I often say that the single sharpest thing you can do as a sports bettor is to shop lines. Get the best price. Hopefully, most of the audience that reads this article already knows this. That’s why they find value in Unabated. For years, I’ve hoped more people would realize this and begin their evolution as a bettor.
Unfortunately, the inconvenient truth is that most sports bettors are stuck in some primordial state swimming in some Jurassic sea. They haven’t discovered land yet nor that they can walk upright.
There are those who argue that we shouldn’t educate bettors. Making them more sentient beings just creates competition for sharp bettors. However, in this article I’ll argue that for this ecosystem to work and to thrive, we need a more critical mass of bettors to evolve.
Price Sensitivity Drives Competition
It’s Bookmaking 101. If you want to attract action to a side, make the price better. If you want to discourage action, make the price worse. This concept seems lost on the vast majority of U.S. sportsbooks. They don’t know which side is sharp so they just hike up the vig and throw out the winners.
When sportsbooks try to compete on price, they create healthy competition to the benefit of the consumer. Unfortunately, the regulated betting space has become very unhealthy. Recreational sportsbooks rule the landscape and they continue to offer worse and worse products to gut the consumer as quickly as possible.
In a healthy environment, sportsbooks compete. In order to compete on price, a sportsbook has to work with lower margins. In order to do that, they need as frictionless an environment as possible. State regulation hasn’t been very frictionless to say the least.
Redundant compliance checks, forced vendor agreements, legal fees, licensing agreements, payment processors, and of course, taxes. That’s just the friction the state puts in the way. Then there is the sludge of trying to compete with the marketing muscle of monolithic operators.
Sports Betting Loopholes Help
As a result, when frictionless options appeared, they were very attractive to low-margin operators. We’ve seen the rise of exchanges and prediction markets. That alone creates a much more liquid and efficient market.
However, we’ve also seen operators attempt to streamline classic bookmaking operations. I recently noticed Bet105, who for a time sponsored our Unabated Podcast, is offering -103 on spreads for the NBA Finals in addition to -110 on player props for the finals.
Could they pull this off in a regulated market? Perhaps, but unlikely. There are just too many hands in the cookie jar in those states.
Regulators Will Miss Price-Sensitive Consumers
“In the land of the blind, the one-eyed man is king.” Same could be said of the current regulated sports betting landscape. We’re so heavily overweight with recreational sportsbooks that not only can a sharp bettor not get bets down, but even semi-sharp bettors find themselves quickly limited.
The bettors are underserved in the regulated space. Innovative operators have tried and failed to gain a footprint in the industry. Circa Sports has done a great job in building a brand but it only resonates within Nevada. Sporttrade has built a tremendous app and trading experience, but they are ring-fenced into a small number of states.
States have done a poor job of regulating sports betting. They’ve taken the competition out of the marketplace so that only a high-margin, marketing-heavy recreational book can survive. Sometimes, even they can’t.
If price-sensitive consumers are underserved, then regulators need to find a way to capture that business rather than see it go offshore or into gray markets. Putting more money into your industry is far better than driving money away from it.
Furthermore, a price-sensitive consumer is a good consumer for a state. Price-sensitive consumers lose more slowly. They have a lower chance of becoming a problem gambler. They understand how sports betting works. They are a sustainable resource that will grow volume numbers in the state.
Price-Sensitive Consumers Are Good for You
As I mentioned, there are a lot of people who question why anyone would want to educate someone else about sports betting if it’s a zero-sum game. The reality is that you probably don’t know as much about sports betting as you think you do. It’s like poker or chess or golf. You can be constantly learning and never truly master it.
That’s because sports betting is a market. As such it’s always evolving. The ways I make money betting these days are nothing like what I was doing just five years ago. What I’m betting on five years from now will likely be different still.
The alternative market has books that serve sharp bettors. Bet105, ProphetX, NoVig, etc. They need more than just the sharpest of the sharps. They need price-sensitive consumers. Not as feeder fish for the sharks in the water. But as critical mass for the functional liquidity of their market.
These days we’re starting to see some evolution in bettors. They are finally starting to see that price matters. Betting -105 instead of -110 reduces the theoretical house edge against them by almost half. They’re becoming aware of arbitrage and other primeval plus-EV techniques. You should welcome them into the pool. Tell them the water is warm.
Support sportsbooks that are trying to work hard for your business. They need you almost as much as you need them – maybe more so.
