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The Last of the Bookies

The Supreme Court says sports gambling is now legal. As such, legit sportsbooks are starting to dominate as a new season of football kicks off. Where, though, does that leave the black-market bookmaker?

John was a fresh-faced twentysomething bookie, not long out of college, when the cops kicked in the door of his uncle’s gambling den, located deep within the seventh floor of a Manhattan walk-up. The officers rushed in with their guns drawn, and John stiffened into a panicked rigor mortis. He watched blankly as one pressed his uncle face-first against the wall, cuffing his wrists before turning to John. Shit, he thought. This is it. There goes my career.

Then he noticed his uncle’s face, grinning. The cop who had cuffed his uncle was now making small talk with him, while other officers searched the apartment before taking seats around the dining table. The mood in the room had changed in the snap of a finger. “My uncle, he looks at me and says, ‘The cops don’t wanna be here. They were hoping we weren’t here,’” John recalls. “Well, fuck, here we are. We all laughed and sat around for a while. These poor guys in vests had to run up seven stories to catch a few bookies instead of going after a murderer.”

Plus, as John points out, “Remember, cops like to gamble too.”

Almost 25 years later, John remains a bookie, short for “bookmaker,” or someone who collects bets from individuals, sets odds for game outcomes and pays out winnings. The common format is that a bettor puts down $110 to win $100 — the $10 take that the “house” charges is called the “vigorish,” aka “juice,” which helps fund the bookie’s operation. This is the basic case with all bookmakers, whether they’re a major company in a Las Vegas casino or one who works his local sports bar. The difference is that sports bets have been legal in Nevada but illegal almost everywhere else, making the black-market bookie a cornerstone in U.S. cities from coast to coast. Some have even become celebrities through the hustle: Perhaps the most famous of them all, Frank “Lefty” Rosenthal, was portrayed by Robert De Niro in the 1995 film Casino (as “Sam Rothstein”).

John, now 46, originally entered the business when his uncle noticed his love of sports and urged him to start a sheet and gather bettors, rather than toil away doing manual labor around New York City. The cash he handled grew over time — from a few hundred in a boiler room to a couple thousand at a casino to, ultimately, $10,000 bags of cash at the golf course. In his 30s, he moved to the West Coast, where he works today. “No matter where you go, the bottom line is, if the flow of cash is good, people will play. Always,” he says.

John is guarded about many aspects of this life — he asked that I use a pseudonym and called me from a burner phone for this story — but earnest about the reality of the bookie business in 2018. Big-time bookies with a large stable of bettors can easily clear six figures a week, and even small players can make six figures in a year with just a handful of regular clients. John, meanwhile, says he’s just a “mid-sized fish” who has benefitted from the illegality of sports betting, which has merely funneled customers to the black market rather than stamp out activity.

Now, the biggest shift of his career is here as numerous states begin drafting up plans to create legal, government-regulated sports gambling. In May, the Supreme Court struck down a 1992 federal law banning sports gambling in effectively every state but Nevada. Since then, major sportsbooks have begun prospecting for fresh deals in the U.S. market. Their pickaxes are already hitting paydirt: William Hill, the U.K.’s biggest sportsbook and a dominant operator in Nevada, this week struck a partnership with major U.S. casino chain Eldorado. Others are launching online platforms for betting, as FanDuel did last week in New Jersey.

“It’s a slow process, but by the end of the year, something like 10 states will have legalized sports gambling in some form, shape or size,” says Mark Conrad, director of the sports business program at Fordham University. “Based on just one month in New Jersey, reports from FanDuel have been big on new growth. Other reports say gambling revenues could possibly exceed expectations. Maybe that’s a temporary thing, but it’s certainly attractive to the big players.” (While estimates vary widely because of the shadowy nature of illegal gambling networks, the American Gambling Association suggests that Americans already put down $150 billion on illegal bets every year.)

Essentially, we’re in the midst of a once-in-a-generation gold rush, with both sportsbooks and prospective gamblers salivating for a share. Left on the sideline is the black-market bookie, who faces the same conundrum as the neighborhood weed dealer in a shiny new market of legalized pot.

Legislators are hoping that if legal sportsbooks can provide greater security, more wagering opportunities and stable payouts, the illegal market will subside. Naturally, there’s a cut of cash at stake for local governments and sports leagues, too — upwards of $1.5 billion could flow into state coffers through taxation, according to Moody’s Investor Services, while leagues like the NBA and MLB are negotiating their own fees on bets.

All these expectations contribute to a bleak outlook for future generations of bookies. The “vast majority” of new gamblers will use legalized channels, and the sports leagues, sponsors and brand partners will be motivated to support the legal framework as much as possible, says David Carter, principal of consulting firm Sports Business Group and executive director of USC’s Sports Business Institute. “Some form of the traditional bookie will exist down the road, but it may resemble the diminished and narrow role now played by traditional ticket scalpers, for whom technology rapidly and forever changed their business,” he concludes.

This is a view that rings true with several sports bettors I spoke to. Martin, a 28-year-old who works for a major sports media company, has been betting on game days since he left college and secured a salaried job. He has two longtime bookies — “one for futures, one for game-to-game bets” — he found through friends of friends, and he usually bets between $50 and $200 at a time. “I know it’s illegal, but it doesn’t feel illegal,” Martin says. “The biggest downside is, um, the two-minute hassle to Venmo the bookie each week, I guess?”

Martin is excited for the future of legal gambling, and expects to transition once legal apps and platforms start springing up in California, where he resides. “In 10 years, I don’t see the use for a bookie unless they can find a niche market. I mean, do people in states with legal weed have weed dealers anymore? I don’t know how they’ll compete,” he adds. “I’ve never been sketched out by sports betting, but if you’re new, why would you bother getting a referral to a bookie or finding one solo if you can go legal, even if that has a 5 percent fee or something? Unless you’re making giant bets, it makes no sense.”

Nonetheless, John laughs softly when I tell him the doom-and-gloom predictions. He doesn’t disagree that new bettors will flock to legal platforms. The crux is whether they’ll stay there, or go on to join the deep pockets and “degenerate gamblers” in the black market. Either way, the veteran bookie is unflustered. “We’re not too concerned about it,” he says. “In fact, legalization might open some doors for us.”

John’s optimism stems from his experience working within an illegal market that’s thrived for a century despite efforts to quash it. For one, the decline of the mafia in the past few decades has made law enforcement less motivated to pursue illegal gambling for the purposes of busting a big criminal enterprise, experts say. Others in the industry believe illegal gambling could survive in a stable form as sports betting becomes more normalized than ever before. As Jason, a small-time bookie in L.A., texts: “The metaphor might be more like the opioid crisis and how people get them from doctors AND dealers, rather than the weed analogy.”

Finding a bookie is a unique process for each bettor, but it often involves a low-key communication with a stranger. You might know a friend who has a bookie and request a referral. You might overhear a group of men at a country club talking about their action, and gently inquire if they know anyone who wants a new customer. You might troll the local sports bar and ask a veteran bartender if they know who’s taking action, or just befriend a guy who’s sitting by himself, anxiously commenting on the end of a meaningless football game despite a lack of evidence that he’s a fan of either team.

Once you get the green light from a bookie, the process of betting is discreet. The bookie will send out his wagers for bettors to review, usually via text or a secure web site that records bettors’ picks. In most American team sports, this involves betting on a point spread (concerning the margin of victory a team will have), moneyline (you simply pick who wins, but each team stands to give you a specific payout ratio for what you wager) and over-under (where you bet on whether the total number of points scored will be more or less than a figure). Payouts usually take place within a day or two of the event, and while hard cash used to be the currency of choice, these days more bookies are using cryptocurrency or cash apps like Paypal and Venmo to manage money with clients.

Besides paying off bets via Paypal and Venmo, there’s not much new about any of this. In fact, sports gambling has been a fixture in the U.S. since before a sovereign America even existed. In 1665, the first horse-racing track, an import from British culture, opened in what’s now Long Island. That era also birthed government-sanctioned lotteries, the proceeds of which helped pay for the resources needed to wage the Revolutionary War, according to researcher Ronald Rychlak. Over the next 200 years, sports betting took on a major commercial role in many U.S. cities, growing alongside game-oriented casinos.

Yet by the turn of the 20th century, government officials had become concerned with an increasing number of betting scandals, most notably the 1919 incident in which eight members of the Chicago White Sox attempted to throw the World Series in exchange for bribes. Though the players were acquitted in court, it was more than enough for nervy politicians to bring down the legislative hammer in their states, painting betting as an immoral stain on American sports. While many citizens agreed with that view in public, by the 1950s sport betting was more popular than ever, just behind closed doors. Organized crime swooped in to fund the network and profited handsomely despite laws like the 1961 Interstate Wire Act, which outlawed phone bets across state lines.

The advent of the internet helped revolutionize sports betting, largely because of the creation of offshore sportsbooks that routed bets to countries like Costa Rica and Colombia in order to evade U.S. prohibition. These sites provided a way for some mobsters to maintain a stake in sports betting while lowering the odds of a physical bust, but for consumers, they came with some problems: Bettors ran into scam sites that just stole their deposits, or struggled to get winnings wired to their accounts in a timely manner.

And so, while the human interaction required to find a local bookie can be inconvenient, using them instead of a legal sportsbook has its upsides. The illegal market’s use of cash and cryptocurrency means that those who want to dodge taxes on their winnings have more leeway to do so. John adds that the biggest gamblers don’t want their activities traced or otherwise accessible by government eyes, given they’re handling huge sums of money, sometimes from uncertain sources. This is a view that USC’s Carter agrees with: “Because certain gamblers and some gambling sectors will want to remain as anonymous as possible, the market for illegal bookmaking will always offer this perceived advantage,” he says.

Perhaps the most enticing benefit of all is the availability of credit: “If you’re at a bar or golf course with other gamblers, and you overhear someone debating whether they should take money out of their savings for a $2,000 bet on a legal site, it’s easy to say, ‘Hey, do you want five times that amount on credit?’” John says. “Then another guy overhears, and soon enough people are saying screw the legal route, let’s do this instead.”

John isn’t loose with such offers — as with most bookies, he reviews potential clients as much as possible to vet their trustworthiness and cashflow. Trying to strong-arm flaky bettors into paying back a debt is a tale of the past, he says. (“Taking someone’s knees out is a great way to catch heat from law enforcement,” he deadpans). But the reliability and personal touch of a good bookie, including delaying payments or even outright forgiving debts, has kept clients coming back. John notes he’s now taking wagers from a second generation of bettors who have been referred by fathers and uncles who are longtime customers. “I’m staying afloat because of that trust factor with people, working with them and helping them,” he says.

The big question now is exactly how commissions and fees will shake out in the legal framework that states create. The federal government’s attempt to levy a 10 percent tax on sports books in 1951 made the business a losing proposition, cratering progress toward legalizing and regulating the industry. So states and sportsbooks will have to play a tricky balancing game to make any increased “juice” palatable to gamblers, especially experienced ones, according to Fordham’s Conrad. “If my bookie is offering me -110, and it’s -120 for a pick’em bet with a legal site, I’d probably go with my bookie,” adds Martin. “If I was a casual bettor, maybe the security and ease of a mainstream book would be fine. But I’m gonna be sticking with my bookie. Why would I pay the 5 to 10 percent hike?”

That’s exactly the kind of take that gives John optimism. Older and wiser, on the downhill of his bookie career, he isn’t one to panic about future prospects (unlike his young handcuffed self). He looks forward to the way legal sports betting will increase the share for all parties involved, especially via a new generation of young gamblers. He’s also bluntly pragmatic about his target demographic: “At the end of the day, there are always a lot of degenerates,” John remarks. “It’ll be like guys who smoke cigarettes and wear a nicotine patch.”

Basically, he expects big bettors will happily take their family out to the casino to watch football and throw down a few casual wagers — and then go straight back to “Joe at the Corner Store” for a lot more action.