On Jan. 8, 53 seconds into an Indiana Pacers-Cleveland Cavaliers game, Alec Burks knocked down an insignificant 3-pointer to give Cleveland an early lead.
Burks' basket didn't jumpstart a Cavs win, but it marked the start of something new in America's evolving sports betting market: a high-risk, high-reward way to wager that, on Sunday, resulted in a $600,000 score for a bettor in New Jersey.
PointsBet, an online bookmaker from Australia, launched earlier this year in New Jersey. The company offers a type of wager they call "PointsBetting," or spread betting, as it's known in the sports betting community.
It works like this: For every point a team covers the spread by, the initial stake multiplies. For example, if you place a $5 "PointsBetting" wager on Team A -3, and Team A wins by 10 points, you win $35 (seven points at $5 per point above the spread). Bettors can cap the win/loss to certain levels depending on the specific market. (Need more detail? Here's a video explainer from former NFL star Darrelle Revis.)
Spread betting has been available at various international sportsbooks for decades, but it has never gained mass-market popularity. It represents around 10% of PointsBet's overall betting handle in Australia, where NBA Hall of Famer Allen Iverson is the face of the book's brand.
PointsBetting is in its infancy in the U.S., however, and it can get expensive quickly, for bettor or bookmaker.
The first PointsBet in New Jersey was placed on the Jan. 8 Pacers-Cavs game. The bettor, a professional gambler who uses the pseudonym Jack Andrews, staked $20 on over 165 seconds for the first 3-pointer to be made. Andrews said he spent hours using play-by-play data to model the probabilities of where on the court each team would attempt its first few shots. But when Burks took a pass from Larry Nance and drilled his opening 3-pointer 53 seconds into the game -- and 112 seconds under the line -- Andrews had lost $2,240 off his $20 bet.
"I've found PointsBetting adds a whole new level of sweat to a bet," Andrews said. "Black Swans happen, and when they happen with pointsbetting, look out."
"[PointsBetting] does appeal to sort of a different type of client," Johnny Aitken, CEO of PointsBets, told ESPN. "A person where it's not just about being right, but really right, and being willing to ride out the upside and downside as well, which this product has."
The largest spread bet PointsBet has ever taken was placed last week on the Baltimore Ravens-Miami Dolphins game. On Sept. 1, a VIP client for PointsBet deposited $600,000 up front and placed a $30,000 spread bet on the Ravens -6. The bettor chose a maximum win/loss of 20 times his original stake.
Then, on Sunday -- eight months to the day of the infamous Pacers-Cavs game -- Aitken was in the trading room of PointsBet's Jersey City office, watching alongside approximately 10 traders as the Ravens scored four straight touchdowns to open the game. Baltimore's lead grew to 42-10 by halftime. It was getting expensive.
"There was no [cursing] when the Ravens kept scoring," Aitken said. "It was business as usual."
In the end, the Ravens blasted the Dolphins 59-10, and the bettor won the max, $600,000, the largest payout on a spread bet in PointsBet's history.
"He's a big bettor, and he had a big win," Aitken said. "So, we'll kind of take our medicine and keep pushing on."
The Ravens didn't produce the only expensive spread bet on Sunday. Another PointsBet client won $169,100 off a $17,800 spread bet on the Kansas City Chiefs -4.5. The Chiefs handled the Jacksonville Jaguars 40-26.
Overall, on Sunday, PointsBet said it suffered a net loss on spread bets of "upward of $1 million." It was the sportsbook's first NFL Sunday operating in the U.S.
PointsBet is operating in New Jersey and Iowa currently but is eyeing New York and Illinois, specifically for their financial trading industries.
"New York and Chicago, with their higher density of financial workers who understand stock derivatives, maybe there's a larger appetite for risk and maybe a larger ego," Aitken said. "We've seen a little bit of that in the northern part of New Jersey, where some people will come over, bet pointsbetting and then head back to Wall Street.
"They are bigger VIP clients who like to ride that volatility," Aitken added. "They want the high-risk, high-reward, and [Sunday] it went all in their favor."
As of Wednesday afternoon, seven spread bets had been placed on the Dolphins' home game against the New England Patriots. Five of the seven bets were on the Patriots -19.