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Mobile-phone technology puts sports book in your palm

Frank Mercadante Jr. likes to wager on college football; it doesn’t really matter who is playing. He’ll bet $20 or $30 on a regular-season game, sometimes he’ll place $50 on the outcome of Bowl Championship Series bowl game.

Don’t look for Mercadante to be standing in line at a traditional window inside a sports book in downtown Las Vegas or on the Strip. Instead, you’ll find him at a bar or at home on the couch using his BlackBerry to scan the odds and then wager.

"It’s never been easier for me to place a bet," he said. "I’ve placed bets from a bar or at home. I even made a bet on a game at a wedding this year."

Mercadante is an example of a new generation of gambler who wants to be able to bet safely online or by using an application, whenever and wherever he wants.

When he turned 21, he immediately signed up for a pager account with Leroy’s Horse and Sports Place. Today at 33, he was one of the first customers to dump their pagers in favor of being able to wager with BlackBerrys.

"It’s a secure way to place a bet. Within seconds of logging in, it confirms your (account’s) total, you select your bet and click it once," he said. "I never have to worry about collecting my winnings. I’m not sending my money overseas."

Betting trends and habits are changing. And, while race and sports books have been the traditional choice for sports betting, it’s expected they’ll be supplemented by online and mobile wagering.

It is also inevitable these companies will lobby legislators and state regulators to allow them to operate online casinos within Nevada.

David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas, said Cantor Gaming was "looking to expand in a big way" with online gaming.

Figures for 2010 released by technology research company Gartner show that smart phones accounted for 297 million, or 19 percent, of the 1.6 billion mobile phones sold last year. That’s 72.1 percent more smart-phone sales than in 2009.

Gartner expects U.S. sales of smart phones to grow from 67 million in 2010 to 95 million in 2011, and become the highest-selling consumer electronic device category.

To capitalize on that growth, American Wagering Inc., the parent company of Leroy’s sports books, has pressed state gaming regulators to approve the company’s sports-betting applications for smart phones.

The Las Vegas-based company received permission last year for its BlackBerry application and extensive field tests for the company’s application for Google’s Android operating-system smart phones have begun.

Both applications let people wager on sporting events from anywhere within Nevada. American Wagering, with 76 locations statewide, is developing applications for Apple iPads and iPhones.

American Wagering Senior Vice President John English said customer response to the BlackBerry application was exceeding company expectations.

"The handle has been phenomenal," English said.

Both applications allow for a fully functioning sports book and offer a menu of sporting events along with in-game betting, propositions and contests. Customers must open an account with Leroy’s before they can bet.

English and Cantor Gaming CEO Lee Amaitis have been at the forefront of the changes to Nevada’s sports wagering industry. Both executives believe their technology will be in demand as online gaming is legalized on a state level in the United States.

Cantor Gaming is part of Cantor Fitzgerald, a brokerage firm that created the technology used to trade bonds and other securities. In 2005, Cantor Gaming began lobbying for legislation allowing wagering with hand-held devices in certain areas of casinos. In 2008, Nevada gaming regulators approved the technology.

"It is legal, but our industry needs to take the next step forward," Amaitis said.

In Nevada, its legal for gamblers within the state’s borders to make sports bets remotely by setting up a casino account and downloading software onto a home computer, downloading a cell phone application or by using a pager. Other forms of online wagering are illegal in Nevada.

Sports wagering using smart phone applications and computers is not illegal because it occurs over private wireless networks and not over the Internet. The gambling also doesn’t cross state lines.

English said his company proved during field trials of its BlackBerry application last year that the technology existed to insure that all sports bets were made within the state. He said the technology consists of several layers of security including geographic location processes and encrypted communications.

Several of Las Vegas’ largest race and sports book operators were skeptical of efforts to increase mobile sports wagering. Industry executives argue that traditional casino sports books and kiosks appeal more to most bettors.

Jay Rood, director of race and sports book operations for MGM Resorts International, questioned whether mobile wagering had taken off as much as some in the industry had said. He described Cantor’s In-Running system, which lets customers wager during a specific sporting event, as "cool," but questioned whether it had reached a critical mass or is profitable.

David Strow, a Boyd Gaming Corp. spokesman, said Cantor Gaming has so far had "minimal impact" on the market. Boyd Gaming operates eight sports books, while MGM Resorts operates 10 in Las Vegas and two in Reno.

When Strow was asked when Boyd Gaming might introduce a sports betting application for smart phones, he said his company is "looking at a variety of options at the moment."

"We might be introducing something later in the year," he said. "If they make business sense we will introduce them. Sports betting beyond the book has been very successful. Kiosks have been a perfect fit for us."

Amaitis said in-running technology has increased betting activity. At M Resort, Palazzo and The Venetian, where Cantor technology has been offered since 2009, he said gamblers wagered $400 million using the technology last year out of a statewide handle of $2.5 billion. He suggested that $300 million of that would have been turned away if not for in-running sports betting.

"I’m not going to turn away any bet," he said. "For me, even if you win $200,000 I want you back. We learn from that bet. As we see it, it’s part of our business model to learn from the pure gambler. Over the long run, we’ll come out ahead."

Amaitis said with the growth of sports wagering, both at brick-and-mortar sites and by smart phone, he wouldn’t be surprised to see the handle increase to $10 billion to $20 billion annually in Nevada.

"I hope we’ll account for half of the annual handle," he said.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

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