I had thought bookies set the odds so that half of incoming bets were on either side. They don’t care which outcome occurs and just take their cut either way. I guess at low volume it’s hard to find that optimal spot and this is what results in losses.
Odds providers have their models on how likely each outcome is. They add a spread to this (for example if it's 50/50, they'll pay out 1.8x instead of 2x). The line can also be affected by other factors, like how likely it is one side is oversubscribed. They don't make money on all markets, just most
But if someone has a model that is so significantly better than theirs that it beats the line _and_ spread, they will make money in the long run. Haralabos Voulgaris for example is likely one of the most successful sports bettors. Very interesting guy imo
There's more to it. Even if the sports-book functions as an exchange, holding ~zero stake in the outcomes, they still want to ban anyone who consistently wins.
That's because if you have a few smart players who consistently win, that means you have a lot of fools who will consistently lose money on the platform - which will drive them away, and impact both betting activity and the spread you collect.
Ideally, you want a bunch of uninformed fools generating huge volume gambling against eachother, while you siphon away spread.
Asian books (not a geographical distinction but a business model) are not exchanges and they effectively pay sharps to bet with them. This is why betting syndicates exist, they set prices, and the business model of Asian books is to make it back on volume from having the best prices (and before legalisation, these were the biggest books in the world, they did billions every week in handle).
But the business model is different: retail-facing bookies have to win their customer base back every week so they need to spend more marketing. Asian books also do promos but they tend to be one-time (which are cheaper to run), they don't have a non-sportsbook business typically, and they don't comply with regulators.
Exchanges do not drive away sharps either. Their business model is largely about providing an environment for sharps. The only times were that hasn't been true is when a syndicate has owned an exchange (this happened with Matchbook). The exchange provides an incentive to invest for people to invest in price discovery, which happens. There is no way for the business to run without someone being incentivized to discover prices. People randomly gambling against each other isn't a business model.
I mean, yes, obviously being a bookie where you can set a crazy spread on convoluted bets is more profitable than being an agnostic, fair betting exchange - but I was pointing out that even a fair betting exchange has every incentive to kick winners off its platform.
The price on most betting exchanges is unbeatable without significant resources (it is set based on Asian books, they will open lines to sharps before betting exchanges list the market).
The price on parlays, with the huge spread, is far more vulnerable because there is no large market for these events. Prices for large events are mostly gathered from third parties, parlays will tend to be priced in-house.
This is part of the reason why bookmakers control who can bet on what on their site. If they opened parlay line with $100k limit to anyone, they would be bankrupted by the end of the day. The purpose of these bets is to create a product that is exciting for customers and is economic for them to provide...but that requires there to be limit on how much customers can bet.
The most profitable product are the handicap markets and point spreads even though the margin for these is usually low single digits. Asian books usually only provide these markets...but the problem is that customers don't like these as much as parlays. The product is entertainment.
CME is a bad example, because large market participants actually go there to buy stuff like commodities that they need to keep their businesses going, and many trades are often net-win-win for both parties. (The active trader made a buck, the producer/consumer of the commodity got their goods. They might have preferred getting them at a better price, but they are still net positive from making the trade at the price they got/paid.)
The retail day traders trying to play there are, of course, in a win/lose fight.
If we start decrying every industry whose business model is based on information asymmetry we are going to have a lot of uncomfortable folk on this forum
> Might have more to do with exploiting addiction and ruining lives for profit.
Thank you for proving my point. The ad industry and the mobile game industry are both tech based industries that engage in those behaviors just off the top of my head.
If you utilize dark patterns to make a profit and then look down on the gambling industry for abusing addictive behaviors, you are just a hypocrite who wants to excuse their own sins
They have to compete with others. If the 'good' betters go with you that means you have worse odds that your competition and anyone else who knows goes elsewhere.
the real money is in pools where only a few people bet. however that works best if you get people to bet on the unlikely thing you want to take the other side as you can win more often. Often the unlikely thing is only possible because you take a side - so the savey better is taking away your bets.
No, it doesn't work that way. Bettors, in this context, aren't price-sensitive so the book is never balanced. There are some tools that bookmakers use to get more balanced - handicap markets - but it still never ends up being balanced if you are a largely retail-facing book.
If you dive into the article you'll see where the big winners, that they call "sharps" have found ways around this, like exploiting differences between multiple books, finding arbitrages and betting heavily and quickly in changing situations before the market has a chance to settle. I play a browser game called Torn that has a play money sportsbook and I've absolutely identified scenarios where either side of a straight win/loss bet was paying out positive. What this effectively meant is that I could bet the same amount on each team in the match to win and be guaranteed to walk away with money.
No this is a big misconception in my opinion. It may be the case at bookmakers like SBOBet, Pinnacle etc. who have fewer markets and higher liquidity (but I'm not sure as I never worked for one). I worked as a trader and it was extremely rare to end up with a balanced book like that. We did sometimes move the odds slightly based on liabilities but we never wanted to move them so much as to arb with the wider market.
Depending on how the money comes in for a given line, the line will move to account for possible losses for the book. So the odds aren’t just set once, they slide around.
Generally this happens based on how the sharks bet, not dissimilar to how market-makers affect stock prices, as a bad/loose analogy.
This is why the sports books ban so few people. 1% gets thrown around a lot but most places that disclose this say “less than 1%” and it’s likely pretty well below 1%. The sports books like the top 5% who aren’t top 0.5% because those people give them information and information is profit.
ultimately we see this play out quite a lot, predatory people cry when they’re preyed upon.
time and time again they justify predatory behaviors and then cry foul when someone figures out a way to take them. “it’s ok when i do it but we shouldn’t allow it when im on the wrong side!”
it’s wild how commonplace predatory shit has become in so many facets of society now.
The idea they are being “preyed on” seems absurd to me. They control the odds they offer. Unless you’re controlling the outcomes of the matches (e.g., by collusion) I don’t see it.
I read a really interesting post in The NY Times (having trouble finding it) that really broke down how crazy sports betting has gotten in the last couple years. The gist is that states love betting, because they can tax them at high rates with little pushback from citizens who are marketed that the money goes to schools. The sportsbooks have to eat the new tax, and change the odds so that they can make a profit. This forces more losers in the state, and causes possible indirect costs from people losing so much. It’s an ugly cycle where no one wins.
On the other hand, some fraction of people are going to gamble away their life savings on bad bets. No idea how you balance the two, but gambling addiction does have a human cost.
It is admittedly not that much different than any other addict looking for their next fix. Yet, if feels lot uglier when it is a billion dollar corporation on the other side optimizing for the human tragedy.
Sure, and I actually have less of an issue with gambling than I do with social media companies and indeed advertising companies in general, but in both situations it's a massive unaccountable corporation abusing people for profit.
Lot’s of people win from Facebook as a communication platform. It also does all kinds of explosive crap, but being able to keep up with distant family and friends has meaningful value.
if they can't ban good bettors they'll either swap the odds to juice bad bettors even more or go out of business. The idea that government can force you to do business with people you don't want to do business with is broad and dangerous. I think that banning discrimination for protected classes is a good idea (or, more accurately, a bad idea that several other bad ideas have made into an idea that does actually make things a bit better in pragmatic terms).
Would you agree that as a guiding principle for good government no one should be forced to associate with anyone they don't want to or disallowed from associating with anyone they do want to? That's the fundamental right that's in conflict with the idea of not being allowed to ban successful bettors. In the US we've decided that the insidiousness of class-based discrimination merits an exception to that idea, but overall free association rules the day. You as a business or a consumer are free to do business or not with anyone you want to or don't, and that's how it should be afaic.
>Would you agree that as a guiding principle for good government no one should be forced to associate with anyone they don't want to or disallowed from associating with anyone they do want to?
For an individual? Sure.
For a business? Morally/ ethically, no. If you have a business model predicated on only being profitable when you pick and choose your customers, then that business model is unsustainable and shouldn't exist. It's complete crap that I get banned from a casino or betting app simply because I know how to profitably bet on things.
If it's not profitable to serve someone like me, then don't serve the product at all. It's like an all you can eat buffet, you shouldn't be allowed to ban someone from there simply because they eat too much. Set time limits, or whatever else you need to do, but don't market it as "all you can eat".
Traditional businesses don't have this problem, Apple makes the same amount of money regardless of who they sell an iPhone to, it's predatory businesses that have this issue.
>if they can't ban good bettors they'll either swap the odds to juice bad bettors even more or go out of business.
Good, do that then.
>The idea that government can force you to do business with people you don't want to do business with is broad and dangerous.
Governments have been doing stuff like this for a long time. Look at how the legal profession works.
And lots of industries ban unprofitable customers. All-you-can-eat restaurants will ban customers who eat/take absurd amounts of food, which is unprofitable. Landlords don't rent to prospective tenants who have a history of not paying rent, which is unprofitable. Every major retailer will ban you if you return too many items too often, which is unprofitable.
So why would betting be any different? Banning highly unprofitable customers is normal business practice across many industries.
There's a reason we call it the free market rather than the forced market. Businesses aren't forced to transact with individuals (unless they are discriminating against specific protected classes like race or gender).
I personally think if betting is allowed then they shouldn’t be allowed to discriminate. Same with my belief that Vegas casinos shouldn’t be allowed to ban card counters. This also naturally discourages predatory business models.
However aside from this, the data is over abundantly clear. Legalized betting significantly hurts the financial health of the places where it’s allowed; because of the rollout in the US, there’s so much data we can derive a definitive causative effect that bankruptcies are up and savings go down in places that legalize it. You can have a liberal view of “that’s their problem” but from a societal perspective this is a net societal harm that has no to minimal beneficial impact.
The principle I’m generally in favor of “natural” consequences of actions being inescapable, for businesses and people, regardless of industry. The other principle is one of value creation being the only products that are allowed to be sold, particularly at scale on the broad market.
If you want to extract oil, you shouldn’t be able to escape the cost of climate change. Similarly, you shouldn’t get extra protection and subsidies from government to enable your business model and subsidies should be countered strongly with tariffs to ensure those subsidies aren’t skewing the global economy.
If you do sales of addictive products like alcohol, tobacco, or gambling you shouldn’t be able to offload the harm of that onto “personal responsibility”. Same goes with mobile phones and social media internationally trying to be addictive now that we understand this “attention grabbing” incentive really well.
And you can tell that gambling isn’t being an honest player because of the lip service these companies pay by claiming they ban people with legitimate gambling problems but the actual evidence is they don’t and instead actually treat these people like whales and keeping them engaged and only banning the people who aren’t costing them money.
But betting specifically is worse than alcohol in terms of destructiveness because the vast majority of people who engage with the product have a problem. At least the vast majority of people engage with alcohol without serious issues like that. And in terms of value creation, it s a cheap low value form of addictive entertainment at best, a step above slot machines. In the common case it’s harmful and the worst destructive.
PS: if you read what I wrote, I didn’t say that sports betting is the exception. Gambling like blackjack and banning card counters was similar.
You're arguing that gambling is bad and that externalities should be priced in.
Fine, but none of that has anything to do with why you think betting/gambling firms shouldn't be able to exclude highly unprofitable customers while basically every other industry can. That's the exception you seem to be calling for.
Can you give an example of other industries that are allowed to classify customers as “unprofitable” and exclude them?
And as a sibling noted, yes I think making that specific industry unprofitable is precisely how to resolve the problem of SCOTUS reversing a 26 year ban on the issue.
I gave three in my root comment. I'm not going to repeat myself.
And OK, if you want to ban gambling then argue for that. Don't argue for removing the freedom to choose who you do business with as a means to that. Talk about throwing out the baby with the bathwater.
Imagine an industry almost identical to gambling where the only difference is how payouts are calculated. Instead, all gambles return exactly the expected value rather than a payout based on random chance. Any of the "other" purposes of gambling like entertainment are just as well fulfilled by this as what we have today.
I suspect most people aren't interested in gambling this way though. Banning winners allows you to turn our gambling into something much closer to this alternate form, while keeping all the marketing benefits of a game people actually want to play. That certainly feels deceptive in ways that a transactional purchase is not.
I don’t disagree with your general idea, that companies will ban customers if they aren’t profitable. But these seem like sort of different examples…
> All-you-can-eat restaurants will ban customers who eat/take absurd amounts of food, which is unprofitable.
I like this example. It is simply not wanting to make a deal with the person. It seems pretty close to the betting situation.
> Landlords don't rent to prospective tenants who have a history of not paying rent, which is unprofitable.
This is different because the renter is specifically reneging on their side of the contract. It isn’t a matter of not wanting to do business with them because the deal has bad terms, but because the landlord has good reason to suspect they’ll actually be ripped off instead.
> Every major retailer will ban you if you return too many items too often, which is unprofitable.
This… I dunno. Making too many returns is not necessarily illegitimate or anything (somebody could just get unlucky and end up with a lot of bad products). But, it is a bad vibe, it feels like maybe the person is running some kind of scam or fraud that you just haven’t worked out the details of.
——
Another example we could add: if you have a some pickup or beer-league sports and for some reason a professional player shows up, and starts playing really competitively and flattening all the other players, you might ask them to not come back, simply to maintain a reasonable competitive landscape for everybody.
Because the loophole for sports betting is it’s a game of skill. If they are actively eliminating skilled players it’s no longer a game of skill, just pure predatory gambling.
Worse, it’s actively trying to exploit their customers through deception.
The whole idea of gambling is predicated on the idea that you can win. If winning can cause you to get banned, the premise of the business is a lie. It's basically false advertising, and these places should not be allowed to claim (or imply) you can win anything. Basically the only thing they should be able to advertise is that they will take your money.
Yup, you can say that this should signal to people that they shouldn’t participate in betting, but if they are still doing it willingly then what’s the problem?
Plus, the innocent partner is now inheriting the debt, because that is how divorces work.
The defenders of predatory industries that threw huge money on A/B tests about how take advantage of people blaming everyone else are getting tired out.
Anything is too strong, but everytime something is a cause we should look at that option along with others. I'm against divorce - but marriage to someone who is abusive is even worse and so I'm forced to allow for divorce despite being against it. There are many many other things in life that are far more complex (even my example is far more complex, but you wouldn't read the 100 volume books if I wrote it - I don't even have time to think about all the details that would need to be in it)
If people want to gamble, they are free to look for a bookie, if people want to buy heroin, they are free to look for a street pharmaceutical sales representative, but neither should be allowed to manufacture demand for their poison, or hand out free samples.
> In 2022, Washington Post reported a bettor Beau Wagner who bet $1,000 and won $50,000 on an NBA game. He tweeted a screenshot of his winning bet, and DraftKings reposted it with the caption, “BEAU KNOWS BETTING”. However, a day after his successful bet, his betting limit was severely restricted to a grand total of three dollars and sixty three cents. DraftKings used his win as an advertisement to lure new, unsophisticated bettors to the platform, but they shut down the very bettor they were advertising.
Sports betting ads are the absolute plague of sports broadcasting here in Australia. You can't go 5 seconds without seeing an ad for gambling. It's just insane, like seeing the cigarette ads in old sports games.
I enjoy sports gambling. I’m sure people reading this won’t believe me, but I am “up” about 47% over the past 2 years, which is when I started. I’m good at it and I have a system.
I wholeheartedly agree with you, they need to ban advertising, as they did with tobacco. The amount of commercials and adverts is nauseating, the industry is predatory, and I’m having serious thoughts about stopping because of that.
I’m not going to defend bans, the industry is shady. People who get lucky once on a big bet shouldn’t get banned, or throttled, especially if they have a history of generally not hitting.
To consider it neutrally, there are people who are just really, really good at it. Think a pro athlete playing on a JV sports team, a man among boys if you will. Those people are sincerely just fucking around with online books anyways and make most of their actual plays in-person, large stakes, and it is their primary source of income.
I get why they get banned. These piddly online books aren’t “meant” for them. I don’t blame them for trying, it’s as close to free money as they can get. I also get why they get banned.
Again, the industry is scummy and predatory. Not defending it. I can see both sides of it though.
Reminds me of when I was a teenager and Denny's banned me and my other hungry, teenage friends from eating at their "All you can eat" buffet. The manager was at least transparent about it, telling us we were literally eating his profits for the day. LOL
Underground is an appropriate place for this activity, no? You want your kids betting their savings on this trash? Your mom and dad wasting their retirement?
Yes, only ~3% of bettors are net profitable, but more important is lifetime value (LTV) vs. customer acquisition cost (CAC). With CAC around $300 and average losses at $100/year, it takes three years of retention just to break even per casual bettor. If the average retention drops below that, sportsbooks lose money on the majority of customers, even if most are losers
Why don't sportsbooks just follow the polymarket model with buying and selling yes/no shares? It's impossible to lose money that way, and it doesn't matter how well any individual better is doing.
There is a lot more money to be made if you can attract a cohort of suckers. It is basically an entirely different business model. Drug dealer rather than an eBay. And running a betfair cannibalises the sucker arm.
Functionally more like parimutuel bets, then? I don’t gamble (on sports or anything else), so I haven’t paid these much attention (though the nonstop betting ads have made watching pro sports much less pleasant).
It's a bit of a conspiracy, but ultimately there is more money in sports betting than in the sport itself, and thus eventually the money will win and sports will just be a mechanism for gambling. The leagues will ultimately be controlled by those who run the gambling and have more money and power than the league itself.
Start a betting pool with a group of friends. Use an exchange (not sports book) internal to the group, so no external money needed. No commission.
It’s no fun realizing you and your friends have taken opposite bets and are just handing money to the house. Keep that money in your social group and make some friendly bets without worrying about the entire group being taken to the cleaners. The group leaves the Super Bowl party, horse races, etc with just as much money as went in (minus tickets, food/drink, etc).
Sportsbooks want action from sharps up until a certain point, because it helps them set the line for the other punters. If they go too far they give too much money to the sharps; not far enough and there is greater opportunity for the regular bettors.
Gamblers anonymous should offer a service where if you are struggling with betting addiction you give them your account and they sell it to a “sharp” who profits until you are banned.
I had thought bookies set the odds so that half of incoming bets were on either side. They don’t care which outcome occurs and just take their cut either way. I guess at low volume it’s hard to find that optimal spot and this is what results in losses.
Odds providers have their models on how likely each outcome is. They add a spread to this (for example if it's 50/50, they'll pay out 1.8x instead of 2x). The line can also be affected by other factors, like how likely it is one side is oversubscribed. They don't make money on all markets, just most
But if someone has a model that is so significantly better than theirs that it beats the line _and_ spread, they will make money in the long run. Haralabos Voulgaris for example is likely one of the most successful sports bettors. Very interesting guy imo
> Haralabos Voulgaris for example is likely one of the most successful sports bettors. Very interesting guy imo
Anyone whose name sounds like a Harry Potter spell is bound to be an interesting person. I'll have to dig into him some more
There's more to it. Even if the sports-book functions as an exchange, holding ~zero stake in the outcomes, they still want to ban anyone who consistently wins.
That's because if you have a few smart players who consistently win, that means you have a lot of fools who will consistently lose money on the platform - which will drive them away, and impact both betting activity and the spread you collect.
Ideally, you want a bunch of uninformed fools generating huge volume gambling against eachother, while you siphon away spread.
It's a deplorable, lose-lose industry.
This isn't correct.
Asian books (not a geographical distinction but a business model) are not exchanges and they effectively pay sharps to bet with them. This is why betting syndicates exist, they set prices, and the business model of Asian books is to make it back on volume from having the best prices (and before legalisation, these were the biggest books in the world, they did billions every week in handle).
But the business model is different: retail-facing bookies have to win their customer base back every week so they need to spend more marketing. Asian books also do promos but they tend to be one-time (which are cheaper to run), they don't have a non-sportsbook business typically, and they don't comply with regulators.
Exchanges do not drive away sharps either. Their business model is largely about providing an environment for sharps. The only times were that hasn't been true is when a syndicate has owned an exchange (this happened with Matchbook). The exchange provides an incentive to invest for people to invest in price discovery, which happens. There is no way for the business to run without someone being incentivized to discover prices. People randomly gambling against each other isn't a business model.
AIUI, two other factors are:
the most lucrative (sports) bets are complex and highly unlikely parley bets, betters here naturally tend to all take one side
They want to offer bets on many sports, matches, and specific events that don't get a lot of bets, so they have to take the risk
I mean, yes, obviously being a bookie where you can set a crazy spread on convoluted bets is more profitable than being an agnostic, fair betting exchange - but I was pointing out that even a fair betting exchange has every incentive to kick winners off its platform.
The price on most betting exchanges is unbeatable without significant resources (it is set based on Asian books, they will open lines to sharps before betting exchanges list the market).
The price on parlays, with the huge spread, is far more vulnerable because there is no large market for these events. Prices for large events are mostly gathered from third parties, parlays will tend to be priced in-house.
This is part of the reason why bookmakers control who can bet on what on their site. If they opened parlay line with $100k limit to anyone, they would be bankrupted by the end of the day. The purpose of these bets is to create a product that is exciting for customers and is economic for them to provide...but that requires there to be limit on how much customers can bet.
The most profitable product are the handicap markets and point spreads even though the margin for these is usually low single digits. Asian books usually only provide these markets...but the problem is that customers don't like these as much as parlays. The product is entertainment.
Do you think the Chicago Mercantile Exchange kicks out the brokers that make the best futures trades? How is this any different?
CME is a bad example, because large market participants actually go there to buy stuff like commodities that they need to keep their businesses going, and many trades are often net-win-win for both parties. (The active trader made a buck, the producer/consumer of the commodity got their goods. They might have preferred getting them at a better price, but they are still net positive from making the trade at the price they got/paid.)
The retail day traders trying to play there are, of course, in a win/lose fight.
> It's a deplorable industry.
If we start decrying every industry whose business model is based on information asymmetry we are going to have a lot of uncomfortable folk on this forum
Perhaps we should. There's no shortage of absolutely predatory behavior out there.
You think he's calling the gambling industry deplorable because of information asymmetry?
Might have more to do with exploiting addiction and ruining lives for profit.
> Might have more to do with exploiting addiction and ruining lives for profit.
Thank you for proving my point. The ad industry and the mobile game industry are both tech based industries that engage in those behaviors just off the top of my head.
If you utilize dark patterns to make a profit and then look down on the gambling industry for abusing addictive behaviors, you are just a hypocrite who wants to excuse their own sins
What if I think all three of those industries are bad?
They have to compete with others. If the 'good' betters go with you that means you have worse odds that your competition and anyone else who knows goes elsewhere.
the real money is in pools where only a few people bet. however that works best if you get people to bet on the unlikely thing you want to take the other side as you can win more often. Often the unlikely thing is only possible because you take a side - so the savey better is taking away your bets.
No, it doesn't work that way. Bettors, in this context, aren't price-sensitive so the book is never balanced. There are some tools that bookmakers use to get more balanced - handicap markets - but it still never ends up being balanced if you are a largely retail-facing book.
If you dive into the article you'll see where the big winners, that they call "sharps" have found ways around this, like exploiting differences between multiple books, finding arbitrages and betting heavily and quickly in changing situations before the market has a chance to settle. I play a browser game called Torn that has a play money sportsbook and I've absolutely identified scenarios where either side of a straight win/loss bet was paying out positive. What this effectively meant is that I could bet the same amount on each team in the match to win and be guaranteed to walk away with money.
No this is a big misconception in my opinion. It may be the case at bookmakers like SBOBet, Pinnacle etc. who have fewer markets and higher liquidity (but I'm not sure as I never worked for one). I worked as a trader and it was extremely rare to end up with a balanced book like that. We did sometimes move the odds slightly based on liabilities but we never wanted to move them so much as to arb with the wider market.
Depending on how the money comes in for a given line, the line will move to account for possible losses for the book. So the odds aren’t just set once, they slide around.
Generally this happens based on how the sharks bet, not dissimilar to how market-makers affect stock prices, as a bad/loose analogy.
This is why the sports books ban so few people. 1% gets thrown around a lot but most places that disclose this say “less than 1%” and it’s likely pretty well below 1%. The sports books like the top 5% who aren’t top 0.5% because those people give them information and information is profit.
I have had a suspicion for a while now that my accounts have eyeballs on them. I think you are correct.
ultimately we see this play out quite a lot, predatory people cry when they’re preyed upon.
time and time again they justify predatory behaviors and then cry foul when someone figures out a way to take them. “it’s ok when i do it but we shouldn’t allow it when im on the wrong side!”
it’s wild how commonplace predatory shit has become in so many facets of society now.
The idea they are being “preyed on” seems absurd to me. They control the odds they offer. Unless you’re controlling the outcomes of the matches (e.g., by collusion) I don’t see it.
Luring people into money-losing/harmful scenarios is by definition predatory.
Sportsbooks are goners.
Future markets don't have to pay state taxes so that 51% drag on profits goes away [1].
[1]: https://finance.yahoo.com/news/kalshi-ceo-state-law-doesnt-1...
Time will tell. Cases that will ultimately determine their regulatory status are still making their way through the courts.
What's the future on that outcome?
Unfortunately, that future would be buying a security so you can't trade it yet.
Given Kalshi a year to figure out how to wash it through a token and then you'll be able to buy calls/puts as futures.
I read a really interesting post in The NY Times (having trouble finding it) that really broke down how crazy sports betting has gotten in the last couple years. The gist is that states love betting, because they can tax them at high rates with little pushback from citizens who are marketed that the money goes to schools. The sportsbooks have to eat the new tax, and change the odds so that they can make a profit. This forces more losers in the state, and causes possible indirect costs from people losing so much. It’s an ugly cycle where no one wins.
Gambling has always been a mob run business. Now it's just the most powerful mob taking the cut.
It's an optional contribution to public funds and billionaire owners.
Nobody wins from say facebook, but at least taxing sports betting raises money for public services.
On the other hand, some fraction of people are going to gamble away their life savings on bad bets. No idea how you balance the two, but gambling addiction does have a human cost.
It is admittedly not that much different than any other addict looking for their next fix. Yet, if feels lot uglier when it is a billion dollar corporation on the other side optimizing for the human tragedy.
Sure, and I actually have less of an issue with gambling than I do with social media companies and indeed advertising companies in general, but in both situations it's a massive unaccountable corporation abusing people for profit.
Lot’s of people win from Facebook as a communication platform. It also does all kinds of explosive crap, but being able to keep up with distant family and friends has meaningful value.
A great argument for banning the industry.
I don't think they should ban it, but they shouldn't be allowed to ban good bettors.
if they can't ban good bettors they'll either swap the odds to juice bad bettors even more or go out of business. The idea that government can force you to do business with people you don't want to do business with is broad and dangerous. I think that banning discrimination for protected classes is a good idea (or, more accurately, a bad idea that several other bad ideas have made into an idea that does actually make things a bit better in pragmatic terms).
Would you agree that as a guiding principle for good government no one should be forced to associate with anyone they don't want to or disallowed from associating with anyone they do want to? That's the fundamental right that's in conflict with the idea of not being allowed to ban successful bettors. In the US we've decided that the insidiousness of class-based discrimination merits an exception to that idea, but overall free association rules the day. You as a business or a consumer are free to do business or not with anyone you want to or don't, and that's how it should be afaic.
>Would you agree that as a guiding principle for good government no one should be forced to associate with anyone they don't want to or disallowed from associating with anyone they do want to?
For an individual? Sure. For a business? Morally/ ethically, no. If you have a business model predicated on only being profitable when you pick and choose your customers, then that business model is unsustainable and shouldn't exist. It's complete crap that I get banned from a casino or betting app simply because I know how to profitably bet on things.
If it's not profitable to serve someone like me, then don't serve the product at all. It's like an all you can eat buffet, you shouldn't be allowed to ban someone from there simply because they eat too much. Set time limits, or whatever else you need to do, but don't market it as "all you can eat".
Traditional businesses don't have this problem, Apple makes the same amount of money regardless of who they sell an iPhone to, it's predatory businesses that have this issue.
>if they can't ban good bettors they'll either swap the odds to juice bad bettors even more or go out of business.
Good, do that then.
>The idea that government can force you to do business with people you don't want to do business with is broad and dangerous.
Governments have been doing stuff like this for a long time. Look at how the legal profession works.
Under what circumstances should a business be allowed to refuse service, then?
Why?
You haven't made any argument.
And lots of industries ban unprofitable customers. All-you-can-eat restaurants will ban customers who eat/take absurd amounts of food, which is unprofitable. Landlords don't rent to prospective tenants who have a history of not paying rent, which is unprofitable. Every major retailer will ban you if you return too many items too often, which is unprofitable.
So why would betting be any different? Banning highly unprofitable customers is normal business practice across many industries.
There's a reason we call it the free market rather than the forced market. Businesses aren't forced to transact with individuals (unless they are discriminating against specific protected classes like race or gender).
I personally think if betting is allowed then they shouldn’t be allowed to discriminate. Same with my belief that Vegas casinos shouldn’t be allowed to ban card counters. This also naturally discourages predatory business models.
However aside from this, the data is over abundantly clear. Legalized betting significantly hurts the financial health of the places where it’s allowed; because of the rollout in the US, there’s so much data we can derive a definitive causative effect that bankruptcies are up and savings go down in places that legalize it. You can have a liberal view of “that’s their problem” but from a societal perspective this is a net societal harm that has no to minimal beneficial impact.
> I personally think if betting is allowed then they shouldn’t be allowed to discriminate.
Why? What makes betting different from every other business in this regard? Why the exception? On what principle?
The principle I’m generally in favor of “natural” consequences of actions being inescapable, for businesses and people, regardless of industry. The other principle is one of value creation being the only products that are allowed to be sold, particularly at scale on the broad market.
If you want to extract oil, you shouldn’t be able to escape the cost of climate change. Similarly, you shouldn’t get extra protection and subsidies from government to enable your business model and subsidies should be countered strongly with tariffs to ensure those subsidies aren’t skewing the global economy.
If you do sales of addictive products like alcohol, tobacco, or gambling you shouldn’t be able to offload the harm of that onto “personal responsibility”. Same goes with mobile phones and social media internationally trying to be addictive now that we understand this “attention grabbing” incentive really well.
And you can tell that gambling isn’t being an honest player because of the lip service these companies pay by claiming they ban people with legitimate gambling problems but the actual evidence is they don’t and instead actually treat these people like whales and keeping them engaged and only banning the people who aren’t costing them money.
But betting specifically is worse than alcohol in terms of destructiveness because the vast majority of people who engage with the product have a problem. At least the vast majority of people engage with alcohol without serious issues like that. And in terms of value creation, it s a cheap low value form of addictive entertainment at best, a step above slot machines. In the common case it’s harmful and the worst destructive.
PS: if you read what I wrote, I didn’t say that sports betting is the exception. Gambling like blackjack and banning card counters was similar.
You're arguing that gambling is bad and that externalities should be priced in.
Fine, but none of that has anything to do with why you think betting/gambling firms shouldn't be able to exclude highly unprofitable customers while basically every other industry can. That's the exception you seem to be calling for.
Can you give an example of other industries that are allowed to classify customers as “unprofitable” and exclude them?
And as a sibling noted, yes I think making that specific industry unprofitable is precisely how to resolve the problem of SCOTUS reversing a 26 year ban on the issue.
I gave three in my root comment. I'm not going to repeat myself.
And OK, if you want to ban gambling then argue for that. Don't argue for removing the freedom to choose who you do business with as a means to that. Talk about throwing out the baby with the bathwater.
If someone wants to ban an industry then making it less profitable is a step in the right direction.
Imagine an industry almost identical to gambling where the only difference is how payouts are calculated. Instead, all gambles return exactly the expected value rather than a payout based on random chance. Any of the "other" purposes of gambling like entertainment are just as well fulfilled by this as what we have today.
I suspect most people aren't interested in gambling this way though. Banning winners allows you to turn our gambling into something much closer to this alternate form, while keeping all the marketing benefits of a game people actually want to play. That certainly feels deceptive in ways that a transactional purchase is not.
I don’t disagree with your general idea, that companies will ban customers if they aren’t profitable. But these seem like sort of different examples…
> All-you-can-eat restaurants will ban customers who eat/take absurd amounts of food, which is unprofitable.
I like this example. It is simply not wanting to make a deal with the person. It seems pretty close to the betting situation.
> Landlords don't rent to prospective tenants who have a history of not paying rent, which is unprofitable.
This is different because the renter is specifically reneging on their side of the contract. It isn’t a matter of not wanting to do business with them because the deal has bad terms, but because the landlord has good reason to suspect they’ll actually be ripped off instead.
> Every major retailer will ban you if you return too many items too often, which is unprofitable.
This… I dunno. Making too many returns is not necessarily illegitimate or anything (somebody could just get unlucky and end up with a lot of bad products). But, it is a bad vibe, it feels like maybe the person is running some kind of scam or fraud that you just haven’t worked out the details of.
——
Another example we could add: if you have a some pickup or beer-league sports and for some reason a professional player shows up, and starts playing really competitively and flattening all the other players, you might ask them to not come back, simply to maintain a reasonable competitive landscape for everybody.
Because the loophole for sports betting is it’s a game of skill. If they are actively eliminating skilled players it’s no longer a game of skill, just pure predatory gambling.
Worse, it’s actively trying to exploit their customers through deception.
The whole idea of gambling is predicated on the idea that you can win. If winning can cause you to get banned, the premise of the business is a lie. It's basically false advertising, and these places should not be allowed to claim (or imply) you can win anything. Basically the only thing they should be able to advertise is that they will take your money.
Yup, you can say that this should signal to people that they shouldn’t participate in betting, but if they are still doing it willingly then what’s the problem?
Maybe divorce, crime, homelessness, bankruptcy, suicide, to name a few?
Plus, the innocent partner is now inheriting the debt, because that is how divorces work.
The defenders of predatory industries that threw huge money on A/B tests about how take advantage of people blaming everyone else are getting tired out.
So then should we ban anything that causes one of these things?
Anything is too strong, but everytime something is a cause we should look at that option along with others. I'm against divorce - but marriage to someone who is abusive is even worse and so I'm forced to allow for divorce despite being against it. There are many many other things in life that are far more complex (even my example is far more complex, but you wouldn't read the 100 volume books if I wrote it - I don't even have time to think about all the details that would need to be in it)
Or at minimum, banning advertising for it.
If people want to gamble, they are free to look for a bookie, if people want to buy heroin, they are free to look for a street pharmaceutical sales representative, but neither should be allowed to manufacture demand for their poison, or hand out free samples.
> In 2022, Washington Post reported a bettor Beau Wagner who bet $1,000 and won $50,000 on an NBA game. He tweeted a screenshot of his winning bet, and DraftKings reposted it with the caption, “BEAU KNOWS BETTING”. However, a day after his successful bet, his betting limit was severely restricted to a grand total of three dollars and sixty three cents. DraftKings used his win as an advertisement to lure new, unsophisticated bettors to the platform, but they shut down the very bettor they were advertising.
Absolute scum.
Sports betting ads are the absolute plague of sports broadcasting here in Australia. You can't go 5 seconds without seeing an ad for gambling. It's just insane, like seeing the cigarette ads in old sports games.
I enjoy sports gambling. I’m sure people reading this won’t believe me, but I am “up” about 47% over the past 2 years, which is when I started. I’m good at it and I have a system.
I wholeheartedly agree with you, they need to ban advertising, as they did with tobacco. The amount of commercials and adverts is nauseating, the industry is predatory, and I’m having serious thoughts about stopping because of that.
They could (in addition to banning Ads), require them to take bets from anyone not banned for misconduct by some neutral party.
I’m not going to defend bans, the industry is shady. People who get lucky once on a big bet shouldn’t get banned, or throttled, especially if they have a history of generally not hitting.
To consider it neutrally, there are people who are just really, really good at it. Think a pro athlete playing on a JV sports team, a man among boys if you will. Those people are sincerely just fucking around with online books anyways and make most of their actual plays in-person, large stakes, and it is their primary source of income.
I get why they get banned. These piddly online books aren’t “meant” for them. I don’t blame them for trying, it’s as close to free money as they can get. I also get why they get banned.
Again, the industry is scummy and predatory. Not defending it. I can see both sides of it though.
Agree with the banning, problem is they are major sponsors of a lot of sports which would then need to find alternatives for funding.
AFL (Australia) is one with very embedded sponsorship from SportsBet.
Even the voting group for the Norm Smith medal (best on ground in the Grand Final) has someone from SportsBet on it.
> Agree with the banning, problem is they are major sponsors of a lot of sports which would then need to find alternatives for funding.
They've managed to get by before sports betting was legalized.
Reminds me of when I was a teenager and Denny's banned me and my other hungry, teenage friends from eating at their "All you can eat" buffet. The manager was at least transparent about it, telling us we were literally eating his profits for the day. LOL
Maybe regulate, not ban, or it just goes back underground.
Underground is an appropriate place for this activity, no? You want your kids betting their savings on this trash? Your mom and dad wasting their retirement?
Yes, only ~3% of bettors are net profitable, but more important is lifetime value (LTV) vs. customer acquisition cost (CAC). With CAC around $300 and average losses at $100/year, it takes three years of retention just to break even per casual bettor. If the average retention drops below that, sportsbooks lose money on the majority of customers, even if most are losers
Why don't sportsbooks just follow the polymarket model with buying and selling yes/no shares? It's impossible to lose money that way, and it doesn't matter how well any individual better is doing.
There is a lot more money to be made if you can attract a cohort of suckers. It is basically an entirely different business model. Drug dealer rather than an eBay. And running a betfair cannibalises the sucker arm.
https://www.betfair.com/
Does exactly this.
Odds are just set by supply and demand and you pay a small fee per bet.
Functionally more like parimutuel bets, then? I don’t gamble (on sports or anything else), so I haven’t paid these much attention (though the nonstop betting ads have made watching pro sports much less pleasant).
It's a bit of a conspiracy, but ultimately there is more money in sports betting than in the sport itself, and thus eventually the money will win and sports will just be a mechanism for gambling. The leagues will ultimately be controlled by those who run the gambling and have more money and power than the league itself.
I’ve thought about making a Venmo for betting.
Start a betting pool with a group of friends. Use an exchange (not sports book) internal to the group, so no external money needed. No commission.
It’s no fun realizing you and your friends have taken opposite bets and are just handing money to the house. Keep that money in your social group and make some friendly bets without worrying about the entire group being taken to the cleaners. The group leaves the Super Bowl party, horse races, etc with just as much money as went in (minus tickets, food/drink, etc).
Sportsbooks want action from sharps up until a certain point, because it helps them set the line for the other punters. If they go too far they give too much money to the sharps; not far enough and there is greater opportunity for the regular bettors.
That's basically the entire economy. SWEs were getting too rich, trickling down too much; Fed ends ZIRP.
Spend a few years soaking it up, then lower rates again. But Trump.
Such a pattern is pretty commonly deployed by power brokers. It's basic statistics.
Gamblers anonymous should offer a service where if you are struggling with betting addiction you give them your account and they sell it to a “sharp” who profits until you are banned.
That’s good for everyone right?
The ROI on gambling is negative. The ROI on stock investing is positive. This is why I don't do the former, and do do the latter.
(Yes, I know, you can still lose all your money in stocks.)
Instead of relying on models these sites could rely on prediction markets to guarantee some fixed (percentage) income from the bet.
Having the house set the rates creates a risk for the house it does not need to take. It seems like an outdated model to run a business like this.
If you don't want to read the article the answer is as simple as you'd imagine. The article however is interesting.
BREAKING: BOOKIES BANNING BEST BETTORS? BETTERIDGE BOMBSHELL!