In1993, the Mt. Carmel Feast in Jersey City had all the elements of a modern carnival: rides, corn dogs, skill games where you could toss rings or pop balloons to win stuffed animals. But down an alleyway, behind the church, there was another game—one that wasn’t open to the general public. Groups of young men crowded around a table taking turns rolling dice, playing an old carnival game called “over/under,” where players bet on whether each roll would be over or under a seven.Spanky Kyrollos was 15 years old when he first discovered the illicit dice game at the fair. He was instantly captivated. He grew up in a family that loved to gamble. He learned math by adding up playing cards. He learned poker at family gatherings. And whether his siblings and parents and cousins played backgammon or chess or cribbage, money was always on the line.
By the time he was a teenager, Spanky knew he had a knack for numbers. He saw math as a form of problem solving, like discovering secrets. As he watched people bet on over/under he figured the odds ข่าวบอล in his head. The game was paying off even money for over and under seven, and 4-to-1 when the dice rolled seven exactly. He knew the odds were off, and it was a bad bet to play. But it got him thinking—the folks on the other side of that table, the ones taking bets from the players, they were going to make a killing.That same year, a friend of his at St. Peter’s Prep came to school selling parlay cards—in which you could pick a number of football games and win big money if they all hit. Cards cost $5 each, and every week it seemed like somebody would hit one for $100, which kept everyone wanting more. Spanky looked at it like the dice game. He realized the odds were skewed so you weren’t winning as much as you should given how difficult it was to hit. He also noticed far more kids bought cards than were winning each week, and even after paying off the occasional lucky winner there was still a lot of money left. He didn’t buy any parlay cards. He asked the boy who was selling them how he could get cut in.
Spanky soon started selling parlay cards for the local bookie to his barber, to the kids in his neighborhood, to family friends. He was getting a cut of the losses, around $100 or $200 a week. It was huge money for a high school kid in the 1990s. He brought his parlay card business with him to Rutgers, and his earn more than doubled. But he blew most of the money betting on sports, “complete sucker shit.” He had always prided himself on being able to solve puzzles and figure out how to beat the odds. But sports betting was proving a tough nut to crack. “Whatever I made on parlay cards I gave most of it back to the bookmakers,” he says. “I was a degenerate.”
InIn 1917, as the United States entered World War I, a number of countries in Europe suspended horse racing, and various U.S. states were considering banning it for reasons both patriotic and moral. The U.S. government had issued a war tax on racetracks, and some smaller tracks shuttered as a result. The nation’s bookmakers soon took up residence in the grandstands of America’s baseball games, barking out bets on every pitch, and often taking in more money than the ballpark did on admission. By 1919, gamblers had so permeated the world of professional baseball, the World Series was fixed by a syndicate of big-money gamblers in what would become known as the Chicago Black Sox scandal.
Soon American gamblers spread their wings to college football, and throughout the Great Depression gambling on sports only increased, with more than $60 million a year wagered in New York City alone. A story in The Saturday Evening Post in 1936 called it “America’s fastest growing industry,” noting that the new breed of sports gamblers were “Wall Street types,” and “adept at figuring percentages, odds, and statistical permutations.”One such Wall Street type was a securities analyst in Chicago named Charles McNeil. He started gambling in the bleachers of Wrigley Field, and soon found himself making more money from gambling on baseball and football than he made at his day job. He quit and turned to gambling full time. Once bookies figured out how sharp he was they stopped taking bets from him, so by the early 1940s McNeil went to the other side of the desk and started making book himself. He had an idea he thought could actually level the playing field between bookmaker and handicappers like him, and he believed it would prove popular among gamblers and bookies alike. His innovation, which we today know as the “point spread,” would revolutionize the gambling world.
“It just seems so un-American for a company to say, ‘Come on, take your shot at us, we’re here for the gamble,’ and then when you do they say, ‘No, you’re too smart, we only want to take the action of people who don’t know what they’re doing.’ It’s predatory.” —“Captain” Jack AndrewsMcNeil set a “line” for every contest he took wagers on, giving the team he believed to be the favorite a certain number of extra points they would need to win a game by for a bet to pay off. In doing so, he turned every contest into something closer to a coin flip. By offering bettors a fair contest, he would ideally attract equal action on both sides. By offering to pay $10 on an $11 bet, he would keep $1 from all of the losing wagers.
Point spreads proved popular, and soon a publisher in Minneapolis named Leo Hirschfield began publishing the spread for games all over the country. He employed a team of handicappers who talked to contacts across America to obtain information to set their lines. Hirschfield then provided these lines to America’s bookies for a fee. The service, known colloquially as the “Minneapolis Line,” helped bookmakers minimize their risk, which enabled them in turn to raise their betting limits.By 1949, there were 23,000 miles of telegraph lines leased from Western Union to service 20,000 bookies with up-to-the-minute sports data. Those bookies in turn provided that information to other smaller bookies. In all there were estimated to be more than 270,000 bookmakers earning their living from sports betting in the United States in 1950. By 1960, there were more than 300,000. As attorney general, Robert Kennedy made shutting down the illegal sports betting network in the United States a top priority, believing the proceeds were funding organized crime. Despite his efforts, by 1972 the number of people working in the illegal bookmaking industry in America eclipsed a million.
SpankySpanky graduated with a degree in computer science and went to work at Deutsche Bank right out of college. He was earning decent money but he was still spending a lot of time betting on sports. He read books on handicapping and betting systems. He looked for patterns, for edges wherever he could find them. In the 1990s, sports betting was moving to the internet, with black market bookies decamping for the Caribbean to operate their bookmaking business far from the arm of U.S. law enforcement. As Spanky combed through one sports betting website after another, it dawned on him that he could use his computer coding skills to beat the bookies. He could do the same types of things he was doing for finance banks to give himself an edge on sports bets. While sitting in a pizzeria watching a basketball game with his then-girlfriend, he told her his idea. Her response was a shrug. “Yeah, whatever,” she said. She knew her boyfriend loved puzzles and games. She had no idea how much this particular puzzle would consume him.Spanky approached a coworker he respected and shared his idea for writing code that could identify positive expected value in sports betting markets. The two of them wrote a code that scanned the 80-plus online sportsbooks’ various lines to look for “middles,” or opportunities to arbitrage lines that were different at various sportsbooks. For example, if their program found a line on a football game at one sportsbook, say the Steelers +4.5, and found a different line on the same game at another sportsbook, say the Steelers +2.5, they would make a bet on the Steelers with one sportsbook and make a bet against the Steelers at the other. Most of the time they would win one bet and lose the other, and only lose the “vig,” or the percentage built into the bet as a commission for the bookmaker, usually about 10 percent. But whenever those games fell right in the middle of the two lines, in this case if the Steelers lost by three points, then they would win both of their bets.