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Sports Betting: Past, Present and Future - Part 2 by Jeremy Martin
The Point Spread
Before the invention of the point spread and 11/10 vigorish (the commission taken by the bookie on all bets), bettors who wanted to wager on an individual game had to bet against the odds on each team that were assigned by their bookie. If someone wanted to take a favorite, they would have to risk heavy odds and bets on big underdogs would pay off a hefty sum in the case of an upset. This odds system presented certain problems for bookies: they ran the risk of losing their bank if a big underdog hit on a given weekend or they could take big losses if all of their customers were on a big winning favorite. If a particular contest looked to be extremely lopsided, the bookie would have to refrain from taking any action on the game in order to minimize his risk. The odds offered by bookies in those days were similar to the moneyline system that is used primarily in present-day baseball betting.
The solution to the bookie's dilemma was the point spread, which first came on the scene in the 1940s. There is much debate as to who the inventor of the point spread was, but most believe it came from professional bettor and bookmaker Charles McNeil from Connecticut. Despite contrasting theories of the originator of the spread, most agree it was McNeil who streamlined the idea and first put it into use. McNeil undoubtedly borrowed some concepts for what he called the 'wholesale odds system' from other professional bettors - including fellow sports betting luminaries Billy Hecht and Ed Curd. Regardless of who is credited with inventing this new system of bookmaking, it changed the face of sports betting forever.
This new point spread system created a windfall for bookies because they could now even out the betting handle on each side of a game by making a point spread that reflected the difference in points between two teams in a game. This virtually guaranteed a profit for the bookies in addition to giving them the option of offering many more games to their customers.
Before the point spread, most bookmakers would try to book games that were fairly evenly matched in order to decrease the risk of huge losses. But with the point spread they could offer any game they wanted because the line reflected the differences between the strengths and weaknesses of the two teams and helped them attract business on both sides of a game. If a particular game saw heavy action on a particular team, the bookie simply had to move the line to make the opposing team more attractive.
Offering a point spread and 11/10 vigorish not only ensured that the bookies would earn a profit over the long run, but it increased the interest in sports betting across the country as bookmakers in different markets began to implement the new system. Over time, the 11/10 vig would earn the bookie a 4.4 percent profit on the bets they booked (in a perfect scenario where action was balanced for all offerings). The 11/10 system also gave professional bettors something to shoot for: 52.38 percent. When factoring in the vigorish, a winning bettor must hit at that ratio just to break even and they must best that percentage in order to achieve profit.
The implementation of the point spread, along with the widespread emergence of television in the 1950s, can be referenced as two factors that perpetuated the massive growth of sports betting during this era. More games were offered by bookies and people could actually watch the contests they bet on at home or their local tavern.
In many American cities - especially in the east -- betting on sports was becoming an integral part of daily life. Some of the men who helped mold the Las Vegas sports betting scene remember being exposed to the enterprise at a very young age. Current Las Vegas professional bettor Lem Banker, who has been prominent in the Southern Nevada sports betting scene for more than four decades, learned the craft as a youngster under the tutelage of his father who ran a bookmaking operation out of his candy store in Union City, N.J. Vaccaro remembers betting at bookmaking operations that were located in the back of cigar stores in Pittsburgh and driving to neighboring communities to 'shop' for better numbers at competing books. Frank 'Lefty' Rosenthal recalls his days as a young man betting in the bleachers at Wrigley Field and Comiskey Park in Chicago where he says, "gambling was more popular than hot dogs."
"Put it this way, I was one of a million kids growing up in that era, [sports betting] was all around you," says Vaccaro. "You learned at an early age what it was and you just gravitated from there. Although there are smart people who grew up on the West Coast, the gambling society in general - the people who started Las Vegas as you know it and the sportsbooks as you know [them] - were probably more from my part of the country."
The Minneapolis Line
Long before Las Vegas became the epicenter of the sports betting world, a man named Leo Hirschfield started a company, Athletic Publications, Inc., that would become the oddsmaking standard for the sports betting world for three decades. Established in the mid 1930s, the company set the lines in all sports and distributed them to bookies across the country via telephone and telegraph. Hirschfield also published and distributed several publications that provided sports information intended to help bookies make a better line and for bettors to be able to spot weak numbers. The most popular of these publications was called The Green Sheet.
While most of his thousands of customers were illegal bookmakers, Hirschfield's business was purely legitimate. He had a team of four handicappers that would analyze each game for the following week and set a line during Monday morning roundtable discussions. The late Mort Olshan, who eventually became the founder of The Gold Sheet tout publication -- which is still immensely popular with bettors to this day -- was a young handicapper on Hirschfield's staff in the late 1940s to the early 1950s. His son, Gary Olshan, remembers hearing stories of how the 'Minneapolis Line' was set.
"[My father] read the sports sections each day from 40 papers from around the country to learn as much as he could about the teams so he could come up with a good line on games," says Gary Olshan. And setting good lines was especially important for Hirschfield and his staff since their reputation and livelihood were at stake. Clients paid approximately $25 a week in order to subscribe to the line service.
According to Howard Schwartz, owner of the Gambler's Book Shop in Las Vegas, Hirschfield used to pay airplane pilots and cleanup crews for the collection of newspapers from all around the country that his staff could use in the formulation of point spreads. Until the company disbanded in the early 1960s as a result of new laws that made it illegal to discuss gambling on the telephone across state lines, just about every point spread used anywhere in America originated from the Minneapolis office.