Super Bowl Could Be a Super Loss for Vegas
One of the unique things about the way the casino industry reports earnings is the open discussion of luck. Obviously good and bad luck impact every business, but nowhere is it more important to the bottom line than in the trade of legalized gambling that keeps places like Las Vegas alive.
Enter the Super Bowl, one of the biggest money movers for the betting industry. Depending on the outcome of Sunday's game between the New England Patriots and the New York Giants, it could potentially be a bust for the Vegas odds makers (and free booze won't be to blame).
"Eight weeks ago the Giants were left for dead after they lost against the Green Bay Packers," says Jack Ablin, chief investment officer at Harris Private bank. "Vegas posted 100:1 odds for the Giants to win the Super Bowl."
Well guess what? Quite of few Giants believers took that bet.
Now, with their ticket to the big game punched, the odds of the Giants winning are just shy of 2:1. According to Ablin, there was enough action on that original long-shot bet weeks ago to get some bookmakers pretty nervous.
This, of course is not the first time the Giants scared Sin City. In 2008 "the betting public put roughly $100 million to work in Las Vegas," says Ablin. "And of course the Giants overcame that deficit, not only beat their spread, but won the game. Las Vegas lost about $2.5 million."
It wasn't the end of the world but in a business based on winning these kinds of bets, losing anything at all is a hard pill to swallow. But fear not, there are plenty of ways for Vegas to compensate.
For starters, a lot of new bets have come in the last few weeks since the Giants' odds improved, making it easier for Vegas to make up for lost bets. Ablin also notes that an increased flow of cash out of New York (a betting Mecca to hear him tell it) may have skewed the point spread. That is to say, while on paper the Giants may deserve to be 6-point underdogs, Vegas has almost certainly set the line at 3-points to keep action even on both sides of the bet (the key to remain a profitable bookmaker).
Regardless of the victors both in the game or at the casino, Ablin says there is one sure play: Bet on Indy. This is the first Super Bowl for the city of Indianapolis and while they're no stranger to major sporting events (they've hosted the Final Four and of course the Indianapolis 500) this is pretty much the biggest stage in sport. For Ablin that means a profit for the city of somewhere between $150 and 200 Million.
Who do you think will win on the field and on the books? Let us know your thoughts in the comment section below.
