Is offshore future bleak?

[CharlieMaxwell]

Get Wild Bill's opinion by going to the RX home page at www.theprescription.com

In addition, read Wild Bill's article on offshore sports book transaction costs, also found on the RX home page.

Charlie

 

[Dante]

good read Bill..I can totally see where posters and bettors will be turning to a handful of books as being the most trustworthy, sadly I have done this already and probably won't ever try a new book again

 

[valueman]

Doesn't this analysis ultimately mean that the future lies with the exchange betting firms?

 

[wilheim]

Plenty of different scenarios possible in the near future for sportbetting in general.

History tells us three things will not change however.

1. There will always be games and races.
2. There will always be lots of people willing to risk their money to bet on the games or races.
3. There will always be plenty of people (hopefully with money) willing to book these bets.

How or in what form it plays out in remains to be seen.

wil.

 

[bryan305]

there is an endless supply of people out there that will bet, but have never thought of doing it. I had never thought about betting at all till I saw one of my classmates doing it, and now I'm hooked for life.

 

[drunkguy]

agree with wilheim in most regards. A couple of points I think are worth discussing:

1. "The first phase of offshore growth has clearly passed." Not so sure this is true. Growth in internet usage is still not topped out, although the rate of increase is slowing down. In addition, wider use of broadband is also increasing the time people spend on the internet. More people with access means more potential customers. Also, this is primarily dependent upon the action of regulatory agencies (governments). If the offshore industry is allowed to grow, it certainly has room to. If govts. decide to accept it and open the doors to easier money transfer mechanisms, advertising, etc, there could be another large boom in growth. I feel growth will directly correlate to the ease and safety of money transfer mechanisms.

2. "the remaining books could be tempted into non-competitive tactics. " I don't think Las Vegas sportsbooks are a valid comparison point. The Vegas sportsbooks are neglected from a management standpoint because they do not have the same earning potential as other games. Same reason we see less floor space dedicated to table games and more to slots each year. Unless the offshore sportsbooks find an additional source of revenue (and I doubt this will be casino games, as there are others already well-positioned in this niche), then they will need to stay competitive in the sports arena or go out of business. This is in vast contrast to the Vegas casino corporations.

3. "With upstart sports books finding little faith from the bettors, no one will be able to stop the established books from setting policies that might not be good for the customer. " Monopolistic tactics like this are exactly what will drive people back to upstart books. If a few books control the marketplace and set policies which are unfair or unreasonable, it makes upstart books more attractive. The balance of power is always a give-and-take.

4. "Now that everyone has heard of offshore books, there can’t be a huge pool of people remaining to come on board. How much longer will the existing ‘square’ bettors in the system put up with losing and add funds to their accounts?" (a) it is easy to say everyone has heard of offshore books when you spend a lot of times on the forums. The fact is, a very small amount of all bettors utilize them and are primarily still with locals. As the population becomes more tech-savvy, more will find the offshores. As mentioned in point (1) above, easing the barriers in sending money offshore can increase the customer pool...(b) history tells us that the losing bettors will continue to put money up year after year after year. If people refuse to "put up with losing", then how did all those casnios in Vegas get built?

thoughts appreciated...

 

[jerseyjoe]

DRUNK GUY---- Very good post you make alot of valid points.I believe that the books that have strong management and have big marketing budgets will continue to grow at a rapid pace also there are still alot of potential bettors out there that haven't discover the off-shore industry yet.I believe the strong books like Pinacle, WWts,Bodog, and Hollywood will continue to grow and take over alot of the industry also reduced juice is going to hurt the smaller books they will not be able to compete with it.I think in the next few years your going to ten big off-shore books that most people will wager at.

 

[Rogthedodger]

I definitely agree with your points in #4 Drunk. One of the main problems in recruiting new customers right now though is the credit card issue: it was SO EASY for people to use their CCs in the past. Since most cards can't be used now, many of the attractive potential customers have been lost. You'd be surprised how many people try to deposit via CC, realize they can't and then just don't try an alternate method. Also, there are many, many non-scammers that understand the protection they have with a CC that they DON'T have with other deposit methods. I can't tell you how many times potential offshore gamblers have asked me: "do those offshore books actually pay you?" Many of those people know that if they got stiffed then they could just chargeback and at least not lose their postup $.

 

[WildBill]

No question if CC's were allowed then things would perk up real fast. Also legalization/regulation would be a huge boon, but lets face it that would almost certainly preclude the big names that we deal with now. A US legalization would benefit companies that aren't that thrilled with sports betting and would even give it up if they got the right to run online casinos instead. I specifically am talking about the offshore business in this and as the DOJ keeps threatening businesses and citing dubious legal positions, the chilling effect could get even worse when it comes to getting new business. People will certainly continue to lose money, but that amount will plateau soon, if it already hasn't. If you know you can't win, you generally cut back and try to keep it as recreational as possible. When it first came out many of these people assumed they would win some money, but as each year goes by the reality that they are squares for life will get to them.

Thanks to all for your comments, there certainly are a myriad of ways to look at this subject and countless possibilities for what could happen in the future. I personally think being wary of the negative and being prepared for that is the best defense to make it less likely to happen. Betting will certainly continue in some form, but we all should be worried about what form that could be.

 

[Rogthedodger]

When it first came out many of these people assumed they would win some money, but as each year goes by the reality that they are squares for life will get to them.

The above almost certainly has merit to it, although I think we'd need to statistical analysis to back that up.....surely there have been studies on that very subject? But, I don't think the % of people that quit SOLELY because they lose would be nearly as impactful on the books' bottom lines as you might think.

However, without the stats to back up my theory I'll just let that argument lay. But, I DO know this: the squares may get older and wiser as the years pass and quit gambling because they realize they can't win. But what happens every 8-15 years? A new generation comes along

 

[Rogthedodger]

I forgot one thing, let's not forget the impact our bleeding economy has had on offshore gambling. Although it is generally accepted that gambling is one of the "untouchable" items people spend money on, the fact that our economy hasn't been great for a few years now surely has some impact on gambling spending as discretionary income.

 

[WildBill]

They don't quit, they learn to bet at a more reasonable level. I have seen plenty of studies on this, but it applies to casino gambling. Think about how the mentality of "systems" works. The danger about systems in a casino isn't so much that people don't realize they really don't work, but that people THINK they work and then are more than willing to lose even more money on them. Think about it this way, if you say to yourself I can't win, but I will just bet $20 on a parlay card every week you won't do much damage. If you say I am a winner and will bet like one, you might risk hundreds of dollars weekly. Even worse when things aren't going well you will reaffirm you are a winner (even though you have no proof that you are) and up your bets expecting to get it all back. Those are the stages of sports betting and most gambling. People start out thinking they can win and it takes a lot of hard knocks to realize it isn't going to happen.

 

[Rogthedodger]

I'll buy that argument. But, don't look past my last statement: But what happens every 8-15 years? A new generation comes along.

The current pack may get smarter and scale back, but a fresh batch is right around the corner..........

 

[wilheim]

Another economic dynamic is the beginning of the "Baby Boomer" retirement era. As boomers retire they find themselves with a lot more time on their hands, and in many cases cyber space is where they end up spending that time. What does this mean for On-line sportsbetting? The more people with disposable income on-line has to be that much the better for nearly every internet recreational activity. Casinos, sportbooks, auction sites, porn sites etc. will do well to target this demographic. A lot is made about the various younger generations, and their disposable income, but imo. men between 50 and 75 love to gamble in one way or another. What better way to ward off boredom than to spend hours everyday on-line in the never ending quest to beat the spread.


wil.

 

[TheGeneral+]

Thanks Bill and Charlie.

 

[Skyweasel]

Hmm, let's see what WB says:

"... this is all pure conjecture"

I've got all the pure conjecture I need for now, thanks.

 

[WildBill]

Just remember in 1994 people in Vegas were about as bullish on sports betting as could be. New Jersey didn't take their opportunity to legalize it thanks to Bill Bradley. There were nickel lines on baseball at Barbary Coast! The Sands shortly thereafter went to 108 juice on football, an industry first. The books had baseball, a not so profitable sport, end in August just as NFL exhibition began, making for a stunning month of revenues on meaningless games. Vegas was growing with the MGM being brand new and tons of new projects were coming. Simply put sports betting had a future that couldn't be better. Now we are 10 years from then, did any of it come true? After 1994 the regulations on betting and the CTRs were the first hit. Then books had a couple of mediocre seasons right as slot machines became more popular than ever, not a good thing when casino managers start thinking about how much money extra slots could bring in. Then the limits began to come down as Becky the Bitch started the trend of books cutting back on the high bets they would take. The limits on phone bets came in. I mean in 10 years the whole world has fallen in on Vegas. It still has its moments and surely it hasn't given up on sports betting, but it is nothing like it used to be and nothing like the bright future it was supposed to have. This is what I worry about. I am not speculating no one will bet anymore, I am just speculating that the business won't be as good as it was. If the reaction of existing businesses is to tighten up their operations by raising vig and cutting down on expenses, lesser players, the squares, will lose their money much quicker and things will get even tougher. It doesn't have to come true, but just don't believe that it couldn't happen because there has been a very clear precedent of it.

 

[wilheim]

WB, do you think the metamorphosis
of Las Vegas from a wise guy gambling town into a "Family Destination" theme park, may have had something to do with the demise of the hotel/casino owned sportsbook?


wil.

[This message was edited by wilheim on February 17, 2004 at 10:31 PM.]

 

[lakerfan]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> There were nickel lines on baseball at Barbary Coast! <HR></BLOCKQUOTE>

What years did they offer this. I still hear people talk about this, like it was recent.

 

[WildBill]

Not at all, it was mostly a case of over regulation. Not that the offshores will do that, but it could be imposed upon them. It is especially dangerous that the DOJ is having some success at getting their advertising blocked from the kinds of media that will get complete newbies on board. Advertising on Stern or on local sports talk radio was one of the few ways to reach interested people that might not have taken the plunge before and it appears like that is gone, at least for now in many cases. Those are the people that every single one of us needs playing with us. Whether a wiseguy, a talented amateur, a book owner, a low-paid clerk...you name it, everyone one with any insight in the business can see they are what truly grease the wheels and keep it running.

Another factor was the slots, but those are just plain popular. Nothing can compete with them unfortunately for those of us that can't stand them. We could worry about that as well, who is to say the most lucrative players won't prefer to play online games with quicker gratification cycles that are all decided by luck?