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Odd Lots

How a Professional Sports Bettor Really Makes Money

Mon May 27 2024
sports bettingreal estate investinginsurance solutionsevolution of sports bettingsetting priceschallenges for professional bettorsinternational gambling operatorsniche marketsintegrity concernsindustry growthprofits and concerns in the gambling industryadvice and regulation in sports bettingbetting constraintsmarket insights

Description

The episode explores the world of sports betting, covering topics such as real estate investing, insurance solutions, the evolution of sports betting, setting prices, challenges for professional bettors, international gambling operators, niche markets, integrity concerns, industry growth, profits and concerns in the gambling industry, advice and regulation in sports betting, betting constraints, and market insights.

Insights

Sports betting has evolved with advanced statistics and analytics beyond traditional metrics.

Professional bettors focus on identifying value and seek profitable opportunities through market-based approaches or creating their own models.

Sports books use liquid markets to set accurate prices and rely on third-party content providers for derivative bets.

Exotic bets offer profitable opportunities, but professional bettors face challenges in identifying mispricings and being able to bet enough without getting shut down.

International gambling operators see the American market as lucrative, but face limitations and collaborate with high-profile figures.

The sports betting industry may face a crackdown as it grows, and concerns about addiction and targeting minors exist.

Sports betting companies make more profits from online casino gambling than sports betting.

Curbing addiction in sports betting requires better regulations, transparency, and research on effective tools.

Betting constraints and third-party pricing raise questions about effectiveness and fairness in the gambling industry.

Exploring new markets like sports gambling can provide insights into traditional markets and make certain concepts more understandable.

Chapters

  1. Real Estate Investing and Insurance Solutions
  2. Evolution of Sports Betting
  3. Setting Prices and Challenges for Professional Bettors
  4. Sports Books and Betters' Strategies
  5. International Gambling Operators and Challenges
  6. Niche Markets, Integrity Concerns, and Industry Growth
  7. Profits and Concerns in the Gambling Industry
  8. Advice and Regulation in Sports Betting
  9. Betting Constraints and Market Insights
Summary
Transcript

Real Estate Investing and Insurance Solutions

00:00 - 06:47

  • Principal Asset Management offers a 360-degree perspective for real estate investing opportunities.
  • The Hartford provides specialized insurance solutions tailored to specific industries.

Evolution of Sports Betting

06:23 - 12:11

  • The world of sports betting has evolved with the introduction of various statistics and analytics beyond traditional metrics like batting average and home runs.
  • Professional sports betters focus on identifying value in bets that offer a greater expected return than the amount staked, constantly seeking profitable opportunities.
  • There are two main approaches to identifying profitable sports bets: market-based approach by spotting mispricings among different sportsbooks and creating one's own model to generate odds.

Setting Prices and Challenges for Professional Bettors

11:45 - 18:35

  • DraftKings uses liquid markets to set accurate prices for bets and relies on third-party content providers for derivative bets.
  • Sports books work with multiple content providers to generate odds for different markets like home runs or three-pointers.
  • Sports books have higher scrutiny and house edges for exotic bets due to the difficulty in pricing them accurately.
  • Exotic bets offer opportunities for profitable betting due to less efficient pricing by fans setting the lines.
  • Professional betters face challenges not only in identifying mispricings but also in being able to bet enough without getting shut down by sports books.
  • Casinos and platforms prevent skilled players from winning consistently to avoid losses.

Sports Books and Betters' Strategies

18:07 - 24:07

  • Sports books use closing line value (CLV) to identify good bets and efficient markets.
  • Professional betters may be limited or kicked out of sports books if they consistently place good bets.
  • Legal regulated sports books may limit the betting amounts for successful betters, leading them to seek other strategies like using multiple accounts and non-regulated sports books.
  • Some betters use offshore sites, bookies, or other people's accounts to continue placing bets after being limited by legal regulated sports books.
  • To avoid detection by sports books, betters need to disguise their bets by starting with normal bets before moving on to more strategic ones.

International Gambling Operators and Challenges

23:39 - 29:56

  • The American market is seen as a lucrative opportunity for international gambling operators due to its liberalization compared to Europe and the UK
  • European bookmaking model, adopted in the US, is viewed as less friendly towards winning players, leading to quicker limitations on successful bettors
  • Sports betting platforms often limit or kick out successful bettors while expanding limits for consistent losers
  • Professional sports bettors may collaborate with high-profile figures who are known for losing money to place larger bets through them
  • Legal-regulated sports books have advanced technology to track user locations and gather personal data upon sign-up
  • Derivative markets in sports betting add significant margins making it challenging for individuals to beat these markets

Niche Markets, Integrity Concerns, and Industry Growth

29:33 - 35:45

  • Sportsbooks offer niche markets with low limits to attract users to their platform, even if the prices are not perfectly set.
  • High-profile sports like NBA are less susceptible to match-fixing due to players' high earnings, while smaller sports face integrity issues.
  • Debates exist around betting on player props in college sports for game integrity concerns.
  • Increased focus on single plays like rebounds in sports due to betting interests, impacting viewer experience.
  • The sports betting industry may face a crackdown as it grows, despite not all operators being profitable.

Profits and Concerns in the Gambling Industry

35:23 - 41:40

  • Sports betting companies like FanDuel and DraftKings are not making as much money as assumed, with high costs such as customer acquisition and branding deals.
  • The real profits for these companies come from online casino gambling rather than sports betting due to higher margins.
  • In mature markets like Australia and the UK, the majority of profits for gambling companies come from online gambling.
  • There are concerns about addiction in sports betting, especially among young men who may exhibit risky behavior due to delusions of winning.
  • Companies are targeting minors through social sports books and apps like prize picks and underdog daily fantasy, contributing to a population losing money without realizing it.

Advice and Regulation in Sports Betting

41:15 - 47:06

  • Advice for Joe heading to Vegas: go with the amount of money you're willing to lose and stick to it.
  • Suggestions for curbing addiction in sports betting: better regulations on advertising, more transparency in apps regarding wins and losses, and increased research on effective tools.
  • Example of identifying an edge in a market through understanding variations in basketball team dynamics.
  • Key trait for professional sports bettors: ability to handle variance and emotional regulation during wins and losses.

Betting Constraints and Market Insights

46:49 - 54:15

  • Stop-loss orders and deposit limits in gambling may not be effective as users can easily bypass them by going to other sportsbooks
  • There is a need for more active regulation of gambling companies rather than solely relying on personal responsibility
  • Betting constraints can limit the amount that skilled bettors are allowed to wager, which may seem unfair compared to other markets like financial trading
  • Third-party pricing of exotic plays in gambling raises questions about how these prices are determined and who the pricing providers are
  • Exploring new markets like sports gambling can provide insights into traditional markets and make certain concepts more understandable
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