In his ground-level office on a back street of Las Vegas, Lee Amaitis is worlds away from the 15-story building in London where he served as the second in command at Cantor Fitzgerald until 2008. Rather than looking at the Tower of London on the River Thames from his office, he now has a view of men entering and leaving Sheri’s Cabaret.

The cabaret is part of the Las Vegas scene that Amaitis, who heads Cantor Entertainment Technology, thrives in. He shellacs his hair back Gordon Gekko-style and wears the collar of his white shirt wide open. With a swagger typical of a casino high roller, Amaitis says he plans to turn Cantor, one of the world’s largest brokers of government bonds, into a sports-gambling powerhouse, too.

“We came here to change the face of the industry,’’ says Amaitis, who’s retained a bit of his native Brooklyn accent.

Cantor Fitzgerald, which lost 658 of its 960 New York employees when terrorists slammed an American Airlines jet into the North Tower of the World Trade Center on Sept. 11, 2001, is known for playing tough. The brokerage’s chief executive officer, Howard Lutnick, battled the widow of founder Bernie Cantor in court for control of the firm in the 1990s. Since then, he has launched a series of lawsuits alleging patent infringement and broker poaching against ICAP and other rivals, which have reciprocated with their own litigation.

Equipped with technology drawn from Wall Street and a trader’s appetite for risk, Cantor is charging into sports betting in Las Vegas. The business — conducted in a section of a casino called a sports book — is characterized by volatile swings in profit and loss, competitors such as the MGM Grand and Caesars Palace and expert gamblers known as wise guys.

“I have friends who run sports books,” says Joe D’Amico, owner of All American Sports, a Las Vegas handicapping service. “I got to tell you, none are without stomach problems.’’

While Wall Street firms are no strangers to Vegas — they have long helped casino developers raise money — Cantor is the first to explicitly set itself up as a gambling operation. With a $150 million investment, the New York-based bond brokerage has taken control of and retooled seven sports books. They are owned by the Venetian and the Palazzo — part of Sheldon Adelson’s Las Vegas Sands — and other casinos.

Cantor has also produced wireless tablets so gamblers can bet anywhere in the casino or hotel. Eventually, it wants to start an online poker casino, too.

Android apps

To promote its new Android app that allows betting from smartphones and tablets in Nevada, Cantor put cardboard fliers in Las Vegas taxis in February. They feature a curvaceous woman’s derriere with the tag line “Sports Betting on Your Android? You Bet Your App!’’

“The idea that we can bring so much technological innovation to that market is a great opportunity,’’ says Lutnick, 50. “I think it will dramatically add to the size of the market.’’

Cantor’s bookmaking software, a modified version of what Wall Street traders use, has changed the way sports gamblers at the Venetian bet. They walk past cocktail waitresses and low rollers at slot machines to get to the sports book, a 10,000-square-foot room furnished with 118 bright-red betting stations. Cantor installed a 100-foot-wide TV screen that can show 34 sporting events at once.

On this February evening, two dozen gamblers bet on events ranging from 14 simulcast horse races to college and professional basketball games. Cantor says its computer servers, driven by the kind of algorithm-rich software that fuels derivatives trading, spew out odds on events at the fastest rate ever in Las Vegas. This speed allows gamblers to place bets during contests on dozens of situations just seconds before they unfold.

During a Los Angeles Lakers-Boston Celtics game, a betting opportunity pops up on the stations. It offers a $100 payoff on a $220 wager that the Celtics’ Paul Pierce will sink the two foul shots he’s about to take. Gamblers bet on Pierce by swiping a finger across the screen. Pierce sinks both.

Before Cantor ran the sports book, people could usually bet only once, before the game began, on the outcome. Today, more gambling means additional revenue for Cantor, which gets a fee of about 2 percent of some wagers, plus its winnings, which are shared with the casino.

Aggressive competitor

“You want to build Wall Street on Las Vegas Boulevard,’’ says Andrew Garrood, a former derivatives trader at UBS who helped Cantor develop the software.

Amaitis, 62, who is spearheading Cantor’s entry into Vegas, is an aggressive competitor who decades ago had trouble with the law. Eight years before joining Cantor, he was busted for possession of cocaine along with other brokers. The U.S. attorney in New Jersey charged him in 1986 with a felony, which Amaitis pleaded down to a misdemeanor, receiving a year’s probation and a $5,000 fine, according to the Financial Industry Regulatory Authority. Amaitis says he hasn’t used drugs or alcohol since his arrest.

In 2005, Nevada’s State Gaming Control Board, the state regulator, approved Amaitis’s application to run sports books. Chairman Mark Lipparelli says a misdemeanor or felony doesn’t prevent a person from getting a gambling license. Regulators haven’t filed any complaints for violations against Cantor, according to state records.

Amaitis was dubbed the “Brooklyn Bruiser” by London newspapers during a 2003 trial about a wrongful-dismissal claim. The suit was brought by Steven Horkulak, a Cantor broker from 1997 to 2000, who accused Amaitis of abusing and traumatizing him.

“In my judgment, Mr. Amaitis is a dictatorial manager,’’ wrote a London High Court judge who awarded Horkulak $1.4 million in damages.

Cantor, which argued that Amaitis’s trading-room behavior was no different from that of executives at other financial firms, appealed the decision and lost. Amaitis declined to comment on the case.

“Amaitis is a very smart, tough guy,” says Richard Bronson, chairman of online gaming company U.S. Digital Gaming.

Amaitis’s big bet with Cantor Entertainment is that Congress will allow sports wagering to spread across the country. In 1992, lawmakers banned the activity everywhere except in the states where it was already happening: Delaware, Montana, Nevada and Oregon.

States want a shot

But states are pressing anew to make sports and online gambling legal as they search for more sources of tax revenue to offset deficits. New Jersey Gov. Chris Christie signed a bill in January legalizing sports betting, contingent on the 1992 federal law being changed.

“I don’t think there’s any doubt that one day sports betting will be legal and widespread in the U.S.,’’ says Joseph Asher, founder of sports book company Brandywine Bookmaking. “It’s widespread already. But it’s illegal.’’

Cantor and its main rival — William Hill, the No. 1 British bookmaker — are chasing a huge jackpot. In Nevada, sports gamblers bet $2.9 billion in 2011 — a tiny fraction of the $380 billion that Americans wager illegally each year, according to a 1999 report by the National Gambling Impact Study Commission.

“All of that outside of Nevada is offshore and illegal,’’ Cantor’s Garrood says. “If that doesn’t give you a hint of the opportunity, then you’re just ignoring the data.’’

Amaitis is fighting his competitors with a lawsuit, echoing the legal wars Cantor ignited against ICAP more than a decade ago. Asher was a Cantor Entertainment managing director until he left in 2007 to set up Brandywine Bookmaking, which also manages risk for Delaware’s sports lottery. Last year, William Hill agreed to spend $55 million for Brandywine and two other sports-betting companies in Nevada. That gave William Hill more than 10 percent of the market, compared with about 14 percent for Cantor as of 2011, according to the companies.

In August, three months after William Hill’s deal for Brandywine, Cantor sued Asher, alleging breach of fiduciary duty for selling out to a competitor. Asher, in a counter-complaint, accused Amaitis of launching into vicious tirades against him when they had worked together.

“Sports betting is a large market, but since both Cantor and William Hill are providing the same thing, I expect the competition to be fierce,’’ says David Schwartz, director of the Center for Gaming Research at the University of Nevada-Las Vegas.

Poker in Tokyo

Amaitis says his inspiration for a gambling business came about in 1996 from watching a Cantor customer in Tokyo play online poker while trading bonds. He pitched the idea to Lutnick.

“I called Howard and said we should think about online gaming,’’ Amaitis says. “I said, ‘Can you imagine if they traded and played poker at the same time. We’d have the whole package.’ ’’

Amaitis, who was the London-based chief of Cantor’s international business, brought gambling to the firm in 2000. The company got a British bookmaker’s license so it could offer spread betting — a popular form of wagering in Britain — through a subsidiary called Cantor Index. The bets offer spreads, say 3-to-1 odds, on the likelihood of a security rising or falling. When people make the wrong call, Cantor keeps the money.

By 2005, with Las Vegas in the midst of a building boom, Amaitis began laying the groundwork for Cantor’s move to the city. He hired one of the state’s top gambling lobbyists, Bob Faiss, to write and push a bill through the Nevada legislature to allow mobile wagering.

Cantor saw so much promise in the technology that in 2005 it contracted with manufacturers to produce about 500 eDeck, or electronic card deck, hand-held devices. The firm lends the touchscreen gadgets to gamblers, who set up an account with a deposit that’s used to make the bets. Cantor, which is phasing out the hardware as it deploys its apps, collects the winnings and fees.

Lutnick says mobile gambling lets bettors take advantage of all that Las Vegas offers, with its restaurants overseen by celebrity chefs and extravagant stage shows.

“People can play and have fun and not have to sit at the green-felt table all day,” Lutnick says. “It’s going to change how much people get to bet because it will free them to play games while they’re at dinner or a show.”

Bored bettors

Garrood, the former UBS trader, helped mastermind Cantor’s second technical innovation: in-game betting. In 2007, he visited a Las Vegas sports book and didn’t like what he saw. Gamblers who had bet on a football game watched it on television with little enthusiasm.

“Everyone looked bored,’’ Garrood says.

He returned to Cantor’s London office to help create software to enable wagering with odds during games. Cantor was following the lead of some British bookmakers, which already allowed in-game betting. Amaitis says Cantor’s technology has single-handedly boosted sports betting in Nevada. Wagers increased $311 million from 2009 to 2011, according to Nevada’s gaming board.

“Because of Cantor,’’ he says.

By taking more bets, Cantor spreads out risk, enabling it to accept bigger wagers, in the hundreds of thousands of dollars. Cantor even took a few $2 million bets on the outcome of the 2012 Super Bowl, says Mike Colbert, the firm’s race and sports book director of risk. The limit at most sports books is about $1,000 to $10,000.

“The old-school way was to throw out any old odds and only take small bets and protect themselves,’’ says Michael Shackleford, a Las Vegas-based actuary and gaming mathematician. “Cantor is more aggressive.’’

Cantor Entertainment is so confident that it’s even offering a wager on itself. The unit, which has been struggling to make a profit, filed for an initial public offering in December. Sports and mobile gamblers bet $362 million with the unit through the first nine months of last year, and it lost $22.2 million in that period, its IPO prospectus says.

While Amaitis lacks income, he’s got plenty of bravado. Surrounded by three flat-screen TVs tuned to ESPN, ESPN2 and CNBC in his office, Amaitis says Cantor will reign over Las Vegas. “I can tell you Cantor will dominate sports in Nevada,’’ he says. Today, with major casinos such as the MGM Grand still controlling collectively more than half of all sports wagers, no one company lords over the market.

The full version of this Bloomberg Markets story appears in the magazine’s June issue.