Better odds on Wall Street or in Vegas?
TEXT OF INTERVIEW
Tess Vigeland: It’s pigskin party time! Get out the chips and guac, maybe some colorful beads and jambalaya if you’re a Saints fan… Or something, um, blue and white if you’re a Colts fan? If you’re a betting fan, you know the Colts have been favored by line-setters in Vegas since the final playoff round a couple of weeks ago. The Super Bowl is the biggest one-day sports gambling event of the year.
So we thought we’d take this opportunity to find out what a Vegas pro thinks about the whole stock-market-as-casino analogy. We reached John Avello at the Wynn hotel in Las Vegas, where he runs the sportsbook, and asked whether he thought the odds were any better on Wall Street than where he works.
John Avello: Probably not. Probably the bettors may have a little advantage in our world, because you’re laying maybe a little less of a juice, so to speak, vigorish. And…
Vigeland: What is it that you just said?
Avello: Juice or the vigorish. In the world of stock-up betting or buying, you know, you have to pay a commission on your stock, and we also charge that in the race and sports book. The vigorish, or the “juice,” as we call it, that is a commission that the races’ sports book takes for every $100 you bet, we charge 10 percent. So let’s take the Super Bowl for instance, if two teams and you were going to take the favorite and lay six points, you would lay $110 to win a $100. And if you won that bet, you would get back $210. Well, the losers, we get to keep their money and the winners get it back and that’s how we make our money in Las Vegas sports books.
Vigeland: So would that be like the fees in my 401(k)?
Avello: It’s a lot less than those fees. You really should look at those close.
Vigeland: So do you invest in the stock market? Have any of your retirement money in there?
Avello: Yes, I do. And things were looking pretty good for a while, and all of a sudden, they’re not looking as favorable.
Vigeland: Yeah. So what does a Vegas bookmaker invest in?
Avello: For me, it’s not about trying to select individual stocks. For me, it’s more the mutual funds for long term, and I’ve always been a believer on “let the money work and be spread out and don’t have to worry about administrating individual stocks.”
Vigeland: Well, could I ask you to lay odds on a couple of things that we here at Marketplace Money are watching kind of closely these days? I promise I won’t hold you to it.
Avello: OK, let’s do it.
Vigeland: All right, health care reform. The odds of it happening this year?
Avello: Health care reform, I’m going to say the odds of it happening this year are probably 6-5 against. Last year, I would have laid probably 1-2 that it would happen.
Vigeland: And what about financial reform, making sure we don’t get into another mess with the banks. That ever going to happen?
Avello: This year, yes. Long term, I’m not so sure. So for this year, I’ll make that a pretty good favorite.
Vigeland: And what about this credit card legislation that’s going to go into effect in a couple of weeks. Wanna bet that it’ll really have any long-term effect on the credit card companies?
Avello: In the short term, I would probably make it 8-1 to that it won’t succeed, only because it’s going to take a little while for everyone to get used to, the economy will still be weak, the consumers don’t really have a lot of alternatives. In the long term, I would make it a favorite, 2-3 hopefully that we will have learned our lessons and things have stabilized — and you know, that’s certainly wishful thinking. And won’t work at all, I’d probably make 2-1 and that’s because we may just get complacent and go back to our old habits again.
Vigeland: And finally, have you put a line out yet on the Red Sox winning the World Series this year?
Avello: Oh yes, the Red Sox to win a World Series has been up — let’s see — must’ve been three months or so?
Vigeland: Ah… So they’re going to take it all, right?
Avello: Uh… Well, there’s a team in the east coast that has something to say about that Tess.
Vigeland: Uh oh. You’re from New York, right?
Avello: Yeah, yes I am. And the Red Sox to win the World Series next year are 7-1. And what that means for every dollar that you would put up, you would win seven. If you’re interested, Tess, I’m here in Nevada with open arms waiting for ya.
Vigeland: All right, I think it’s about a three-hour drive, so I’ll see you in a bit.
Avello: OK.
Vigeland: And by the way, he’s picking “Avatar” to win its title match at the Oscars next month.
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