One of the more exciting ways to view the expansion of legalized sports betting is to think about all the new options it will present to a sports bettor. After all, when the US experienced the proliferation of casino gambling from the late 1990s to the late 2000s, we saw a boom in new table games and new machine variations. This creates opportunities for casinos to reach more customers and also creates opportunities for advantage players to find new games to beat. We’re going to see this within sports wagering as well. While some might think that legalized sports wagering across the US will closely resemble the microcosm of Las Vegas with only a few different companies and limited variety in bets that are offered. There are others who believe the opening of the floodgates will give rise to new ways to lay our money down on a sporting event.
Let’s explore some of the outside-the-box options that are beginning to show up in other legalized jurisdictions. I’m going to leave it up to the reader’s imagination to think of ways to beat these bets. As a quick disclaimer, I have no affiliation with any of these sites and purposely did not include any hyperlinks in this article. It is purely a tasting sampler of what’s to come in sports wagering.
FastPick
The entire industry of Daily Fantasy Sports (DFS) was predicated on finding a way to make it legal to wager on sports despite the restrictions that PASPA and UIGEA presented. Anyone who ever played DFS knew it was as close as they could get to legal sports wagering. In the past year, a startup DFS parlay site has emerged in the form of FastPick.
On FastPick, customers fill out a parlay card based on the performance of various players competing that day in professional sports. You can choose which player might have more fantasy points in one of the Head-to-Head matches listed. Or you can choose an over/under on the total fantasy points that a listed player might have. Your parlay card can have a minimum of 3 legs and a maximum of 10 legs. If you go 3-for-3 on a 3-leg parlay, you get paid 5-for-1. If you’re lucky enough to go perfect on a 10-leg parlay the payout is 500-for-1.
For a recreational sports bettor, sometimes the world of DFS can be intimidating and frustrating. It’s widely known that a small percentage of DFS players win a large percentage of the money. Basically, if you’re not expert-level, the chance of profiting against other more advanced players with their spreadsheets and databases is extremely low. However, FastPick enables you to play against the house and is essentially a prop parlay card. The nice thing about parlay cards is that you can compound your edge when you find one. FastPick is currently licensed in New Jersey and Pennsylvania with plans to expand to more states.
PointsBet
If your sports betting experience goes back far enough you may have had a local bookie who offered “action points.” Essentially, you not only bet on who would win or lose, but by how much. The bigger the margin of victory, the bigger the profit. Conversely, the bigger the margin of loss, the bigger the monetary loss. To my knowledge, Vegas books have never offered these bets in a straightforward scale. Some have offered margin-of-victory props, but not in an uncapped multiplier sense. An Australian company emerged within the last year named PointsBet and has been offering these wagers in Australia. Last week they signed deals to begin offering this format in New Jersey and New York. The latter requires the state to legalize sports betting.
With PointsBet, a customer might wager that the Philadelphia Eagles will not only cover the -4 spread for their season opener against the Atlanta Falcons on September 6, but they could wager that for each point beyond 4 that they win by, they’ll get $10. So if Philadelphia wins by 14, they get $100 (10 points beyond the line of -4). This is called spread betting, and while it’s been done before elsewhere, this will be new to the legalized markets in the US.
There will be a max win and a max loss so that a customer can’t completely lose their shirt in a bizarre result. The potential for a large profit if their team wins big will be enticing to many. It’s a lot like options trading for sports bettors. Of course, as with options, there’s still a vig. You’ll likely be betting Eagles -4.5 or Falcons +3.5 as your initial starting point. It’ll be interesting to see how they progress in the U.S. market.
PropSwap
Bucking the trend, here’s a company that began in Las Vegas and has already been spreading into other markets. PropSwap operates as a secondary market for betting tickets. It allows customers to sell a wager they’ve made before the event is completed. For instance, you bet on the Washington Nationals to win the World Series, but they’ve been disappointing so far. You can sell your ticket on PropSwap to someone who might be a bit more optimistic that the Nats will be able to turn it around. You set the price. Alternatively, you can buy tickets on PropSwap if you feel there’s value to be had in a ticket offered for sale.
Currently, you can post a ticket for sale on PropSwap from any state. You then mail the ticket to the PropSwap offices in Las Vegas. In order to buy a ticket you need to be located in Nevada, New Jersey, Pennsylvania, Connecticut, or Massachusetts. At least, that’s the current list of approved states.
Sellers control the price of their listed tickets and PropSwap takes a 10% commission if your ticket sells. They also charge a $10 fee to mail you a check. If you buy a ticket, they mail it to you and it’s now your responsibility. Since PropSwap has been around for a couple years, there’s a decent amount of liquidity in the site now. However, don’t expect to immediately find deals when you go looking to buy up some discounted futures tickets. Between the vig built into futures wagers, the PropSwap commission, and sellers over-valuing their tickets, deals are hard to come by. However, this idea is growing and I think we’ll see more secondary markets for sports wagers in the future.
The Future
There’s tremendous headroom for growth in the sports wagering industry beyond the traditional sports book model. In New Jersey, for instance, each casino and racetrack has up to three online licenses they can subcontract out to other companies. It’s doubtful that any casino would want to cannibalize their own sports book operation by having three other competing sports books on their license. They’re going to want to find derivative markets that will bring income without taking market share. As more states come online, they’ll look toward the early adopters, like New Jersey, to determine what’s worked and what hasn’t. I expect future news of betting exchanges, secondary markets, proposition betting, and sports fantasy to continue to develop. It’s an exciting time to be interested in sports wagering and I’ll continue to attempt to highlight developments here as they happen.
What I want to know is if the price of sports betting (essentially, the vig) in other jurisdictions will be competitive. Nevada’s wagering tax is 2%. That of other states may be higher, forcing those books to offer worse lines. I know that higher gaming taxes in some other existing jurisdictions have pretty much crushed any chance of decent video poker being offered.
In general, it has seemed over the years that states other than Nevada want to meddle in the nuts and bolts of whatever gambling is offered more than Nevada does, for instance the “casinos close at 2” rule in AC, the silly riverboat fiction in the Midwest, or the idiotic $5 bet limit in Colorado. The common thread was “gambling is nasty, so we’re going to limit it somehow.” Nevada has always realized that doing that would be like telling people in Kentucky that they could only do so much crystal meth. Illogical.
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For the record, casinos in Atlantic City have been open 24/7 for at least 20 years now.
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Nevada’s tax on gaming revenue is 6.75% and there is a 0.25% federal excise tax on handle on sports wagering. However, how states approach the taxation of the gaming revenue will be an important part of the equation as sports wagering spreads. Pennsylvania unwisely set a prohibitive tax rate of 36% on sports revenue. As a result, there are still no sports books willing to do business in PA yet.
Mistakes in the legislation of sports wagering will no doubt happen. For instance, Mississippi will go live any day now but the wording of their sports wagering act prohibits any mobile betting beyond the physical grounds of the casino. They will see the error in that once the revenue split between physical betting and mobile betting begins to show in other states. If you believe markets tend towards efficiency, then we should see states begin to “get it right” over time. Fortunately, other states have a good example to follow in the form of Nevada. However, Nevada’s approach also has room for improvement. The more states in the mix, the faster the path towards efficiency.
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PropSwap is a strange one. Who in the know would ever hedge a position in that manner, right? But because there are so many players who have no idea about the options available to them, PropSwap becomes relevant. And they’ve also been diligent and pushed forward into states outside Nevada, so they’re setting precedent in some important areas. I dismissed the idea at the start, but I give them credit now and would like to see them thrive.
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The states that think they can tax sports betting like they do standard casinos games will wake up and smell the coffee soon. There is much less margin in spots betting. I think in the end it won’t be a windfall for states and you will see some states have sports betting and others wont bother with it and no state will set the world on fire with the sports betting revenue.
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Outside-the-Box options are exciting for sports advantage players. By a show of hands, is there anyone out there still making money on the NFL inside the box? Perhaps I saw one hand way in the back, but for the most part, NFL lines are just too dang sharp these days. This will all change if the options Captain Jack present above, such as FastPick and PointBet, are adopted. As with anything “new,” mistakes will be made by both bookmakers and the betting public, which will create lucrative opportunities for APs.
One can only hope for an environment similar to what we had in the late 1990s and early 2000s, when online sports books bumbled and stumbled in their attempts to grab a piece of the expanding sports wagering pie. One example was ½-point Fridays, in which bettors received a bonus half-point on college and NFL sides. Sure, this promotion contributed to the eventual demise of the sports book that offered it, but boy, was it a gas while it lasted!
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Great points Steve Sharp. I’ve been taking the new DraftKings online sports book for a spin this weekend here in NJ. Their app is filled with outside-the-box options, especially in-game. I’ve been doing this a while and there are some bets I’ve never seen before. It’s true their vig-spread needs to be lower but they are making their own opinions so far. Anytime we can get a sports book to think individually instead of as a mass group we have the possibility of new markets. I hope to do more blogs on the new interesting twists we’ll see in the months ahead in various markets.
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Steve Sharp is a name you’ll be seeing more of on this blog and in other spots on LVA as we prepare his book, tentatively titled Win at Sports Betting, for publication over the next few months. Steve placed his first bet online in 1999 and left his insurance-industry job soon after to bet full time. In the book, he writes about his experiences over the past 20 years in the trenches, how to make money today, and provides his vision for the future of sports betting. We’re pleased to have Steve as a participant on this blog.
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