Introduction to Pinnacle Sports
PinnacleSports.com is an online sportsbook founded in 1998 and counted on by the largest and most successful bettors in the world. Due to a proven track record of 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 while keeping their ownership private, their story is quite remarkable. The following 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 thousands of dollars per month. At the start, a former developer of nuclear submarines named Michael Kent communicated with the computer, and an orthopedic surgeon named Dr. Ivan Mindlin facilitated bet placing. The group already had dozens of members when in 1983, now legendary gambler Bill Walters was recruited. At this time, the group was making as much $1 million (USD) per week betting on college sports.
In 1987, the Computer Group broke-up over legal issues, and members went their separate ways. While there are rumors that 5Dimes.com was programmed by a former member, and BetHorizon was founded by one of their key runners, these are unconfirmed. While also only a rumor, though one that's never been denied, it's often said that 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 that 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-1990's. The original company is often said to have been heavily influenced by former Computer Group founders. This toll-free betting shop servicing the US offered high betting limits and fast payouts.
In 1998, a law was passed: betting sites operating from Margarita Island now had to be associated with a hotel with at least 300 rooms. Interestingly, the only one that existed on the island was owned by close associates of Hugo Chávez, who appeared destined to take over power. Seeing the writing on the wall, a few sportsbooks such as PlayersOnly (now sportsbook.ag) and Rio (later Skybook) moved their businesses, while NASA (now betus.com) and countless others temporarily closed up shop. Of the books that closed, very few paid players on a timely basis and quite a few didn't pay at all. Heritage, on the other hand, in March 1998, used overnight express mail with a thank you and apology letter to all clients; they enclosed 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 of 1998, Pinnacle Sports was launched from Curacao, followed by the Dutch Antilles (a constituent of the Kingdom of the Netherlands). This brought added peace 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 was that their management team was near a complete match to that of the original Heritage Sports. With punters remembering the 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.
Despite no 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. They displayed betting lines, and bets were placed over the phone. It wasn't until the final day of September, 2000 that the website went live. The 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 of 2003.
Pinnacle Sports Early Internet Struggles
Pinnacle's growth from startup Internet betting site to the giant they are today didn't come without a challenge. The initial version of their website had much downtime, and on two occasions was completely wiped out: once due to a hurricane and another time due to a tropical storm. This proved a smaller challenge than the "everyone wants a piece" struggles that soon took place internally.
Only months after planetpinnacle.com went live, a copycat sportsbook called Direcbet was launched using the same software. Adding insult to injury, the head of finance, marketing director, and the majority of their IT team were recruited away by a mole insider to work for the new company. About a year later, there was a falling out with Pinnacle Sports partners: one took a buyout, left, and restarted Heritage Sports, a reputable betting site still live at heritagesports.eu. The same can't be said for Direcbet. This spinoff was rogue from the start and went on to stiff players. Guys like Eugene M. and Matt K., who had 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 surely they'd be famous last words of a bookmaker soon to go bust. One example was their claim that a player could max bet as many times as he'd like and that Pinnacle would never limit his action regardless of how much his account had 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 who are 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 up with -105 base pricing on American sports sides and totals. These were soon reduced to -102.5 and -104 (NFL) in 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, but 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 like. What's even more amazing is that 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 (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 as $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 the player making the bet, how much he is betting, when he will bet, 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. They have every confidence that they can reach the place where neither side is +EV and profit long-term from the small markup, 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 on handicapping, pricing props, pseudo-arbs, and the like. There were a total of 77 issues produced between September 2005 and September 2007, and you can still find them by Google searching Pinnacle Pulse.
While the name of their marketing director, Simon Noble (former CEO of the first online sportsbook), signed the bottom of these publications, many were ghost written by Elihu D. Feustel. He's since written the book Conquering Risk: Attacking Vegas and Wall Street. He's 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 they just had vig. What this meant is that 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 that 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 (becoming efficient) due to Pinnacle's 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 UK-approved Alderney Gambling Control Commission (AGCC). They can market in print and on television in the UK with no restrictions other than the usual ones faced by gambling companies. After stopping the acceptance of US players right after UIGEA (2007), they began to focus most of their marketing on football (soccer) while still remaining an expert on US sports. Understand this: there's no online sportsbook that has lower margins, faster payout, or is friendlier to winners than www.pinnaclesports.com. Most all of their sportsbook history worth reporting was in this story. They are the market leader in terms of volume, and it's unlikely this will change any time soon.
Author: Jim Griffin
Updated: March 2015
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