September 1, 2010
Casino executives rarely refer to their sports books as top revenue-generators. Sports books are popular, important amenities, for sure, and at certain times of the year, such as Super Bowl Sunday or March Madness, they are packed with customers waiting in long lines to place their bets and land a seat at the bar to watch the game. But that frenzy comes only a few times a year. Cantor Gaming CEO Lee Amaitis doesn’t believe it has to be that way. And so far, the sports books Cantor operates are proving to be much more than amenities.
In August, it was reported that Cantor Gaming, which operates sports books in Las Vegas at M Resort Spa Casino and The Venetian and Palazzo, is responsible for about 15 percent of the state’s entire sports wagering handle. The company soon will add the Hard Rock and Tropicana Las Vegas to its roster of customers.
How is Cantor transforming sports wagering? At the core is a unique gaming technology it calls In-Running Wagering, which uses sophisticated algorithms like those used to conduct high-speed stock and commodities trades to generate live odds as a game is going on. The technology is an outgrowth of the financial transactional expertise and technological innovations pioneered by parent company Cantor Fitzgerald, the New York-based investment banking and brokerage giant. In-Running Wagering processes transactions in milliseconds, enabling people to bet directly from their seats in the sports book at any time during a game or from predetermined locations within a casino. In a traditional sports book customers can wager on the outcome of a game or the over-under total points or some limited additional wagers. In-Running Wagering allows bettors to wager throughout the game on any number of propositions: whether the next football play will be a pass or run, whether a basketball player will make both free throws, whether a baseball pitcher will throw a strike, and on and on - all in real-time.
“I think that’s gone really well,” says M Resort Chief Executive Anthony Marnell III. “It’s a whole new way of gambling.”
Casino space has always been at a premium, but Amaitis notes that Cantor has proven at M that even a 100-seat sports book with a VIP room that seats eight can perform quite well under its model.
“We’re writing three to four times what any other casino writes in a much smaller space,” he says. “And you know why? Because we have no lines, everybody’s doing it on a computer. It’s all account-based. We can handle transactions much faster.”
And there’s a bigger picture, as he sees it. “The gaming business is at the tip of the iceberg over how to provide ways for people to have fun and not necessarily put them in the position where if I bet a thousand on a game I’m stuck. We give you probably 25 different things you can bet on while the game is on, all calculated through millions of lines of code that we created ourselves and algorithms that price those models. We look at it as trading. We’ve taken sports betting outside the world of amenity and created it as a business.”
He says the revenue Nevada’s sport books generate is peanuts compared to what they could be doing. “We think that has not been paid attention to as a real business. We think that it’s only been paid attention to as an amenity. We’re taking significantly large wagers down there, and multiple wagers, and people are staying and opening accounts. I’ll tell you what, there is absolutely no depression in sports wagering.”