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Gambling
Michael Konik
Author, "The Smart Money"
Tuesday, March 13, 2007; 1:00 PM
Thinking about wagering on some NCAA tournament games? Ask Michael Konik if that's a good idea. Konik went from being a journalist covering the casino industry to an agent for a sports betting syndicate that made millions gambling on games. He was online Tuesday, March 13 at 1 p.m. ET to discuss how the top sports bettors get inside information, manipulate bookies and influence lines -- and how the individual gambler is almost always at a disadvantage.
Eds. note -- washingtonpost.com reminds readers to only gamble in a responsible and legal manner.
Read an excerpt of his book, "The Smart Money".
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Arlington, Va.: How big are these syndicates? What kind of money are we talking about here? What do they know that the average avid sports fan doesn't?
Michael Konik: Enormous. Average bet of between $500,00 and $1 million per game. What they know...everything!
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Anonymous: What kinds of things do the big-time bettors do to influence the lines?
Michael Konik: The huge amounts The Brain Trust and other syndicates bet is what moves the point spread.
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Arlington, Va.: Michael,
I am only 23 and have been sports gambling since I was 16. I feel like I know more about sports gambling at 23 than 99% of people my age. What age did you begin gambling at? What things do you use to handicap and pick your games? Data? Fading the public? Looking for lines with opposite line movement of the public? Situational stats?
Michael Konik: I dabbled in my teens and got serious in my 20s. Didn't learn to consistently win until my 30s.
The Brain Trust -- and our competing syndicates -- use powerful computer modeling to derive a better line than the bookies. We also look to "fade the public," or go against prevailing media opinion.
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Waldorf, Md.: What are your chances of winning at playing the slot machines?
Michael Konik: Long-term? Zero percent.
Unless you're cheating. (Or have some other "advantage play" that most casinos frown upon.
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Alexandria, Va.: Can you recommend a book or a Web site that discusses parimutuel betting and how the odds are continually adjusted for the exotic horse racing bets? I'm fairly computer literate and I wonder how the complex calculations are done.
Michael Konik: For horse racing literature, I always look to Washington, D.C.'s own Andy Beyer.
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Washington, D.C.: I say this every year but I never do it, bet on every single underdog in the first round of the NCAA Tourney. From studying the last two years of the tourney over 50 percent of the underdogs cover. What do you think about this strategy?
Michael Konik: I endorse it.
If you bet the dogs indiscriminately, you'll eke out a small win against the juice. If you do it discriminatively, you'll earn long-term profits.
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Falls Church, Va.: I have made literally hundreds of bets at sports books in Las Vegas, almost exclusively on college basketball, and over the years I have been stunned by how close to the actual spread the games end up. My question is this -- are there any statistics or studies that show success rates by book makers in how close their spreads are to the final scores?
Also, isn't it true that the sports books ideally want an equal amount of money on both sides of the spread and they will automatically clear their 10 percent commission anyway?
Michael Konik: The line isn't meant to predict the final score; it's meant to attract the equal action you reference. That the games often do fall near the number is a testament to several things, including the strength of the line. (But often the result is wildly "off" from the opening number.)
The most successful bookies aren't score predictors, they're market predictors.
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Arlington, Va.: I've always thought that the typical bettor is playing a fools game when it came to gambling. In Vegas or any other casino, no matter what "system" they think they have, they can't defy the laws of probability and statistics. I always thought that the gamblers with the biggest advantage are good poker players and horse racing bettors. These two types of bettors can take advantage of less skilled bettors with less experience and knowledge. Do you agree, and, if so, what other type of bettors can be successful?
Michael Konik: Poker, I agree.
Horses, I don't -- simply because the House edge, the vig, is so high. The ponies CAN be beat, but only by a tiny minority of the players.
And, if you believe hat this dude wrote about in "The Smart Money," apparently some people do pretty well at sports betting, too.
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Dayton, Ohio: Michael --
are there any noticeable patterns on the under/over scores for Thursday/Friday games versus Saturday/Sunday? Do you see teams who put on an offensive show in their first game of the weekend showing fatigue in the second?
Michael Konik: Haven't seen this trend. But we generally look to the under both early and late, simply as a contrarian play, since the public money loves the over.
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Washington, D.C.: Michael--
In your opinion, is there any chance that we see a reversal in the law governing American bettors gambling with offshore (Internet) books? The last-minute bamboozle by Frist and Co. (inserting language into the Port Security Bill that essentially scared off offshore books from taking American bets) was an absolute travesty. Will a Democratic-majority Congress do something about this?
Thanks
Michael Konik: If they had any integrity they would,
Two things you aren't going to stop people from doing (and enjoying). And gambling is the other one...
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Washington, D.C.: Hi Michael, love the book. Can you speak to the notion that bookmakers set lines to encourage equal action on both sides of the line, implying that the books are happy to simply take the vig? In theory, this makes perfect sense and is sound, but I am not convinced bookmakers don't set lines to "trap" bettors and encourage heavy action on one side. Then, when the game goes the book's way, there is a windfall for the book. Am I off base here?
Michael Konik: Thank you. Glad you liked it.
Your notion is plausible, but not true. Some big bookies have "an opinion," and you'll see it in the line. But they'd rather be brokers than bettors, otherwise they'd be on the other side of the counter.
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Miami Beach, Fla.: The U.S. market doesn't really do too much in-game special bets like they do in Europe. Stuff like: Arenas scores over 30 and Wizards win by point spread ... odds are 100/1, etc. This type of betting can be more fun because you end up wagering smaller principal on multiple bets but can hope for a large payout. If they did more of this the betting negative stigma could go down.
Any thoughts?
Michael Konik: I think the future in sports betting may be in this kind of in-game exchange-driven wagering.
Tradesports is one of my favorite sites.
And how hypocritical can we be as a nation? You can gamble on pork bellies and Asian currency and tech stocks -- but not on a football game.
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Alexandria, Va.: Can you comment on the article Wharton economist Justin Wolfers wrote regarding point shaving? He looked at over 9,200 NCAA games where one team was favored by at least 12 points. In those games, the spread was only covered 48 percent of the time. In all other games, the spread was covered right around 50 percent of the time. Given the large sample, this difference is small but significant.
Michael Konik: The statistics, however, don't suggest to me point shaving. They suggest that there's some serious value in betting dogs around those numbers!
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McLean, Va.: When betting underdogs, do you tend to be more profitable with the spread or the moneyline?
Michael Konik: They are perfectly correlated (or should be, at least in theory.) Long term, your results should be the same.
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20009: Any insight on how the new government action against online offshore gambling sites will affect people's betting habits?
Michael Konik: The government has given the virtually extinct species of Outlaw Bookies -- the guy at the corner bar, the used car lot, the country club -- a new life.
And brick-and-mortar casinos will be busier than ever.
The urge to gamble can't be stanched by a charlatan like Bill F.
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Seattle: Do advantage sports bettors face the same kind of heat from the casinos that a blackjack card counter would? (Seriously, the amount of time and trouble casinos go after to lean on $25 bettors is unbelievable).
Michael Konik: I suggest you read "The Smart Money" for some truly nauseating tales of what happens when a sharp guy tries to win in Vegas!
One reason I stopped playing blackjack is the syndrome you describe.
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Anonymous: Not really a sports question; I am going out to LA this summer for a wedding with my brother and were probably gonna travel a little bit while were out there.
We thought of going to Vegas for a day. Is there a particular day of the week that isn't that crowded/might have lower tables then on the weekends?
Michael Konik: Wednesday is the lightest day in the casino week.
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Bethesda, Md.: I got to Vegas every year for the first weekend of the regular season NFL. Is there any advantage (perceived or otherwise) to bettors going early in the season as opposed to later in the year specifically related to the NFL?
Michael Konik: In the distant past, bettors could "know" more about the games early on than the bookies. With the advent of the Internet, there's almost no piece of information that's not public knowledge.
Pretty hard to get an edge just be being early.
The Brain Trust and the Hollywood Boys always found that we did better LATER, because we had more data to pour into our computers,
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Atlanta: Are parlays and teaser bets for suckers?
Michael Konik: Generally, yes.
But as I revealed in "The Smart Money," there are some highly specific exotic bets that return a profit.
For example, parlaying the first-half total with the over-all total. These two events are highly correlated. (And the bookies no longer will take this bet!)
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Washington, D.C.: What is the definition of gambling? Is spending $5 to enter an NCAA pool gambling? Is playing fantasy baseball for a $100 entry fee gambling? I don't really know the answers to those questions but was curious as to what you think.
Michael Konik:"Investing" in the stock market is gambling.
An office pool is gambling.
Buying a $1 scratch-off lottery ticket is gambling.
Playing fantasy baseball for money is gambling.
Being a casino with slot machines that pay out 89 percent is not gambling. It's business.
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Anonymous: Do you still bet professionally? Did you get bored with it at some point?
Michael Konik: I no longer do. But I consult with others that do.
As I wrote, it wasn't the game I became bored with, it was dealing with bookies and casinos and suspicious banks that got to be tiresome.
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Washington, D.C.: Michael -
I (and many others, I would imagine) am interested in hearing your thoughts on what you think will happen with NETeller in the coming days and months. Most of the U.S. customer funds have been frozen for the last 60 days after the arrest of the founders. What should we expect next?
Michael Konik: More stonewalling.
I have a friend with more than $50K frozen, and he is contemplating becoming a Canadian resident to free it up.
This debacle is utterly shameful, both on the part of our loving government protectors and NETteller. The money is/was supposed to be segregated from business operations. There's no convincing explanation why customers don't have their funds by now.
Ugly situation.
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Washington, D.C.: How did you get involved with the Brain Trust in the first place?
Michael Konik: I wrote a magazine profile of Rick Matthews, the top man, who then invited me to join his merry gang.
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Mills - Cary, NC: What do you consider to be the most enjoyable sports book to bet/watch games at? I am heading to Vegas Thursday.
Thanks boss.
Michael Konik: The one that takes any size bet without whining.
I used to love Caesar's Palace. But now it's run by people who want to manage the casino as though it's a motel.
The best bookmaker in Vegas -- fairest lines, lowest spread -- is the guy at The Palms.
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Washington, D.C.: The target of the online gambling bill was surprisingly online gambling (not gambling in general) because of its especially addictive characteristics and its use as a money laundering device. Brick and mortar casinos at least have some checks in place against illegal behavior and stacking the deck. Also, online gambling and gambling over the phone was illegal before this bill. The bill just added some enforcement tools.
Michael Konik: I'm not sure what "illegal behavior" you're referencing. The biggest complaint I -- and the authorities -- have with the offshore shops is that they didn't/don't voluntarily pay U.S. taxes on their profits, contributing, instead, to the national economies of the nations that license them.
Now that there' been a crackdown, the entire industry is crying "regulate, don't eliminate."
They ought to have been singing this tune five years ago.
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Burke, Va.: Michael,
If the business is so lucrative, more lucrative than the profit in writing a book I would think, why did you get out? Or did you?
Michael Konik: I address this at the conclusion of "The Smart Money."
The decision wasn't solely based on "what's more lucrative, betting or writing." There are a lot of other factors, too. Not the least of which is that I cannot legally bet on sports from my home state of California -- and the Vegas casinos are not keen on taking Smart Money action.
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Tampa, Fla.: Mr. Konik,
I hope you can answer this question which became the subject of lively debate with my comrades at lunch today. What percentage of their annual receipts do Vegas sports books make off of the NCAA tournament?
Michael Konik: It's the second biggest event for them in total handle, after the Super Bowl.
March Madness is probably about 15 percent of their annual business. (But don't tell this to the NCAA...) The exact number is searchable through profit disclosure reports they're compelled to make. A few minutes of Googling and you'll have a definitive number.
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Michael Konik: Thanks for all your great questions!
-mk
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