business.

Playing Poker Online Magazine: OK. That makes sense because in 1998 and 1999, it was cheaper to find a new client. Is that where the difference in earnings comes from?
Wagner: The fact is yes, that is where the difference is. But, that is not our selling point. Our selling point is that if you stop worrying about writing business and let us do it, you can focus on marketing – which is the key to the success of an online sportsbook. And, that is the simple fact for credit bookmaking, post-up bookmaking and future success in this industry. As long as you think ‘beating the clients’ is the key, you are limiting your business. Let our company worry about that – and, you find clients. Spend your time finding clients and you will make money.

Playing Poker Online Magazine: The theory is sound, but what about the facts?
Wagner: The owners of the sports operation in question do not want me to be specific about whom they are. But, let me simply say that when we took over their operations, they could not even make the post-up money good. Now they have $1.4 million in the bank. So, yes, the facts do follow the theory.

Playing Poker Online Magazine: Wow! That is incredible. Can any poker room, casino, racebook or sports book do this with V.O. Group, S.A.
Wagner: Yes. We have programs for all online products except for bingo. And, by 2006 we should be able to offer options for even bingo operators..

Playing Poker Online Magazine: So how does a bookmaker or current operation learn more about outsourcing their operations to V.O. Group, S.A.?
Wagner: Simply go to any of the V.O. Group, S.A. sites to learn more. I suggest starting at www.BettorsNet.com or calling 1-877-512-1001 or emailing agents@bettorsnet.com to get more information.

Article Note: The situation in this Case Study is a true case, however may not be representative of your situation. All situations are different and therefore may result differently.

Success With Price Per Head (Agent Success)

2005-06-20T08:37:00.000-07:00

Case Study in Agent Success via Use of Price Per Head (PPH) Software Written and Owned by V.O. Group, S.A., the most successful offshore sportsbook in Costa Rica.

Price Per Head vs. Dollywood Sportsbook

Featuring Dalton Wagner, Founder V.O. Group, S.A.

As Founder and Proprietor of V.O. Group, S.A., Dalton Wagner has the reputation of being the most innovative operator in offshore gaming. His most recent innovation involves the direct attack upon the Onshore Bookmaking market via the unique value proposition of actually partnering with Bookmakers and Agents onshore (as opposed to attempting to steal their business). With formidable competition, Mr. Wagner founded V.O. Group, S.A. in 1998. While most companies formed that late failed, V.O. Group, S.A. has become one of the top 10 operators offshore (as measured by AnteUp; Gambling Online Magazine; Poker Player Magazine; and Many other Publications).

Online Gambling: The ‘buzz’ in offshore gambling appears to be focusing on only two subjects as of late, including: Poker and Your Price Per Head Offering. What exactly is Price Per Head and Price Per Head Agency?
Wagner: As you know, one market that a post-up sportsbook has historically been unable to attack is the huge market of bettors that have been betting with their local guy for years (local guy = agent or corner bookie). The reason this market exists is the personal relationship that an onshore bookie or agent has with his clients. Sportsbooks have attempted to educate the player and lure him away from the local bookie, however V.O. Group, S.A. has decided to take another tact. Via our Price Per Head software written by Matthew Wilson, we have been able to PARTNER with onshore bookies or agents with our Price Per Head Agency Relationship.

Online Gambling: OK. Be more specific. How does a Price Per Head Agency Relationship Work?
Wagner: Price Per Head Agency is based on the very fair and equitable agreement between an onshore bookie and an offshore bookmaker. The deal is based on the onshore bookie recruiting players and the offshore bookmaker setting lines, writing the business and handling all accounting for the onshore bookie. And, all the onshore bookie does is simply pay the offshore bookmaker an agreed upon price per head per week.

Online Gambling: So, opposed to paying the offshore bookmaker a percentage, they simply compensate them a fixed price.
Wagner: Absolutely. The fact is that offshore sportsbooks have been gouging the onshore bookie or agent for years. Our offering stops that action in it’s tracks.

Online Gambling: Gouging! That is a pretty strong comment. Can you back that up?
Wagner: Let me give you an example…and, you judge for yourself. The example of Jeff W. in San Jose, California comes to mind. Jeff contacted V.O. Group, S.A. in early October 2004 when he was writing 72 head of business making an average of 12 wagers a week of $152. Rather, his turnover per client was an average of $1,824.00 a week. Via his agreement with a sportsbook we will call Dollywood, he was splitting his earnings 50/50. Once he shifted the business through BettorsNet.com, he was paying $30 a head a week. So, would you call this gouging?

Online Gambling: Actually, the numbers sound good. But, I have to admit, I am not sure. Can you help me understand better?
Wagner: That is very good answer. Let me simply do the math for you to illustrate the facts, and then you will have a much clearer set of information to deal with. If your average player bets $1,824.00 a week on just straight bets, you should have a minimum hold of 4.5% (parlays, teasers and props have a MUCH HIGHER HOLD). So, that means you should make $82.08/person ($1,824.00 x 0.045). Then, multiply this by the number of head equals a theoretical earn of $5,909.76 ($82.08 x 72). So, this means he would make $2,954.88 per week and Dollywood would make $2,954.88 per week.

Online Gambling: Well, $2,954.88 per week sounds pretty strong if you ask me How does this compare to his using BettorsNet.com?
Wagner: When Jeff started using BettorsNet.com, we simply charge him $30 a head a week. Rather, $30 times $72 is $2,160.00, representing a savings of $794.88 a week, or $41,333.76 a year.

Online Gambling: So, by Jeff W. switching to V.O. Group, S.A. or BettorsNet.com he was able to make an extra $41,333.76 a year?
Wagner: No. Actually, he made $25,000 in the first three months because most of his players are far worse than the theoretical averages. Almost every one of his players bet a proposition or a teaser or a parlay at least once a week. And, holds on those bets are far greater than 4.5%. On top of that, his players also play in our racebook and casino losing much, much more than 4.5%.

Online Gambling: Oh, I see. If he would have used Dollywood, he would have simply split more profit with them. But, via BettorsNet.com, he was able to keep 100% of the extra earn because he had already compensated you for the $30/head.
Wagner: That is exactly correct. Jeff W. came down in January 2005 and I took him sail fishing. It is the first time I ever had a client pay my bill. Why? Because, and realize I am quoting here, Jeff states that I will make him an extra $100,000 this year alone.

Online Gambling: Wow! That is incredible. I bet large credit sportsbooks, like Dollywood, are quickly becoming unfavorable of your new product.
Wagner: Yes. They hate our new software offering! But, that is what you get when you take advantage of your clients or partners as they have. And, as far as I am concerned, credit shops with Agent Split Agreements have simply NOT been treating their partners fairly and now they will pay the bill.

Online Gambling: I must say, I agree that if your numbers are even close to correct, it appears that the credit shops that split the earn ARE GOUGING AGENTS AND ONSHORE BOOKMAKERS.
Wagner: Well, the facts speak for themselves. And, I am glad you see the facts for what they are.

Online Gambling: Is there ever a case where an onshore bookie or agent should opt for a split as opposed to a Price Per Head Agency agreement?
Wagner: Absolutely Yes. If you are starting up a new book, or if you need financial backing because you are not strong enough to support a losing week - then, you should opt for a split. The best way to judge this is simply look over your figures for the last year. Could you afford to pay out the worst week you had without going broke? If you answer yes – then, you should opt for PPH. If you could NOT afford to pay it, then you should opt for a split or not be in business at all.

Online Gambling: So how does a bookmaker learn more about this?
Wagner: Simply go to any of the V.O. Group, S.A. sites to learn more. I suggest starting at www.BettorsNet.com or calling 1-877-512-1001 or emailing agents@bettorsnet.com to get more information.

Article Note: Any assumption that “Dollywood” is related to “Hollywood Sportsbook” or “BetHollywood.com” or “BetAtHollywood” or “Hollywood International” is the assumption of the reader and not the responsibility of Gambling Online Magazine.

Innovation In Bookmaking

2005-06-14T08:12:00.000-07:00

Q & A with
Dalton Wagner, Founder V.O. Group, S.A.

As Founder and Proprietor of V.O. Group, S.A., Dalton Wagner has the reputation of ferreting out new markets and attacking while other companies sit on their hindquarters and watch. One market that has always eluded offshore bookmakers is the ‘guy who likes dealing with his credit bookmaker’. Typically this market has been untouchable for the offshore bookmaker, but NOT for Dalton and V.O. Group, S.A. We had an opportunity to catch up with Dalton Wagner on his last visit to Panama.

Vegas Offshore: Tell us about this new product that you are calling your Price Per Head Agency Relationship.
Wagner: As you know, one market that a post-up sportsbook has historically been unable to attack is the huge market of bettors that have been betting with their local guy for years. The reason this market exists is the personal relationship that an onshore bookie has with his clients. Sportsbooks have attempted to educate the player and lure him away from the local bookie, however we have taken another tact. We have partnered with local bookies around the world to make their offering better and more valuable.

Vegas Offshore: So instead of attacking the local guy, you actually approach him with your offer?
Wagner: Exactly. The fact is that the relationship is the last thread holding clients to a local guy. Yes, there is the fact that the local guy extends credit, but with bonuses and promotions we can overcome that offering. The key is the relationship.

Vegas Offshore: I’m confused, please explain.
Wagner: As you know, the onshore bookmaking market has lost steam to the offshore providers like V.O. Group, S.A. The reason is that the offerings that I can provide are far superior to those that any onshore bookmaker can offer. The PPH concept is based on allowing the onshore bookmaker to provide his clients my offerings on a purely anonymous basis via an online automated tool. Rather, by signing up with my PPH service, an onshore bookmaker can compete with all offshore sportsbooks on equal footing offering 24-hour wagering, 365 days a year. All the bookmaker does is use an online system to assign PINs and PASSWORDs and pay me a small fee per week for the service.

Vegas Offshore: Wait a minute. So, this means that a small time operator in Cleveland, Ohio can offer all the same things that V.O. Group, S.A. does without making the multi-million dollar investment?
Wagner: Now your catching on. For as little as $25 per head per week, a guy in Ohio can compete with the biggest sportsbooks in the world. And, better yet, never answer another wagering phone call again.

Vegas Offshore: OK, I get it. They use your automated tool to drive their clients to your software online, and they simply pick up the figures at the end of the week.
Wagner: Exactly correct with one exception. Their clients can bet on the phone via our call center staffed with 250 people OR bet online. Again, they have access to all of the offerings V.O. Group, S.A. provides including call center access, client services and technical support.

Vegas Offshore: Is the PPH product only based on sports wagering?
Wagner: Very good question. The answer is no. We actually have the ability to offer clients two (2) casino products including blackjack, baccarat, slots, 3 card poker, roulette, etc. And, clients may also bet on horses at over 350 tracks worldwide.

Vegas Offshore: Wow! That truly is incredible. So, a bookie that has one client can compete with the likes of MVPsportsbook.com on equal footing?
Wagner: Exactly correct. But, there are two keys to the success of the product launch. The first is being able to compete head to head with the biggest sportsbooks in the world. But, arguably the most important factor is that since the onshore bookie no longer has to answer phones or track plays, he can spend all of his time picking up new clients, NOT writing bets.

Vegas Offshore: I remember that in a prior interview you had stated that the key is not winning, but finding more losers.
Wagner: An embarrassing quote, but true. Amateur bookmakers think that the key is to beat the clients you have. That is a huge mistake. The key to getting rich as a bookmaker is finding a new client every single day of the year. The numbers take care of themselves, the key is to get more and more people playing. That is the TRUE BEAUTY of the PPH software and agency relationship.

Vegas Offshore: Do you have any success stories to tell?
Wagner: I have many, but will tell you one that emphasizes what the PPH program can do. I have a bookmaker that has been working out of San Antonio, Texas for 10 years. The guy has historically made $200,000 a year from his 25 or 30 players. He was introduced to our product in July 2004, and today he is writing over 185 clients. The ability to outsource answering calls and writing tickets to us has allowed him to grow his business 600% and his revenue over 1000%.

Vegas Offshore: Why did his revenue grow more than his business? Is it because your lines are sharper than his?
Wagner: There you go again. That is the obvious mistake that everyone makes. Again, don’t worry about beating the clients. Worry about getting more clients to play. But, to answer your question directly, the ability for his clients to play in the casino, play 24 hours a day, play games/halves/quarters, props, etc. is where the extra revenue comes from. Our lines might be sharper, but the advantage is more clients betting more often.

Vegas Offshore: How many bookmakers do you currently work with?
Wagner: We are writing business for over 250 bookmakers now. Some represent groups as small as 2 or 3; and others represent groups as large as 500. Again, remember the key is finding as many clients as possible. If you get to where you are writing 15 clients or more, it is almost impossible to lose for an extended period of time.

Vegas Offshore: So how does a bookmaker learn more about this?
Wagner: Simply go to any of the V.O. Group, S.A. sites to learn more. I suggest starting at www.BettorsNet.com or calling 1-877-512-1001 or emailing agents@bettorsnet.com to get more information.

State of the Offshore Gaming Industry

2005-06-13T10:20:00.000-07:00

Q & A with
Dalton Wagner, Founder V.O. Group, S.A.

As Founder and Proprietor of V.O. Group, S.A., Dalton Wagner has the reputation of making one-dollar work like three in online marketing. With formidable competition, Mr. Wagner founded V.O. Group, S.A. in 1998 and has quickly risen to be one of the largest offshore operators in the world with over 50,000 active clients. We had an opportunity to catch up with Dalton Wagner on his last visit to Antigua.

Vegas Offshore: This year has been interesting for V.O. Group, S.A. and the offshore industry as a whole (advertising changes, etc.). How do you feel about the industry at the current time?
Wagner: I feel the industry is as strong as it has ever been. We are still finding that our advertising is bringing us new clients at an ever-growing rate. Some competitors are complaining that the crimp on advertising is affecting the industry, but we are not seeing this trend. Consolidation within the industry has begun, and I am sure you will continue to see smaller competitors gobbled up, and medium to larger companies merging. The weaker will go by the wayside.

Vegas Offshore: What about the rumors of V.O. Group, S.A. being bought?
Wagner: I am glad you used the term 'rumors'. The fact is that in July 2004 three suitors approached V.O. Group, S.A. because of our record-breaking profit year. In two of the cases we did see 'value' in a merger/relationship. However, at the end of the day, we could not come to terms that were agreeable on both sides. At this time V.O. Group, S.A. stands independent. And, we are happy being independent, profitable and growing.

Vegas Offshore: It is rumored that Bet On Sports (PLC; BSS.L) was one of the suitors. Is that true?
Wagner: There were three suitors that approached V.O. Group, S.A. And, in all cases confidentiality agreements were signed. For this reason, I cannot confirm or deny who any of the potential suitors were. What I can tell you is that one was a major sportsbook player, one was a major casino player and two were PLCs. I doubt that helps.

Vegas Offshore: Well, if Bet On Sports was involved, I bet you are happy you weren't involved in their November 24, 2004 stock debacle.
Wagner: The Bet On Sports stock debacle was an over-reaction by the market in my opinion. In one day you saw their stock drop 50% in value. And, the reason was poor performance in a very short period. If you looked at the other publicly held offshore gaming companies, you saw the same thing, just not as drastic as with BSS.L. Simply put, I know the founder of Bet On Sports, I know the management of Bet On Sports, I know the staff at Bet On Sports and I would not hesitate to invest in Bet On Sports. They were, and still are, undervalued in my opinion. They are a great competitor and a great company. I wish I had some of their stock at the new adjusted price. I just don't see how you can lose.

Vegas Offshore: It is rare to hear the 'competition' speaking so highly of a major competitor. Why would you do so?
Wagner: Simple. Bet On Sports is a great company. And, I am sure they would tell you the same about V.O. Group, S.A. The fact is, that there are companies out there that make our industry stronger. And, ones that make it weaker. Bet On Sports and V.O.Group, S.A. strive to make our industry stronger and more legitimate on a daily basis (as do BetCris.com; BoDog.com; etc.). What kind of ambassador for the industry would I be if I downplayed a 'good' competitor like Bet On Sports for my own benefit?

Vegas Offshore: If Bet On Sports did approach you, would you consider a merger?
Wagner: I like being independent. But, simply put, NEVER say NEVER.

Vegas Offshore: What of the rumors that you are looking at Panama as a potential relocation site?
Wagner: Our operation currently has offices in Costa Rica, Antigua and Belize. In Costa Rica we currently have over 400 employees. With employment costs in Costa Rica on the rise, the burden of Caja and the ever-changing political climate, we have looked at several alternative locations. One of the most desirable is/was Panama. However, due to the massive failure of BetPanAm.com and the political debacle involving their past gaming commission, we have decided to stay put for the current time. I think it is very safe to say that our primary location will be Costa Rica for the next 5 years. Pending any crazy licensing or governmental changes.

Vegas Offshore: I have visited your office in Antigua, however had no idea that you employed 400 individuals in Costa Rica. Why do you need such a large staff?
Wagner: Our industry has a reputation for being lazy and getting by on a shoestring budget. Most sportsbooks, casinos, racebooks and poker rooms answer phones when it is convenient and buy computers when the ones they are operating blow-up. Most are simply embarrassing to the legitimate operators. To run an operation like ours, servicing 50,000 bettors, you need lots of space, a 1st rate phone system, fiber and satellite phone and Internet backups, IT professionals, accounting professionals, etc. V.O. Group, S.A. is currently located in 35,000 square feet of space, operating 24-hours a day, 365 days a year, and we are busting at the seems. At the current time, we are negotiating to buy the building next to us for future expansion. I think we will employ 600 people come this same time next year.

Vegas Offshore: I have noticed that you are still branching into other products. How has this strategy worked for V.O. Group, S.A.?
Wagner: In 1998 we started with our sports product. We then branched into the casino product. In 2001 and 2002 we opened several major race books and poker rooms. The fact is that we are profitable in all products. However, our core product, and hub for our advertising, is focused on the sports product. The strategy has worked, but we will not desert our core product. You can look for our re-launch of interactive betting in early 2005 and bingo in mid 2005.

Vegas Offshore: What other changes do you see in 2005 for V.O. Group, S.A.
Wagner: I think you will see V.O. Group, S.A. work more on our Internet interface to make it more gamer-friendly; you will see our company move into land-based gaming; and you will see us acquire two or three smaller competitors. Rather, you will see what you have always seen, expansion.

Vegas Offshore: What other changes do you see in 2005 for the industry as a whole?
Wagner: The strong will get stronger. The weak will get weaker. And, the acquisition race will be on.

How Much Should a Bookmaker Expect to Make with PPH

2005-03-14T07:13:00.000-08:00

Q & A with Dalton Wagner, Founder V.O. Group, S.A.

Dalton Wagner, Proprietor of V.O. Group, S.A. has recently found himself one of the most popular interviews in the offshore sportsbook industry. The reason is his new Price Per Head Agency offering for Onshore Credit Bookmakers. We had an opportunity to catch up with Dalton Wagner and discuss the issue on his last visit to St. Kitts.

Vegas Offshore: Last time we talked you mentioned that your Price Per Head offering was growing beyond your wildest dreams. How is it doing now?

Wagner: Our Price Per Head software allows onshore bookmakers to make more than they have ever dreamed. For this reason, the product is growing faster than we could have ever imagined.

Vegas Offshore: Can you be a little more explicit?

Wagner: We wrote the software offering with input from two bookmakers 24 months ago. Today, we have over 500 bookmakers using the software writing business for over 20,000 clients a week, generating over $500,000 in revenue on a weekly basis in football season.

Vegas Offshore: That is incredible. For you to grow that fast, bookmakers must simply love the product.

Wagner: Yes, bookmakers love the product. Not only does it take the burden of answering phone calls and doing accounting away, but it also allows bookmakers to insulate themselves from legal issues and market their product more aggressively. We have literally 50+ examples bookmakers that are writing hundreds of clients with our software. Can you imagine how they could have done that without us?

Vegas Offshore: The largest onshore bookmaker I have ever met wrote 300 clients and had a staff of 10 clerks on football Sunday. Who is your largest onshore bookmaker?

Wagner: I obviously can’t reveal identities, but I can tell you that she is writing 750 head a week on average and employees nobody.

Vegas Offshore: You have a bookmaker working with you that writes over 750 head a week, what do you think she makes annually?

Wagner: I know exactly what she makes. Let’s just say it is well over a million a year.

Vegas Offshore: How many bookmakers do you currently work with?

Wagner: We are writing business for over 250 bookmakers now. Some represent groups as small as 2 or 3; and others represent groups as large as 750.

Vegas Offshore: Anything else you would like to add?

Wagner: Sure. If you’re a bookmaker onshore, call us or visit us online to learn how to save money and/or grow your business beyond your wildest dreams. The service is modestly priced, and we have never had a disgruntled user. The value proposition is simply huge for any bookmaker.

Vegas Offshore: So how does a bookmaker learn more about this?

Wagner: Simply go to any of the V.O. Group, S.A. sites to learn more. I suggest starting at www.BettorsNet.com or calling 1-877-512-1001 or emailing agents@bettorsnet.com to get more information.

Innovation In Bookmaking

2005-03-08T08:41:00.000-08:00

Q & A with Dalton Wagner, Founder V.O. Group, S.A.

As Founder and Proprietor of V.O. Group, S.A., Dalton Wagner has the reputation of ferreting out new markets and attacking while other companies sit on their hindquarters and watch. One market that has always eluded offshore bookmakers is the ‘guy who likes dealing with his credit bookmaker’. Typically this market has been untouchable for the offshore bookmaker, but NOT for Dalton and V.O. Group, S.A. We had an opportunity to catch up with Dalton Wagner on his last visit to Panama.

Vegas Offshore: Tell us about this new product that you are calling your Price Per Head Agency Relationship.

Wagner: As you know, one market that a post-up sportsbook has historically been unable to attack is the huge market of bettors that have been betting with their local guy for years. The reason this market exists is the personal relationship that an onshore bookie has with his clients. Sportsbooks have attempted to educate the player and lure him away from the local bookie, however we have taken another tact. We have partnered with local bookies around the world to make their offering better and more valuable.

Vegas Offshore: So instead of attacking the local guy, you actually approach him with your offer?

Wagner: Exactly. The fact is that the relationship is the last thread holding clients to a local guy. Yes, there is the fact that the local guy extends credit, but with bonuses and promotions we can overcome that offering. The key is the relationship.

Vegas Offshore: I’m confused, please explain.

Wagner: As you know, the onshore bookmaking market has lost steam to the offshore providers like V.O. Group, S.A. The reason is that the offerings that I can provide are far superior to those that any onshore bookmaker can offer. The PPH concept is based on allowing the onshore bookmaker to provide his clients my offerings on a purely anonymous basis via an online automated tool. Rather, by signing up with my PPH service, an onshore bookmaker can compete with all offshore sportsbooks on equal footing offering 24-hour wagering, 365 days a year. All the bookmaker does is use an online system to assign PINs and PASSWORDs and pay me a small fee per week for the service.

Vegas Offshore: Wait a minute. So, this means that a small time operator in Cleveland, Ohio can offer all the same things that V.O. Group, S.A. does without making the multi-million dollar investment?

Wagner: Now your catching on. For as little as $25 per head per week, a guy in Ohio can compete with the biggest sportsbooks in the world. And, better yet, never answer another wagering phone call again.

Vegas Offshore: OK, I get it. They use your automated tool to drive their clients to your software online, and they simply pick up the figures at the end of the week.

Wagner: Exactly correct with one exception. Their clients can bet on the phone via our call center staffed with 250 people OR bet online. Again, they have access to all of the offerings V.O. Group, S.A. provides including call center access, client services and technical support.

Vegas Offshore: Is the PPH product only based on sports wagering?

Wagner: Very good question. The answer is no. We actually have the ability to offer clients two (2) casino products including blackjack, baccarat, slots, 3 card poker, roulette, etc. And, clients may also bet on horses at over 350 tracks worldwide.

Vegas Offshore: Wow! That truly is incredible. So, a bookie that has one client can compete with the likes of MVPsportsbook.com on equal footing?

Wagner: Exactly correct. But, there are two keys to the success of the product launch. The first is being able to compete head to head with the biggest sportsbooks in the world. But, arguably the most important factor is that since the onshore bookie no longer has to answer phones or track plays, he can spend all of his time picking up new clients, NOT writing bets.

Vegas Offshore: I remember that in a prior interview you had stated that the key is not winning, but finding more losers.

Wagner: An embarrassing quote, but true. Amateur bookmakers think that the key is to beat the clients you have. That is a huge mistake. The key to getting rich as a bookmaker is finding a new client every single day of the year. The numbers take care of themselves, the key is to get more and more people playing. That is the TRUE BEAUTY of the PPH software and agency relationship.

Vegas Offshore: Do you have any success stories to tell?

Wagner: I have many, but will tell you one that emphasizes what the PPH program can do. I have a bookmaker that has been working out of San Antonio, Texas for 10 years. The guy has historically made $200,000 a year from his 25 or 30 players. He was introduced to our product in July 2004, and today he is writing over 185 clients. The ability to outsource answering calls and writing tickets to us has allowed him to grow his business 600% and his revenue over 1000%.

Vegas Offshore: Why did his revenue grow more than his business? Is it because your lines are sharper than his?

Wagner: There you go again. That is the obvious mistake that everyone makes. Again, don’t worry about beating the clients. Worry about getting more clients to play. But, to answer your question directly, the ability for his clients to play in the casino, play 24 hours a day, play games/halves/quarters, props, etc. is where the extra revenue comes from. Our lines might be sharper, but the advantage is more clients betting more often.

Vegas Offshore: How many bookmakers do you currently work with?

Wagner: We are writing business for over 250 bookmakers now. Some represent groups as small as 2 or 3; and others represent groups as large as 500. Again, remember the key is finding as many clients as possible. If you get to where you are writing 15 clients or more, it is almost impossible to lose for an extended period of time.

Vegas Offshore: So how does a bookmaker learn more about this?

Wagner: Simply go to any of the V.O. Group, S.A. sites to learn more. I suggest starting at www.BettorsNet.com or calling 1-877-512-1001 or emailing agents@bettorsnet.com to get more information.

$1 000 000 March Madness brackets contest

2005-03-02T07:59:00.000-08:00

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$1 000 000 March Madness brackets contest

2005-03-02T07:22:00.000-08:00

Bookmakers! Read Below To Earn More Cash Than Ever

2005-02-28T07:35:00.000-08:00

Bookmakers!
Read Below To Earn More Cash Than Ever

Are you a onshore bookmaker that wants to Minimize Legal Exposure, Increase Potential Profits, Spend More Time Enjoying the Money You Are Making, and Grow Your Business Beyond Your Wildest Dreams? If you answered ‘YES’ to one or all of these questions, then you need to look at a Price Per Head Agent Relationship with our company.

The concept of a Price Per Head Agent Relationship is based on you, the onshore bookmaker, paying our company a service fee to offer the same services that we offer to thousands of clients (on an anonymous basis).

For the first time, you will be able to offer Internet and Phone access to Sports, Horse and Casino (2 casinos) wagering to all your current clients (via a simple PIN and PASSWORD betting system). No longer do you have to compete with offshore sportsbooks and lose clients. YOU WILL BE ABLE TO OFFER EVERYTHING THAT THEY OFFER!

We are Licensed to offer bookmaking services.

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Take advantage of our $5,000,000 USD investment to make your services better than ever. No longer will you have to answer calls all Saturday and Sunday. No longer will you have to lose clients to the offshore bookmakers. No longer will you have to worry about having your door kicked in by the authorities. Now you can compete with the Big Boys! You will simply sit back, watch the games, and earn more than ever before.

To learn more, go to our website, and click on ‘Agents’. If you prefer to use a white-labeled site without bonus and promotional text, visit www.BettorsNet.com for more information.

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Call 1-888-333-6914 for more information.

State of the Offshore Gaming Industry

2005-02-22T10:04:00.000-08:00

State of the Offshore Gaming Industry

Q & A with

Dalton Wagner, Founder V.O. Group, S.A.

As Founder and Proprietor of V.O. Group, S.A., Dalton Wagner has the reputation of making one-dollar work like three in online marketing. With formidable competition, Mr. Wagner founded V.O. Group, S.A. in 1998 and has quickly risen to be one of the largest offshore operators in the world with over 50,000 active clients. We had an opportunity to catch up with Dalton Wagner on his last visit to Antigua.

Vegas Offshore: This year has been interesting for V.O. Group, S.A. and the offshore industry as a whole (advertising changes, etc.). How do you feel about the industry at the current time?

Wagner: I feel the industry is as strong as it has ever been. We are still finding that our advertising is bringing us new clients at an ever-growing rate. Some competitors are complaining that the crimp on advertising is affecting the industry, but we are not seeing this trend. Consolidation within the industry has begun, and I am sure you will continue to see smaller competitors gobbled up, and medium to larger companies merging. The weaker will go by the wayside.

Vegas Offshore: What about the rumors of V.O. Group, S.A. being bought?

Wagner: I am glad you used the term 'rumors'. The fact is that in July 2004 three suitors approached V.O. Group, S.A. because of our record-breaking profit year. In two of the cases we did see 'value' in a merger/relationship. However, at the end of the day, we could not come to terms that were agreeable on both sides. At this time V.O. Group, S.A. stands independent. And, we are happy being independent, profitable and growing.

Vegas Offshore: It is rumored that Bet On Sports (PLC; BSS.L) was one of the suitors. Is that true?

Wagner: There were three suitors that approached V.O. Group, S.A. And, in all cases confidentiality agreements were signed. For this reason, I cannot confirm or deny who any of the potential suitors were. What I can tell you is that one was a major sportsbook player, one was a major casino player and two were PLCs. I doubt that helps.

Vegas Offshore: Well, if Bet On Sports was involved, I bet you are happy you weren't involved in their November 24, 2004 stock debacle.

Wagner: The Bet On Sports stock debacle was an over-reaction by the market in my opinion. In one day you saw their stock drop 50% in value. And, the reason was poor performance in a very short period. If you looked at the other publicly held offshore gaming companies, you saw the same thing, just not as drastic as with BSS.L. Simply put, I know the founder of Bet On Sports, I know the management of Bet On Sports, I know the staff at Bet On Sports and I would not hesitate to invest in Bet On Sports. They were, and still are, undervalued in my opinion. They are a great competitor and a great company. I wish I had some of their stock at the new adjusted price. I just don't see how you can lose.

Vegas Offshore: It is rare to hear the 'competition' speaking so highly of a major competitor. Why would you do so?

Wagner: Simple. Bet On Sports is a great company. And, I am sure they would tell you the same about V.O. Group, S.A. The fact is, that there are companies out there that make our industry stronger. And, ones that make it weaker. Bet On Sports and V.O.Group, S.A. strive to make our industry stronger and more legitimate on a daily basis (as do BetCris.com; BoDog.com; etc.). What kind of ambassador for the industry would I be if I downplayed a 'good' competitor like Bet On Sports for my own benefit?

Vegas Offshore: If Bet On Sports did approach you, would you consider a merger?

Wagner: I like being independent. But, simply put, NEVER say NEVER.

Vegas Offshore: What of the rumors that you are looking at Panama as a potential relocation site?

Wagner: Our operation currently has offices in Costa Rica, Antigua and Belize. In Costa Rica we currently have over 400 employees. With employment costs in Costa Rica on the rise, the burden of Caja and the ever-changing political climate, we have looked at several alternative locations. One of the most desirable is/was Panama. However, due to the massive failure of BetPanAm.com and the political debacle involving their past gaming commission, we have decided to stay put for the current time. I think it is very safe to say that our primary location will be Costa Rica for the next 5 years. Pending any crazy licensing or governmental changes.

Vegas Offshore: I have visited your office in Antigua, however had no idea that you employed 400 individuals in Costa Rica. Why do you need such a large staff?

Wagner: Our industry has a reputation for being lazy and getting by on a shoestring budget. Most sportsbooks, casinos, racebooks and poker rooms answer phones when it is convenient and buy computers when the ones they are operating blow-up. Most are simply embarrassing to the legitimate operators. To run an operation like ours, servicing 50,000 bettors, you need lots of space, a 1 st rate phone system, fiber and satellite phone and Internet backups, IT professionals, accounting professionals, etc. V.O. Group, S.A. is currently located in 35,000 square feet of space, operating 24-hours a day, 365 days a year, and we are busting at the seems. At the current time, we are negotiating to buy the building next to us for future expansion. I think we will employ 600 people come this same time next year.

Vegas Offshore: I have noticed that you are still branching into other products. How has this strategy worked for V.O. Group, S.A.?

Wagner: In 1998 we started with our sports product. We then branched into the casino product. In 2001 and 2002 we opened several major race books and poker rooms. The fact is that we are profitable in all products. However, our core product, and hub for our advertising, is focused on the sports product. The strategy has worked, but we will not desert our core product. You can look for our re-launch of interactive betting in early 2005 and bingo in mid 2005.

Vegas Offshore: What other changes do you see in 2005 for V.O. Group, S.A.

Wagner: I think you will see V.O. Group, S.A. work more on our Internet interface to make it more gamer-friendly; you will see our company move into land-based gaming; and you will see us acquire two or three smaller competitors. Rather, you will see what you have always seen, expansion.

Vegas Offshore: What other changes do you see in 2005 for the industry as a whole?

Wagner: The strong will get stronger. The weak will get weaker. And, the acquisition race will be on.

Revenue Share vs. PPH Agency

2005-02-16T14:02:00.000-08:00

Revenue Share vs. PPH Agency

Q & A with

Dalton Wagner, Founder V.O. Group, S.A.

Dalton Wagner, Proprietor of V.O. Group, S.A. has recently found himself in the middle of a controversy between Revenue Sharing Sportsbooks and his Price Per Head Agency Concept. We had an opportunity to catch up with Dalton Wagner and discuss the issue on his last visit to Curacao.

Vegas Offshore: We hear that the Price Per Head offering you launched several months ago has landed you in some hot water?

Wagner: Yes, it appears that my Price Per Head Software offering has been a little too popular with onshore bookmakers and it is making my competition a little upset.

Vegas Offshore: Can you be a little more explicit?

Wagner: Several offshore bookmakers have lost relationships with their agents because my Price Per Head offering has lured them away and toward my offering. Specifically, several of the largest credit sportsbooks in Costa Rica have lost packages to me in the range of 500-1000 head apiece. And, they are not happy about it.

Vegas Offshore: Why are so many people leaving their agency relationships with credit sportsbooks?

Wagner: Well, in the old days an offshore sportsbook might partner with an onshore bookmaker. The deal was based on the onshore bookmaker finding the business and the offshore operator writing it and doing the accounting for a fee. The deal was typically 50%/50%. However, with my Price Per Head offering, I can offer the same offerings, but only charge the onshore bookmaker a nominal fee for using my service. The fact is that 50% is simply too much to charge an onshore bookmaker. I charge bookmakers a flat fee based on the number of head I am writing and let the bookmaker keep the rest of the money.

Vegas Offshore: Wait a minute. How can you afford to write the business for a simple fee when it historically cost 50%.

Wagner: The simple fact is that 50% of the revenue is ridiculous. I can charge a fee as little as $25 per head, per week and allow a client to have access to sports wagering, casino wagering and horse wagering – and, make a profit. Furthermore, we have written a software interface that allows agents onshore to manage their clients limits, run reports, etc. from any computer in the world. The offering is robust, efficient and simple to use. And, unfortunately for offshore sportsbooks that share in revenue, agents and bookmakers simply love it.

Vegas Offshore: Is the PPH product only based on sports wagering?

Wagner: No. We actually have the ability to offer clients two (2) casino products including blackjack, baccarat, slots, 3 card poker, roulette, etc. And, clients may also bet on horses at over 350 tracks worldwide.

Vegas Offshore: How many bookmakers do you currently work with?

Vegas Offshore: Anything else you would like to add?

Vegas Offshore: So how does a bookmaker learn more about this?

Wagner: Simply go to any of the V.O. Group, S.A. sites to learn more. I suggest starting at www.BettorsNet.com or calling 1-877-512-1001 or emailing agents@bettorsnet.com to get more information.

Super Bowl Wagering in the millions. Odds lines point spreads prop bets

2005-02-02T08:48:00.000-08:00

Super Bowl Bets

Even for the casual sports fan, the Super Bowl wagering odds lines spreads is must-see TV. And for many Americans it's also the time to gamble.

The Super Bowl is the biggest sports gambling event of the year. Last year, $81,000,000 was wagered legally on the big game. This year, about $375,000,000 in bets will be wagered online this Sunday. Millions of others will participate in office pools proposition bets

Superbowl Wagering before playoffs

2005-01-21T13:29:00.000-08:00

After investing the AFC and NFC Championship winner markets individually, we now an opportunity to look at the outright Super Bowl wagering market. Although odds on to win the NFC Championship, Philadelphia Eagles are only third favourites behind the equally fancied New England Patriots and Pittsburgh Steelers. Both the AFC teams can be backed at a best price 3/1 to go the distance. The strength of the AFC conference is demonstrated by the fact fourth in the betting is Indianapolis, available at 8/1 with l. The Colts are one of three AFC franchises quoted in the top four for the Super Bowl wagering market. Apart from the above teams, only Atlanta are awarded a single digit quote by the majority of firms. That said it is possible to find 12/1 for the Falcons. For those who feel San Diego can continue their season of surprises and actually win Super Bowl wagering, it is worth noting that Super Bowl wagering Odds are way out of line with their 25/1 quote. The general price on offer for the Chargers is around the 14/1 mark. Of the NFC teams without the luxury of a bye week, Green Bay Packers are available at 25/1 and Seattle Seahawks at 33/1. The recommendation at the start of the season was Minnesota at 50/1 and that is still the price available. The Vikings though will need to show considerable improvement if they are to have any chance. Also available at the same price as Minnesota are New York Jets. Denver Broncos and St.Louis Rams are the 66/1 outsiders.

The Evolution of Prices in the 21stCentury American superbowl wagering Market Abstract We report the intraday characteristics of wagering prices and

2005-01-13T07:23:00.000-08:00

The Evolution of Prices in the 21stCentury American superbowl wagering Market Abstract We report the intraday characteristics of wagering prices and odds in the American superbowl wagering market. Using data from an online sports book we find systematic differences in the return distributions and the frequency of changes in prices and commissions over the day and over the week. Volatility is greatest in the minutes leading up to kickoff. Additionally, volatility is greater than normal when prices are initially quoted and in the middle of the day. Consistent with market efficiency, there is little or no evidence of autocorrelation in returns for either a portfolio of games or for individual games. -------------------------------------------------------------------------------- Page 3 1The Evolution of Prices in the 21stCentury American superbowl wagering Market One of the advantages of analyzing wagering markets, unlike equity markets, is that all securities, i.e., bets, reach a known terminal value in a relatively short period of time. Additionally, unlike para-mutuel wagering, once a bet is placed, the impact of subsequent wagering does not affect the odds on the placed bets. Empirical studies on American superbowl wagering markets have, by necessity, used prices observed at daily or weekly intervals.1In this paper we report the intraday characteristics of wagering prices in the American superbowl wagering markets using data observed at 15 minute intervals during the 2003 regular season. Related to our work, Avery and Chevalier (1999) examined the hypothesis that sentimental bettors can affect the average prices and the path of prices in superbowl wagering markets. Using daily NFL data from 1983-1994, they examined whether the changes in the lines from the open to the close reflects either sentiment or new information or both. They found that 79% of the point spreads change over the week and that point spreads move predictably, partiallyin response to variables known prior to the opening of wagering. However, the changes are small, so that a wagering strategy of wagering against the predicted movement in the point spread is only borderline profitable. Like Avery and Chevalier, we find that price changes are quite common. Our observations, made at fifteen minute intervals, enable us to analyze a finer pattern of price movement through the week preceding a game. 1See e.g., Avery and Chevalier (1999), Dare and MacDonald (1996), Even and Noble (1992), Gandar, Zuber,O’Brien, Russo (1988), Golec and Tamarkin (1991), Gray and Gray (1997), Lacey (1990), Pankoff (1968), Paul and Weinbach (2002), Sauer, Brajer, Ferris, Marr (1988), Stern (1991), Tryfos, Casey, Cook, Leger, and Pylypiak(1984), Vergin and Scriabin (1978), Winkler (1971), Woodland and Woodland (2000), Zuber, Gandar, Bowers(1985). -------------------------------------------------------------------------------- Page 4 2We find the following intraday patterns in American superbowl wagering market prices. First, there are systematic differences in the return distributions and the frequency of changes in prices and vigorish (commissions) over the day and over the week. Volatility is greatest in the minutes leading up to kickoff as the standard deviation of returns on odds bets is about ten times larger than normal. Volatility is also observed to be somewhat larger when prices are initially quoted and during the middle of the day. Second, we observe a negative correlation of the time series of transactions costs and the volatility of wagering prices. One explanation for this negative relationship is that there is an increase in liquidity concomitant with volatility. In addition to the analysis of the intraday changes in the point spread, we examine intraday changes in the money line, or odds. In a money line wager the bettor obtains a payoff in the event of an outright win by the chosen team. To encourage bets on the underdog, the sports book will offer increased odds. Because money line wagers on superbowl games have been unavailable until recently (see Bassett (1981) and Woodland and Woodland (1991)), the time series of these Arrow-Debreu securities has never been examined.2We add to the literature by testing for efficiency in the odds market for superbowl games. Consistent with market efficiency, we find little or no evidence of autocorrelation in returns for either a portfolio of games or for individual games. I. Description of the Data wagering data were gathered from the internet using a computer program that downloaded a webpage every 15 minutes. The internet sports book we used is maintained by Sports 2Campbell, Lo, and MacKinlay (1997, p. 507) note that “in practice, since true Arrow-Debreu securities are not yet traded on any organized exchange, Arrow-Debreu prices are not observable.” -------------------------------------------------------------------------------- Page 5 3(http://www.sports.com), which is located on Costa rica. Over the course of the season there were occasions when the website was down, presumably because of network or system maintenance. There were also times when our network was unavailable. Overall, we were able to obtain more than 90% of the observations during the 2003 regular season. There did not appear to be any systematic period when data-processing was problematic, although ’s planned site maintenance tended to be in the late evening or early morning hours. Size and Scope of Internet superbowl wagering Markets It is logical to question the value of using the online markets to characterize wagering markets, in general. However, we know of no other way to obtain intraday data. One obvious question that arises is: what is the size of the online markets relative to casino sports books?Strumpf (2002) reports, that in 2000, there were 204 online wagering sites with winnings of $1 billion, compared to 156 wagering locations in Nevada with winnings of $113 million. In a recent 60 Minutes piece, CBS (2001) reports that one online site, World Sports, has millions of dollars in revenues. World Sports is the largest of the nearly 1,000 internet gambling sites. Further, CBS indicates that online sports books presently collect more money from the Super Bowl than fromall of the sports bookies in Las Vegas combined. Thus, it appears that the online market dominates the casinos in the area of sports wagering. In fact, it is also fair to say that internet gambling is growing at a much faster rate. Sinclair (2001) reports that internet gambling -------------------------------------------------------------------------------- Page 6 4increased by 89% in 2000 and brought in an estimated $2.2 billion in worldwide revenues (Bedell 2001).3wagering on superbowl Games We collected the following information from the website: point spreads, money lines, and totals (over-unders), along with the vigorish pertaining to each price. A representative quote appears below. superbowl superbowl Mon 12/29 GameSpread Money Line Total PointsMon 12/29 417 Michigan State +3.5 -109 +144 OVER 48.5 -104 06:00 PM 418 Nebraska -3.5 -101 -159 UNDER 48.5 -112 The point spread, also referred to as the “line,” refers to the number of points that are added to a team’s score to determine the winner of the bet. Often point spreads are quoted using half points. In the example above Nebraska is favored to beat Michigan State by 3.5 points. A point spread bet on Nebraska would require Nebraska to win by more than 3.5 points for the bettor to win. A bet on Michigan State would require Michigan State to win outright, or for Michigan State to lose by less than 3.5 points. In the event that Nebraska beats Michigan State by exactly 3.5 points (an impossibility when the line includes a 1/2 point) the bet is a push and all money is returned. In our sample of NFL and superbowl games, the modal point spread is −3 points for home teams in the NFL, indicating that the home team was typically favored by 3 points. Other peaks in the distribution of point spreads are found at −7, −4 and +3 points. The distribution of the 3Spain (2004) reports that one of the world’s largest online-gambling enterprises expected to handle 150,000 calls with an average bet of $111 during the 2004 Super Bowl. Additionally, the Super Bowl alone is expected to generate $375 - $400 million in bets online, about three times the total race and sports wagering in Nevada in 2002. -------------------------------------------------------------------------------- Page 7 5superbowl point spreads indicate a bit more variation and a larger range of spreads, as more than 106 games had a spread less than −15 and 45 games had a spread greater than 15.4The difference in the distribution of closing lines from NFL and superbowl games implies the differences in skill levels between the two opponents is perceived to be, on average, greater for the marginal superbowl game than the marginal NFL game. In these markets, which are dealer markets, a bet is made between an individual and the house, i.e., dealer. In point spread markets the dealer is guaranteed revenue if an equal amount of money is bet on each team. In most Las Vegas casinos, the vigorish, or commission, is 10% for any losing bet. Continuing the example above, suppose Nebraska wins the game by fourteen points and there was $10 bet on each team. Each bettor would initially pay $11 ($10 bet, plus $1 commission), and the bettor choosing Nebraska would have $21 returned. The bettor choosing Michigan State would not win anything. Using this 11-for-10 rule, one must win 52.4% of their point spread bets to break even. Unlike casinos, the sports book typically charges a vigorish of 5%. Therefore the bettors using the sports book must win 51.2% of their point spread bets to break even. ’s margins are smaller probably because their overhead is lower than that of a casino, as the cost of casino construction and maintenance is significantly higher than developing a website to perform similar functions. While the superbowl wagering market has largely consisted of point spread wagering since the 1940s (see Woodland and Woodland (1991)), money line or odds wagering has recently becomeavailable as a wagering option. The money line quotation above has Michigan State +144 and Nebraska −159. The outright winner of the game determines the winner of the bet. If the favorite wins, in this case Nebraska, a bet of $159 would win $100. If the underdog wins, in this case 4Again, we consider the home team as the reference team. -------------------------------------------------------------------------------- Page 8 6Michigan State, a bet of $100 would win $144. To ensure positive revenues the dealer must receive more money bet on the favorite. More specifically, for this particular game, if the dealerdesired equal profit regardless of the outcome of the game, the amount wagered on the favorite would need to be about 50% more than that wagered on the underdog.5The last type of wager we consider is the over-under, or total. A bet on the total is a wager on the combined number of points scored in a game, see, e.g., Gandar, Zuber, and Dare (2000) or Paul and Weinbach (2002). The bettor can choose either over or under. If the total points scored is greater than the over-under, then the bettor choosing over would win. Data In most cases, a superbowl team will play one game per week. Most of the superbowl/NFL games are played on Saturdays/Sundays, although some games are played on other days. Las Vegas Sports Consultants provides the opening line for many casinos. Historically the Stardust sports book would produce the first line available, usually providing their lines on Sunday nights. With the success of internet sports books, many internet sites will be the first to post prices. In our dataset we find that the point spreads and over-unders are posted first. In general, point spreads and over-unders are available on the website Sunday evening for the following weekend’s games. The money lines tend to be posted a day or two after the point spreads. In most cases, the first money lines were posted on Tuesday for the next weekend’s games. 5The payoff to the dealer in the event the favorite won would be XDOG– XFAV(100/159) and the payoff to the dealerin the event the underdog won would be XFAV– XDOG(144/100), where XDOG& XFAVare the amount wagered on theunderdog and the favorite. Equating the payoffs results in XDOG/XFAV≅ 0.668 or XFAV/XDOG≅ 1.5. -------------------------------------------------------------------------------- Page 9 7As mentioned above, the use of online sports book data may be of questionable value, possibly because of the size and scope of the sports book used in this study. To further address these concerns we collected historical daily wagering data from the website (. The archives include data from casinos () as well as other online markets (e.g., ,). We computed the correlation of the data with that of the casino and other online market data. In all cases, we found that the correlations of point spreads, money lines, and totals to be greater than 0.98. These high correlations are assuring, and give us confidence in making inferences with regard to wagering markets in general. Another issue needs to be addressed regarding wagering on the website. That issue is market depth, a term familiar to market microstructure researchers. Depth in this market refers to the largest amount of money that can be wagered at a published price. Presumably, restricts the amount of any bet because they would like to reduce the adverse selection problemcaused by giving the market a free option to trade (Glosten and Milgrom 1985). ’s advertised depth for superbowl/NFL games is $20,000/$10,000 per bet for point spread wagering, $10,000/$5,000 per bet for money line wagering, and $5,000/$3,000 per bet for totals wagering. Consecutive bets may be placed, but the bets must be at least one minute apart. This delay allows to adjust prices in response to order flow. II. Summary StatisticsTable 1 reports the summary statistics for our dataset with the upper panel corresponding to all NFL observations and the lower panel corresponding to all superbowl observations. In all, we process over 130,000 NFL observations, with the average observation occurring 4,550 minutes -------------------------------------------------------------------------------- Page 10 8(75.8 hours or 3.2 days) prior to kickoff. The median line using the home team as reference is −3 points, indicating the market considers the home field advantage to be about 3 points. This line is consistent with the observed outcome, as the median difference in the home team’s score and the visiting team’s score is 3 points. The superbowl sample consists of 267,092 observations with a median line of −4 points. Interestingly, the median observed outcome is 5 points. To illustrate ’s quoting convention of the commissions, consider the MichiganState vs. Nebraska example above. In this game, a $101 point spread bet on Nebraska would win $100 if Nebraska scored 3.5 more points than Michigan State. A $109 point spread bet on Michigan State would win $100 if Michigan State beat the spread. If the quotation included a positive number instead of a negative one, the point spread payoff would be computed in a way that is similar to how payoffs are determined for money line wagers. That is, if the game were quoted Nebraska −3.5 +105, then a $100 point spread bet on Nebraska would pay $105 conditional on a Nebraska win against the spread. Table 1 reports the vigorish as follows: if the observed quotation is negative, the value is set to the observed value + 100. If the observed quotation is positive, the value is set to the observed value – 100. For both the NFL and superbowl samples, the mean and median vigorish are about –5, meaning that the typical bettor must wager $105 to win $100. For a bettor to profit they must win, on average, 51.2% of their wagers to overcome this 5% commission. Note that the typical bet in a casino has a 10% vigorish requiring the average bettor to win 52.4% of their bets to obtain a profit. As the standard deviation of the vigorish is 6.2, the NFL vigorish varies considerably. The standard deviation of the superbowl vigorish is a notably smaller 3.5. As we show below, point spreads change more frequently in the superbowl market than in the NFL market where the vigorish changes more frequently. -------------------------------------------------------------------------------- Page 11 9Home and visitor money lines on NFL games range from –1,300 to +1,015. These money lines can be used to compute the Arrow-Debreu price for a favorite (Money line < 0) as follows: 100Money linePriceMoney line=−(1) The Arrow-Debreu price for an underdog (Money line > 0) can be calculated as: 100100PriceMoney line=+(2) Therefore, the median price of the wager on the home team with a payoff of $1 is 62.1¢ (= −164 / −264), and the median price of the wager on the visiting team with a payoff of $1 is 40.2¢ (= 100 / 244). As we have seen above, superbowl point spreads are more dispersed than NFL point spreads. This variation also occurs in the money line market. The minimum superbowl moneyline is –9,000 corresponding to a price of 98.9¢ (= − 9000 / −9100). The maximum superbowl money line is +7,000 corresponding to a price of 1.4¢ (= 100 / 7100). We define the money line (no-arbitrage) spread as the sum of the Arrow-Debreu prices of the home and visiting teams minus $1. This spread represents ’s revenue, assuming an equal number of bets on each team. Under this assumption, Table 1 shows that derives revenue between 2% and 3% on these money line wagers.6Lastly, we observe that the average and median over-under, or total is about 41 points for NFL games and 52 points for superbowl games. The range on the NFL totals is 32.5 to 55.5 and the range on the superbowl totals is 37 to 85.5 points. The vigorish on totals is reported in a way similar 6The spread of −57.1¢ was found in one observation in which an obvious data error occurred. In this case the hometeam money line was +400 and the visiting team money line was +350. The home team money line should havebeen entered as −400. In further analysis this observation is excluded with no difference in results. -------------------------------------------------------------------------------- Page 12 10to that of point spreads. The vigorish on superbowl games is approximately 8%, as opposed to 5% for NFL games. III. Time Series Analysis We next examine the changes in the wagering variables over fifteen minute intervals. As noted in Gandar, et al. (1988) "reportedly, no more than five percent of all line movements are due to public information about injuries and weather. The rest are in response to order flow."7Therefore, we expect the intraday patterns in prices to vary most when bettors are placing wagers, not necessarily when information regarding the game is released. Changes in the Time Series Figure 1 charts the probability of a change over 15 minute intervals in event time for the time series variables corresponding to the home team in the superbowl market. To conserve space we do not display the visiting team series or the NFL series, which are very similar. We make the following observations. First, the number of changes in the first few minutes of wagering is greater than the average, this is especially so for the superbowl games. The probability of a change during the first few observations is on the order of 8% to 20%. Second, there is a dramatic increase in the probability of a change in the minutes leading up to kickoff. Third, the vigorish is far more likely to change than the point spread, as the vigorish in the point spread changes more than 80% of the time in the 15 minutes prior to kickoff.8The changes in the series were also 7CBS (2001) quotes an official from one internet sports book “the majority of our gamblers like to wait till rightbefore kickoff. They like to listen to, like, the pre-game show. And then the last half-hour before the game, we’ll get, you know, 100, 150 bets a minute.” 8Note this observation may be unique to as other sports books tend to charge a constant vigorish. -------------------------------------------------------------------------------- Page 13 11examined by time of day, as opposed to event time, and not surprisingly, there are more changes during the middle of the day. In Figure 2 we focus in on the twenty four hours prior to kickoff when most of the wagering activity allegedly occurs. The figure shows that the increase in the probability of changes in all of the series begins approximately 6 hours (24 15-minute-periods) prior to kickoff. Interestingly, point spreads in the superbowl market change nearly 40% of the time in the last 15 minutes prior to game time. Finally, Figure 1 and Figure 2 show that the money line odds are more likely to change than the point spread. In the superbowl/NFL market, the money line odds change almost 45%/70% of the time just prior to kickoff, but the point spread changes less than 40%/15% of the time. Money Line Returns Next, we compute the money line returns over adjacent observations. Returns are calculated as the natural log of the current Arrow-Debreu price divided by the previous Arrow-Debreu price. In Table 2 we provide the summary statistics for the money line returns based on event time. We categorize the data into four distinct time periods: (1) all observations with more than 1 day prior to kickoff, (2) data observed within 24 hours of kickoff, but not within the last hour prior to kickoff, (3) data observed within one hour of kickoff, but not within the last 15 minutes, and (4) observations in the 15 minutes prior to kickoff. For both the NFL and the superbowl markets, the average money line returns are essentially zero over the week preceding the game. Consistent with Figures 1 and 2, the magnitude of the standard deviation of the return increases as the time to kickoff decreases. The standard deviation of returns is almost 10 times larger in the 15 minutes prior to kickoff compared to the observations taken more than 24 hours -------------------------------------------------------------------------------- Page 14 12prior to kickoff. The standard deviation and the range of money line returns are greater for superbowl games than the NFL games. We also examine the average and standard deviation of the money line returns by time ofday. Unlike the series shown in Figure 2 of Wood, McInish, and Ord (1985), we find that the wagering return volatility is fairly uniform over the daytime hours. However, the volatility over the nighttime hours is close to zero. Autocorrelation of Money Line Returns Market efficiency, in combination with the assumption that equilibrium expected returns are constant through time, implies that the autocorrelations of the returns are zero for all lags (Fama 1976). In testing for autocorrelation we form an equal-weighted portfolio of returns in event time. Each series is limited to the 24 hours prior to kickoff as that period corresponds to time when prices move the most. Figure 3 displays the coefficient estimates along with the 95% confidence levels for the superbowl home team returns. In general, the plots indicate very little, ifany, autocorrelation in returns. Because there is very little systematic risk in the time series of money line returns, our construction of an equally-weighted portfolio could disguise any potential autocorrelation that may otherwise be evident in a test of game-by-game autocorrelation. Therefore, we estimate the autocorrelation function for each game. Table 3 reports the summary statistics for the coefficients at lags 1-4 along with the percent of coefficients that are significant at the 5% level. The evidence indicates a slight amount of autocorrelation for a minority of games. As a robustness check we included only those games in the highest quartile of volatility over the week and found similar results. These autocorrelation results are consistent with market efficiency. -------------------------------------------------------------------------------- Page 15 13Our results are similar to those reported in Wood, McInish, and Ord (1985) who find negligible autocorrelation for the trading day market return series which excludes overnight returns. Money Line No-arbitrage Spread In computing the money line no-arbitrage spread series we calculate, for each game, the Arrow-Debreu prices for the home team and the visiting team and then subtract $1. Next, we compute the equally weighted average of the spread over the last 200 observations (roughly 2 days). Figure 4 displays the time series of the money line spread. To avoid selection biases we require that for a game to be included in the series at least 80% of the observations need to be present. While the range of the equally weighted money line spread is fairly narrow (approximately 10 basis points), there appears to be a downward trend as the time to kickoff nears. This narrowing of spreads may result from the dealer attempting to attract order flow to balance the book. That is, a discount might be applied to the price of the team with fewer bets. Over the same event-time interval, the cross-sectional standard deviation of money line returns was calculated. The standard deviation of the home team volatility is plotted along with the spread series in Figure 4. As shown previously, the volatility increases as the time to kickoffdecreases. The correlation of money line returns with the spread is reported in Table 4. Consistent with the visual evidence in Figure 4, there is a negative correlation between the spread and volatility. This observation differs with what is found in equity markets because bid-ask spreads have been found to increase with volatility. One explanation for this counterintuitive result is that volatility is a proxy for liquidity. When liquidity increases, the sports book offers a narrower spread. -------------------------------------------------------------------------------- Page 16 14IV. Conclusion We detail the intraday characteristics of prices in the NFL and superbowl wagering markets using an online sports book. We find systematic differences in the return distributions and the frequency of changes in prices and commissions over the day and over the week. Volatility is greater when prices are initially quoted and during the middle of the day, but volatility is the greatest in the minutes leading up to kickoff. The time series results show that intraday returns in the wagering market varysystematically across the trading day and over the week prior to kickoff. Unlike the stock market, prices tend to move more during the middle of the day than at the beginning or end of the day. Not surprisingly, the volatility of prices is highest in the minutes leading up to kickoff. Tests for autocorrelation cannot reject market efficiency. Finally, there is a negative relation between money line spreads and volatility. However, the volatility might result in greater liquidity in the market during times when a significant amount of wagering is taking place.

Superbowl Betting Tips

2005-01-11T16:26:00.000-08:00

Super Bowl Betting Tips

One Game Does Not Make A Season

Always approach Super Bowl betting in terms of an entire season or seasons. One
or two losing weekends should never spell disaster - off weeks are an inevitable
part of sports gambling. Successful bettors "grind out" their winnings
over the course of the season. In other words, don't try for the big kill on
one game - simply set your goals (and your money management systems) to win
more games than you lose over the long haul.

Early Season Pointspread and Money Line Value

Look for excellent moneyline and point spread values early in the season, before
the odds makers have had a chance to "catch up" with which teams are
hot and which teams are not. Start your Super Bowl handicapping analysis during
the summer so you'll be ready to take full advantage of the first few weeks
of the season.

Bet Quality, Not Quantity

Narrow your weekly betting choices down to no more than 5 - 7 games per week.
It's a rare week when more than a few games will stand out as good wagering
values. Find these games and you'll better your odds of winning more than you
lose.

Shop For The Best Odds and Lines

With hundreds of online sportsbooks and more springing up every season, college
Super Bowl lines and point spreads will vary. Be certain that you are getting
the best odds for your betting dollars.

History Does Not Always Repeat Itself

Never put too much stock in a team's performance in a single game. Much to
the bookmakers' delight, most gamblers are enticed by a team who looked great

the previous week. The oddsmakers will adjust the lines to reflect this effect,
and in the process the team in question will have poor line value. Plus, last

week's "great" team usually comes back down to earth the following
week and fails to cover.

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super bowl wagering

2005-01-11T07:14:00.000-08:00

Super Bowl Wagering. All about the Superbowl