Introduction to Pinnacle Sports
PinnacleSports.com is an online sportsbook founded in 1998 that the largest and most successful bettors in the world count on. Due to a proven track record that involves offering the lowest margins, highest limits and fastest payouts, with no personal limit collars, they've achieved a consensus top rating on all major industry review portals. Considering they managed to do this all this while keeping their ownership private, their story is quite remarkable. This article is an account of their history.
The Computer Group
Pinnacle Sports is often said to be owned by former members of a famous US betting syndicate called the Computer Group which started in the 1970's. Because personal computers didn't exist back then, the first computer used was a massive machine rented for several thousand per month. In the start, a former developer of nuclear submarines named Michael Kent communicated with the computer, and an orthopedic surgeon named Dr. Ivan Mindlin facilitated placing the bets. The group already had dozens of members when in 1983 now legendary gambler Bill Walters was recruited to place their bets. At this time the group was making as much $1 million (USD) per week betting college sports.
In 1987, The Computer Group broke-up over legal issues and its members went their separate ways. While there are often rumors that 5Dimes.com was programmed by a former member, and BetHorizon was founded by one their key runners, these are unconfirmed rumors. While also still only a rumor, though one that's never been denied, it's often believed PinnacleSports.com had the most Computer Group ties, while today's heritagesports.eu is owned by one single former member.
Pinnacle's Start: The Original Heritage Sports
The company who today operates heritagesports.eu is owned by a single partner of the original Heritage Sports founded in Margarita Island Venezuela in the early to mid-1990s. The originally company is often said to have been heavily influenced by former Computer Group founders. This toll free betting shop that serviced the US offered high betting limits and fast payouts.
In 1998, a law was passed that betting sites operating from Margarita Island now had to be associated with a hotel that had at least 300 rooms. Interesting, the only of these that existed on the island were owned by close associates of Hugo Chávez who appeared destined to soon take power. Seeing the writing on the wall, a few sportsboks such as PlayersOnly (now sportsbook.ag) and Rio (later Skybook) moved their business, while NASA (now betus.com) and countless others temporarily closed up shop. Of the books that closed, very few paid players timely and quite a few didn't pay at all. Heritage on the other hand in March 1998 overnight expressed mailed a thank you and apology letter to all clients that contained a check for their full balance. While out of business this was a classy move serious punters in the industry appreciated and never forgot.
Pinnacle Sports Founded in the Dutch Antilles
In October 1998 Pinnacle Sports was launched from the Curacao, which was still then the Dutch Antilles (a constituent of the Kingdom of the Netherlands). This brought added piece of mind as most online sportsbooks were based in countries with unstable governments while Curacao was practically ruled by a founding member of the European Union. What brought Pinnacle Sports more attention, their management team was near a complete match to that of the original Heritage Sports. With punters remembering their classy exit that involved checks in hand before anyone realized they had closed, they quickly became a popular choice of US sports bettors. However at this time online betting was still not offered.
While not yet offering online betting, the original Pinnacle Sports did use the internet. They had many websites, some just an IP address, but also pinnacle.an and sportgamblers.com forwarded to the correct site. These displayed betting lines and bets were placed over the phone. It wasn't until the final day of September 2000 their website went live. This site was developed by Author Thompson, better known in the industry as AJ. He's still around. After helping his father start a sportsbook that stiffed punters, he became head of IT with expekt.com and more recently began working for Bodog Europe. Of course, the web address pinnaclesports.com was already registered, so initially they used the URL planetpinnacle.com before moving to their current address in May 2003.
Pinnacle Sports Early Internet Struggles
Pinnacle's growth from startup internet betting site to the giant they are today didn't come without challenge. The initial version of their website had much downtime, and on two occasions was completely wiped out - once due to hurricane and another time due to tropical storm. This proved a smaller challenge than the "everyone wants a piece" struggles that soon happened internally.
Only months after planetpinnacle.com went live, a copycat sportsbook called Direcbet was launched using the same software. Adding insult to injury their head of finance, their marketing director, and the majority of their IT team was recruited away by a mole insider to work for this new company. About a year after this there was a falling out with Pinnacle Sports partners and one took a buyout, left and restarted Heritage Sports. This is a reputable betting site still live at heritagesports.eu. The same can't be said for Direcbet. This spinoff that was rogue for the start went on to stiff players. Guys like Eugene M. and Matt K. who left Pinnacle for Direcbet clearly missed the boat. Today, Pinnacle Sports is one the highest paying betting employers, but for a quick buck many original staff burned that bridge.
Pinnacle Masters Online Bookmaking
The ideas Pinnacle Sports had in 2003, at the time sounded ludicrous and seemed surely they'd be famous last words of a bookmaker soon to be bust. One example was their claim a player can max bet as many times as he'd like and Pinnacle would never limit his action regardless of how much his account won. Still to this date, Las Vegas sportsbooks, UK betting shops, and virtually all online betting sites give personal limits or refuse action from players too sharp. Pinnacle claimed to welcome it, and later proved this was the case.
In 2004 they added the lowest house edge casino in the industry and followed it up with -105 base pricing on American sports sides and totals. These were soon reduced to -102.5 and -104 (NFL) on certain markets. While most bookmakers had betting odds such Patriots -7 -110 (1.91 decimal) / Jets +7 -110 (1.91 decimal), Pinnacle would set the same as Patriots -7 -104 (1.96 decimal) / Jets +7 -104 (1.96 decimal). Then as they took bets they'd move the lines by pennies. For example, if a large bet came in on the Patriots the line would become Patriots -7 -105 / Jets +7 -103. If another bet came in it might move to -106 / -102, so on and so forth.
Not only did Pinnacle have the lowest margins they also offered the highest betting limits. At today's Pinnacle it's possible to wager between €25,000 and €80,000 per bet on an NFL point spread. Also this is a "per bet limit" which just gives them a chance to move the line. Players can make as many max bets as they'd like. What's even more amazing is their payouts are handled on automation. If you request a large e-wallet withdrawal to Neteller or Skrill once your account is verified each future withdrawal comes in a matter of minutes (as in 2-3 minutes in most cases).
Understanding the Pinnacle Model
Pinnacle Sports employs the most talented handicappers in the world who open betting lines on a market. Initially the limits are a little smaller than their massive norm, such a $5K or $10K US per bet. They then adjust the lines as they take bets looking for a spot that their known winners have no interest in betting, because neither side is +EV.
The way Pinnacle moves the lines is genius as it involves advanced algorithms that consider: who is the player making the bet, how much is he betting, when and why. In other words, user profiling is just as much, if not more, a factor as how much is being bet on a side. Their confidence level is that they can reach the place neither side is +EV and then profit long term from the small markup which is less than what other bookmakers charge. While this seemed like a crazy idea in 2004/2005 today it's how betting works. Pinnacle discovered that when unrestricted (example: limit collars) betting is a market and functions as such. To make the most profit Pinnacle just needed to find more savvy sports bettors.
The Pinnacle Pulse
Equipped with a platform that would profit off savvy punters, Pinnacle Sports began educating the typical betting forum crowd. They did so via a newsletter called the Pinnacle Pulse that would give tidbits into handicapping, pricing props, pseudo-arbs and the like. There were a total of 77 issues produced between September 2005 to September 2007 and you can still find these Google searching for Pinnacle Pulse.
While the name of their marketing director, Simon Noble (former CEO of the first online sportsbook), was signed at the bottom of these publications, many of them were ghost written by Elihu D. Feustel. He's since written the book Conquering Risk: Attacking Vegas and Wall Street. He's much better known these days as SBR moderator Justin7.
How the Betting Market Matured
Before long the word got out that the Pinnacle odds were closest to accurate, and just had vig. What this meant is you could go to any recreational sportsbook such as JustBet or Sportsbook.com and search for arbitrage opportunities. When found, you could either bet in such a way profit was guaranteed with an arb, or you could just bet the non-Pinnacle side. Doing the latter was often +EV and many made a fortune doing this. As a result the betting market began to mature (become efficient) due to Pinnacle offering reduced juice, large maximum bets, and no cap on the number of max bets that could be placed. And just like that, due to Pinnacle, the entire betting market changed.
Pinnacle Sports Today
Today Pinnacle sports remains licensed in Curacao, while also holding a license with the Alderney Gambling Control Commission (AGCC) which is UK approved. This means they can market in print and on television in the UK with no restrictions other than the usual ones gambling companies face. After stopping accepting US players right after UIGEA (2007) they began to focus most their marketing on football (soccer) while still remaining an expert on US sports. Understand this: there is no online sportsbook that has lower margins, faster payout, or that is friendlier to winners than www.pinnaclesports.com. Most all their sportsbook history worth reporting was in this initial story. They are the market leader in terms of volume, and it's unlikely this changes soon.