High-Tech Bookie : The Man Who Took Vegas by Computer

WHEN VIC SALERNO was a dentist, his patients sometimes rinsed out their mouths and wound up catching a glimpse of a celebrity’s yacht.

In the 1970s, Salerno’s eighth-floor office faced west over the harbor of Marina del Rey. Sunsets painted the sails pink as soft rock music was piped in to calm nerves. The drills and other instruments of pain were carefully hidden so as not to distract from the ocean view out floor-to-ceiling windows.

Salerno’s clientele rewarded the conscientious dentist with more than $200,000 a year for working 3 1/2 days a week.

In 1978, after eight years of what many would call the “good life,” Victor Salerno, at 34, was bored. Increasingly, his Fridays turned into “triple-headers,” starting out at Hollywood Park for the afternoon races, buzzing over to Los Alamitos for the evening schedule and then, if he still had cash, winding up on Western Airlines for the 11 p.m. hop to Las Vegas.

“That was the most hyper, crazy flight ever, that last flight to Las Vegas,” recalls Salerno, a passionate fire plug of a guy who bears a slight resemblance to John Belushi and has the unbelievable stamina for a daily routine of three packs of Marlboro and half a dozen Cuervo Gold tequilas. Mid-flight dice games sometimes blocked the aisle and many passengers lost their bankroll before landing. Salerno confesses that he never had any money past 2 a.m. and that the wait for the 7:30 a.m. flight back was excruciatingly long. So were the hours at the office.

While some men might have gone out and bought a red Corvette, Salerno abandoned his dental practice for Leroy’s Race & Sports Book, a hard-luck bookie joint in downtown Las Vegas smack-dab in Glitter Gulch. Since then, Salerno’s had a view that couldn’t be more different from Marina del Rey.

Through the strip of two-way mirrors that line his office at Leroy’s, Salerno has seen “Cryin’ Kenny” lose a bundle in the last seconds of a game and then run full throttle down the length of the bar to crash headfirst into the wall. He has seen a 60-year-old grandmother climb on top of the cigarette machine to attempt a bump-and-grind striptease.

Now his office is filled with the high-adrenaline voices of track announcers calling horse races and the rumblings of drunken customers. But there are other sounds as well: the quiet drum of fingertips on computer keys and the staccato tap-tap-tap of two printers at work.

Salerno is more than just another sports bookie in Nevada, the only state where betting on sports teams is legal. (Betting on horse racing is legal in 43 states.) Salerno and his partner, Javed Buttar--a lanky, aristocratic Pakistani computer whiz, who once didn’t know a daily double from a double-header--are the founders and co-owners of CBS Computer Systems, a company that specializes in hardware and software designed for the sports-betting business.

Together, this unlikely pair helped drag the bookmaking business out of the old-fashioned coziness of the corner booth and the handwritten ticket and into the precise, high-tech style of modern-day Wall Street. Their systems have enabled bookmakers to speed up betting transactions and cash winning tickets faster. And come Super Bowl Sunday, bettors in Nevada, who are expected to plunk down a record $40 million, can cash their tickets immediately after the game instead of waiting to “settle up” on Monday. The systems also cut down on employee theft, and they’ve even helped local regulators double-check what once was very questionable bookkeeping.

In just four years, CBS Computer Systems has dominated the market and brought automation to 43 of Nevada’s 60 licensed sports books, including some of the biggest neon palaces, such as the Las Vegas Hilton, the Stardust Hotel and the Golden Nugget.

Setups range from the smallest--combining an IBM Series / 1 mini computer, a Cubix workstation and C-Itoh printer--all the way up to the most elaborate, such as the one at the Las Vegas Hilton which features 30 workstations, 30 printers and 30 optical scanners to electronically read exotic bets such as parlay cards. All customers receive customized bookmaking software.

The company charges from $40,000 to $800,000 to install a system, and as much as $2,500 a month for the service contract. And if the system crashes, all users have backup copies of their records.

America’s increasing enthusiasm for betting is helping to make a bull market for Salerno’s wares: Bettors in Nevada last year plunked down more than $1.1 billion in legal wagers on sporting events, up from a mere $41 million in 1975, according to estimates based on figures from the Nevada Gaming Control Board. Football, America’s most popular betting sport, soaks up about 40% of that action, followed by basketball (32%), baseball (21%), boxing (5%) and hockey (2%).

Just because bettors are wagering more money each year doesn’t necessarily mean that bookmakers are consistently raking in higher profits. They’re not. The win percentage, the percentage of money bet that the house keeps as a profit, has been dropping from 7.5% in 1975 to a projected 2.5% last year. Most gaming veterans blame the downturn on the increasing sophistication of bettors, who now have access, via newspapers, cable TV and computers, to statistics and breaking sports news not available to them a decade ago.

Given the downward trend, the top brass at most big hotels aren’t thrilled to be in the bookmaking business. They rate it a miserable way to make money--compared with, say, slot machines, which routinely hold on to 15% or more of the cash coming in. Michael (Roxy) Roxborough, Las Vegas’ leading oddsmaker, says hotels provide sports betting mostly as a courtesy or even a loss leader to keep guests and their billfolds from straying to casinos that do offer sports betting.

At the same time, the industry’s regulators have helped build CBS Computer Systems’ business. In 1985, the Nevada Gaming Control Board gave all sports books until last June to computerize their record-keeping to guard against profit-skimming and tax evasion. (About 95% have complied.) “Vic has made it possible for the big corporate hotels to become bookmakers,” says Roxborough, who supplies wagering information to 25 hotels. “Before computers, there was just too much room for hanky-panky.”

In the days of handwritten betting tickets, a coffee stain in the wrong place could blur the numbers enough to cost the house some dough. And then there were the legions of customers who tried to change $10 tickets to $100 tickets and losers to winners.

“A guy once soaked part of a ticket in ink remover, made about the prettiest forgery ever,” recalls Jimmy Viccaro, race and sports book director at the Golden Nugget, who eventually caught up with the scam artist. Nowadays, the computer reveals the details of each bet. “It protects me every day,” he says.

Viccaro isn’t worried about computer hackers either because each system is free-standing and not connected by telephone or cable lines to any other computers.

As for bettors, the system speeds up the action. In the past, clerks filled out handwritten tickets in triplicate with a copy each for the bettor, bookmaker and the accountant. For example, to handle the blizzard of bets on the Super Bowl in 1984, the year before they got the computer system, a bleary-eyed crew of four at the Stardust had to stay up almost all night to grade the 20,000 handwritten wagers worth $2 million, says Stardust race and sports book director Scotty Schettler. Today, it would take about a minute and a half, he says.

Although the popular image of a bookie might still be some guy in a plaid jacket chomping on a cigar, the reality in Las Vegas is more likely to be someone in a suit with a hotel ID badge sitting in front of a computer terminal. And every week, he’ll probably be on the phone to Salerno for “customer support.”

But back in 1983, if you’d asked a veteran bookie to rate Salerno’s chances of becoming the king of high-tech bookmaking, he’d have given you odds of about a million to one.

When Salerno started toying with computers, it had been just five years since he was a “square,” a term Vegas bookies use scornfully to refer to a gambling tourist who just throws his money around.

Victor Salerno was born in 1944 in Los Angeles, right into the family upholstery business, Salerno Bros. His favorite part-time stint for the company was when he was tearing out booths at the Brown Derby and found bracelets, rings, watches and cash. But Salerno always wanted to be a dentist. A whiz at math, he attended Notre Dame High School in Sherman Oaks, where he played football with Terry Donahue, UCLA’s head football coach. He attended California State University, Northridge, then went off to Marquette University to go to dental school.

Salerno’s last name drew some ribbing from classmates for gangster ties, but Salerno is proud to point out that he’s not related to reputed Mafia kingpin Tony (Fat Ducks) Salerno. Rather, he notes, his first cousin is Frank Salerno, the detective who helped solve the Los Angeles Hillside Strangler case.

He became more involved in gambling when he married Judy Merillat in 1975--and started hanging out with her fun-loving father, Leroy. In 1978, with a one-year license, his father-in-law bought the bookie joint that bears his name. When his father-in-law’s license renewal was turned down the next year because of problems with a partner, Salerno stepped in and bought the operation--which consisted of a dilapidated parlor and bar and a roster of regular, dollar-bet customers.

For the next two months, Salerno did some wild moonlighting. He spent Tuesday, Wednesday, Thursday filling cavities in Marina del Rey and the rest of the week bookmaking in Las Vegas.

Over the next five years, Salerno realized that computerization might be his only hope of surviving the increased competition from the big hotels opening their own sports books. At the time, the only company offering a betting system wanted $300,000 for a setup that couldn’t even print out a customer ticket. So Salerno decided to try to create his own. He hired Javed Buttar, who had just completed a digitized phone service for a sports-line company in town.

Buttar arrived in Las Vegas with an eclectic list of credits. In Pakistan, he had researched the potential of bouncing communications signals off meteor trails. And in the United States, he had investigated the possibilities of predicting the liquid-weight loss of tomatoes during truck shipments in the San Joaquin Valley.

“My impression of a bookmaker was some ill-educated person who went through the school of hard knocks,” Buttar says. “I was very impressed by Vic’s dental degree.” Buttar expected the bookmaking project to take six weeks. It took almost 12 months--and a $175,000 investment by Salerno--to complete.

Once they installed the system at Leroy’s, they realized that there was huge potential for selling it to others. In 1984, they launched CBS Computer Systems with a third partner, whom they bought out last year.

At first, the old-time bookies were afraid of the machines. “We thought it might take our jobs,” Viccaro says. “I thought I’d get electrocuted,” recalls Herbie (Hoops) Lambeck, who works out of Leroy’s and is Las Vegas’ most respected oddsmaker for boxing. Other bookmakers were convinced that bettors would find computer printouts too phony-looking.

Nonetheless, the computer company overcame initial hurdles. Salerno kept fine-tuning the system to make it more understandable to bookies. He and his partners first persuaded a large independent spot, Gary Austin’s Race & Sports Book, to try it. When it clicked there, they talked the Stardust, then the state’s largest sports book, into buying the system.

Since then, sales have mushroomed, especially since the Gaming Control Board issued the computer records rule. Last year, the company installed 18 systems.

Out-of-state inquiries about the system come in almost every day, possibly from illegal bookmakers, but Salerno says he turns them all down. Is it a crime to sell computer software for bookmaking purposes outside Nevada? Clearly. Two Las Vegas men, arrested by the FBI and the Los Angeles police, were convicted last year for conspiring to send through interstate commerce computer software to assist in illegal bookmaking. (Their sentence, though, was three years’ probation.)

Now both Leroy’s and Salerno lead sort of Old World / New World double

lives. “I guess I live in a Damon Runyon fantasy land,” Salerno says one afternoon in his office, whose plush style could best be called high-tech bordello. Red fabric covers the walls, and overstuffed red armchairs share the space with an IBM Series/ 1 computer, a pair of printers and a row of four color TVs hooked up to the rooftop satellite dish.

Just outside the door, in stark contrast, is about the most low-tech place in town. Unlike the clean, quiet facilities at hotels on the Strip, Leroy’s was and is a small-time joint; it’s the last independent bookie joint in Vegas, with losing tickets littering the floor, loud drunken cheers from loud drunken patrons, 50-cent pickled eggs at the bar and enough cigarette smoke to close an airport.

Salerno himself is quite Runyonesque. Superstitious, he drives the same route to work during a winning streak and won’t wear “unlucky” shirts. He’s also renowned as someone who “sweats games,” a terrible loser who agonizes during every play. When things aren’t going his way, he’s been known to slam a beer mug down so hard he’s left holding only the handle. He “sweats” so loudly, in fact, that he has often drawn an audience to his office door.

Upstairs, the second floor of Leroy’s is being converted to worldwide headquarters for the computer business, which has some ambitious plans.

CBS Computer Systems, which now has a staff of 12, is talking to bookmakers in Australia and England about importing its equipment. It also hopes this summer to test sports betting on Caribbean cruise ships traveling beyond U.S. jurisdiction. (The company is experimenting with transmitting data through a shipboard dish that follows the path of a satellite via a $60,000 gyroscope.)

Salerno and Buttar are also hoping to cater to sports fanatics who follow games nationwide and who aren’t content with finding out the odds from a morning newspaper. So next fall, CBS Computers Systems plans to test-market in the Los Angeles area a 900 telephone number that would deliver an up-to-the-second computerized con sensus of the major Las Vegas sports lines. (The company claims that it’s within its First Amendment rights--as are newspapers and television--to disseminate breaking “news” in Las Vegas and that the service would not violate federal laws against the interstate transportation of betting information.)

Right now, they’re trying to turn R2-D2 into a bookie. They’ve just completed a prototype for robot betting tellers that could be placed throughout casinos for easy access. The tellers will operate just like bank machines: Insert credit card, make bet, receive receipt--”Good Luck” flashes on the screen.

But somehow, talking to Salerno, listening to him pitching computer software and peripherals, you realize that he didn’t quit being a dentist to become a computer salesman. Sure, he likes making all the money, but his true passion is gambling and the eccentric personalities drawn to it.

This afternoon, Salerno and Schettler, a longtime friend, are trying to explain what’s so much fun about a business that drives them to work 365 days a year and consigns their bottom line to fate and the skills and temperaments of athletes half their age.

“Remember Cryin’ Kenny?” asks Schettler of the man with the reputation as the town’s worst loser. “He shot the TV out at Del Mar (Sports Book). At Churchill Downs, he used to set up two fifths of booze and a bucket of ice on the cigarette machine, and he used to forget where he parked his car--not where in the parking lot but at which hotel.

“Once after a particularly bad day of losing, I remember Cryin’ Kenny came up to me and said: ‘Let’s go get arrested, ‘ and after I refused, Kenny went off to do it on his own.

“So Kenny goes to Caesars and starts acting up. They threw him out but gently because he was a big player. But he started swimming around in the fountains, so they have to have him arrested.

“Cryin’ Kenny had $8,000 on him. When you go to jail, they take your money and give you a check. But Kenny had given them a phony name. He had a helluva time trying to cash that check.”

Salerno is laughing so hard he is wiping away tears. “These things never happen in a dental office,” he says. “Every day is something different.”