Rufus Peabody
Appearances
Planet Money
How sports gambling blew up
A bookmaker can make more money. Let's say if they know the public's bias, they can make more money setting a line somewhere between the true price and the price the public thinks. That's the way to maximize.
Planet Money
How sports gambling blew up
I said, theoretically, you can make more money setting a line somewhere between the true price and where the public thinks the price is.
Planet Money
How sports gambling blew up
The Pittsburgh Steelers played the Arizona Cardinals. I had made a friend with a professional sports bettor, a guy that bet baseball. And he loaned me $10,000 to bet. I had my own $10,000 to $12,000. My boss, Kenny, unbeknownst to everybody else, invested $40,000 in me and gave me a 20% free roll on it. Meaning that if it wins, you take 20% of the profits. But you suffered another losses. Correct.
Planet Money
How sports gambling blew up
And so I ended up with close to $60,000 bet on the Super Bowl. And so I basically was pretty leveraged. Yeah. And I remember being like, if this game doesn't work out, you know, I gave it a shot. All right. And what is causing you to have such conviction about a game? Oh, nothing. It wasn't conviction about the game. It was betting the props. The props.
Planet Money
How sports gambling blew up
I still remember going, it was like Harrah's, Caesars, the Rio. I ended up getting down like $200 at a time, like $5,000 positions on a few things that were really good. And so I was diversified. Within the game? Within the game. I wasn't betting on the outcome of the game, but I still, to this day, have never watched that game. I was too nervous.
Planet Money
How sports gambling blew up
How did you experience the game if you didn't watch it? I went to this little par-3 course that's open at night, right south of the airport. And I played the par-3 course twice until I felt like the game would definitely be over. And then I went grocery shopping. And I didn't have a smart, this is pre-smartphone. I went grocery shopping and then I went home and cooked myself dinner.
Planet Money
How sports gambling blew up
And then and only then did I open my computer and check and see how the game went. And were you just going through your prop bets, seeing what happened? First I looked at the box score and I saw the first score was Gary Russell one yard touchdown run. I was like, ah, right. And it turned out out of like $56,000 bet, like I profited like 23,000 on it.
Planet Money
How sports gambling blew up
Yeah, probably. He just drives around Las Vegas, and the money piles up. And I remember having like $30,000 on that front seat and being like, oh my God, so much money. In cash. In cash.
Planet Money
How sports gambling blew up
I try to drill things down to their root cause. I try to figure out why things happen in a baseball game or a golf tournament. What makes a player good? It's not just their score. What are the things that are driving their score? Which of those are repeatable, which aren't? And right now, you have all this computer vision, that type of data available now.
Planet Money
How sports gambling blew up
And with a lot of these sports, I mean, we're now talking about bat speed. measuring bat speed and looking at, like, aging curves for bat speed.
Planet Money
How sports gambling blew up
No, they had, their whole thing was, we're going to take all comers. We want to be, we want a lot of volume. We think we're better than people.
Planet Money
How sports gambling blew up
So I would drive up to New Hampshire to bet at these kiosks initially. And then once there was mobile betting, I had an account on DraftKings.
Planet Money
How sports gambling blew up
One week I lost $30,000. I got a phone call to tell me that they were cutting my limits on golf.
Planet Money
How sports gambling blew up
Because I had bet enough, it spurred them to actually go in and look at the stuff I'd been betting and how I'd been doing. Books are not limiting people just because they win. They're limiting them because they think they're going to win in the future.
Planet Money
How sports gambling blew up
Refusing a bet wasn't a thing. It never was a thing here. Huh. Like, if you got kicked out of a casino or if you couldn't bet there, it was because you did something wrong. Like, you violated the sacred bookmaker better covenant.
Planet Money
How sports gambling blew up
Rufus Peabody is who crossed Roxy's bridge. I never was a bettor as a kid. I didn't know anything about sports betting. You didn't feel a little twinge of desire? None. None. Most people that got their start, they started losing and then they learned how to win. But I was never a bettor. I never grew up betting besides NCAA tournament pools. I was always good at those. But for me, it was a game.
Planet Money
How sports gambling blew up
So it was this team won 82 to 64, but why did they win? Basically, I kind of wanted to report on the why it happened. You wanted explanations. I wanted explanations.
Planet Money
How sports gambling blew up
They would bet on what plane was most likely to land next, right? And this is like sort of pre-internet days or pre, like, being able to see flight plans and stuff like that. And so it was like, okay, American Airlines is like six to one, like, you know, Southwest is two to one, whatever. What people didn't realize, though, was Roxy actually had a contact in the control tower. And so Roxy won.
Planet Money
How sports gambling blew up
He made money off of these bets. But he didn't make enough to draw suspicion. That was the key. But he would occasionally hit the Japan air at 301, right? Or whatever.