THE ILLEGAL WHOLE'S LEGAL HALF
Last Friday, Sept. 21, in a Minneapolis office a man in shirtsleeves picked up the telephone. New York was calling. "Hello," the voice at the other end of the line said. "I want to get the line on tomorrow's big college games."
"O.K., hold on a minute...here we are. California-Baylor, Baylor seven-point favorite. Texas Christian 19 over Kansas. Maryland 13 over Syracuse. Missouri is a six-point favorite over Oregon State. Notre Dame over Southern Methodist. Pittsburgh seven over West Virginia. Georgia Tech is 10 over Kentucky—that's the one that's on TV. Stanford is 21 over Washington State. Oregon-Colorado is even." (On some days the smartest of handicappers take a beating. For actual results see pp. 52-57.—ED.)
"How about the National League pennant race?"
"Just a minute and I'll check that.... As of today, Brooklyn is 4 to 1 over Milwaukee. Cincinnati is out."
"Thanks a lot."
"Want the election?"
"Yeah, let's have it."
"Eisenhower is 3½ to 1 against Stevenson, but both must appear on the ballot. If Eisenhower doesn't go, Stevenson would have to be rated the favorite. Against anyone but Eisenhower."
"Why's that?"
"Republicans would have to substitute Nixon. Nixon is no favorite."
"O.K. Thanks a lot."
"Goodbye."
Federal 8-5656 in Minneapolis hung up, but not for long. The call was only one of several hundred that will be made in the next two weeks. With the National League pennant race still undecided, the World Series not far off and football under way, the Minneapolis "clearinghouse," or to use its proper name, Athletic Publications Inc., is entering what promises to be its most hectic season of the year and indeed perhaps ever. With national prosperity at an all-time high, it is readily conceivable that bettors this year will wager well in excess of $30 million, which is an educated estimate of the total amount bet annually by Americans.
As pre-eminent practitioners in one special corner of the giant betting industry, Athletic Publications employs 15 persons, three of them handicappers, and operates year round. Watching over them is the firm's president, Leo Hirschfield, a short, gray-haired gentleman of 60 who enjoys as much prestige in the odds-making field as the president of Harvard enjoys in his.
While much of the firm's success is obviously attributable to Hirschfield, he refuses to take any bows. "I haven't the least idea how to handicap," he says. "I wouldn't know who was the favorite between Notre Dame and Slippery Rock Teachers. I have very efficient and loyal employees without whom I could not possibly operate this business."
Actually, Hirschfield got into the odds-making business more or less accidentally. The son of a doctor, he grew up in Minneapolis, served as a Marine in World War I, attended the University of Minnesota for a spell and got married. In 1928 he moved to New York and worked for a manufacturer of lighting fixtures until Hitler's seizure of Czechoslovakia cut off the firm's supply of glass. Hirschfield, anxious to get back to Minneapolis, heard that the Gorham Press—as Athletic Publications Inc. was then called—was up for sale, and after mulling it over, he bought it in 1940.
Hirschfield changed the firm's name and set about rapidly expanding its services. All the Gorham Press had offered was a weekly football record. Today Athletic Publications Inc. publishes four annual schedules and record books covering baseball, football, college basketball and professional basketball, and two seasonal weeklies, one updating football, the other basketball.
The greatest change wrought, however, was the institution of a daily odds-making service for telephone clients. Hirschfield started it in response to public demand. For a fee, Athletic Publications Inc. furnishes odds on baseball, football (the leading college and National Football League games) and basketball (the leading college and National Basketball Association games). The most detailed of the services is that offered on baseball. It costs $25 a week. Odds are sold on games in both major leagues, the International League, the American Association, the Southern Association and the Texas League.
Exactly how the handicappers compute the odds is a secret of Athletic Publications Inc., but the shrewdest guess is that each handicapper computes his own odds, then everybody gets together to hammer out a compromise for the house. So that the handicappers can keep abreast of sports, the firm subscribes to 59 daily and Sunday newspapers and 97 college newspapers. Hirschfield much prefers the college press to information gathered by campus agents. One of the baser canards currently in circulation about Athletic Publications Inc. is that it employs coaches and students to forward information. Hirschfield denies this, and adds, "We get more rocks thrown at us for no reason whatsoever."
Other allegations have it that Athletic Publications Inc. is the nerve center of a million-dollar gambling empire and that Hirschfield is the secret advisor to a bookmaking ring.
"The mayor of Minneapolis, the chief of police, the county attorney, the FBI or anybody else can walk in through our open door just as you did," Hirschfield indignantly told me. "In the operation of this business, we break no laws, neither federal, state nor local. We neither make wagers nor accept them. At no time do we have any financial interest in the outcome of any athletic contest whatsoever. If a man buys odds, it's not my business what he does with them. If I were to sell you a car, do you think I'd ask if you planned to use it to rob a bank?"
Hirschfield maintains that the largest group of his telephone clients is composed of sportswriters and broadcasters. "Most of them are capable of making their own predictions," Hirschfield says, "but they apparently prefer to compare their odds with ours, since we are considered fairly accurate."
The next group Hirschfield claims is composed of sports fans who enter newspaper contests. "They feel," he says, "that they will have a better chance of taking down some of the prize money if they substitute our opinions for theirs."
There are two more groups: bettors and bookmakers. Of the bettors, Hirschfield says, "This is no fault of mine." Of the bookmakers, he says, "It is true that a limited number of bookmakers now use our predictions [Hirschfield has a polite distaste for the word "odds"] as a basis for accepting wagers. These people could use the predictions made by their local sportswriters and sports announcers, if they had sufficient confidence in their consistent accuracy. If they use ours instead, it is only because they consider ours more reliable."
As one might expect, some sports officials haven't found Hirschfield's business as bland as he makes out. Big Ten Commissioner Kenneth (Tug) Wilson refused to see Hirschfield after he came up with a plan to end basketball scandals. The National Association of Basketball Coaches once reneged on their invitation to have him address their convention.
Naturally, this irks Hirschfield, who is proud of his reputation as a businessman and who is highly regarded in his community. "I am a member of the finest Jewish country club in Minneapolis, and your application for membership is considered very carefully and very thoroughly before you are admitted," he says. "The sportswriters and sportscasters here are very friendly, and I frequently have lunch with Charlie Johnson, executive sports editor of The Minneapolis Star and Tribune. If you would take the trouble to read our weekly football and basketball publications over the years, you would find that some of the finest sportswriters in the country contribute to these magazines, and have no objection to doing business with us. You would also find, in reading these publications, that the articles on the individual teams are written, not by us, but by the publicity directors of the various colleges. They have no hesitancy about doing business with us. We are on the mailing list of 99% of the colleges whose records we carry, and receive from them the publicity releases that they send to newspapers...."
To keep his fine reputation, Hirschfield has turned down "hundreds and hundreds" of requests that he print football parlay cards. "I consider them to be gambling paraphernalia, akin to punch boards," Hirschfield says. "It is not illegal to print and sell parlay cards, but I simply do not feel that they fit in with the code of ethics under which I operate this business."
Others lack Hirschfield's ethical qualms about parlay cards. In fact, two companies—Arcadia Sales & Publishing Co. in Chicago and Hyke Football Service in Dallas—print them. Neither firm, of course, accepts wagers on the cards. They merely print them for sale to customers who can do with them as they wish. The cards, however, are another important facet of the over-all betting picture in the U.S.
Hyke Football Service, which also sells football handicaps by wire or long-distance phone for the weekly rate of $20 or the seasonal rate of $100, is the older of the two. Hyke Football Service prints 11 different cards, e.g., "Big 4," "Two Teamer," "Coast to Coast," "Ten/Two Fifty," which vary in the number of teams one must pick to win. On the "Ten/Two Fifty," for example, one must select exactly 10 teams. On the "Two Teamer" one is allowed to select a minimum of two teams and a maximum of 10. All cards carry 30 to 40 handicapped games.
The prices are reasonable: a C.O.D. express shipment of 250 cards, the minimum order accepted, costs $6; 500 cards cost $8.75; 1,000, $12.75, and 5,000, $52.75.
The cards printed by Arcadia Sales & Publishing Co. in Chicago are similar to those put out by Hyke Football Service but slightly higher in price, e.g., 5,000 cards cost $64. The interesting thing about Arcadia Sales & Publishing Co., though, is that it is located in the same office building, 236 North Clark Street, as Football Handicapper Bill Kaplan. Arcadia and Kaplan are not connected, but the building has come to be regarded by some as a shrine.
Bookmakers in the card business must work with great efficiency. They use runners to distribute the cards to bettors, and each runner is usually assigned to a specific beat, e.g., a high school or factory. For running the cards to the bettors and the bets back to the bookmaker, a runner usually receives 25% of his beat's total volume, win or lose. In towns where bookmaking competition is keen, however, the runner gets a better break. The bookmaker pays anywhere from 35% to 50% of the year's net.
For the bettor, the cards are a poor investment. If he picks two games out of two, for example, he is paid off at 2 to 1. The correct odds are 3 to 1. To weight the odds even more, the bookmaker ordinarily wins if the bettor picks a tie.
Bookmakers who handle the parlay cards are regarded as "little jerks" by the big bookmakers. Pride aside, a big bookmaker can never handle parlay cards because he is constantly on the move, a precaution which he finds eminently expedient when it comes to dodging cops and mobsters. Of the two, he fears the latter more. Lacking the protection of the law, a bookmaker is easy prey to hoodlums who decide to cut themselves in.
A few years ago, a Chicago bookmaker moved to Montreal after the syndicate demanded a cut. Encouraged by his expatriation, other bookmakers followed. For a while they prospered and on one occasion even found themselves protected by international law—when the U.S. attempted to obtain records of their long distance calls to the States. As usually happens, however, mobsters moved in, and, as an acquaintance of the Chicago bookmaker puts it, "They squeezed for a piece and got it with ill grace."
By now Montreal was really alive. The mobsters, flush with success and exuberant by nature, began to get out of hand, so much so that local authorities soon had no other course but to ask that everyone leave. The bookmaker and mobsters sorrowfully returned the U.S., but last year they were back, this time in another city. They didn't care for the cold weather but, all in all, their new city proved such a good location that they returned there last week to resume operations. To oblige local police, they refuse to take bets from Canadian citizens or make book on Canadian pro football games. This last point is rather a costly concession, as a fair number of Stateside clients have expressed interest in the pro games after seeing them on TV.
Despite the outside world's impression that bookmakers can calculate odds as swiftly as Univac, most of them are dumb and only slowly acquire the mathematics of odds-making.
Early this month, for example, a bettor called a bookmaker for odds on the National League pennant race. When given the odds he astounded the bookmaker by pointing out that he could win simply by betting on all three teams to lose.
"The bookmaker quoted Brooklyn at 17 to 10 not to win," the bettor says, thoroughly disgusted by the bookmaker's stupidity. "Cincinnati was 4½ to 1 not to win, and Milwaukee was 10 to 13 not to win. After I heard that, I told him that I would bet $1,700 to his $1,000 on Brooklyn to lose, $2,250 to $500 on Cincinnati to lose and $1,300 to $1,690 on Milwaukee to lose. I pointed out that if Brooklyn won, I'd lose $1,700, but I'd win $500 from my Cincinnati bet and $1,690 on my Milwaukee bet. Add these two together that's $2,190. Subtract the $1,700 I lost on the Dodgers. That leaves me winning $490. If Cincinnati won, I'd wind up winning $440. If Milwaukee won, I'd win $200."
Particularly confusing to bookmakers is the payoff on a parlay, i.e., when the winnings on one bet are applied to another. In baseball, four-team parlays are not uncommon. To ease the burden posed by parlay problems, A. C. Lowther, an insurance executive in Alexandria, La., drew up a baseball parlay chart in 1946, just in time to catch the postwar boom. Certified by a C.P.A. and priced at $10, Lowther's parlay chart instantly offers the answer to any baseball parlay problem. Ordinarily, it would take an average bookmaker a few minutes to figure the payoff on a $1 parlay on four teams with the odds at 5 to 7, 1 to 3, 2 to 3 and 4 to 5. But if the bookmaker uses Lowther's chart, he has the answer—$6.85—in no time at all.
The bookmaker would be most happy if odds and parlays were his only difficulties. Unfortunately, there is another: the tax law. As the law now stands, it is absolutely impossible for a baseball, basketball or football bookmaker to pay his proper tax and stay in business. Under the law, a bookmaker is compelled to pay a 10% tax on all bets, win or lose. But a bookmaker, under optimum conditions, can make only 4.8% profit on football and basketball and only 2.4% on baseball, excluding overhead. If he were a baseball bookmaker who paid the full tax, he would be 7.6% in the hole before he even started; if a footballer or basketball bookmaker, 5.2%.
The 4.8% in football and basketball is arrived at thusly: all bets are at 11 to 10, with the games, of course, handicapped by points; e.g., Michigan State 14 over Michigan in football. The Michigan bettor takes the 14 points, but must put up $1,100 to win $1,000; the Michigan State bettor also must put up $1,100 to win $1,000. The bookmaker accepts the bets, theoretically must pay 10% tax on the $2,200 in bets. That would be $220. The game is played, and Michigan State wins 28-0. The Michigan State bettor collects $1,000 from the bookmaker; the Michigan bettor pays the bookmaker $1,100. The bookmaker's profit on the two bets is $100, and $100 is only 4.8% of the $2,200 in bets.
In baseball, the 2.4% edge is arrived at in much the same way as the 4.8% in basketball and football. As a simple illustration, Brooklyn and Milwaukee's starting pitchers are rated even. (In baseball all odds are predicated on the starting pitchers.) The bookmaker makes the game into what is known as a 105 pick. The Dodger bettor must put up $1,050 to win $1,000; the Braves bettor must also put up $1,050 to win $1,000. The bets are made with a bookmaker, and the Dodgers win. The Dodger bettor wins $1,000; the Braves bettor pays up $1,050. The bookmaker's profit: $50. But the tax is $210.
Bookmakers who pay the tax actually do so at the rate of 1% instead of 10%, i.e., all $1,000 bets are booked as $100 bets, the bookmaker then pays 10% on $100. But even this is shaving it rather close for profit. If the object of the law, which was passed in haste after the Kefauver hearings, is to collect taxes, it should be changed. At best it is unrealistic. However, the likelihood for a rewritten law is slight. A Congressman promising such a change would be denounced instantly as in the pay of bookmakers. Few are the Congressmen who will chance this.
In addition to the small profit, bookmakers grumble about baseball because of the work involved. The season begins with the March exhibitions and lasts until the end of the World Series in October. During the season there are few days of rest, and if the bookmaker is taking bets on minor league games, he doesn't even take those.
Even so, bookmakers do a lot of baseball business. In fact, they do so much that they have made it the No. 1 betting sport (aside from horse racing, a sport that is not taken seriously by practising bettors as the 14% take is too much to overcome). Baseball betting should not be viewed with alarm; the big action is perhaps the finest compliment that can be paid to the game's integrity. Bookmakers are not interested in a corrupt sport—they are the ones who pay off the fixer's bets. Baseball also stands high because of the number of players needed to play. Generally speaking, bettors and bookmakers contend that the more players there are involved in a contest, the less chance there is to fix it. The biggest bookmaker will take a $5,000 bet on a baseball game, yet hesitates about taking $500 on a fight.
Football is the No. 2 betting sport, though on any fall Saturday it is No. 1 and probably exceeds even horse racing. A bookmaker will take up to $5,000 on a college or pro game but only $1,000 on a pro exhibition, since coaches usually try out new plays and players. One unusual thing about football is that the so-called game of the week, say Michigan-Michigan State, isn't necessarily the one that draws the most action. It may be Pennsylvania-Dartmouth if the word passes that Penn is really "up."
Basketball is No. 3, but betting has declined in recent years because of the scandals. As a matter of fact, not all bookmakers and bettors are certain that the scandals are over. The biggest bet a big bookmaker will take on most, not all, college games is $3,000, and few are the bookmakers who care to take that much. On pro basketball there is little action.
Despite scandal, boxing remains a betting sport. However, boxing doesn't attract the action of old. Only big fights draw big money, and those bets are usually arranged between two men who agree to abide by the referee's decision alone.
The most interesting side of betting is the bettors. Today there are about 10 men in the U.S. who are big bettors, i.e., bettors who wager $5,000 or more, say on a football game, and often on 10 or 15 games on the same afternoon.
"We're supposed to be everything from cardsharps to fixers," one of them said recently. "But all we do is put in a lot of hard work handicapping and then play the best price. If we lose, we hurt no one but ourselves. We don't influence athletes, officials, the stock market or the price of eggs. It is absurd for people to think we're fixers or racketeers. Nothing annoys me more than to be equated with a Frank Costello. He's a criminal, a racketeer. We'd never fix a game. We happened to become bettors because we followed sports closely and developed a betting interest. When we hear of something funny going on, we report it—if the officials will listen to us. Something funny is the last thing we want anyway. It throws our handicapping off form."
What the man says is true. Not long ago a basketball referee was dismissed after bettors supplied information to his superiors. Other authorities are now watching a football referee who, bettors say, was involved in an unsuccessful attempt to fix a recent bowl game. Fixers are never professional bettors. They are either hoodlums or "semi-wise guys." A semi-wise guy is, in betting parlance, one who "plays it by ear, a guy who hears what I'm going to bet, then bets the other way without having to do any handicapping."
Despite personal pride in their handicapping, most big bettors don't care to make their identities known. Yet some of them are so celebrated that their betting is an open secret. One of these is H. L. (Facts Forum) Hunt, the Dallas oilman, who has a fondness for football. (In Texas, incidentally, $200,000 to $300,000 is often bet on a single high school football game.) Hunt got his start running a gambling room on "Hamburger Row" in El Dorado, Ark. during the early '20s. He was known as one of the best poker and checker players in that neck of Arkansas, and legend has it that he picked up his first oil lease in an El Dorado poker game, and on a bluff at that.
Hunt is noted for his fantastic memory. Texans tell the story about the time a trainful of oilmen were heading for a meeting of the American Petroleum Institute in Chicago. Hunt watched but didn't play in a big, rowdy poker game in which the raises flew like tumbleweed in a Panhandle storm. When it was over, Hunt could recall every bet that was made.
Another oilman noted for his betting is Ray Ryan of Evansville, Ind. Like Hunt, Ryan is reputed to have won his first oil lease in a poker game. No one would be surprised if he bet as much as $50,000 on this year's World Series. Ryan is, without doubt, the nearest modern version of the 1890 sportsman, in the best sense of the term.
One of the most remarkable bettors today is a securities analyst, or, rather, a former securities analyst. He worked for a nationally known bank during the Depression, and, according to legend, was dismissed after he started offering odds on what employees would be fired, including the president at 20 to 1.
"That's a slight exaggeration," the analyst says. "He wasn't on the list. I was though. I quoted myself at 3 to 1. Maybe I should have been even money. The trouble was I was always telling them what they should do. They never listened, and I rubbed it in too much, I guess. But I don't mind. I own stock in the bank now. I felt like going to the last stockholders' meeting and raising a little hell, but I didn't. It would have been fun though."
In practice, big bettors tend to specialize in one sport but, of course, that does not stop them from betting on other sports. The biggest baseball bettor in history, the late Isie Silverman of Miami Beach, often bet on football. Silverman, who died last May 11 at the age of 65, was born in Albany, N.Y., and as a child fell in love with baseball. He kept voluminous records, particularly on pitchers, and could recite earned run averages with the ease of a barker delivering a spiel. He bet as much as $2 million a year (this includes money bet over and over again) and was especially adept at coming up with a pitcher on a losing club who could beat a winning club.
In football he usually didn't bet with bookmakers but against the fans of both teams, making them put up the long end. When Silverman didn't get the long end, he would rely on amazing sources of information. He would bet against a visiting team, and when it arrived for the game, the star halfback would be out with a twisted ankle that no one else had heard about. To other pros in his trade, Silverman had his peculiar side. He liked to play cards, which, along with craps, is looked down upon as a hustler's game. But he just craved action. He would bet $2,000 to $3,000 a hand at a local bridge club, then leave the game to walk across the street to a drugstore for a Coke because it was only a nickel there and a dime in the club.
In 1952 Silverman had the bad luck to be arrested twice on charges of engaging in a game of chance, but beat both raps on lack of evidence. When arrested, he gave the name Isidore Silvers. His use of an alias is understandable. Arrest is an indignity that no bettor feels he should be made to suffer, particularly if he is pre-eminent in his calling. When Silverman died, those who knew him mourned him. "He was," they agreed "Mr. Baseball."
A few gamblers have adapted Silverman's techniques, and some have improved upon them. Perhaps the best one, with amazing sources of inside football information, was an Ohio bettor, now in semiretirement. In the 1940s he ranged far and wide through football-rich Ohio and Pennsylvania, spotting prospective college stars while they were still high school juniors. The bettor would become acquainted with a promising lad, and, after expressing an avuncular interest in his future, offer to pay his way through school. The boy's parents would enthusiastically consent, and the bettor would then notify a college in mind that he had just the quarterback the coach was looking for. There was no need to worry about a scholarship, the bettor would inform the school, he was taking care of everything. Within a few years, he had put a considerable number of boys through college, not one of whom ever knew his benefactor's real occupation. There was no reason why the boys should have. He never asked them to play their best or worst; he never sought to influence them in any way. All he would do was call up a boy at one college on a Friday night, ask about his marks, then turn the conversation to the big game the next day. Having learned that the fullback pulled a leg muscle, he would then call the boy at the rival college to see how that team was doing. By comparing notes, he was able to make a killing. Naturally he was happy. And so were the boys. Several of them became All-Americas, and a few are now coaching.
But the greatest bettor of them all is the aforementioned securities analyst. Universally respected for both his brains and integrity, the analyst is, so to speak, the Supreme Court of betting. Many betting disputes are sent to him for adjudication, and, in rendering decisions, he has made any number of rulings that have become part of betting's extensive but unwritten law.
In 1947 Alabama was a 14-point favorite over Miami in a Friday night game in the Orange Bowl. Several bettors heard a weather forecast that reported a bad storm was headed toward Miami. They took Miami and the 14 points, reasoning that the wind and heavy rain would make scoring all but impossible. But the rains were so torrential that officials postponed the game until Saturday night. The storm passed, and the next night the weather was fine. That night Alabama defeated Miami 21-6, and thus the bettors who had taken Miami lost 21-20. But they wouldn't pay up. They protested that the game had not been played on Friday night as scheduled. The analyst got the case, and after brooding about the problem, reluctantly ruled that all bets were off. Since then no bet on a sporting event, except for outdoor boxing, carries over to the next day.
Last year a pro football exhibition game between the Los Angeles Rams and the New York Giants in Portland, Ore. caused considerable controversy. It was a night game, and just before it started, at about the time bookmakers and gamblers in the East were going to bed, both teams agreed to a sudden-death overtime in event of a tie. The Rams were favored. The game ended in a tie, and in the overtime the Rams won 23-17. The Giant bettors, on the losing end, protested. There had been no announcement of the sudden-death overtime in the event of a tie. They had bet on a football game, and a football game has only four quarters. The analyst's verdict: sudden-death overtime, even though not announced, is part of the game.
The most recent dispute occurred last August 31. It involved a game between the Phils and Pirates at Pittsburgh. Harvey Haddix of the Phils was favored over Ron Kline of the Pirates. Haddix was announced as the starting pitcher, but he hurt his back while warming up. Granny Hamner, an infielder, went in to pitch for Haddix. The Pirates won 6-3. The bookmakers demanded that the bettors who had bet on Haddix pay up. He had been announced as the starting pitcher, his name appeared in the box score. Officially there was no doubt that Haddix was the starting pitcher. But the Haddix bettors refused. And the analyst agreed with them. He ruled that all bets were off. His reasoning: a starting pitcher is not a starting pitcher unless he pitches at least one ball in the game.
There are those who seriously contend that the analyst, endowed as he is with a Solomonlike mind and an uncanny way with numbers, would have made the greatest Secretary of the Treasury in U.S. history. When asked about this, the analyst demurred.
"I'd much rather have been Secretary of State," he replied with genuine modesty. "I think I could have done something there. During the war I offered 3 to 1 the Russians would be at our throats when it was over. My friends just said, 'Ah, you're nothing but an economic royalist.' "
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NO. 1 ODDSMAKER, Leo Hirschfield of Minneapolis clearinghouse, scans student daily for clues affecting Illinois grid odds.
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BUSY AS BROKER, Chicago Handicapper Bill Kaplan, who prints predictions under byline "Pigskin Pete," reads ticker tape in his office as he talks on the telephone.
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TEXAS OILMAN, H. L. Hunt of Dallas, is a big bettor who is fond of football.
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OLD-STYLE SPORTSMAN, Ray Ryan, may bet large sums on this year's Series.
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BIGGEST BASEBALL BETTOR, the late Isie Silverman, had canny odds sense.