On-the-Fly Wagering

Will on-the-fly wagering not only revolutionize the gaming industry but also the stock market? Lee Amaitis, CEO of Cantor Gaming believes that it will. Amaitis teamed up with Andrew Garrood, a derivatives trader, to develop software that can calculate the odds for betting on sports events. They called this software Midas. In 2004 Cantor opened a sports gambling casino in the United Kingdom that let users set their own bets. They allowed spread betting and the Cantor Index that let people bet on changes in the stock market. Then Amaitis asked the Vegas casinos to let him lease their sports books and teach in-running to American gamblers. It took a year and a half, but Cantor Gaming signed the deal with the M resort in Las Vegas in July 2008. Amaitis bought Las Vegas Sports Consultants which gave him a library of research and statistics. Cantor’s CTO, Sunny Tara explains, “The computer gets the info, the algorithm churns millions of combinations of calculations, it feeds out a price, and that gets displayed on the customer’s terminal in just a few milliseconds.” “It is very similar to a Wall Street model.” They were able to connect what Garrod had in England and what Cantor already had. The amazing thing is that Midas can be working on several games at the same time. In March 2009 Cantor Gaming started its sports book operation at its M Resort casino. Thus was born on-the-fly wagering, known as in-running, which means that one can bet while the game is being played. For instance, while watching a game of baseball, the gambler can bet on whether the batter will strike out or get a hit. Not until Cantor Gaming arrived in Las Vegas was this style of on-the-fly wagering in existence. Until then the sports gamblers were given a limited number of opportunities to bet and a limited amount of time to place their bets.

Since Cantor Gaming introduced in-running in Las Vegas, it has had a great impact on the gambling world, but the possibility of using this software for stock-trading has tremendous implications for our culture. Lee Amaitis says the new technology will make it possible for small investors to participate in the stock market and cut out stockbrokers and other middlemen. Cantor Gaming is working toward letting gamblers bet on the stock market like the Cantor Index in the United Kingdom. If people bet on the performance of stocks without actually owning them, Wall Street, the economy, and our society would be greatly affected. A classic domino effect would be likely to occur. People could use these projected bets as sources for which stocks to purchase, thus causing odd fluctuations in the stock market. This would directly affect the economy through changing individuals’ and corporations’ cash flows, and of course when any factor in the economy is changed, society is affected as well. The sports book at the M Casino in Las Vegas has been run by Cantor Gaming since 2009. Cantor Gaming is a division of Cantor Fitzgerald which is a Wall Street Financial services outfit. The betting at the M Casino is operated much like day trading on Wall Street. Amaitis remarked that “This is going to become Wall Street in the desert.” “We are not building a sports-betting operation; we are building a trading operation.” There are those who are very much opposed to using in-running on Wall Street. John Bogle, founder of Vanguard Group said, “One of the big trading firms announced that its average hold time on a stock was 11 seconds.” “That is not investing—it’s gambling.” The Wall Street firms do not like to compare investing with gambling; therefore they do not approve of the use of hand-held devices like the e-Deck in their traditional investment houses. Another fact that may prevent in-running from being used to trade stocks is that Cantor Fitzgerald is a private company. It has not been subsidized by the government. But if a company like Goldman Sachs started using in-running, the publicity could be detrimental to its business. Goldman has already had bad publicity because of the purchase of four casinos.

While older versions of gambling are fading, should managers choose the technology of on-the-fly wagering to be the future of gambling? Will the Midas affect our lives in the way that facebook, twitter, and the cell phone have affected our culture? If this technology becomes common use in the stock market, what will it mean to the millions of stockholders who buy and sell stock every day? Amaitis says he doesn’t worry about the stigma associated with gambling. He says, “My job is not to judge the morality of why people gamble.” “My job is to invest in and create things that make money for my partners.” In an article in Database Marketing & Customer Strategy Management, Shaun Doyle says that because of the competition and high customer expectation the gaming industry is being forced to provide more products and services to its customers. The casinos have more data about their customers and they could use this data to decide whether to stick with the traditional forms of betting or to invest in the new technology. For instance, if the data indicated that most of their customers were of the younger generation, the hand-held computers would be feasible, but if they are older, they would probably prefer an atmosphere of more socializing and the traditional methods of gambling. Amaitis wants anyone who has a smartphone or Internet connection to be able to make in-running bets with Cantor. He is even considering the possibility of betting on elections, the Academy Awards, and American Idol. He tried Hollywood futures; that is, letting people bet on movie box-office results, but the Motion Picture Association of America objected. But the technology of on-the-fly wagering is catching on, and it may be the future of gambling. This could be just one more area of our culture affected by high-tech innovations.