Your government in action

So for years, law enforcement turned a blind eye to neighborhood video poker machines, and now the state is pumping money to local police agencies to crack down on bars with machines that pay out. Funny, this get-tough approach is happening just as state-licensed casinos are opening across the state.

Tavern owners have a good point -- if county officials didn't think that poker machines were paying out, then why do they charge more to license the machines than they do to license pool tables and video games? (I'm a little mystified as to why video games and pool tables have to be licensed. If there an official reason, or is it just a naked attempt to squeeze more revenue out of business owners? That's a rhetorical question.)

Meanwhile, the state plans to sink $25 million into a soccer stadium in Delaware County. I hope that everyone in Pittsburgh who cheered when the state agreed to ante up for the new Penguins' arena can make it out to Chester for a soccer game. You paid for it; you might as well enjoy it.

Long odds

Wharton Business Professor Justin Wolfers has an idea for ending sports betting scandals: legalize sports gambling, but only on the outcome of the game, not on the point spread or the over/under.

Wolfers notes that with few exceptions--the Chicago Black Sox Scandal being the most notable--attempts to fix the outcome of a sporting event involve point shaving, rather than trying to throw the game to one side or another. It is easier for the underworld to recruit players and refs to shave points--affecting bets tied to the point spread and the over/under--than to throw games, because the former seems like a victimless crime:

Legalizing wagering on which team wins or loses a particular game, while banning all bets on immaterial outcomes like point spreads, would destroy the market for illegal bookmakers and make sporting events less corruptible by gamblers. ...

Bettors value regulation: They get paid, their legs don’t get broken, and they can talk about their wagers around the water cooler with no legal risk. The rise of government-run gambling on horse racing in Australia paralleled the demise of the country’s illegal bookmakers in second half of the 20th century.

I'm no fan of prohibition of any sort, whether it is drugs or gambling, so Wolfers' argument has great appeal to me. I'd have no problem with legalized sports gambling. However, I'm not sure there wouldn't still be a flourishing underground market for betting on point spreads and the over/under, because legally operating bookies would have a tough time ensuring a profit on games in which payoffs only go to gamblers who pick the winner.

Without the point spread, few bettors would want to risk money on the underdog, particularly when the two teams are unevenly matched. As it is now, when too many people start laying their money on one team over another, bookies can manipulate the point spread to encourage bets on the other team. If wagers are evenly distributed among the two teams, the bookie is sure to make money off the vigorish that losers have to pay in addition to their bet.

Now, I suppose a substitute for the point spread would be for bookies to give odds, as is done in horse racing, so that the payout on the underdog would be higher than on the favorite. Still, it seems to me that bookies could lose a lot of money in games in which a longshot wins, because they money they pay out to winners could be significantly higher than the money coming in from losers (in horse racing, of course, there are more than two competitors, and thus more losing bets get placed) unless they significantly boosted the vigorish. In any case, manipulating the odds to ensure a profit would seem to be more challenging than doing the same with the point spread.