LAS VEGAS >> It was shaping up to be the biggest Super Bowl score ever for Las Vegas’ legal bookmakers.
Philadelphia plus 4 points against New England, with the money just like the bookies like it — almost perfectly balanced on both sides. In the days before this year’s game, bettors carrying fistfuls of cash lined up 20 deep at sports book windows, wagering a total of $158.6 million.
The reward for those booking the bets? A paltry $1.17 million win that probably didn’t even cover the light bill at most casinos.
The house won, as it usually does. But those eyeing a huge payoff as sports betting is on the verge of expanding across the nation should understand that opening a sports book — while potentially very lucrative — isn’t the same as actually printing money.
“It’s a high-volume, high-risk operation,” said Jay Kornegay, who runs the sports book at the Westgate Las Vegas. “It’s a roller-coaster ride every day.”
Philadelphia’s upset of New England cost the books a big profit on the Super Bowl, with the 198 legal books in Nevada eking out a 0.7 percent hold. It wasn’t much, with the bookies narrowly avoiding losing money on the Super Bowl for the third time in 28 years.
It’s a bookie’s life, as it always has been. Unlike other games in the casino where there are fixed ranges of percentage win rates, the profitability of sports books in Nevada is often dependent on the skill of those making the lines.
“There’s no mathematical probability like the other games,” Kornegay said. “You really can’t control a lot of it. You just do your best to put yourself in a positive position to win.”
It’s not like the bookies are crying poverty or about to turn the lights out. They won $248.8 million in Nevada in 2017, a record payout in an industry that lately has been growing exponentially every year.
But that’s only a 5.1 percent return on $4.87 billion in bets placed. And that’s before paying state and federal taxes along with the many costs of operating both sports books and phone betting apps.
That’s why bookmakers could bypass states like Pennsylvania, where legislation passed last year calls for a 36 percent tax on sports book revenue, far higher than Nevada’s 6.5 percent rate. And they don’t have much appetite for suggestions by the big sports leagues that they get a 1 percent cut as an “integrity” tax.
“I think we will do a lot of business with the leagues and we should because their customers are our customers,” said Joe Asher, CEO of William Hill US, the offshoot of the British chain that operates about half the sports books in Nevada. “But you don’t get something for nothing. If we’re going to pay them money we should get something in return.”
Nevada’s 2017 results were no aberration, according to gaming researchers and the people who actually run the books. In the 33 years the UNLV Center for Gaming Research has been running the numbers, sports books are holding 5.52 percent of customer bets on average every year.
The low margin is the big reason casinos for years offered sports book as more of an amenity for their customers than big profit centers. Up until the 1980s most casinos didn’t even bother putting in sports books.
“If you have a good year you hold 7.5 to 8 percent and maybe 4.5 to 5 percent in a not-so-good year,” said Jimmy Vaccaro, who has been running sports books in Las Vegas since 1976. “And that’s the figure before anyone sticks their hand in. That’s the figure before we pay the help.”
But as sports have boomed in recent years so has sports betting. The ability to watch almost any game on TV has spurred betting, and the recent introduction of betting on phone apps has been so successful that phone play already accounts for more than half the betting total at some books.
And with the Supreme Court decision Monday knocking down the ban on sports betting in other states, there’s no shortage of operators willing to take their chances on 5.52 percent profit margins on a much bigger scale.
Already, Caesars Entertainment has said it will enter the market, and MGM Grand is expected to get in too. The William Hill chain already has a sports book in place at Monmouth Park race track in New Jersey that could take bets before the end of the month, and fantasy sports players DraftKings and FanDuel are jumping in with the advantage of having millions of accounts already in use for fantasy play.
The margins may not be big, though the handle almost surely will be.
And the major players are betting their biggest gamble will pay off.