Edition 09: The Information Economy’s Impact on Sports Betting
Behind the interconnected web of information in professional sports
Good morning and welcome to another Monday morning edition of The Handle! We’re focusing today on the information economy and its impact on sports betting.
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In 2021, there is no offseason for major sports. The power of social media and the evolving nature of league insiders has transformed the news cycle of sports into a 24/7, year-round flow of information and scoops coming in all different shapes, sizes, and of varying magnitude. On the most public level, the most famous NBA and NFL insiders release information for millions of followers on Twitter. Some notable names with large followers include Adrian Wojnarowski’s (@wojespn) 4.9 million followers, Shams Charania’s (@ShamsCharania) 1.4 million followers, Adam Schefter’s (@AdamSchefter) 8.4 million followers, Ian Rapoport’s (@RapSheet) 2.4 million followers, and countless others. In the information age we live in, where worlds are interconnected through high-powered technological capabilities, communication and leveraging tips to a bettor's advantage have never been of easier access.
Check out this cool graphic from Owen Phillips (@owenlhjphillips) on the scoop leaderboard for 2021 NBA free agency, with Woj Bombs leading the way 💣💣💣.
Each league has its own Sports Betting Integrity Unit committed to shutting down the spread of injury information or access to anything under the hood of player information that may impact the line movement and bets placed. On the latest episode of Betstamp’s Circles Off podcast, sports betting legend Spanky details times of calling coaches and athletic departments posing as school newspapers looking to get information divulged about specific players or injury statuses. Evidently, sports bettors will do everything and anything to gain an edge and “tipping” is banned amongst leagues to prevent these edges. Bettors like Spanky will do anything to beat the closing line and consistently retain value as a bettor. With player health under a microscope and the rise of load management amongst leagues, team officials and insiders are given access to key information which would move markets if known publicly.
Outside of the ethical concerns regarding information leaking from team personnel and those around players on the day-to-day, with the year-round nature of sports, there has been an explosive rise in the past year of sports betting integrations for all facets around the game including media companies, leagues, teams, players, and individual personalities. These sponsors and partners are competing for access to news and information which can give them all edges possible to maximize revenue.
In a sport like the NFL, training staffs are professional, team staff are highly loyal, and players are noticeable everywhere they go. In short, extracting inside NFL information is an incredible challenge, and tough to take advantage of for betting purposes. On the other hand, college basketball and football do not have the same robust information infrastructure that professional leagues have. Trainers and staff members are paid far less, especially at the lower levels of college football. Outside of the major programs in college basketball, the players are nearly unrecognizable. The support staff often has student managers who may or may not be paid. In short, there is no serious infrastructure that prevents the leaking of relevant information from low-paid employees at most levels of college football and basketball.
Let’s take an overly simple example to illustrate how relevant information could reach the ear of a professional bettor. A manager for a Group of Five football team could learn far ahead of time that a quarterback was unlikely to play. They could overhear a conversation between trainers while grabbing towels to throw in the laundry. The market could have priced that quarterback at about 50% to play. If that manager is close with a professional bettor, it would be possible to get down hundreds of thousands of dollars without raising a red flag or moving the line significantly. Now, getting down that much would require skill and significant outs, but is far from impossible in the pay-per-head world. The expected value of such a bet would be significant, and any professional would recognize the value of the information and be willing to pay a broke college student more than enough to make it worth his while to spill the information.
Now, it would be naive to say this is a new phenomenon. There have always been low-paid insiders in college sports. There was always the possibility for this information to slip out to someone who could use it for gambling purposes. Some states have even recognized the possibility, and either outright prevents wagering on collegiate sports or ban wagers on games that involve a college based in that state. These laws, while well-intentioned, will never prevent offshore gaming, or serve as a strong enough incentive to a determined pro bettor who has his eyes on inside information and an outlet through which to receive it.
Now, we’re not speculating on how often this happens or even that it does. Now that gambling is in the center of the sports universe, the sports universe should be prepared for the underbelly that can come with gambling. Those risks could turn into an issue for the billion-dollar industries that are college football and basketball. Whenever there is money to be made, someone will try to find a way to make it.
Miscellaneous Recent Consumption:
Press -- What a week. We give you a brief look at the happenings in one of the busiest weeks in the industry since PASPA’s repeal in 2018.
Flutter Entertainment, Fanduel’s parent company, generated $902.89 million in revenue during the first 6 months of FY2021. Flutter’s revenue has increased 159% YoY. FD’s also reported a 45% market share and expects to turn a profit in 2023. Learn more here (h/t Front Office Sports).
Barstool Sports is in discussions with the MLB to acquire midweek streaming rights with a sports betting integrated focus. The MLB has also partnered with DraftKings and BetMGM already. Read further here (h/t Front Office Sports).
BetMGM announced a partnership with the Arizona Cardinals for retail and online sports betting, including the first sportsbook to open inside an NFL stadium. More info here (h/t Yahoo).
DraftKings purchased Tilman Fertitta’s Golden Nugget iGaming for $1.56 billion. Golden Nugget has a partnership already with Fertitta’s Houston Rockets, which will provide DK with market access when Texas legalization arrives. Read more here (h/t Sportico).
The NFL partners with PointsBet, BetMGM, and WynnBet as authorized second-tier gambling operators, joining Fox Bet. Top-tier operators include Caesars, DraftKings, and FanDuel. More here (h/t Sportico).
Rush Street Interactive (either BetRivers or SugarHouse) has been selected as Connecticut’s Final Sports Betting Skin. CT is gearing up for a Fall 2021 launch.
Sporttrade CEO Alex Kane did a Twitter space with one of the most reputable people in sports betting content and a founding member of the Unabated Sports team, Captain Jack Andrews.
Twitter
Potential California group filed a 2022 online sports betting voter referendum, h/t Daniel Wallach for the scoop.
Inside David Purdum’s bankroll survival guide for football season:
Another congrats to David Purdum for resigning to ESPN for multiple years. A lot of great knowledge and info is gained from his Twitter follow.
Pods
Opportunities — In honor of this week’s theme, here are some trainer jobs that might interest you.
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