Sports Betting Strategy

The Evolution Of Sports Betting And Sportsbooks

Everyone's favorite pastime is finally publicly accepted.

Sports betting has come a long way. From meeting bookies for handoffs and placing bets over the phone, to the bright lights of Las Vegas where sportsbooks used to (and still do) welcome queues of bettors waiting to place their bets of all types.

With the legalization of sports betting in the United States, it feels like sports betting is on the cusp of hitting the main stream. Only a few states have opened the doors so far but as more make the push, we wanted to take a look back and review the history of sportsbooks.

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The Early Days

It’s hard to imagine it now but sports betting has existed in the United States all the way back since the 1600’s. Once upon a time, the colonists from England arrived in America with their love of everything sport. Back then, horse racing was considered a pastime for the elite and it’s true that not everybody could afford to go to the tracks.

In order to accommodate the working class, there were illegal sports betting shops set up for them to bet. These shops were known as pool rooms and in most cases they were located near the actual tracks. These sportsbooks offered better odds and became extremely popular over time, even with the race track gentlemen that actually attended the races.

As the betting action spread to other spots and events, more and more poolrooms began to pop up across the country and gain popularity. Whether they were hidden in the small back rooms of bars or in a saloon, or even in the basements of hotels, these sportsbooks flourished around the United States. In response to the underground crime that largely controlled these sportsbooks, lawmakers in the United States began passing restrictions that kept bettors from wagering outside of race tracks.

The Beginnings Of The Las Vegas Strip

The growth of the Las Vegas Strip was the real birth of sports betting in the United States. It finally became legalized in Nevada in 1931 and that’s when the action really got going.

At this point in time, sports betting provided a much-needed source of income during the Great Depression. Once the federal government accepted sports betting as a legitimate enterprise, the poolrooms moved from the rear of the bars and hotel basements to the infamous Las Vegas strip, which is where business really exploded.

However, even at this point the truth is that gambling and sports betting still had a notable reputation as being run by illegal units such as mobsters. It’s also no secret that the mafia had a vested interest in the sports betting scene in Las Vegas. With tax-free money being moved around and easily laundered, the Vegas strip became an absolute haven for those that wanted to take advantage of the unique circumstances.

Turf Clubs

Rather than an immediate explosion of action in Las Vegas, sports betting slowly crept into relevance over a period of time. Some casinos in Nevada included something called “Horse Parlors”. A federal law that was passed around this time introduced a 10-percent tax on all bets, which is known as vig or vigorish. This resulted in many operators being forced to go independent in an effort to avoid going bust.

There were a few dedicated sportsbooks known as Turf Clubs that opened such as the Hollywood Horse and Sports Book, which was owned by Jimmy “The Greek” Snyder. These clubs managed to survive by charging a high vigorish or juice in order to offset the federal tax that they were forced to pay at the time.

The Real Sports Betting Boom

From humble roots in Las Vegas in the 1930’s, the sports betting scene was primed to explode in 1974 when the federal tax was significantly reduced from 10% to 2%. That 8% reduction really opened the door for sportsbooks to thrive. Many people don’t realize how small the margins are with sports betting; the real gambling money (for casinos) is made with slots. That led to more and more books opening across the state as all of the casinos in the area wanted a piece of the action at the time.

By 1975, the Union Plaza Hotel and Casino opened the first casino-based sportsbook in the state. It wasn’t long after that when every casino and hotel along the strip jumped in to the action and began following suit. Before long, it was the pioneering spirit of Frank “Lefty” Rosenthal of the Stardust that turned sportsbooks in to what they are now.

The Big Race And Sportsbooks

Rosenthal is the real-life inspiration for the movie “Casino”. He was a major player in Las Vegas in the 1970’s that helped create the landscape that exists in the town now based on his overall vision for the sports betting scene. Rosenthal was the owner of the Stardust Casino, which ended up becoming the beautiful betting mecca of Las Vegas. The venue could accommodate up to 600 sports fans and bettors at one time. It was built with comfortable chairs, a modern bar and multiple television screens that showed sports at the same time. This vision of Rosenthal’s became the blue print of modern Las Vegas sportsbooks to come over the next few decades.

The Modern-Day Sportsbook

The evolution of sportsbooks has led to what is now a royal treatment in Las Vegas with some of the finest hotels and resorts on the Las Vegas strip providing huge rooms and luxurious accommodations for those that visit. From humble beginnings, the billion-dollar industry now features casino sportsbooks that offer countless high-definition televisions, comfortable seating, fully stocked bars and cocktail service, plenty of food options and plenty of other options that people could imagine wanting available to them to make the betting experience complete.

In terms of the sports betting experience, the best books in Vegas are the equivalent to the best sports bars. With countless people flocking to the books for the atmosphere (and to place some bets), it’s the ideal spot in Vegas to be for the Super Bowl, March Madness, NBA Finals or just your given NFL Sunday.

The Internet & The Growth Of Online Sports Betting

While Vegas has blossomed into a gambling hub, the challenge for many sports bettors is that it’s not a place that’s easily accessible. Sure, if you’re in Vegas, it’s a great place to be and bet, but the challenge is that most people are not. So where do you go to place your bets?

As the internet came into full effect in the early 2000’s, online sports betting became the place to be. Offshore websites tiptoed around certain laws to bend but not necessarily break the rules, and customers found ways to get their money to those offshore accounts. It became easier over time as online wallets and credit cards would allow these types of transactions.

Sports betting really started to gain ground at that point as players could now bet from wherever they are in the world. People would talk on forums and handicap games together, and then they’d place their bets online from the convenience of their own home.

For a long period of time, the gray market dominated as the United States and other countries couldn’t figure out how best to regulate this business. However, everything changed in 2018.

Legalization Of Sports Betting In The United States

In May of 2018, the supreme court changed a rule to allow each individual state to decide whether or not they want to legalize sports betting. It had been banned federally since 1992. That’s really spurred online sports betting in the United States. Although it’s mostly been in the gray area (offshore sportsbooks) for many years, now a number of companies have opened up shop legally (with a license) in the states that allow sports betting. Companies like FanDuel and DraftKings offer the same type of service that customers could get offshore but now it’s done in a clean, legal and safe manner.

As the rest of the states join the party, expect to see sports betting not only online but at sporting events, at corner stores and in the mainstream as we move forward into this new era. It used to be a popular pastime that was hidden in the dark. Now it has finally been brought to the light.

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