I love a “weird” bet. While I won’t complain about a -110 winner on an NFL Sunday, I do particularly enjoy wagering on something a little off the beaten path, like sacks, esports props, or (on my brother’s recommendation) the method of the next wicket in a cricket match.
All of this is to say that I kinda get why a sportsbook would take bets on the play of Toronto Raptors center Jontay Porter, even if it prompted an investigation by the NBA after what was reportedly an eyebrow-raising amount of wagering on those markets.
Porter has played just shy of 14 minutes a game for the Raptors this season and averaged 4.4 points, 3.2 rebounds, and 2.3 assists in his time on the court. He’s not a huge name in the NBA. Somehow, though, a few Porter-related props, such as Under 0.5 three-pointers, were among DraftKings' top "NBA Moneymakers" for users on Jan. 26 and March 20.
Which raises the question: Why do you need to offer Jontay Porter props at all?
College concerns
It's worth noting here that the NBA hasn't announced any formal allegations against or involving Porter. His brother, Denver Nuggets forward Michael Porter Jr., said he “highly” doubts Jontay would do anything to put his basketball career at risk.
However, and this might be a bit more of a reach, similar questions could be asked of college player props, another hot topic of late as the NCAA pushes to ban those markets all over the U.S. The NCAA is trying to protect student-athletes from harassment and threats from irate prop bettors, among other concerns. At least one college coach has suggested angry gamblers have lashed out at players.
In Ohio, a review by the Casino Control Commission prompted by the NCAA's request for a college player prop ban found that betting accounted for just 1.35% of all legal sports wagering in the state during 2023, or approximately $104.6 million of the $7.65 billion staked in the Buckeye State last year.
Why offer these markets — earning the ire of the NCAA, which is concerned about student-athletes being harassed, threatened, and pumped for inside information — if the handle is so relatively light? Ohio regulators ultimately decided it wasn't worth it, and prohibited licensed bookmakers from offering college player props.
Sure, some people (i.e., me) like to dabble in smaller betting markets. Others still could prefer college to professional sports and, as a result, prefer college props, especially in states lacking pro teams. There is definitely demand.
But I think another reason why is the direction the online sports betting business has trended, especially at the bigger shops, which is that operators are trying to give users as much to choose from as possible.
That trend may be good for bookmakers at times, such as when it reduces the financial threat posed by major sporting events like the Super Bowl. But could also backfire, because more betting markets may mean more room for trouble.
A method to the (seeming) madness
Yet you can see the allure. For example, the Kansas City Chiefs winning this year’s Super Bowl, the game's final score going Over 46.5 points, and Travis Kelce making a ton of receptions were not good outcomes for most sportsbooks. In Nevada, bookmakers held just $6.8 million of the $185.6 million wagered on the Big Game, or a win rate of 3.7%. However, other Super Bowl props not hitting may have helped ease the pain, especially since there are so many props available for that day in particular.
Analysts from investment banking firm Citizens JMP Securities met recently with executives from DraftKings and published some of the insights from that meeting in a note to clients last week. One of those insights was regarding the multitude of products that DraftKings can provide its users.
“Lastly, the scale of the company and its ability to give the end-customer the most product offerings are in a way hedging itself in more volatile games/events, protecting margins to the downside, in our view,” JMP analyst Jordan Bender wrote. “The depth of the product offering during the Super Bowl, for example, allowed it to meet its gaming margin target for the day, while we believe most of the industry generated negative outcomes.”
In search of the 'most mores'
The sports betting business, like others, is increasingly about giving people what they want exactly when they want it.
FanDuel's parent company, Flutter Entertainment, recently warned in its annual report that if they "fail to introduce, or delay the introduction of, new products or services," it could hurt their ability to attract and retain customers.
Moreover, Chris Grove, the co-founding partner of Acies Investments, predicted at the recent NEXT iGaming and sports betting summit in New York that the winners in U.S. online gambling will be operators with the “most mores.”
This means operators could strive to offer "[m]ore product features and content to win the core verticals of [online sports betting] and online casino," one of Grove's slides suggested.
The major operators have indeed been arming themselves with more and more products and features, such as ensuring customers can wager on horse racing and, in the case of DraftKings, purchase lottery tickets.
DraftKings and FanDuel are also cross-selling users from their daily fantasy businesses into sports betting. For fantasy players turned sports bettors, their familiarity with individual player statistics may nudge them toward player prop markets. Some of those fantasy leagues could be plenty deep, too, so those bettors may be used to digging deep for value, including from reserve and role players further down the bench.
But smaller betting markets could also reflect smaller salaries and compensation for the players involved.
“The risk of competition manipulation is greater for leagues and events where athletes earn less money, as they are more vulnerable to bribes,” warned a recent white paper from the Canadian Centre for Ethics in Sport and McLaren Global Sport Solutions. “Promising young athletes or lower-earning professionals are targeted and groomed by criminal ‘fixers’ who study their habits and vulnerabilities, then attempt to develop relationships in order to exploit these vulnerabilities.”
Some questions could and maybe should be asked about the role artificial intelligence is playing here. With so many betting markets up, are flesh-and-blood humans the ones setting all those lines and odds, and are they able to keep a watchful eye over all of them?
JMP noted that AI came up in its meeting with DraftKings. The technology "should benefit revenue, like efficiency around betting lines, hyper-personalization, and responsible gambling, while becoming more efficient around the cost structure, including less reliance on human interaction (i.e., customer service) and other friction points,” Bender wrote.
In short, then, while bookmakers may be trying to provide as many options as possible for bettors, they may ultimately offer something that is more susceptible to shenanigans. That can put operators in an awkward position, and drag their partners in the sporting world along for the ride, when something suspicious arises.
Offshore awaits
Even so, banning betting markets outright isn’t a silver-bullet solution.
If those markets don’t exist at onshore, regulated sportsbooks, they will still exist offshore. Shrinking the number of wagering markets could mean legal sportsbooks in the U.S. bleed business to offshore competitors that pay no taxes and offer no warnings about suspicious betting patterns. There’s also no guarantee you will completely stop people from harassing athletes or trying to corrupt games, and regulators and lawmakers will have fewer levers to pull to address the matter. Jerks could get just as mad at a player over losing a spread bet as they may for a prop.
So less might be more here. Fewer wagering markets could mean better oversight. It could also be that fewer wagering markets mean more action for illegal operators.
That action is already substantial, as one recent study estimated illegal gambling operations earned $40.9 billion in gross gaming revenue last year, or 71% of the total pie in the online gambling industry.
At least some of that money is coming from bettors who were limited at regulated sportsbooks or who went looking for certain markets, such as someone in New Jersey who wants to wager on a Rutgers game but can’t in their home state.
What to do then? Some of the solutions are already there. When suspicious wagering happens, it’s flagged by operators and shared through integrity monitoring services. Regulators are looped in, investigations occur, and punishments, if needed, are handed down.
Harassing and threatening people is also a crime already, I’m fairly certain (although my law degree is non-existent). Moreover, two states, Ohio and West Virginia, have passed legislation that specifies sports bettors can be banned from wagering for harassing and threatening athletes.
Admittedly, these are reactive measures, not proactive. There does come a point, though, where reactive measures can become proactive, as being punished for something may act as a deterrent.
"If you're turning off a winning wagerer, are you turning off a losing wagerer?" wonders Interim MGC Chair Jordan Maynard.
— Geoff Zochodne (@GeoffZochodne) March 28, 2024
With all that said, the general public’s view of the sports betting industry right now isn’t great, and it's clear all it can take to spark a scandal is going one or two prop markets too far.
Sportsbook operators could pump the brakes a bit, especially in the current climate. Props on all five starting players for an NBA seem safe enough, but it could be that bench players get fewer markets going forward.
Moreover, if social media is any indication, there are a lot of sports bettors out there who have been limited by the mainstream bookmakers. Maybe those limits could be hiked a bit, and some sharps invited back, if operators focused on the fundamentals and not on trying to create a million different markets for bettors looking to add yet another leg to their same-game parlay.
I don’t have a great suggestion for what to do — I'm not even sure we need to do anything at all — but every sports betting-related incident increases the pressure for regulators and operators to do something, even if those responses aren’t great either.
