SNAPSHOT:
steve ducharme
Title: Chairman.
Organization: Nevada State
Gaming Control Board.
Age: 51.
Hometown: Las Vegas.
Resides: Las Vegas.
Education: B.A., University of Nevada Las Vegas; associate's degree, Clark County Community
College.
Family: Single.
Background: Joined the Las Vegas Metropolitan Police Department in 1970, where he spent 12 years undercover investigating vice and narcotics and was a supervising detective in the fraud unit and the sexual assault unit; retired from the police department in 1991, when he was appointed to the gaming control board, which oversees all aspects of gaming for the state; was reappointed to the board in 1995 and appointed chairman in 1998.
In his 38 years as a Las Vegas resident, Steve DuCharme has seen nearly every side of the city. He's worked the streets as a police officer. He's worked undercover in the vice and narcotics division. He's investigated fraud and sexual assault.
Now DuCharme's mission is to steer what made Vegas famous: gambling.
As chairman of the Nevada State Gaming Control Board, DuCharme oversees all aspects of gambling in the state, including sports books. His organization investigates and licenses people who work in gambling and invest in gambling. His organization also investigates cheating, such as the Arizona State University point-shaving scandal in 1994. In that case, unusual betting patterns triggered an investigation by the gaming control board, which eventually led to six people — two of them former ASU players — pleading guilty in the scheme.
DuCharme spoke recently with Street & Smith's SportsBusiness Journal correspondent Alan Byrd about sports books, how they operate and what controls the state places on them.
SBJ: How do sports books operate?
DuCharme: Generally, the sports book manager contracts with a line-setting service. There are a number of companies that analyze and handicap games and then set the point spread. The manager then makes modifications to the spread and posts his numbers at 8:30 in the morning for daily events and on Monday morning for football.
Based on the bets that are made during the week, the manager will make small adjustments to the point spread in order to balance the books to try to reduce or limit their exposure. Still, only the sports books with a high volume will come close to balancing the books.
SBJ: Compared to other forms of gambling, how large is the sports book industry?
DuCharme: It's kind of an adjunct to traditional casino gaming. Sports books started out several years ago just as an additional service to the casino's big money players, and they have grown from there.
Even now, the sports pools and race books have a dedicated core of customers who make around 85 percent of the wagers. While there are a substantial number of bets in the sports books, the hold [amount kept by the casino] is a very small percentage. Typically, the casino retains less than 3 percent of what is bet. That's compared to a hold on a 21 table, which is about 15 percent. On parlay cards [where gamblers bet on several games] the hold is considerably higher.
SBJ: How much is spent in Nevada's sports books on an annual basis?
DuCharme: In 1997, there was $2.43 billion wagered in Nevada's 133 sports books. Football was the leading wager with $950 million bet on football alone, including $77.25 million on the Super Bowl alone.
SBJ: Has that number been increasing or declining, and why?
DuCharme: It's increasing basically because gambling is the national pastime. You put any number of zeros at the end of a number to say how much is bet on sports and it could be as high as $20 billion a year, and legal wagers are only 5 percent of that.
To further that, even television personality Bob Costas says that even though the final outcome of games are decided, if the game is close to the point spread, it will have higher ratings.
SBJ: Do the local office pool and other forms of illegal sports gambling affect legalized sports gambling?
DuCharme: No. But you have two different forms of illegal gambling, one of which is the office pool where no one makes a profit, versus the one where a guy with a notebook takes bets and keeps some of the money.
The second kind of illegal gambling affects legal gambling. We have found through joint investigations that a lot of money made through illegal gambling is laid off [spent] in Las Vegas. If a bookie has a lot of money on one side of a bet, they bet the other one in Las Vegas to try and even the bet.
SBJ: How has the Internet affected legal sports wagering?
DuCharme: We haven't seen it yet because a lot of people are leery about using the Internet to wager. People aren't sure that they are going to get paid when they win, but there are a number of offshore gambling sites that have a following. It has also been the position of a number of jurisdictions, like Australia, to limit sports gambling on the Internet.
SBJ: Do you see similar legislation in the United States?
DuCharme:I don't think you will see it in the United States in the future. There is no way to safeguard both sides of the wager to ensure that it is placed where gambling is legal and that it is placed by a person who is legally allowed to gamble. There doesn't seem to be the software protections to ensure the integrity of the bet.
SBJ: Does sports gambling increase the interest in a game?
DuCharme: Yes, it does. Just as the testimony of Bob Costas indicated, you might have a lopsided game, but the point spread still creates excitement. A lot of people enjoy putting down a $5 to $10 bet on a team, but there is obviously a potential for problems.
SBJ: What do you see as the major issues affecting sports wagering?
DuCharme: We've taken steps to crack down on the amount of illegal money being laundered through legitimate sports books.
SBJ: What sort of steps?
DuCharme: We've recently required that the books must report anyone who wagers over $10,000, and we have made it an illegal practice to be a messenger bettor.
SBJ: How much money is laundered through legal sports books?
DuCharme: We really have no way of knowing. Based on transcriptions of wiretaps, it is millions of dollars.
SBJ: How does your department monitor sports wagering?
DuCharme: Generally, sports wagering is self-policing. The bettors are just as sophisticated as sports managers, and if there is any irregular betting it is quickly brought to our attention.
In one instance, where the Arizona State University players were involved, it was brought to our attention by bettors who noticed the same group of bettors placing bets on the line, regardless of what it was. They called our enforcement officials, who quickly rounded up the offenders.
When you have sophisticated semiprofessional gamblers, it is in their interest to have a fair game also. You don't see that in other segments of gambling because the general table player is not that sophisticated.
SBJ: Do you work with the sports leagues and colleges to prevent cheating?
DuCharme: That's generally handled by the FBI. We worked with the FBI on the Arizona State case. Typically the FBI provides agents to colleges to provide information about gambling and what to watch out for.
SBJ: Can what happened at Arizona State be curtailed?
DuCharme: There is always the potential out there, especially when local bettors have access to the athletes. That was why our state enacted laws that sports books in the state cannot bet on any amateur team in Nevada or a professional game that takes place in Nevada.
SBJ: Is what happened at Arizona State widespread or the exception?
DuCharme: It is the exception. There are usually some manifestations when something is up. The betting trends change, and there is a lot of money being dumped on one team.
SBJ: Casinos outside Las Vegas don't offer a sports book. Why is that and do you see that changing?
DuCharme: There's a federal law that was passed in 1992 that said only those states that have sports gaming laws can continue having sports gambling. That law allowed only Delaware, Oregon and Nevada to have sports books. [Only Nevada and Oregon have a form of sports betting today.]
SBJ: How are sports books registered?
DuCharme: They have to get a license, and it's a full-blown investigation. We would investigate anyone who has an ownership interest in other sports, the percentage of revenue from other sports, we would track where they got their money from the first dollar they ever received, their personal history and their business practices, but sports books are generally offered by the big public companies.
We do find when we license sports book managers that they typically grew up making bets in their hometown and have a background in illegal gambling. We figure since they moved to Nevada they want to conduct themselves legally, but if they have a lot of recent arrests or convictions for illegal wagering, they won't get their license.
SBJ: Why have the larger companies taken over the sports book industry?
DuCharme: It's competition. If you're a small company, then you are gambling. If you are a large company, you can balance the books. We do have a hybrid system called Leroy's, which sets up satellite books in smaller casinos. They have a centralized location, which is connected via computer [to satellite locations]. They have about 35 to 40 locations.
SBJ: How do you see the industry changing over the next 10 years?
DuCharme: There are some new technologies that are offering new betting opportunities. For instance, there is a new program where people can sit at a television screen and make a wager on each individual play of a game, and there are a number of propositions on each play, such as whether they will pass or run.
Alan Byrd writes for the Orlando Business Journal.
