The advantage of backing US talent in sports trading
Jay Rood, chief risk officer at Bet.Works, on why automated trading functions won’t work in the US
We’ve enjoyed some incredible sporting action in the last year – from the FIFA World Cup last summer to Tiger Woods’ incredible Masters victory and the thrills of the most recent NBA season.
But the drama hasn’t been confined to the field of play. The repeal of PASPA in May 2018 led to the first legal sports bets being taken in New Jersey just in time for the World Cup and by the start of the NFL season they were taking mobile bets.
We’ve seen legislative changes in a number of states since then. Who’d have put money on New York ever actually allowing sports bets even a couple of years back? Well, in July the Rivers Casino Schenectady took the first licensed wager in that state – six years to the month after land-based sports wagering was actually legalized there.
It’s an exciting time to be involved in betting for operators, support teams and the bettors themselves. Everyone wants a piece of the action, from huge casino groups to tech specialists, marketing experts and the online betting operators who have had years to establish themselves legally in European markets.
While undoubtedly the US market can benefit from external expertise, there are regional customs and trends that make native partners a more favorable option for those looking to make it big in the US.
In my own field of trading this is particularly true: we favor different sports and don’t display our odds in the same way, for a start. But the cultural variations run much deeper.
The Las Vegas effect
US gamblers act and wager very differently to the European bettor. They tend towards a much higher average wager, mainly due to the environment in which the American gambler operates – historically a casino where the focus is gambling activities within a small window.
Obviously, this type of activity has developed in Las Vegas mega casinos and it requires a unique skillset to handle the action of high-value individuals.
European betting is more focused on the mass-market wager. There’s a much lower average bet, leading to a model in which a more automated approach of trading can be implemented.
Fantasy land
The prevalence of legalized betting in European markets means fantasy sports has always been something of a niche pursuit there. For decades they’ve played fantasy soccer competitions through newspapers for fun, while placing real-money bets on whatever sports event they want elsewhere.
The US, of course, is very different. Just a couple of years back, most American sports fans could only really test their knowledge and hunches via fantasy sports competitions, meaning the sector grew exponentially.
Fantasy sports has educated the average player in recent years and has made bookmaking to the mass public a little bit more of a challenging proposition that requires an understanding of American sports, leading to an advantage for local traders.
Hands-on approach
In a more automated European model where the mindset is to ‘trust the machine’, there will be areas where bookmakers’ hold will suffer from lack of a more monitored approach, for example when considering in-play adjustments to player or team biases and in-game injuries.
In jurisdictions that will be primarily mass market, the pre-match handle will be the main focus as many casino operators looking to provide some stimulus to their bottom line will look to sports betting to provide that boost to betting itself and casino, hotel and restaurant revenue. That has already been proven in the states where sports betting launched last year.
This brings you back to the handling of high-value customers in these environments and the advantage of having traders with experience of these types of customers.
Jay Rood recently joined Bet.Works, a Nevada-based technology and services company delivering advanced igaming and sportsbook technologies and services in the market. He leads a team of traders from Bet.Works’ new office in Las Vegas and is currently on an aggressive hiring spree for local talent. Rood previously spent over 25 years as MGM Resorts’ VP for racing and sports.