Sports Betting Guide to American Sports Betting Operations

This is a perfect introduction for those new to the game or trying to figure out how to get involved. Additionally, understanding how to use betting trends can significantly improve your success rates. Check out our guide on Using Betting Trends for Greater Success for more insights.

We here at Gameadvisers.com are experts who have seen and done it all in the American sports betting space. It’s high time that we put together a piece that explains everything and breaks it down neatly for the bettor, showing them each of the options available in the betting space. 

Times are different in the sports betting biz since the United States Supreme Court ruled to strike down the Professional and Amateur Sports Protection Act, which was signed into law by George H.W. Bush in October of 1992 after former NBA player Bill Bradley helped spearhead the bill getting to his desk.

This “PASPA” bill basically gave Nevada a monopoly on sports betting (three other states technically had parlay betting available, but none really took a stance on writing bets). That lasted until May 14, 2018, when PASPA was repealed by the Supreme Court – at that point, states were free to establish their own sports gambling laws in the absence of a system that no longer had federal regulations. 

Many states, hungry for the money that could come for the tax money that would come from legalized sports betting, have signed on over the last several years. While New Jersey politicians were the ones who successfully fought to have PASPA repealed (which is comical, considering Bradley played at Princeton, in New Jersey, before his stint with the New York Knicks), it was actually Delaware that wrote the first legal single-game (straight) bet in early June of 2018. By the end of that year, Rhode Island, West Virginia, New Jersey, Mississippi, New Mexico, Arkansas, and Pennsylvania had either started writing bets or voted to allow it. 

In the future, we will go over more of the historicals regarding sports betting in the United States. This gives you a background into how the groundwork was laid. 

A third option… 

From the time PASPA went through until the first offshore bookmaker popped up on a website or with an 800 number, those who wanted to bet on sports had exactly two options: legal or otherwise.

They could go to Nevada and bet at one of the legal sportsbooks in Reno or Las Vegas, or they could call their local bookie (parlay cards aside, respectfully). The betting through the local bookie was (mostly) done on credit. He would give the customer an established limit to be able to bet on games and also for an overall amount he could have in action – whether it be for a week and a settle every week or until the player won or lost a certain amount. Check out our guide on The Advantages of Using Online Betting Sites for more insights.

When the internet was invented (not by Al Gore, by the way) in the mid-1990s, a handful of bookmakers decided to flee the USA for Caribbean islands that were very friendly to letting them run a betting operation so long as they decided to hire local help to answer the phones as wagering clerks. Those jobs would often pay more – by a lot – than lawyers, doctors, or other jobs where locals earned their degrees could make in third-world countries. Speaking English had its benefits, especially as a female who could talk to customers and “agents.” 

This is where BetCRIS, TheGreek and Pinnacle were all born, with American owners taking their “illegal” business to a destination that welcomed them and the taxes they would pay to host countries like Antigua, Curacao, the Dominican Republic and, eventually Costa Rica. This allowed American players a third option – to bet on the internet (and with a credit card) – to a faceless operation, in addition to Nevada and the local bookmaker. 

Government intervention on sports betting… 

Some of those operations that had established offices offshore began to explore ways to expand their businesses. The aforementioned “third option” was set up at first to accommodate players who were posting up their money, but many of those bookies had credit operations or knew how to run them from their time in the USA. Thus, they set up operations (think Heritage is a good example), allowing them to book business from post-up and credit customers.

This became vitally important after Oct. 13, 2006, when President George W. Bush signed the Unlawful Internet Gambling Enforcement Act. The UIGEA bill was a basically a farce, getting tacked onto a SAFE Port Act on the last day before the 2006 elections, with New Jersey senator Frank Lautenberg saying that no one on the Senate-House Conference Committee had even seen the final language of the bill before it got rammed through. 

The repercussions were swift and severe. Many companies who had dealt with US customers betting sports, playing poker, in their casinos, and/or all of the above were suddenly in the crosshairs of the US Government. The offshore properties were now forbidden to “knowingly accept payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law”.  

Chris Moneymaker winning the World Series of Poker Main Event (as an amateur accountant) in 2003 created a poker boom that was great for the game of Texas Hold ‘Em. It also helped spur UIGEA – the massive amount of gambling money in both sports and poker that was being played offshore (and therefore, untaxable by the US Government) left Congress with no choice but to attack. 

Somehow, there was an exception made for fantasy sports in the UIGEA bill, as they were declared games of skill and not games of chance. This will be something we at game advisers will cover in a future story – the companies to be discussed are obviously DraftKings and FanDuel. Michigan football coach Jim Harbaugh’s quote about Ohio State’s football coach Ryan Day hits home here; “sometimes people standing on third base think they hit a triple, but they didn’t.” 

Now what? 

The Nevada operators nervously eyeballed what was happening down south. This was especially true in Costa Rica, as many talented bookmakers were making more money working for well-heeled owners there than they could for private owners or corporations in Nevada throughout the period when that was the only state that legalized single-game bets. The 2006 passage of UIGEA changed many things. 

One of the sharpest credit outfits in Costa Rica almost immediately closed shop, and multiple sharp bookmakers who were on the “back-9” of their careers decided that it would be easy to call it a career rather than to fight back and/or go work elsewhere, as American business became very difficult to obtain at that point. Credit-wise, it was there – but many operations counted on post-up (customer puts up money through credit card, debit card, NeTeller, PayPal, or other bank options) business for survival.  

Head Shops! 

“Pay Per Headshops” was not a particularly popular thing in the 1990s and most of the 2000s. But UIGEA expedited the process of many offshore operations to figure out how to stay in business, given their sudden inability to take deposits each week through the aforementioned avenues.  

The arrangements and agreements between US-based bookies and offshore operators who helped them run their businesses varied wildly based on friendship/relationship/what-is-my-friend-getting-somewhere-else situations.  

In roughly 2009, one enterprising office in Costa Rica decided to drop the price from these PPH shops from an average market price of $10 per player to either $3 or $4 per player.  

That basically means that if an agent in the USA has 100 players in action during a given week, he was only paying for the services rendered by that office to help his players make bets. The “pay-per-head” shop assumed zero risk; they were only in charge of putting up lines for the clients to bet.  

This was a rare if not unprecedented step in the business; most offices offshore were established by bookmakers who had their own customers from the get-go. To see someone try to “steal” business by enticing agents to throw their players into that shop just to write bets with no risk was something that had not been done.  

It worked. 

This “pay-per-head” model is now very popular for bookmakers. They no longer have to worry about paying very much money for each customer who bets into the office where their players play. The competition comes between guys who are good at sales AND good at convincing agents that their software is the best, their guys booking the games are the best, and the pricing is fair for the offer. The cat-and-mouse game has played out for more than a decade. 

If you are a bookmaker in Murfreesboro, Tennessee, and you have 30 customers, you don’t have to answer the phone for as long as you want to read your customers the line each day and night. You can instead give your customers to an offshore office of your choosing and let them do the booking, grading, and everything else that entails booking the business with the (big) exception of paying and collection, which is your only job once you send your business to a per-head shop. 

Pros & Cons – and your options 

With the current situation, bettors have never had it better. Most of these people that are running per-head shops do not care whether their agents win or not, because as long as the customers are betting there, they get paid.

The employees are generally not paid well. If the owner is not hands-on with the lines and the sharp guys inevitably get into those spots, the agent runs the risk of not doing very well and paying a low price.

Some per-head places down south still charge closer to $10 per player each week, knowing they can keep agents with good customer service and sharp line movers to save the agent money in the long run. You get what you pay for! 

Different ways to bet on sports betting

No, this is not a tutorial on straight bets, parlays, round robins, horses, and/or roulette and craps.  

Customers have more options than ever when the calendar turns to 2024. ESPNBet just launched. DraftKings and FanDuel are going nowhere (cue Harbaugh’s quote from earlier). Caesars and BetMGM will be around because of their retail presence. Fanatics has lots of money and perhaps the biggest database of all for marketing purposes. Others in the US sports gaming space will try and infiltrate, but success is gonna be tough at this point with the other established entities. 

But that’s just one aspect of the betting game at this point. We will soon discuss the other options mentioned earlier in this report. There are four that all deserve their own breakdown: 

• In the book (Go to Vegas or a physical book and bet with cash, get a ticket) 
• Post-up (put money into an account in the USA) 
• Credit (local bookmaker around the corner) 
• Per-head (a local bookmaker gives you an account to bet online, and you settle through him) 

Best thing 

The four options listed above are always all in play for people who are hungry enough to look for those options. They are all vitally important because shopping for the best price is more important than anything (other than handicapping ability) when trying to win at betting sports.  

Stay tuned for more information on why this is the best time to be a sports bettor, in addition to more historical information on sports betting!