By:Seth Lubove
Friday, May 11, 2012
In his ground-level office on a back street of Las Vegas, Lee Amaitis is worlds away from the 15-story building in London where he served as the second in command at Cantor Fitzgerald until 2008. Rather than looking at the Tower of London on the River Thames from his office, he now has a view of men entering and leaving Sheri’s Cabaret, featuring “Hot Fully Nude Girls.”
The cabaret is part of the Las Vegas scene that Amaitis, who today heads Cantor Entertainment Technology, thrives in. He shellacs his hair back Gordon Gekko-style and wears the collar of his white shirt wide open. With a swagger typical of a casino high roller, Amaitis says he plans to turn Cantor, one of the world’s largest brokers of government bonds, into a sports-gambling powerhouse, too, Bloomberg Markets reports in its June issue.
“We came here to change the face of the industry,” says Amaitis, who’s retained a bit of his native Brooklyn accent.
Cantor Fitzgerald, which lost 658 of its 960 New York employees when terrorists slammed an American Airlines jet into the North Tower of the World Trade Center on Sept. 11, 2001, is known for playing tough. The brokerage’s chief executive officer, Howard Lutnick, battled the widow of founder Bernie Cantor in court for control of the firm in the 1990s. Since then, he has launched a series of lawsuits alleging patent infringement and broker poaching against ICAP Plc and other rivals, who have reciprocated with their own litigation.
Equipped with technology drawn from Wall Street and a trader’s appetite for risk, Cantor is now charging into sports betting in Las Vegas. The business – conducted in a section of a casino called a sports book – is characterized by volatile swings in profit and loss, competitors like the MGM Grand and Caesars Palace and expert gamblers known as wise guys.
“I have friends who run sports books,” says Joe D’Amico, owner of All American Sports, a Las Vegas handicapping service. “I got to tell you, none are without stomach problems.”
While Wall Street firms are no strangers to Vegas – they have long helped casino developers raise money – Cantor is the first to explicitly set itself up as a gambling operation. With a $150 million investment, the New York bond brokerage has taken control of and retooled seven sports books. They are owned by the Venetian and the Palazzo – part of Sheldon Adelson’s Las Vegas Sands Corp. – and other casinos.
Cantor has also produced wireless tablets so gamblers can bet anywhere in the casino or hotel. Eventually, it wants to start an online poker casino, too.
To promote its new Android app that allows betting from smart phones and tablets in Nevada, Cantor put cardboard flyers in Las Vegas taxis in February. They feature a curvaceous woman’s derriere with the tag line “Sports Betting on Your Android? You Bet Your App!”
“The idea that we can bring so much technological innovation to that market is a great opportunity,” says Lutnick, 50. “I think it will dramatically add to the size of the market.”
Cantor’s bookmaking software, a modified version of what Wall Street traders use, has changed the way sports gamblers at the Venetian bet. They walk past cocktail waitresses in tight skirts and low rollers at slot machines to get to the sports book, a 10,000-square-foot room furnished with 118 bright-red betting stations. Cantor installed a 100- foot-wide TV screen that can show 34 sporting events at once.
On this February evening, two dozen gamblers bet on events ranging from 14 simulcast horse races to college and professional basketball games. Cantor says its computer servers, driven by the kind of algorithmic-rich software that fuels derivatives trading, spew out odds on events at the fastest rate ever in Las Vegas. This speed allows gamblers to place bets during contests on dozens of situations just seconds before they unfold.
During a Los Angeles Lakers-Boston Celtics game, a betting opportunity suddenly pops up on the stations. It offers a $100 payoff on a $220 wager that the Celtics’ Paul Pierce will sink the two foul shots he’s about to take. Gamblers bet on Pierce by swiping a finger across the screen. Pierce sinks both.
Before Cantor ran the sports book, people could usually bet only once, before the game began, on the outcome. Today, more gambling means additional revenue for Cantor, which gets a fee of about 2 percent of some wagers, plus its winnings, which are shared with the casino.
“You want to build Wall Street on Las Vegas Boulevard,” says Andrew Garrood, a former derivatives trader at UBS AG, who helped Cantor develop the software.