Online sites take bets on gas prices
Online sites take bets on gas prices
By Don Oldenburg
THE WASHINGTON POST
May 7, 2006
JOHN GIBBINS / Union-Tribune
What are the odds that gas prices are going to rise? Coronado resident Tony Barron – and the rest of us – can bet on it, literally.
Will gasoline prices continue to go up?
You can bet on it.
No, really. If you're the gambling type, you can now bet on those skyrocketing pump prices that once again have consumers over a barrel. An online gambling site has posted odds on the short-term future of the price per gallon.
“Will gas prices hit $4 by June 15th? The odds are 3 to 1 they will. You wager $100 and win $300,” says Freddy Harris, the general manager and top oddsmaker at YouWager.com, a First Fidelity sportsbook based in Costa Rica. “If you want a longer shot, you can bet gas prices will get to $5. If you're right, we will pay you 8 to 1. If not, we will cheerfully take your $100.”
With interest rates and gasoline prices steadily rising and consumer confidence falling, some folks may be hoping to hedge the high cost of gasoline by wagering on it. Since the gas-price odds appeared on YouWager.com's board more than two weeks ago, about 60 people have put money on the $5-a-gallon bet, says Harris, and about 150 have bet that gas will break $4 a gallon.
“It's a fun thing. This is something you could debate at the barbershop. Put your money where your mouth is . . . if you have a strong opinion,” says Harris.
But while the days of cheap gas seem to be over, at least you can still place a cheap bet. The minimum is $25, and the maximum is $100. But gas wagering goes off the board Wednesday, so bettors risk 34 days of market manipulation and things happening that can affect gas prices. And they'll have to wait until June 15 to find out whether they're winners.
Bettors may be the only ones other than the oil companies finding some comfort in the upward trend. The Energy Department figured the average retail price of gasoline nationwide in late April at $2.914 a gallon – but as consumers in the Washington area, San Diego, Los Angeles and New York know, it was next to impossible to find gas for less than $3.
Gasbuddy.com, a volunteer-fueled Web site that scouts best pump prices by locality, recently had regular gas nationwide averaging $2.909, compared with $2.477 a month ago and $2.222 a year ago. “Just so everyone knows it is fair, we go by AAA's fuelgaugereport.com,” says Harris, referring to auto club AAA's online tracking of the national averages for regular, mid-level and premium gas prices. YouWager.com will combine those and divide by three for the gas price on June 15.
Typically, gamblers would log on at YouWager.com to put money on a baseball game or the NBA playoffs instead of gas prices. A sportsbook, it makes odds and takes bets on just about every sport out there.
But oddsmakers like to dabble in a few “special,” non-sporting events. YouWager.com recently closed its betting line on who will win “American Idol” (it's Chris Daughtry pays 1.25 to 1, Katharine McPhee pays 2.2 to 1 and Taylor Hicks pays 3 to 1). But you can still bet on Paula Abdul checking into rehab before the end of “American Idol” (5 to 1 she will), on the United States launching a pre-emptive attack on Iran before July 10 (10 to 1 it will), on the outcome of former Enron exec Kenneth L. Lay's trial (1 to 6 he's guilty), on Tom Cruise marrying Katie Holmes now that the baby's born (3 to 1 he won't), and on Democrats taking control of the U.S. Senate in this year's elections (2 to 1 they will).
Harris says compared with the $300,000 to $500,000 in wagers YouWager.com gets on a Monday NFL game, it sees “very little” action on the oddball lines. But customers who register, deposit a minimum amount and activate their account can bet on whatever's on the board. “Then you are literally off to the races,” he says.
But a warning to novice gamblers who think they can feed their sport-utility vehicles by wagering on gas prices: Betting on online sportsbooks can itself be a gamble. Except in Nevada, accepting sports bets is illegal in the United States – which is why YouWager.com is located in Costa Rica and some 2,500 other online sportsbooks and casinos are located beyond the three-mile U.S. offshore limit.
“We could not do this inside the United States. The laws are funny – it is absolutely legal for you to be in Washington, D.C., or Arlington, Va., placing the bet, but it would be illegal for me to be there taking the bet,” says Harris.
Another issue is that some online gambling sites are scams in which even winners end up losers. While YouWager.com has been in business 12 years and is certified and endorsed by the Off Shore Gaming Association (OSGA) and the Official Offshore Betting Guide (OOBG), two independent industry watchdogs that monitor online gambling businesses, many gambling sites don't get the seal of approval, and some are blacklisted due to their bad business practices and rip-offs.
And, other than filing a complaint with the OSGA and OOBG, a customer has little recourse if there's a dispute because online casinos and sportsbooks are outside the scope of U.S. consumer-protection laws.