It’s déjà vu all over again for NBA Draft-loving users of online sports betting sites.
Yes, stop me if you’ve heard this one before, but last night’s draft was preceded by a market-moving tweet by an NBA insider.
The same thing happened in 2022, as ESPN's Adrian Wojnarowski (a.k.a. “Woj”) tweeted that it increasingly looked like Jabari Smith would be the pick at first overall, followed by Chet Holmgren, and then Paolo Banchero. Spoiler alert: Banchero went first overall, to the chagrin of bettors who smashed Smith at pricey odds.
This time around it was Shams Charania of The Athletic tweeting Thursday that it looked like Scoot Henderson was "gaining serious momentum" to go second overall, albeit with a caveat that the Charlotte Hornets were "torn" between Henderson and Brandon Miller and that a final decision was pending.
Odds on Henderson to go second shortened as steep as -800 (BetMGM said Thursday morning that Scoot had been +350 to go second overall), but Miller was ultimately the pick.
"All along, the entire Charlotte Hornets organization has been all-in on Brandon Miller -- ownership, front office, scouts, coaches," Woj tweeted Friday night. "They see him as a perennial future All-Star player."
Sources: Scoot Henderson is gaining serious momentum at No. 2 with the Charlotte Hornets in tonight’s NBA draft. Hornets have been torn over the last week between Henderson and Brandon Miller. Team has final meetings today to settle on decision.
— Shams Charania (@ShamsCharania) June 22, 2023
It's fair to say people lost money betting Scoot as second overall, but there is a twist here, due in part to the expansion and mainstreaming of legal sports betting in the U.S. Woj is technically connected to Caesars Sportsbook and DraftKings via their partnerships with ESPN, but Shams has partnered directly with FanDuel, and he co-hosts a basketball show on FanDuel TV.
The intel from Shams and his ties to FanDuel led to questions being asked after Miller was selected. An insider paid by a bookmaker provided information that may have led punters to place losing bets; what’s up with that?
“I don't think there is anything nefarious going on but I find it puzzling that a regulated Sportsbook is allowed to take bets on the NBA draft and also employ an ‘insider’ who can tweet nonsense that can move the betting markets,” former Dallas Mavericks executive Haralabos Voulgaris tweeted Friday morning.
Audience first
I’m not suggesting there was any funny business by Shams, FanDuel, or whoever here. While insiders may get a bit more leeway with misfires because they’ve been right enough in the past, are citing sources with a variety of motives, and have hedged accordingly, I think people will ultimately tune out somebody who keeps getting it wrong. Credibility is a currency in journalism; if you don’t trust what I report, why read me at all? And if they’re not reading, you’ve got no audience and nothing to offer a partner like FanDuel.
But let’s be real here. We live in a world where some people see conspiracies everywhere, are convinced the NFL is rigged, and believe there are leaked “scripts” of sporting events. The mere appearance of any conflict of interest will be enough to set off some folks. Moreover, even a mistake made in good faith can be costly for bettors and earn their ire. You've got to do right and be seen as doing right by players. It's not an easy sell, and it shouldn't be one.
FanDuel has taken steps to assure the public there is separation of Shams and sportsbook. In announcing the new NBA show in October 2022, the New York-based company said that "in keeping with its commitment to safer gambling and sports integrity," the bookmaker and Charania agreed the scoopster can't sign up for a daily fantasy sports or sportsbook account. A FanDuel executive also told the Washington Post that Sham-bombs would be dropped on the public initially, not their trading team.
“It will always go to the audience first,” Chris Jones, FanDuel’s vice president of communications, said at the time. “He’s not sitting in an office; he is a contributor to our network, which is based in [Los Angeles], and not at all tied to our sportsbook operation, now or in the future.”
The watchdogs are, well, watching
But there is an added concern here because sports betting is a regulated activity in certain states, and there are rules about advertising, marketing, and promotion. While I can't recall any conflict of interest rules for a situation like this, in a state like Massachusetts, sportsbook operators are responsible for "the content and conduct of any and all Sports Wagering advertising, marketing, or branding done on its behalf or to its benefit." That extends to marketing done by the operator itself, an employee, an "agent," an affiliate, or a third party.
Massachusetts sports betting regulations also state that operators can't allow, conduct or participate in "any unfair or deceptive" advertising for their products. We here at Covers are bound by these rules because we are a marketing affiliate and get paid commissions by sportsbook operators.
Is a tweet from a sportsbook-connected insider advertising, and if it misses the mark, is it misleading advertising? I'm not a lawyer, so I'd say it's in the eye of the beholder, which in this case would be a regulator. It’s not like Shams is giving away “Can’t Lose” parlays or something that would surely attract the attention of state watchdogs.
Same as it ever was
There’s also a lot more of this stuff happening than the casual reader may realize. News and sports media have contracted over the past few decades as ad dollars dried up, and sportsbook operators have stepped in to fill the void by paying for marketing real estate and creating their own content factories, such as FanDuel TV, that employ former mainstream media figures.
So, does sports betting have an “insider” problem? Yes, but it’s a permanent issue and only part of a broader problem. We’re talking about a business that makes its money from customers who are already losing more than they win (otherwise there wouldn’t be a gambling industry) and who then have to swallow the indignities of bad beats and other misfortunes. Nobody is getting the benefit of the doubt.
Instead, you have to prove your credibility daily in the information you provide, the odds and lines you set and offer, and the advice you give. There’s also something to be said for transparency. A lot of casual bettors don’t know how the sausage gets made, and a bit of insight there could go a long way.
‘Twas ever thus. While FanDuel says it does not get advance notice of the news that Shams breaks, their word alone may never be enough for some.
Lastly, even if draft wagering can be a loss leader for sportsbooks, it can pay for players to stick to their betting budget. The next atomic tweet could be just around the corner.
