Ask A Bookmaker With Johnny Avello: How Do Modern Sportsbooks Handle Limiting Sharps?

DraftKings' Hall-of-Fame bookmaker answers questions about the sports betting industry
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Welcome to our weekly “Ask a Bookmaker” feature, which answers many of the common (and uncommon!) questions gamblers and enthusiasts have about how sportsbooks operate in the modern age of sports betting.

Respected bookmaker Johnny Avello has been involved in the betting industry since the 1970s and previously managed the Las Vegas sportsbooks at Bally’s and the Wynn. Now the director of race and sportsbook operations for DraftKings, Avello was recently inducted into the Sports Betting Hall of Fame.

Have a question you’d like to ask Avello? Send them to jbalan@bettercollective.com. Questions and responses have been edited for clarity and brevity.

On social media, there are fairly constant complaints from online sportsbook customers about their play being limited. Can you explain what the process is to address sharp action in the modern online sportsbook and the thought that goes into mitigating risk?

Johnny Avello: Let’s talk about sharp money in a retail environment first, where people bet over the counter. You’re cordial to them, and some of those guys are good people. All they’re trying to do is bet and get the best of it, so to speak. You have those guys on a limit, on how much they can bet. And it’s easy, because they come in one at a time, you take their bet, you move the line, and you’re good. You’ve eliminated any other sharps wanting that particular offering, because one gets it, and that’s it.

But when you’re in a digital environment, like we are, with so many customers, it’s possible to get hit on the same offering multiple times from sharps. Therefore, we have to keep our limits at an area where we can manage it. We let them bet, but it’s a smaller amount.

You told me a little while back that it doesn’t take many wagers for you to identify a sophisticated bettor — maybe one or two. Can you walk us through how that is possible?

JA: It doesn’t take much. Two bets probably gets you a good idea. Three or four pretty much confirms it. Sometimes you’re off on those lines, sometimes intentionally or you’re a little late, and what will happen is the sophisticated guys will grab all the value they can if something is off. You can tell who is taking all the stuff that’s so-called “off.”

Are the frequent complaints we see on social media about limits in any way a misconception? How do you view those complaints for how you operate?

JA: You try to keep the guys to a certain limit and let them bet those limits, and like I said, it’s easy to do that over the counter. It’s much more difficult when you’re dealing with hundreds of thousands of wagers in a day. You’d like to just say, “OK, guys, this is your limit” and one guy can bet it, then the line will move, but that’s not the case. But, because it’s so hard to monitor, sometimes the guys don’t get their full limits, because you have others betting the same thing at the same time. It’s a hard thing to do in an online environment. That’s what I can tell you.

In that sense, are you talking about “beards” — people using multiple accounts or different people to achieve the level of wagers they want to make?

JA: That’s been done through time, but that’s not really a concern. When we get bet on anything from a sharp guy, we’re usually moving the line, so it doesn’t matter. First of all, you shouldn’t have multiple accounts, but if you have multiple accounts through other people, sometimes that’s hard to detect. But if the line is going to move as soon as a sharp guy bets it, the goal is not to get hammered on the same thing by multiple sharps.

But if you’re dealing with the quantity that DraftKings and the national books are, how much does it really have an impact? Especially with these big games, you guys just have so much handle. At that level, wouldn’t sharp money be on both sides in those situations?

JA: That’s true, too. You don’t mind the sharps betting, because sometimes they’ll bring you in line when you’re out of line, or they’ll tell you where the line is going. You need to use their information. It’s valuable. But you just can’t have an abundance of all-sharp money, because if that’s the case, you’re going to make a lot less than what you should be making, because they’re going to take all the value out of it.

It’s a difficult situation. I mean, you want those guys to bet, but you also want to be able to monitor it. We’re still figuring it out. It’s so big right now, the network. We’re trying to figure out how we balance it out and guys don’t get cut down too much. It’s a work in progress.

This seems like one of the most significant issues the industry needs to figure out in the years ahead, but it also seems to be a tough line to walk.

JA: You want to be fair, and sometimes, because of the way it’s structured, where so many guys can bet at the same time, and you’re getting too many bets from the sharps at the same time, sometimes they get limited down too far. They’re not happy, and you’re not happy doing it, but until we can figure this out, with this huge network we have, we’ll continue to work on it.

Sharps can be happy, and we try to make them happy. If you tell them $500 is what you’re going to get, they’re happy with the $500. But they’re not happy with $25. And sometimes they get cut a little too far, and I totally understand that. We have to be able to figure this out so we’re not totally bombarded. That’s all.

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