Dec. 19 (Bloomberg) -- The final week of the National Football League season has already started in Las Vegas.
Just behind the ticket counter on Dec. 17 at the Las Vegas Hotel SuperBook, oddsmakers finished the betting lines for the last regular season games -- which take place Dec. 29 -- before this week’s games are even played.
The SuperBook posts opening odds on NFL games before anyone, helping to set the market for what’s become a $6 billion-a-week worldwide business, according to Las Vegas-based handicapping information website Pregame.com. The final week of the regular season is among the most challenging for oddsmakers, who wrestle with late-season injuries, the motivation of teams out of playoff contention and whether other clubs preparing for the postseason will rest key players. Doing it as early as the SuperBook, with a full slate of games to be played before the final week, compounds the difficulty.
“It’s kind of like a preseason week when you’re trying to figure out who’s going to play and how long they’re going to play for meaningless games and adjust it for motivation,” said Jay Kornegay, the SuperBook’s vice president of race and sports operations. “There’s always going to be matchups of teams that need to win and teams just playing out the season.”
The city’s largest sportsbook, the 30,000 square foot Las Vegas Hotel’s SuperBook generally limits wagers on its opening odds to $3,000. That guideline stays the same when the odds are adjusted after Sunday’s action and then rises to $10,000 the following day. By the end of the week they’ve taken several “healthy five-figure bets,” Kornegay said.
The advantage of being the world opener on gambling lines is that your book gets all the early action, according to Pregame president R.J. Bell. The downside is that you don’t get to read the market. Nevada’s 184 sportsbooks offering football wagers took in $1.6 billion in bets on pro and college games from November 2012 through October 2013, Nevada Gaming Association records show.
“It’s your opinion against the rest of the world,” Bell said by telephone. “That takes a lot of guts.”
The sportsbook at the Stardust hotel, which closed in 2006, opened in 1976 after Congress lowered the tax on wagers to 2 percent from 10 percent. For years, it was the first with betting lines, said Bob Scucci, who ran the book.
“There was so much liability in hanging that opening line,” Scucci, 49, now the regional director of race and sports for Paradise, Nevada-based Boyd Gaming said in a telephone interview. “You’re going head to head against the sharpest bettors in the world and often times you’re not on the right side.”
That worry isn’t lost on the people who set odds and whose fascination with sports gambling translated into careers competing against people like themselves, with millions of dollars turning on final scores.
“My beer will go down a lot better if the book is winning,” Kornegay said in a telephone interview. “We certainly take it home with us because we never close. There’s always something on the line.”
In Las Vegas, that’s literal.
While some bookmakers incorporate power rankings based on performance and computer models, Kornegay and three of his colleagues use their combined 70 years of experience and reach a consensus. It’s usually a quick process with few disputes, assistant manager Jeff Sherman said.
The general practice is that home-field advantage is worth three points and the spread is built off that, taking into consideration such factors as recent performance, motivation, injuries and a team’s popularity. The lines are adjusted as oddsmakers seek to balance wagers on each team to reduce risk and profit off the amount they charge -- the vigorish -- to place the bets.
Kornegay, 50, said he didn’t know Las Vegas had sportsbooks when he made his first trip to the city for spring break about 30 years ago after being outvoted 7-1 by a group of friends from Colorado State University. Kornegay, who majored in restaurant business management, was hoping to sip margaritas on a Mexican beach and instead got sucked in by the books.
“I was so intrigued by them,” said Kornegay, an Air Force brat who grew up watching sports with his father no matter where they lived. “While my friends were all playing $2 blackjack, I was in the book trying to figure it out.”
He convinced his girlfriend, Pam, to move to Lake Tahoe, where he began his casino career before moving to Las Vegas. Married for 23 years, Pam now asks who they should be rooting for and whether they are giving or getting points while watching games together at home, Kornegay said.
Johnny Avello, the executive director of the Wynn Las Vegas Race and Sports Book, said it’s difficult to leave work each day after more than 30 years in the business. He posted the opening lines for college football games for more than a decade until recently being surpassed by offshore books.
“After a full day of being around it, sometimes I try to detach for an hour or so and then find out the results after the games,” said the 61-year-old Avello, who grew up in Poughkeepsie, New York, and came to Las Vegas in 1979 after attending the now-defunct New York School of Gambling. “It’s very hard to get away from what your decisions are.”
The big losses can be especially memorable, such as when his sportsbook lost more than $1 million on the New York Giants’ upset of the New England Patriots in the Super Bowl after the 2007 season, he said. The Patriots hadn’t lost and were 12-point favorites.
“I know there are going to be some rocky roads and some real positive times,” Avello said. “That’s just the way the business is. It’s a roller-coaster ride.”
In 2012, it wasn’t as much fun as an amusement park for Nevada sports books.
In the 12 months ending Oct. 31, Nevada casinos held on to a smaller percentage of the money handled from football bets than any other sports offering according to the state’s Gaming Control Board. Their win percentage from pro and college football over that period was 3.66 percent, compared with 4.85 percent from baseball; 5.1 percent from basketball; 6.4 percent from slot machines; 11 percent from blackjack; all the way up to 32 percent from three-card poker. Only bingo, at 2.85 percent, is lower.
The reason for the skid in football revenue was one of the worst runs of luck that several oddsmakers said they could remember, as Nevada books lost $6.2 million on football bets in October 2012 and $5.3 million in November. This September, they made about $28 million on the sport.
The stress of being on the right side of decisions weighs hard on sports book operators, said Jay Rood, the director at the MGM Mirage in Las Vegas. Rood said he found himself yelling at a television when former Houston Texans coach Gary Kubiak collapsed at halftime of a Nov. 3 game two days after Denver Broncos coach John Fox left the team with a heart condition.
“These coaches were dropping and I said to the TV, ‘Try booking your sport and see how stressful that is,’” said Rood, who once ran the football pools in his dorm at New Mexico State University before coming to Las Vegas. “Everyone says these guys put in long hours and have lots of stress. Times that by 16 games a week.”
Legal sports betting in Nevada represents around 1 percent of all sports betting in the U.S., according to the American Gaming Association, meaning football betting would be at least a $160 billion business.
Jimmy Vaccaro, 68, who manages the race and sportsbook at the South Point Casino, said interest in NFL gambling skyrocketed during the third quarter of the Jan. 26, 1986, Super Bowl, when 325-pound defensive lineman William “Refrigerator” Perry had a 1-yard touchdown run to give the Chicago Bears a 44-3 lead over the New England Patriots.
Vegas sports books had recently started offering proposition bets, and gave up to 100-1 odds on whether Perry, who had two rushing touchdowns that season, would score.
“I lost like $100,000 on that one play,” said Vaccaro, whose own gambling interest started as a 12-year-old playing 25 cent spot sheets -- now called parlay cards -- at Louie’s pool room outside Pittsburgh. “After that word got out, every newspaper in the country called guys like me because it was an unbelievable story and, in today’s world, it went viral.”
Football gambling has grown 12-fold since 1990 in Nevada, when records show $132 million was bet on the sport.
While the preparations for Week 17 are a sign for oddsmakers that their busiest season is drawing to an end, there’s little time to take a breather, not with college football bowl season, the NFL playoffs leading up to the Super Bowl and then college basketball’s national tournament beginning in March.
“It’s just a change of seasons for us,” Kornegay said. “We don’t get a slowdown too much between the football season and March Madness. We usually have to make it through March before we can kind of take a knee.”
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