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Sunday’s Super Bowl is likely to generate more legal bets than any sports contest in American history. “You can guarantee it,” said Jason Scott, who oversees oddsmaking at BetMGM. Sportsbooks are bullish about the big game, in part because some of the trendiest ways to wager stack the odds against customers even more than usual.
For the average fan, it is easier than ever to bet on sports, and harder than ever to win long term.
The Kansas City Chiefs and Philadelphia Eagles are playing in Glendale, Ariz., making this the first Super Bowl in a state with regulated sports betting. Two-thirds of states now allow betting, and last year, Americans wagered about $93.8 billion on sports, according to Eilers & Krejcik Gaming. The research firm expects Americans to bet more than $1 billion legally on the Super Bowl.
Thanks to the profusion of online betting, sportsbooks are encouraging customers to bet during games—a category that is “growing exponentially,” Mr. Scott said. Chris Grove, partner emeritus at Eilers & Krejcik, said in the near future, in-game betting should account for the “overwhelming majority” of U.S. sportsbook revenue.
Streaming delays put sportsbooks one or two plays ahead of millions of viewers.
Roughly half of bets on NFL games this season were placed after the opening kickoff. Customers can wager on lines that move with every play, as well as on short-term “prop” bets like, “Will this possession end in a touchdown?” TV programmers love so-called microbetting because it keeps viewers hyper-engaged, and sportsbooks love it because recent technological advances give them a significant upper hand.
The house edge that bookmakers bake into the odds, the “vigorish,” is slightly higher for in-game bets than for those placed pregame. The difference might seem trivial, but by betting incessantly throughout a game, the vigorish “is going to eat your bankroll away,” said Matt Buchalter, an actuary in the Toronto area who teaches courses on sports betting through a program called Analytics.Bet. The rush of live betting “is like playing a slot machine,” he said. “A lot of problem-gaming behaviors get exacerbated when you’re betting every 30 seconds instead of every three hours.”
Pregame, sportsbooks post odds that are sharpened as betting trends emerge. In-game, they mostly depend on algorithms to account, in real time, for a dizzying range of variables: a limping quarterback, a flag-happy referee, an unexpected substitution, a shifting weather forecast. In 2018, when the first states outside Nevada began legalizing sports betting, “in-game line-making for American sports was a disaster,” said Ed Miller, vice president of innovation at the odds provider Huddle. A savvy viewer could identify beatable lines fairly easily. But automation has come a long way. For bettors, “you’re worse off today than you were four years ago, for sure,” Mr. Miller said.
In some states, bettors can wager on hundreds of possible outcomes, including the color of the Gatorade dumped on the victorious head coach, like Los Angeles Rams coach Sean McVay endured in last year’s Super Bowl. (Orange is this year’s favorite.).
Sportsbooks have an added advantage because in-game odds are updated using a data feed that is only about a second behind the on-field action. However, viewers watching this year’s Fox telecast via a cable or satellite provider will be about 15-30 seconds behind, and latency on the Fox Sports app is considerably worse. Last year, streaming technology company Phenix analyzed lag times for different ways of watching NBC’s Super Bowl telecast (which the network declared the “most streamed Super Bowl ever”) and found that feeds from streamers such as YouTube TV and FuboTV were nearly a full minute behind.
These providers don’t dispute Phenix’s findings. A FuboTV spokesperson said in an email, “Reducing latency is important, but the vast majority of our users prioritize stream reliability (no buffering) and picture quality over live latency.”
The delays mean that sportsbooks are one or two plays ahead of millions of viewers. Andrew Pace, founder of betting advice company inplayLIVE, said people basing gambling decisions on a streaming feed are “dead in the water.” Sophisticated bettors know to wager during commercials and other extended stoppages.
“The single biggest trap of live betting,” Mr. Pace told me, is the temptation to do what bettors call chasing losses. Say you bet last month on the San Francisco 49ers to beat Philadelphia. The payout on a 49ers win kept increasing as they fell behind one touchdown, then two, then three, and a wishful 49ers fan might have kept betting on their team even as the game clearly slipped away. “That’s where things can get really ugly for people,” Mr. Pace said.
“People chase,” said Mr. Scott of BetMGM. “I’m not going to dispute that, but I don’t think they chase any more in-game than they do from match to match.”
An even bigger source of growth for sportsbooks has been parlays, in which bettors string together multiple bets for the chance at a larger payout, but lose if any of the components fails to transpire. Bettors can now place same-game parlays, bundling wagers on, say, the winning team, the total points scored and a quarterback’s passing yards. (Naturally, sportsbooks offer in-game same-game parlays, too.)
FanDuel, which controls about half of the national online betting market, according to Eilers & Krejcik, leads the industry due in part to its success capitalizing on parlays. Last October in Illinois, for example, seven out of every 10 bets placed at FanDuel was a parlay, according to data published by the state’s gaming board. FanDuel made about $29.60 for every $100 bet on parlays, compared with $4.80 for every $100 in non-parlay bets.
The recent explosion of parlays is “unbelievable,” said Dave Sharapan, a 20-year veteran of the industry, who remembers when Las Vegas sportsbooks expected maybe 15 percent of bets to be parlays. The downside, he added, is that “you have to keep getting new customers, because parlays are hard to win, and people run out of money.”
Same-game parlays are difficult to price because many outcomes in a game are correlated: Chiefs quarterback Patrick Mahomes throwing three touchdowns raises the likelihood of his team winning. To compensate, sportsbooks apply a higher vigorish, which is tough for customers to perceive and varies among sportsbooks. Last week, for example, a bettor could find identical odds at FanDuel and DraftKings for bets on Kansas City as a 1.5-point underdog, Chiefs tight end Travis Kelce to score a touchdown or Eagles quarterback Jalen Hurts to score a touchdown. But a $10 parlay on those three events stood to win $65 at FanDuel and $57.50 at DraftKings.
Bettors can gamble on the results of individual plays and players such as Kansas City Chiefs quarterback Patrick Mahomes.
DraftKings Director of Race & Sportsbook Operations Johnny Avello said parlays are popular “because you can turn $5 into $20,000, and I see that happen all the time.” (The implied odds of hitting that bet are 1 in 4,000.)
More and more, sportsbook promotions are geared toward incentivizing parlays, often with “risk-free” or “no-sweat” offers. Many customers assume that means a full cash refund if a bet loses; in fact, typically an unsuccessful “no-sweat” bet is refunded with a non-withdrawable, expiring bet credit. Lose the credited bet and come away empty. Last month, Ohio became the first state to explicitly prohibit this type of misleading offer, and Massachusetts regulators say they plan to follow suit.
FanDuel didn’t respond to requests for comment regarding their “no-sweat” promotions. A DraftKings spokesperson said, “DraftKings doesn’t make unfair or deceptive claims or make misleading statements regarding the probabilities of winning or losing at the various games offered.” A spokesperson for BetMGM, the No. 3 operator based on national market share, said the company recently stopped calling offers “risk-free.”
Steve Brubaker, an Illinois horse-racing lobbyist, said he was shocked to see sportsbooks reporting enormous parlay revenue. Indeed, in 2019, Illinois lawmakers approved sports gambling based, in part, on projections showing parlay bets would represent a smaller proportion of the betting total.
To “shine a light” on the situation, Mr. Brubaker announced recently on Twitter that for 50 days he would place a daily $1 bet on the first same-game parlay promoted on FanDuel’s home page. He posts a screenshot of his ticket before games begin, then reports the outcome. As of Friday, he was 0 for 21.
“I don’t want to take the fun out of it,” Mr. Brubaker told me. “I just worry that people will bet really irresponsibly when the sportsbook is encouraging that.”
Mr. Buchalter, the actuary and longtime bettor, concedes that the excitement of parlay payouts might appeal to some Super Bowl viewers. But, “they’re losing bets for me,” he said, “and I have a math degree.”
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