Episode 746: Wall Street Goes To Vegas
Nevada pretty much has a monopoly on sports betting in the United States, but it is illegal for a casino in Nevada to take bets from out of state. The thing is, there are plenty of gamblers all across the country who want to lay down money on a game.
Enter Cantor Fitzgerald, one of the most respected firms on Wall Street. They specialize in high-volume, low margin businesses--think bond sales--where they make a tiny percentage on each trade. One Cantor executive wanted more. He went looking for extra business and found it in sports betting. He created a new company, Cantor Gaming, to run sportsbooks, places where you can bet on sports. It was Vegas betting, Wall Street style.
Cantor Gaming was known for two things: They could take real-time bets, while a game was underway, and they could take really big bets. Like, really big.
But there was a problem with Cantor Gaming taking these really big bets. If someone wagered say, $700,000 on a game, and not enough people bet on the other side, Cantor Gaming was taking on a lot of risk. Cantor, remember, came from the world of Wall Street trading. It was looking to make a lot of sales, and make a little money off each of them.
So Cantor Gaming went looking for people to take the other sides of bets. And it found them. But they weren't in Nevada. Things got messy.
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