On a quiet residential street a few miles from the glitzy Strip, in a Spanish-style home with a white Mercedes 500SL parked out front and two satellite dishes next to the swimming pool, Lem Banker sat at the kitchen table that serves as his desk, looking hard for winners.
Like a Wall Street financial analyst, he had assembled a portfolio of statistics on each potential investment, though his variables were not price-earnings ratios but injuries, weather, team morale and past performances.
The UPI sports wire chattered on the counter next to the sink and he got up to check it for late news. He sifted through the local papers and the Gold Sheet, a Los Angeles-based weekly digest of team ratings that is to gamblers what the Bible is to priests. He shuffled some numbers on his calculator and punched into his computerized phone the code for the Stardust Casino, one of a half-dozen places around town where he maintains accounts.
Beating the Odds
The phone there rang once.
"Hey, pal. It's Lem. Yeah, what's that basketball game tonight? . . . You got the Bulls by a point, huh? OK. Thanks, pal, call you back."
Then he dialed another bookmaker, looking for an extra half point, a margin that can mean thousands of dollars to a "wise guy" (professional gambler), who, year in and year out, earns a six-figure income beating the odds and point spreads in games of sport. The stock market, horse races and casino tables he shuns as foolish bets.
Across town, in his office on the ninth floor of the Valley Bank Building, Michael (Roxy) Roxborough, president of Las Vegas Sports Consultants Inc., was also at work, making the line--the projected point spread in more than 200 football and basketball games--that Banker and millions of American bettors across the country have to beat if they are to take money from the bookmakers.
His line, uncannily accurate and distributed each Sunday evening to 25 Nevada "sports books," is one of the most closely followed in the country. To a large extent it even determines what illegal bookmakers from Seattle to Miami will offer their clients on any particular game or championship fight.
"Our objective is not to pick probable winners, but to set a line that evenly divides the public, with half the money backing one team and half the other," said Roxborough. If a perfect point spread is posted, he explained, bookmakers can pay off the winners with the losers' money and keep as profit the 10% commission--called "vigorish" or "juice"--they charge on successful wagers.
Sports wagering has enjoyed a phenomenal growth in the United States during the past decade. It is now the fastest growing sector of the Nevada gambling economy, having grown from the $41 million bet in 1975 to $886 million last year. According to Gaming & Wagering Business, a monthly New York magazine, the amount Americans bet legally and illegally on sports increased 8% in 1986 to $22.2 billion, a figure about equal to Bulgaria's national budget.
If gambling were a single corporation, the magazine says, its total revenue would make it the nation's 15th most prosperous company, ranking just behind Chrysler and ahead of Philip Morris.
With every state except Hawaii, Indiana and Utah now permitting some form of gambling, sports wagering generally has become a socially acceptable pastime. Lines and odds are published by newspapers and analyzed by television sportscasters. The National Football League weekly publishes an injury list, which appears to have little purpose other than helping gamblers make decisions. If you include office pools and friendly wagers, an estimated 90 million Americans make at least one bet a year on sports.
Super Bowl Bonanza
The Super Bowl alone brings about $25 million in bets to Nevada's bookmakers. "If you can't bet on the Super Bowl, who the hell would watch it?" Pete Rose, the Cincinnati Reds manager, asked last year.
Throughout the week, lines like Roxy's move in reaction to the placement of bets, injury reports and changed playing conditions as bookmakers add or subtract points in order to encourage bets on the underdog.
Like most professional gamblers, Lem Banker makes his own line and believes it "constitutes an order" on a football game when he finds a three-point difference between his projected point spread and that of a bookmaker. He hires runners with beepers and clipboards to shop the bookies for the best bargains and jokes that one of his agents arrived in Las Vegas 10 years ago with nothing but a $10 bill in his pocket and a white shirt on his back "and he hasn't changed either one since."
"The whole thing is you can't have (personal) favorites," said Banker, 60, who likes to buck public opinion and back underdogs. "It's just numbers and discipline and skillful money management. You got to be willing to grind it out, not to panic when you lose. I never bet more than 2% of my bankroll on any one game. And I use a lot of psychology. Like the first week of the NFL (National Football League) strike, I figured all the scabs playing for the home teams were going to be intimidated and I bet every visiting team. I went 10 and 4."
Never betting less than $1,000 a game--"the minimum to make a decent living in today's economy,"--he breaks even if he wins 53% of his wagers over the long haul; at 60%, he can make more than many corporate executives. Unlike the "squares" (novice gamblers), the wise guys decrease their bets when they are losing and increase them when winning. If the price isn't right, they don't bet.
Unlike Banker, Roxborough dismisses psychology's role in professional sports. "Up here we go for talent," he says. "When the dust settles, the best teams win the most games." Working with a handful of handicappers--each a specialist in a particular sport--he relies heavily on computerized banks of statistical analysis and acts as a sort of clearing house for the informational nuggets circulated within the bookies' network of contacts. Roxborough deals with no one outside Nevada, he says, and does not have "insiders" working for a team or a league.
Changing of the Guard
His predecessors, the first generation of Nevada line makers and bookmakers in the 1950s and '60s, wore checkered pants, smoked cigars, came from the East and were so cautious they looked both ways before crossing a one-way street. Bob Martin, 68, who made the football line for 15 years until his retirement in 1981, considered intuition a key element of his professional success and used to pay airport workers to save him sports pages from out-of-town newspapers they collected while cleaning planes.
But Roxborough, 36, represents the changing of the guard. Like his young counterparts, he wears conservative business suits and talks about data bases and "solid numbers" rooted in hard statistics. He went to college, majoring in political science at American University in Washington, D.C., and in probability theory and behavioral psychology at the University of Nevada, Las Vegas. He even teaches a course on sports book management at Clark County Community College in North Las Vegas.
Casino executives attribute Nevada's boom in sports betting primarily to the great increase in the number of sports events televised each week. But there are other reasons as well: In 1974, the 2% federal excise tax on wagering began an incremental descent to its present level of .25%. In 1975, the state allowed casinos to enter the bookmaking business, ending a monopoly that independents in small bookie "stores" had enjoyed for 24 years.
And in 1978, the technology was perfected enabling horse tracks around the country to transmit races live to subscribing casinos via coded satellite signal. Nevada today pays $40,000 daily to televise as many as 45 races and in effect subsidizes the nation's major tracks. In the rush to tap this new market, casinos tore up cabaret lounges and bars and replaced them with posh bookie parlors far removed from the old store-front operations of Brooklyn or Boston.
The Las Vegas Hilton opened its football-field-sized race and sports book last December at a cost of $17 million. Forty-eight huge television screens, the largest measuring 26 feet by 19 feet, relay odds and as many as a dozen live games and five races simultaneously from throughout the country to gamblers who sit in stuffed chairs, sipping free drinks and reading complimentary copies of the Racing Form, which the Hilton flies in specially every night from the East. Fourteen TV dishes on the casino's roof scan the skies.
Inside the out-of-sight administrative center, which vaguely resembles an airport control tower, two women sit at a bank of computers, repeating payoffs and scores aloud before making them official, much like a pilot and co-pilot running through a check list prior to take off. Chip Rogers, the control room supervisor, hits the number-36 button on his console and one of the rooftop dishes zeroes in on the Weststar 5 satellite, transmitting the fifth race from Chicago's Hawthorne track.
"If any satellite's in the Western Hemisphere, we can pick it up," he says.
The casino's entry into bookmaking has largely eliminated the independents. One of the few that survives is Leroy's, a down-scale bookie store on South 1st Street, just out the front door of the upscale Golden Nugget. It is run by Dr. Vic Salerno, who was a dentist in Marina Del Rey for eight years before moving to Las Vegas in 1978.
Leroy's, which handles $18 million a year in bets, has a couple of 13-inch TVs, odds that are written with Magic Markers on plastic-covered bulletin boards and a loyal clientele of locals who get angry when Salerno shuts up shop for one day a year--Christmas.
Salerno had lost $30,000 the previous weekend, and he was in his back-room office, checking a special computerized accounting program he designed, knowing full well that bookies have a greater "power of recovery" than players. He punched an imaginary score into the San Francisco-Houston game and saw that if the 49ers won, 21-12, he would lose $300.
"In dentistry, I never had a losing day," he said. "I loved it, but the reason I stopped was the boredom. Now I'm working 7 a.m. to 11 p.m., seven days a week, and I have great highs and tremendous lows. It's like an opiate. I'll tell you truthfully, after getting into this business, I don't know if I could ever do anything else again."