Last January, a few friends and I visited the sportsbook at the M Casino in Las Vegas, one of several sportsbooks now run by Cantor Gaming, a division of Wall Street powerhouse Cantor Fitzgerald. Traditional sportsbooks stop taking bets when the sporting event in question begins. In contrast, Cantor allows “in-running betting”, a clunky phrase that means you can bet during the event: as touchdowns are scored, interceptions are made, home runs are stolen, or buzzers are beaten. Cantor went a step further and built a mobile device you can carry around with you anywhere in the casino to place your bets while watching games on TV, drink in hand. (Cantor also runs spread-betting operations in the UK and bought the venerable Hollywood Stock Exchange prediction market with the goal of turning it into a real financial exchange; they nearly succeeded, obtaining the green light from the CFTC before being shut down by lobbyists, er, Congress.)
Back to the device. It’s pretty awesome. It’s a Windows tablet computer with Cantor’s custom software — pretty well designed considering this is a financial firm. You can bet on the winner, against the spread, or on one-off propositions like whether the offensive team in an NFL game will get a first down, or whether the current drive will end with a punt, touchdown, field goal, or turnover. The interface is pretty nice. You select the type of bet you want, see the current odds, and choose how much you want to bet from a menu of common options: $5, $10, $50, etc. You can’t bet during certain moments in the game, like right before and during a play in football. When I was there only one game was available for in-running betting. Still, it’s instantly gratifying and — I hate to use this word — addictive. Once my friend saw the device in action, he instantly said “I’m getting one of those”.
When I first heard of Cantor’s foray into sports betting, I assumed they would build “betfair indoors”, meaning an exchange that simply matches bettors with each other and takes no risk of its own. I was wrong. Cantor’s mechanism is pretty clearly an intelligent automated market maker that mixes prior knowledge and market forces, much like my own beloved Predictalot minus the combinatorial aspect. Together with their claim to welcome sharps, employing a market maker means that Cantor is taking a serious risk that no one will outperform their prior “too much”, but the end result is a highly usable and impressively fun application. Kudos to Cantor.
P.S. Cantor affectionately dubbed their oracle-like algorithm for computing their prior as “Midas”, proving this guy has a knack for thingnaming.
Fascinating. How do you know their mechanism is an automated market maker? Do you have any information on what underlying scoring rules (or other things of that nature) they use? I read the Yahoo! article, and it does indeed say that there is some statistical algorithm running in the background, but do you have any more technical information than that? Thanks.
Thanks Mike. It’s an automated market maker in the sense that it’s always providing odds on both sides of multiple outcomes, and constantly updating them based on the game (intelligent prior) and what other people have bet so far. I have no idea what scoring rule if any they are using or the nature of their algorithm. Yahoo! Predictalot is using an approximate version of Hanson’s logarithmic market scoring rules market maker. Our dynamic prior is pretty simple: based on the strength of teams and the current score of the game. Cantor, dealing with real money, must have a much more sophisticated prior in their “Midas” algorithm, as alluded to in the Wired article.
What is the take out for in game betting applied by Cantor?
Not sure if it’s the same Cantor device but I believe they have the same thing at the Palazzo as well.
@Eric P: Not sure. You could compute it by summing the odds of two opposite bets: next time I go I’ll try. I suspect it’s close to the typical 5% vig.
@Daniel: Yes, that’s the same device: http://www.cantorgaming.com/about.html
I haven’t used the device, but I like the fact that it has influenced other books in town. Many now have in game wagering, albeit without the device. During breaks they post “in-game” odds that stay up for a few minutes. Makes watching the games in the books that much better, as a player seeks value even as he’s enjoying the game.
And lest we forget, the goal of a book is not to predict the outcome as much as to get the proper amount of action on either side of a bet. Then their vig is in the bank.
Here’s is a Bloomberg Markets Magazine cover story on Cantor Gaming, now apparently called Cantor Entertainment Technology, Inc.:
http://www.bloomberg.com/news/2012-05-09/lutnick-seizes-las-vegas-with-cantor-fitzgerald-s-bet-on-sports.html