Friday, March 25, 2011

2-for-1 Book Reviews: "Lay the Favorite" and "Gaming the Game"

 I am cross-posting here and on Davian, the technology and marketing partner for my inflation-focused autotraded product

Of the two, "Lay the Favorite" is by far superior in the literary sense, while "Gaming the Game" is poorly written but has a lot of details on actual booking and betting operations.

"Lay the Favorite" by Beth Raymer is an autobiographical book, chronicling her entry and work in the world of high-stakes sports betting.

Raymer stumbles into working for "Dinky," a professional bettor in Vegas while working as a waitress. Dink is a Jewish guy from Queens who ended up moving to Vegas to work professionally. He teaches Raymer the ins and out of the job: lines, runners, various contacts around the country. Dink bets his own money exclusively and does not do bookmaking. He comes across as a very smart and genuinely nice guy. They do go down to the Caribbean during the offshore gambling boom: Raymer describes a non-stop Spring Break scene with money flowing in at incredible rates, though few of the bookies who set up shop there were able to build a serious, professional enterprise.

Raymer moves to NYC for boxing, and ends up working for another major gambling figure, and a friend of Dink's, on Long Island. "Bernard Rose"'s character is also intricately chiseled: a sharp, gregarious glutton who, like Dink and Battista (from below) works long hours across many markets. She does a stint in Curacao with Bernard, too, while the boom still lasts. Raymer eventually leaves this world for a new life and a new boyfriend.

Overall, the book is very enjoyable and can even be classified as "chick lit" while a guy might read it for the underworld detail. The writing is crisp, the stories flow and connect well, while the characters are unforgettable. 

"Gaming the Game" by Sean Griffin is the story of the alleged mastermind behind the NBA referee betting scandal, James "Sheep" Battista.

The books seems to have been edited only for spelling, and not for style. The result, outside of the direct interview quotes that take up about half the volume, is a tedious, tortured narrative, often clearly taking Battista's street-talk and putting it in the storyline. There is also quite a bit of minutiae on local bookmaker "legends" and a drawn-out appendix that make the book sound like a rushed term paper stretching for the required length. This is ironic considering that the author is a professor (criminal justice) at Penn State- Abington. There are other fillers, such as pictures of the airport Marriott where the characters met or the front doors (really) of the high school the characters attended. The final style quibble is the gratuitous use of "consequential" (28 times), "legendary" (10 times) and "seminal" (5 times).

That said, the book is a must-read for fans of true crime and sport bettors. Through a series of interviews, Griffin chronicles Battista's rise to the top echelon of professional bettors and his subsequent downfall, driven by opioid addiction and his involvement with the NBA ref scandal. The book also works to correct the wrongful impressions that the media had created about Sheep: he does not seem to have been involved with organized crime, and he had not been a threatening figure in the "industry" that forced the ref to participate in the scheme.

Battista comes from a hard-working lower middle class family from a Philadelphia suburb. He gets by in school and eventually enrolls in a university, but drops out shortly thereafter. He had been around drug dealers, and starts using his shoe salesman job for this purpose. He then moves on to an electronics store, where he organizes an embezzlement scheme but gets caught. Eventually he winds up working in the bar/restaurant scene, and starts picking up bookmaking skills. He learns the trade with a couple of local bosses before forming up his own group, The Animals (based on the guys' nicknames). They work very hard and do well, hide from the local mafia, move to Vegas, spend some time in the Caribbean running a sportsbook, and then break-up. Battista eventually moves up and becomes a helper to four or five of the really large professional bettors, helping them place bets (one of these is "The Computer," who was, my guess, profiled on 60 Minutes recently).

To use the finance terminology, the sharps are portfolio managers: they have analysts (handicappers) working for them to find value: a discrepancy between the actual line and what the line should be. Then the PMs make the capital allocation, and traders, people like Battista, would have to place the order in the market without moving it (or moving it in the other direction prior to placing the real money).

Tangentially, Battista gets involved with Donaghy, an NBA ref, through a small-time drug dealer with a Napoleonic complex who is a mutual acquaintance/friend from high school. It appears that Donaghy had been betting, quite successfully, on games he reffed for years. He ends up being paid for his "picks" by Battista, who himself places sizable bets on the inside information. Donaghy is portrayed in the book as a greedy, aggressive, misanthropic and socially maladjusted man. 

Of course, the word gets out, and the FBI is eventually on the case. Battista is the only one who does not cooperate, and all three end up with similar sentences. Battista is now free and trying to rebuild his life outside of the underworld, reconnecting with his five children and repaying the restitution he was ordered to pay.

The book is interesting in several other ways. It offers an inside glimpse into the world of high-stakes betting and the hoops these guys go through in order to place bets (hopefully the system will change, and the US will get Betfair, a true peer-to-peer exchange, where anyone can bet or lay). The other significant new piece for me is the entire shadow banking system that exists to support the bookmakers who currently operate on the ground in the US: this is a network of guarantors, deposit-keepers and cash runners, spread around the country, settling accounts once per week, collecting or forgiving debts, transferring cash, etc. Unlike lotteries or casinos, it appears that most illicit sports bets are done on credit, with periodic settlements. Finally, there are the market dynamics of how lines move based on money flows, rumors and news.

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