Last November at the Canaccord Genuity Digital Gaming Summit, DraftKings founder and CEO Jason Robins had this to say about sports betting, which sent gambling Twitter into a frenzy: “This is an entertainment activity. People who are doing this for profit are not the players we want.”
Remember! If you're trying to win money – DraftKings doesn't want your business.
However, Monty Brewster is welcome to play anytime! pic.twitter.com/9PS32htOyJ
— Captain Jack Andrews (@capjack2000) November 30, 2021
To paraphrase Britney Spears: Oops, he did it again, this time at the Goldman Sachs Travel and Leisure Conference.
What he said this time: “What we are doing is trying to get smart at eliminating the sharp action, or limiting at least that we don’t want as much.”
Of course, Robins is right, from a business, bottom line perspective. He doesn’t want to lose money. Fact is, he’d be in big trouble if he lost money. There are shareholders to answer to (and those shareholders are currently none too pleased, as DraftKings stock is trading about 80% off its historical high).
I wrote about this last December, saying, basically, “Well, this sucks, but whatcha gonna do?” These new-fangled sportsbooks are running things differently than the olde-tyme sportsbooks. They’re not using “sharp” action to help them set the lines, so they don’t want sharp action, period. At least Robins is up front about it. All the sportsbooks that are doing the same — limiting sharp action, limiting bettors who beat the closing lines, throwing out terrible odds — should be as bold as Robins. Let’s at least be honest, you know?
Robins’ honesty can be abrasive at times. In fact, he threw out a few other tidbits at the Goldman Sachs conference that left me with that hand-on-chin, eyebrow-raised feeling.
“The other thing that’s interesting that I think could affect this market a little differently is that there is still a pretty prevalent illegal market. The switching costs for some of those people — or I guess shouldn’t say switching costs, but like the propensity to switch to [the] legal market, some have, but a lot haven’t. And I think that’s going to continue to happen over time. So some of the biggest bettors are still pushing their action offshore.”
Um, but, uh, what? I mean, yes, of course some of the biggest bettors are still offshore, but when they come ashore and start betting with DraftKings, won’t the company — and I quote — “get smart at eliminating sharp action”? And aren’t many of the “biggest bettors” still betting offshore because they’re already been “eliminated”?
“I think that as the market matures, the win rate [for operators] should go up. And I think that when you’re in an earlier-stage environment, not the worst thing in the world if you’re giving people a couple of extra winning experiences out of every 10 instead of trying to maximize how much margin you’re taking.”
OK, I don’t know about this one. A lot to unpack. For starters, I would think the opposite is true, that as a market matures, the win rate for operators would go down, as losing bettors will eventually walk away — or limit themselves — while winning bettors will keep at it.
As for the second part? Eeeesh. I don’t even want to know how DraftKings is giving me “extra” winning experiences, but I guess I’ll take ‘em. Beggars, choosers, etc.
Sharps, parlays, and more
“What we’re not looking to do are things like taking money from people by forcing them into bets they don’t want or trying to direct them there. What we are doing is trying to get smart at eliminating the sharp action or limiting at least that we don’t want as much and then also making sure that we have a high parlay mix because people do like that.”
Oh boy. OK, the middle part about the sharps we covered already. The last bit, about parlays, well again: These are for-profit companies, and parlays are both A) huge moneymakers and B) wildly popular, so yep, give the masses what they want, of course.
But it was that first bit there — the fact he felt compelled to say DraftKings isn’t “forcing” me into bets I don’t want — that made me look over my shoulder to see if Big Brother was watching. Now I’m wondering if other sportsbooks are doing something like this, highlighting bets they want me to make because they are +EV — for them. To be honest, I have seen some “promo” bets, or boosted bets, that I dove in on without doing any due diligence.
And this just in: I’m a sucker. I need to update my process here. Be back in a sec. Let me go build some DFS lineups, where at least I know the ground I walk on is secure.
Oh, by the way, about DFS
“In DFS, our margins got substantially higher as the market matured because we just decided to make them higher. And you can do that.”
Take my rake. Please.