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.