A few weeks ago I was asked by Doug Upstone, who writes in a number of venues on sports betting issues, such as the Daily Racing Form-owned Statfox, to do an interview. We finally got around to it this week. We did part of it electronically and then wrapped it up with a phone call. Here’s our Q&A exchange, which I put in here because it introduces me as well as provides some big picture tips on things that I think are important in sports betting.

Q. You have long been one of the most successful sports handicappers in the industry, what methods have allowed you to stay on top.

A. That’s kind of you to say, Doug. I think the most important “method” is not being beholden to a single method. Different forms of analysis will have value for a while and most will come around to being properly reflected in the marketplace, which depletes their value. While it’s important to have a good defense, a balanced offense, and be well coached, you have to look for changes in the sports that you handicap. For instance, several years ago I would have said that the running game (both offensively and defensively) is a lot more important than the passing game in handicapping matchups, even in the NFL. There’s no way you can make that same statement today. Things are always changing in every sport, and you have to stay ahead of the curve.

Q. What in your background led you to doing this kind of work?

A. As a kid I was a sports fan, and I liked statistics. I used to bet small amounts with a friend and we would ride our bikes down to the barber shop every week to play a dollar parlay card. I realized that I had a good feel for it. So I’d always bet on sports, but didn’t intend to get in the business. After publishing a couple of articles on sports betting in the early 90’s I was encouraged to self-publish a little book on football betting in 1996. It sold a surprising number of copies pretty quickly and people really seem to like it. All of the sudden people were writing to me asking me questions, asking if I sold picks, etc. So being in the business is kind of a happy accident. It just happened organically from people liking my work. I was also helped by several people to get exposure. Tim Trushel, Jeff Nelson, Marc Lawrence, and the late, great Mike Lee were all interested in what I was doing and supported me.

Some of the early online guys like www.oddswiz.com (a really underrated guy who has been blogging about offshore sports books before there were blogs and before you could even bet online) and Heath Boutwel helped me out as well.

Q. You recently had another Gambler’s Boot Camp, can you explain how a sports bettor could value from attending one of these?

I’ve known Fezzik, the pro sports bettor who won the Hilton contest, for a number of years and every time I’m out in Vegas we would get together for dinner. I found myself writing down a couple of things after every meeting and I think he benefited from some of the stuff I would share as well. I thought it would be a good opportunity to teach a small group of people about how to pursue the handicapping and wagering process at a pretty high level. He didn’t want to do it and I hadn’t really though much more about it, but then he called me out of the blue this year and was suddenly amenable to it. It’s been a great experience, we get some pretty sharp attendees and some other guys who know a decent amount but are really eager to learn. It’s a good process to tell what you do and then have to explain why it is done that way. We just did one and the preparing for it really gave me a head start on this upcoming football season, both in handicapping and refining some of my wagering techniques.

Q. Kevin, you have written three books related to sports wagering, the latest, “Real World Sports Betting: How Real People Make Real Money in the Global Sports Marketplace”. Without giving away all the juicy details-please explain how this book would be valuable to the sports bettor?

A. I think if you’re interested in a subject you really need to be trying to learn from people who know a little bit more about it. I’m proud that from what people tell me, the beginner and intermediate guy learns a lot from my books, while people who bet for a living will tell me that there’s usually a nugget or two in there for them, even if they’re experienced and have a high level of expertise. I’ve actually got a juicy (if I can steal your word, Doug) little ebook coming out this fall that I think people would like, and if they get on my mailing list at www.FootballAnnual.com they can get it a no charge.

Q. You publish a newsletter called the Maximum Profit Football Weekly. What make “the Max” different in the marketplace?

A. I think what really differentiates it is that it stands on its own as a valuable product. It’s not just a vehicle to sell picks, and in fact, there’s far less promotional content than other newsletters. I’ve also got some pretty serious contributors in Dave Fobare, Erik Scheponik, and Matty Baiungo, who do a very good job and give people some real food for thought.

Q. What does Kevin do for fun?

A. My answer would have been a lot different a few years ago, but right now I just love doing stuff with my kids.

Q. What is your favorite book (or movie) that you have read (seen) that has left an impression on you?

A. “It’s a Wonderful Life” is my favorite movie, because Jimmy Stewart helps me to remember my dad. It also reminds me of the power we have to touch those around us. So it’s kind of for personal reasons but it is also a lot less corny than people think. He goes to some pretty dark places before the people who care about him pull him back out.

As far as reading goes, I read a ton for work but try to work in some investment books, simply to get a feel for how top traders (who are like bettors) and analysts (who are like handicappers) approach their work. I also like the international thriller genre and I read a little theology as well. I’ve got a bunch of biographies stacked up that I’m sure I won’t touch until after we’re done with football and basketball.

Q. I notice that you seem to have a low-key presence for someone who has been as successful as yourself. Why this path?

A. It seems like the people in this business who are constantly throwing a parade for themselves really don’t fare all the well when it comes to the bottom line results for their customers. But I’m also able to do so due to the structure of my business and the tremendous loyalty of my customers. You can’t buy my picks online, and you can’t buy my service for a day or a week, you have either buy a season or become a member of my VIP Club. So I enjoy the luxury of not having to get up in the morning needing to come up with some game to sell on the internet. Being able to do just the work for my customers is a much better way to spend time than trying to remember if I’ve had my Conference USA Game of the Month yet this month and then try to figure out a way to outhype all the other guys on the web sites.

KO’s Note: Thanks to Doug for his interest. Here’s the full interview.

Dallas sports radio titan Norm Hitzges has been dominating the ratings for 35 years now.  You may remember him as ESPN’s college football handicapper in the early 90’s when his 22-3 November (against the spread) was rewarded by not being invited back the next year.

Norm knows his stuff, and I’ll be talking football betting as Norm’s guest at 11:50AM EDT (10:50AM for Texans) Thursday morning on Sportsradio 1310 The Ticket.  It’s a fun and informative segment every year and you can listen here.  If that doesn’t work go to the upper right hand corner from The Ticket’s main site.  Norm’s new producer is Mike Bacsik, who gave up Barry Bonds’ record-breaking 756th home run while a pitcher for the Washington Nationals.  Hopefully we’ll hit it out of the park with our betting talk and preseason analysis.

Are we ever going to see reasonably intelligent coverage of sports betting in the media?  When a smart guy like the National Football Post’s Michael Lombardi tosses out something this flawed, I begin to give up hope.

Lombardi analyzes the direction of the NFL Super Bowl futures market by comparing early odds to more recent odds, but he keeps on referring to “odds” without answering the question “odds on what?”.  Apparently, he is talking about odds against winning the Super Bowl.   But it never actually says that, which could confuse a lot of readers.

Lombardi also doesn’t specify what his source is for the data.    I assume it’s Las Vegas Sports Consultants, but a better way to do this would have been to survey five different major books in Vegas and get an average of their odds, or maybe list the best available price.  After all, you can’t actually make a bet through LVSC, and you won’t find any odds board completely mimicking their prices.  The sports book directors have to take a 20-1 shot and make it 18-1 to make themselves appear necessary.

But the most obvious flaw, as pointed out by readers commenting on the article, is to judge the marketplace on “points” of his own creation.  Incredibly, New England’s being bet down from 6-1 to 4-1 is “2 points” while Seattle being bet down from 60-1 to 40-1 is “20 points”.    The decrease in return on risk is obviously identical , with early bettors enjoy a 50% higher return than current bettors in both instances.   But because Seattle is more of a longshot they get the “20 points” in moving from 60-1 to 40-1 while the Patriots get only “2 points” for being bet down from 6-1 to 4-1.

In fact, the Patriots move is significantly more substantial from the perspective of money wagered.  It doesn’t take a ton of cash to make a skittish sports book drop a 60-1 shot down to 40-1 but there’s clearly stacks of greenbacks backing the Pats at 6-1, 5-1, and 9-2 to get them down to 4-1.

A better way to do this would have been to analyze the season wins over/under market, as there is a lot less bookmaker profit built into those (any futures board with the Chiefs 40-1 to win the Super Bowl and the Browns 50-1 has a hell of a lot of juice built into it).  Season wins bettors have the opportunity to bet “yes, I like this team” or “no, they’re going to disappoint”, which means that the moves up and down are meaningful.   In a futures market sometimes the oddsmaker will move someone lower and then balance it off by moving someone higher on little more than a whim.   For instance, one of the more confident moves in the season win totals market is the suggestion that the Bengals are going to have a big year.  Yet in this survey Cincy is 75-1 early and 75-1 late. 

The ordinarily savvy Lombardi’s piece on the way the money is flowing in the NFL futures market is a good concept, but is poorly implemented.  As Lombardi admits, he has little gambling knowledge, and clearly (like most folks) he is mathematically challenged as well.  Lombardi is well worth checking out on non-betting issues, like his Sunday notes columns, but he needs to put a little more effort into any future wagering related columns.

A federal appeals court shocked everyone yesterday by yanking the rug out from under Delaware’s plan for single game sports betting.   The three-judge panel decided that Delaware (state motto: Our Lawyers Suck) could only offer parlay bets, and not single game wagers as planned.  They also have limited the wagering to the NFL.  In their infinite wisdom, the jurists interpreted the 1992 federal law banning sports betting except in grandfathered states Nevada, Delaware, Montana, and Oregon as limiting Delaware to the wagering options they offered before 1992.  Delaware offered a few months of NFL parlay card betting in 1976.

The governor and state officials are understandably upset, as are officials at the three Delaware racetracks that are in the midst of multi-million dollar renovations to turn portions of their facilities into Vegas-style sports books.

Delaware politicians who were counting on a revenue boost were stunned by the unexpectedly far-reaching decision. Fortunately for these officials, I have their solution, it’s called “The First State Parlay.”

Delaware is permitted to offer parlay wagers on NFL football, but not single game wagering.     So why not create a parlay that comes as close to possible as mimicking single game wagering.  Here’s how it works.

The “First State Parlay” requires the bettor to pick one team at the prevailing pointspread.   That team must win to complete the first leg of the parlay.   The bettor then picks a second game where they are allowed to move the line 47 points.   The bettor must lay 11 to 10 odds on his parlay bet.  11-10 is the standard for single-game wagers in the sports betting industry.  

Let’s show an example of how the “First State Parlay” would work.  In the first week of NFL action, let’s say Vinnie Cheesesteak from Philadelphia wants to drive down to Delaware Park to bet $110 to win $100 on his beloved Eagles at +2 over the Panthers.    He must combine the Eagles at +2 with a second game that he gets to move 47 points, so he takes the Bears, currently a 3-point dog, at +50  over the Packers.

If the Eagles cover +2, and the Bears can stay within 50 points of the Packers, Vinnie Cheesesteak wins $100.  If the Eagles don’t cover the spread he loses $110.   If either game lands right on the number it’s a push, and his stake is refunded, no matter the result of the other game.

While this comes very close to replicating single game wagering, by stipulating that the second leg of the parlay can be moved by 47-points, and no more, Delaware can claim that there is still an element of chance.  In the playoffs following the 1999 season the Jacksonville Jaguars hosted the Miami Dolphins in the what proved to be the last NFL game for both QB Dan Marino and coach Jimmy Johnson.  If you took the Dolphins from +7.5 and moved them 47 points to +54.5, you would have lost your bet by a half-point when the Dolphins were filleted by the Jags 62-7.   

Is the “First State Parlay” an obvious workaround to try to turn single game betting into parlay betting?   Yes.   But it seems to fit into the new parameters set by the court.  Delaware should hire some new lawyers and have them consider it as a potential solution.  

We’ll have more on the legal issues regarding sports betting in the days ahead, as well as in the Maximum Profit Football Annual 2009, which will be released this week.   Visit www.FootballAnnual.com to arrange for your free copy to be sent to you.

Yesterday we showed some numbers indicating that while everyone knew that Brett Favre was in poor form last year, he was even more ineffective than people thought down the stretch in 2008.  We’ve got negative vibes about another aging star with a new address as well.

Everyone understands why folks in Buffalo are excited about the Terrell Owens joining the Bills.   Buffalo isn’t ordinarily a destination that high-profile free agents flock to.    Owens has enjoyed some very productive years in the league and tends to play well while keeping his head on straight in his first season with a new franchise.  But is T.O., who will turn 36 during the season, still an elite receiver?   

My pal Norm Hitzges (I’ll be on the radio with him on the Ticket in Dallas next week, details to come) points out that Dallas is pretty thin at wide receiver, yet had very little interest in bringing Owens back.  While some of that is due to his coach-killer persona, the numbers suggest that TO is a guy in decline.

In his last 20 games with the Cowboys, TO caught 5 or fewer passes in 17 of those 20 games.   And while had had the occasional big play, he failed to consistently gain yardage.   In fact, he had fewer than 40 receiving yards in half of those 20 contests.   He simply has not been an elite receiver.  And there’s a good chance that he won’t be worth the headaches that he brings upon his club.

If T.O. isn’t putting up numbers, will he blame the QB and offensive coordinator while ignoring his declining ability to get open and his dropped passes (10 drops last year, only 3 others had more)?   If so, he could become a divisive force for the fourth franchise in his career. 

The NFL is a league where chemistry and continuity matter a lot.  The addition of a negative force with a big mouthpiece can really hurt a team.  Football bettors should keep a sharp eye on the situation in Buffalo.

The Vikings are obviously not comfortable with Sage Rosenfels as their quarterback, no matter how good he’s looked in camp and in their first preseason game.   Rosenfels started five games in each of the past two seasons with the Texans, going from 15 TD’s/12 INT’s on 7.0 yards per pass attempt in 2007 to a gruesome 6 TD’s/10 INT’s last season, though he did improve to 8.2 yards per attempt.

And it’s clear that Brad Childress doesn’t have an ounce of confidence in Tarvaris Jackson.

But is Brett Favre the answer?  In his last 12 starts with the Jets last season Favre’s numbers were 10 TD’s, 18 INT’s, and 5.8 yards per attempt.  Sure, he had a bum elbow, but are things going to be any different this year?  The Vikings have 12 games after Favre turns 40. One of the reasons given for his previous decision not to return was that he was sore after workouts and he worried about being able to get it done over the course of the season.   Sounds like a pretty reasonable worry.

Comments by some Jets after last season made it clear that Favre wasn’t universally loved by New York teammates who went through their offesason program without him.   And Favre’s signing is much later and far more controversial this go-around.  Childress has a lot of fence-mending to do with players, both QB’s and non-QB’s alike, displeased with the decision. 

I know the Vikes will be tough to match up against with Peterson and Harvin, particularly when they’re in the game together.  And their defensive line will be among the best in the league for at least 12 games.   But the circus-like Favre signing is a giant risk that could very well be a colossal mistake.  

If you’re a poker fan and are approached by a semi-famous tournament player you’ve seen on TV to bet on sports together, avoid the temptation.

I know, it’s a pretty obvious rule, but you’d be surprised.

There’s a nice little scam in use by “poker pros” that I’ve heard about on more than one occasion.    You won’t find the top tier guys trying to pull this off.   Rather it’s a guy who isn’t swimming in sponsorship money, and hasn’t had a big hit in a while.   Maybe they’ve made a WPT or WSOP final table, got some TV exposure, and are known a little bit in the poker niche.  While not respected by the poker elite, they enjoy some street cred among impressionable gamblers who know them only from a TV appearance. 

Here’s how it works. The poker player gets friendly with someone who recognizes them from ESPN or the Travel Channel. Over beers, he let’s it be known that while he’s pretty good at poker, he’s particularly sharp as a sports bettor.  The poker pro let’s it slip that he’s looking for outs in different parts of the country for line shopping, getting down the kind of money he wants to play, etc.   Slightly star-struck, the mark makes it known that he can help out with a bookie or agent back home.

The ”relationship” blossoms.  The poker player and his new “partner” will split all the action, with the poker pro making the bets and the unsuspecting ”partner” paying and collecting.  Confusing minor fame in the poker niche with expertise, to say nothing of integrity and honesty, the mark accepts the deal, and let’s the poker pro start playing on his account.   You can imagine what happens from there.

The poker player begins making max bets, and plenty of them.    If the poker player wins, he gets half the winnings sent to him when the mark collects from the local bookie or agent.  And it’s important to string together some winning weeks early, because  when he loses the game begins. 

Rather than paying kicking in his share, the poker player fires off a wide array of creative excuses for not being able to pay up.  When the money owed to the mark’s bookie or agent starts getting bigger, the poker player eventually just stops returning calls.  

The mark is holding the bag, and now realizes that the excuses were just part of the ruse.  He understands that he’s been scammed, but what’s he going to do, call in Norman Chad to mediate?

The moral of the story is clear.   Don’t get into a financial arrangement with people you don’t know well, and don’t be impressed by the minor celebrity of a lower tier poker pro.  

This is, of course, mind-numbingly evident for any thinking person not star struck by a two-year old TV appearance, no matter how many times it has been re-run.

But you’d be surprised.

Heading to Vegas for some meetings that should prove to be very fruitful when the pigskin starts flying in a couple of weeks and I’m making use of Delta’s new GoGo inflight wi-fi service.    

While looking to make my first ever above-the-clouds online sports bet I was reminded of a critical difference in key numbers between the NFL’s regular season and preseason. The reversal of favorites in the Cowboys/Raiders game is notable, as Dallas -2 moving to Oakland -1 is a much more critical line move than it would be during the regular season.   The Colts move from 1.5-point favorite to 1.5-point dog against the Vikings is of similar importance. 

1 is not a key number in the regular season, but it is of massive importance in the preseason.  Why is this?  In the regular season a team down 7 scores a TD late and kicks the extra point to send into OT.  It’s so close to automatic that it is earthshattering news when someone actually goes for 2.

Equally automatic is the decision in the preseason to try to go for the win with a 2-point conversion. Nobody wants to extend an exhibition game, so the third and fourth stringers that will be cut on Monday will be sent out to go for 2.   Succeed and they win by 1, fail and they lose by 1.   This makes a 1-point game in the preseason game much, much, much more likely than would be the case in the regular season.

So pay attention to your 1’s for the next four weeks.   And greetings from 30,000 feet.

As online poker inches toward legal acceptance, online sports betting is expressly denied legality in every current well-supported legislative option legalizing online gambling.   The favorable treatment of poker is a result of a well-organized lobby, with poker stars testifying on Capitol Hill and lobbyists engaging legislators.  The Poker Players’ Alliance, a lobbying group backed by poker sites, is headed by a former US Senator Al D’Amato, adding credibility and visibility. 

Why is there no similar representation for online sports betting? 

Ask David Carruthers.

Carruthers, a veteran of the British gaming industry, was hired away from Ladbrokes in 2000 to be CEO of online wagering company BetOnSports.  Founded by Americans, BetOnSports had a British corporate structure, operatings in Costa Rica and a listing on the London Stock Exchange.  Carruthers accepted an invitation to debate then-Congressman Jim Leach on The Wall Street Journal editorial page.  The reasonably polite, fairly respectful debate was published in The Journal on April 4, 2006.

73 days later, on July 16, 2006, Carruthers was arrested at Dallas-Fort Worth Airport while changing planes on a flight from his home in London to his company’s offices in Costa Rica.   The charges?  No more than being the CEO of a sports book that accepted bets from US customers.   The same description fit 100 other guys, including American founders of online sports books who traveled freely in and out of the US.   But Carruthers was the one that was arrested.

This April Carruthers finally pleaded guilty and agreed to testify against company founder Gary Kaplan.  It is expected that he will be free to return home before the end of the year.

The investigation into BetOnSports had been going on for a while, but just over two months after some high profile media advocacy, Carruthers, a London resident employed by a British company with operations in Costa Rica, is arrested and over three years later is still not free?

Not exactly encouraging to anyone thinking about stepping up to be the voice of the online sports betting industry, is it? 

Lots of sports betting issues being kicked around by governments, courts, and the media right now.   And those issues being raised generate a lot of questions.  Let’s try to answer a few.

Q. Is Delaware set for full scale sports betting this fall?

A. It sure looks that way.   The professional sports leagues had an emergency request to delay implementation of Delaware sports betting denied.   They’ve appealed that ruling but it looks like Delaware sports betting is a go, at least until a December trial, where the leagues will sue to stop it. 

It appears as though harness tracks Dover Downs and Harrington Raceway will be joined by thoroughbred plant Delaware Park in offering full scale sports wagering this fall.   The tracks have invested millions to create sports book facilities.   Vegas-style sports betting on college and pro sports kicks off on September 1st.

Q. Can anything else derail Delaware’s plan?

A. Senate Republicans Orrin Hatch of Utah and John Kyl of Arizona, longtime foes of gambling, wrote a letter to Attorney General Holder asking him to take action in Delaware.   Tough to see the Obama Justice Department bending over backwards to accomodate that duo.  

Q. New Jersey’s casinos can’t be happy about this, can they?

A.  Not at all, this new challenge comes at a time when Atlantic City casino revenues are plummeting.   There appears to be considerable momentum in the Garden State to legalize sports betting in an effort to counter Delaware’s foray into not only sports betting, but casino gambling as well.   The problem is that Delaware, along with Oregon, Montana, and Nevada, is allowed to offer sports betting under federal law.  When Congress banned sports betting in the US back in 1992, those four states were grandfathered, as they had all allowed sports betting in some form or fashion previously.   Nevada’s offerings you’re aware of. Oregon, Montana, and Delaware’s previous offerings have all failed to stick.  But those states can offer sports betting without a change in federal law. The same cannot be said for New Jersey.

Q. What about Barney Frank’s online gambling legislation?

A.  Even if it passed, Frank’s legislation would not help sports bettors.  It specifically exempts sports betting, and like-minded legislation by Senator Menendez introduced more recently covers only poker.  

Q. What’s so special about poker, and why is poker being treated differently than sports betting?

A. Follow the money.   The poker sites poured a bunch of money into lobbying and marketed it beautifully, making it look like a grassroots effort by enlisting the support of poker players all over the web.   Hiring former Senator from New York Alfonse D’Amato as spokesman/lobbyist was a shrewd move.  Meanwhile, the NFL has spent boatloads of money lobbying against sports betting.  There’s no similar organized effort for sports betting.