Gamblers on Gambling: A Conversation About Sports Betting and the Industry
Chasing Losses, Playing Responsibly, Sneaking into VIP Programs, the Role of AI, Policy Reform and More
I recently went on Circles Off, a podcast hosted by The Hammer.
It’s one of my favorite shows, hosted by real professionals providing reflections on and descriptions of the sports betting world. In this episode Rob and I spoke about my background in gambling, my current betting, responsible gambling, policy and more.
Here are a few of our exchanges, edited slightly for clarity.
On Whether Knowing a Sport Helps When Betting on it
Rob: “You said you grew up, played [and watched] tennis. Does that give you [an advantage] betting tennis?
Me: “I think it does now, but in the past it didn't. When I started off I was like ‘I know these players, I know who's going to win’ and had this arrogance in relation to the market. And so it initially really hurt me, where I was just betting my thoughts. But after a while [I realized] it wasn’t sustainable… so I sat down and tried to quantify some of the beliefs I had.
A lot of my betting is in more prop and derivative markets (as opposed to who is going to win), and I started testing my thoughts. So for example, this player, if he wins is he likely to blow someone out? That’s pretty easy to test, you have a dataset with all his matches and see if compared to the average player, he wins more or less of his matches in straight sets. So I think it was when I made the switch to being able to quantify my opinions, that’s when it started helping out a lot. But when I first started it probably hurt me.”
My favorite quote on this is from Marco Blume, head of trading at Pinnacle (the sponsor of Circles Off):
“Many people who know, or believe they know something about a sport actually cannot quantify it. If Lebron James is not playing for the Cavaliers, everybody knows it’s bad for the Cavaliers, the question is how bad is it? This quantifying– is Lebron James worth 5% equity? 2%? 7%?– [there’s a] big difference between all of those numbers! And so the real skill comes when you have sport knowledge and you can quantify it, and only very few people are actually able to do this over a long run basis.”
On Finding Edges While Betting In-Game
Rob: “In sports I’m more familiar with, like football and hockey, when I’m betting live I know that certain teams have certain tendencies. The goalie pull (when losing teams have the goalie abandon the net and play offense at the end of a game) is very obvious in hockey, but some teams will pull earlier. In football it’s your play calling when you’re trailing vs leading, how quickly you run plays, things of that nature. I would imagine you can gain a similar edge in tennis by knowing how certain players act in certain situations.”
Me: “That’s definitely true, especially [for markets] like game and set totals and spreads… If you’re someone whose style is more serve dominant, [once you fall behind] you’re probably going to give [that set] away… [there are times] when a player will be up 2 sets to 1, fall behind in the 4th set and [give it up] to lose 6-0, and then start trying again in the final set to conserve energy.”
On Acting like a Degenerate as a Sharp Bettor, and Responsible Gambling
Me: “One thing that I've experienced a lot and has informed my thoughts on responsible gambling is [how] acting like a degenerate and potentially even an addict [helps accounts]. Things like chasing losses works… It looks better if you deposit $1,000 three times than if you deposit $3,000 once… seeing how that rewards accounts definitely informs my betting in terms of keeping accounts open and it also informs concerns I have about some of the predatory aspects of the business.”
Rob: “Out of curiosity, have you ever had a sportsbook reach out to you when you exhibit those behaviors?”
Me: “Never. I've had them reach out when I exhibit those behaviors to give me VIP [status], [but] I've never in my life had a sportsbook reach out to me for responsible gambling considerations… These companies don’t care.”
Rob: “I generally agree, I do think the vast majority don’t care, [but] I think there’s people within responsible gaming setups that actually do care.”
Me: “Sorry, to clarify: I don’t think that the people working in responsible gambling at major sportsbooks want people to be on the streets and lose all their money. I just think these are for profit companies, and [making money is the prevailing ethos].”
Rob: “I think that sportsbooks, especially the casual recreational ones, just want people to bet literally as a form of entertainment. Not looking for an edge, not price shopping site to site, just use the site because instead of going to the movies for $20 you lay down some bets for $20 and have the opportunity to win. I think that behavior is encouraged, provided it doesn’t go overboard, but I’m not sure they do enough when they do go overboard.”
Me: “Yea I agree it’s a tough question, which is why I don’t think the sportsbooks should be the ones in charge [of responsible gambling]. Obviously they should be in charge of their own responsible gambling campaigns, but you gotta have some rules or regulations… To be clear, they have a hard job. No one goes to a bakery and says, this baker makes the best muffins in the world, and we’re gonna blame him because someone goes in and buys [too many] muffins… modern sportsbooks do an incredible job, the product offerings are amazing.”
Rob: “I can tell you, I've been betting for 20 years and it's night and day.”
Me: “Yeah, and it’s hard to tell them ‘you’re a for profit business, we want you to be able to make some money but we don't want you to make too much money, and you can't make too much money off of certain people.’ It's objectively a really hard thing [for them] to do which is why I think you just need to have government intervention to make rules [about what practices are and aren’t allowed].”
On Limiting, Policy and VIP Programs
Rob: “I think where regulation has let bettors down, especially newbies who are just in the space for the first time, is that the regulation seems to be more aligned with making the sportsbooks happy than protecting the consumer. Now it might seem hypocritical for me to say this… [because] I don't want a coalition speaking on my behalf as a bettor, because I think all bettors are different… but as a pro, selfishly I think that betting is a dog eat top type of world.
Everyone can win if they put their mind to it, I mean if you've listened to every episode of this show I would guarantee that you have the principles to win at sports betting, it's very easy, but scaling is very different… so I constantly balance that it’s kind of unfair that you you can limit a percentage of the population but take huge bets from whoever else with, well, this is my livelihood and I can get around those limits a lot better than [most]... and that's a big edge for me right now because a lot of my previous edge, which was strictly the modeling of sports, is slowly being eroded because there's so many people who are now involved in the space.”
Me: “Yeah I agree… no one cares about sharp bettors, but when you say oh did you know if you exhibit signs of addiction or problem gambling your limits go up 10x, that’s what people actually care about… what actually moves the needle is the realization that the same mechanisms that restrict winning customers are expanding limits for losers… but I know this is is true for me and probably true for you, there are things that I know I can do to increase the limits on my accounts… looking like a real loser will increase my limits and obviously bigger limits means you can bet more and make more money, so if [VIP programs were abolished] that would decrease my earn. So I try not to say regulation is going to make it easier for me to make money—it won’t—but I think it’s probably net good for society.”
Rob: “It's actually sad when you lay it out like that, but yeah I'll just clarify what you're saying but it'll come out of my mouth. It’s a big time goal for me when I'm betting with a [recreational] book to try to get into the VIP program, because then you're betting into very soft numbers at high limits, and it's sad that that's become part of the game… but it is and ultimately there's pretty easy ways to go about doing that, but you do have to exhibit the behaviors of a problem gambler, and then you go back to the top point which is like well aren't all these responsible gaming practices in place, how does it get to this, and it’s just a really [ugly situation]…
At the end of the day people aren't stupid, especially in the sportsbook business, you know the vast majority of your revenue is coming from a very small subset of players. Now I don't think that sportsbooks should be required to prohibit everyone from betting, [but] I think the onus is on the sportsbook to make sure that the person is actually comfortable with losing the money that they're being afforded to bet… the problem is the nurturing of bettors, and when you’re in the door and you deposit a certain amount of money, and already you have the VIP team that’s like maybe this guy could be [a big loser], that’s where I think responsible gaming practices fall short.”
On Defining Problem Gambling and Chasing Losses
Rob: “I'm going back through our old [direct messages] and I gave you these warning signs [of problem gambling]:
Trying to win back money lost by continuing to gamble or betting larger amounts to cover losses
Neglecting work to gamble
Hiding or lying about the extent of gambling to friends and family
Using gambling as a mechanism to cope with anxiety or stress
Borrowing money to gamble
Denial of a gambling problem
I mean, a lot of these are the same warning signs whether you had alcohol addiction, drug addiction, a lot of it's the same thing. Neglecting personal relationships to gamble is another one, so those to me are the biggest warning signs altogether, and it’s scary because when you lay them out I've known so many people who've exhibited those patterns.”
Note: All of the warning signs Rob describes are listed in the DSM-5 (Diagnostic and Statistical Manual of Mental Disorders), which psychiatrists use to diagnose gambling disorder. According to the DSM-5, someone has a gambling disorder if they meet at least four of the listed nine behaviors and their gambling has led them to clinically significant impairment or distress. Behaviors included in the DSM-5 but not listed by Rob include preoccupation with gambling, inability to stop gambling, and irritability when attempting to cut back gambling. While existing data isn’t great, conservative estimates (from before the expansion of online sports betting) put the number of Americans with gambling disorders at nearly 10 million each year.
Me: “And you can exhibit them sometimes, I mean anybody who's gambled a decent amount has chased their losses, at least I think… I was talking to a social worker recently, and we were trying to delineate what are the signs of problem gambling, and she said ‘if you chase your losses that means you're a problem gambler’ and I was like that describes 100%, or maybe 90% of gamblers at some point.”
Rob: “I do chase losses in sports betting. Now let me clarify here, I don't chase losses where if I had a losing NFL Sunday I'm going to go put a bunch on Sunday Night Football to win it all back, but let's say I bet a bunch of pregame college football props on a Saturday and the early slate doesn't go well. I don't always bet midday on Saturday but I might find myself betting midday on the later stuff [if I lost in the morning]. With that said I'm not just firing randomly to win my money back, I'm looking for edges, it's basically like I'm going to work harder to try to make the money back. So I don't view it as a chase because I'm still finding positive expected value bets, but ordinarily yeah I might have been out on Saturday or Saturday night and if things are not going well I might be at the desk for the rest of the night.”
Me: “I do the same thing, for big tennis tournaments I try to keep a decent schedule both in terms prepping pregame stuff and also live betting, and it'll be like okay I'm going to live bet the morning slate and then there's fewer matches in the afternoon so I'm going to take a break then. But if the morning slate is bad, I'm going to keep betting. And yeah, most of those, try obviously for all of them to be good bets, but chasing losses is natural.”
Rob: “Even at the blackjack or craps table, a different form of gambling, I’ll chase losses. But the only thing I'll say, and some people might call me out for this, is that when I pull that money out of my pocket and I put it on the table to buyin I assume it's gone, and that's my mentality. I am betting this as a form of entertainment, I'm totally comfortable with losing it, and if I lose I'm not going to the ATM and pulling out more money… I'm lucky in a sense that I can do that because some people can't, they don't have the luxury of of having a disposable income to bet for entertainment with and they're betting to try to win, but when I know the odds are stacked up against me in a game I'm not an idiot, if I'm playing roulette I know that if I play X amount of spins over time I'm going to lose X amount of money, it's a mathematical formula. And I'm fine with that, I'm just hoping to get lucky.
If I'm down a little yeah I might press it, but I know that I came here expecting to lose. And that was the biggest difference for me, because Rob from 20 years ago wouldn't do that. Rob from 20 years ago would go to the casino, I could count cards and would have an edge in my favor but if it didn't go right I’d go and pull out more money and bet more than I could afford to lose. I don't do that anymore thankfully, but yeah I think that's the perspective and what [responsible gambling campaigns] are trying to ingrain in the culture, especially in the sports betting space, that it's fine to lose a little bit for entertainment… The problem to me is getting that message across to 21 to 25 year old males, because you can send someone to give a speech to a college campus, and you know who's going to listen? None of those kids.”
On Creating Effective Responsible Gambling Content
Circle Back, which Rob mentions, is a new show produced by The Hammer, available on both Youtube and Spotify, where a panel of bettors (professionals and amateurs) react to Tweets and Drama from Gambling Twitter. I appeared on last week's episode (Youtube link, Spotify link).
Me: “I think the only way people are going to engage with [responsible gambling content] is if it's high quality, if it's entertaining… I have no idea how to make entertaining responsible gambling content.”
Rob: “So a secondary goal of creating Circle Back was to do just that. For me, picking on bad tweets that are out there that are sending bad messages to sports betters, about, you know, bet the farm on this, do whatever, by using those as examples and then kind of making fun of them, I actually do think that that could cater to the masses. Still in our infancy of doing that show but the demographic skews much younger than this one.
Responsible gaming is very important to me. It always has been because of the amount that I lost when I was younger, and I went through serious depression, lost relationships, didn't talk to people, literally avoided people for years. I've lived through that, and I don't want other people to have to go through that. Once you go through that experience you're like this is rock bottom…
I'm very aware that I co-own a business in the betting space that sends people to sportsbooks, we produce content here that is sponsored by sportsbooks, we're in the betting space. I try to do this as responsibly as I can, and be as open with the audience as possible. But Circle Back to me, as much as we wanted to create a TMZ type of ‘The View’ roundtable, it’s just as much about education in the space that I think people might actually watch, versus a 10 minute YouTube video on how to manage your bankroll. Not to say that that doesn't have value because it does… but it's going to take a specific type of person to sit down and watch that video.”
On the Role of AI and Technology in the Future of Sports Betting
Me: “I think greater personalization is the big thing, when you log on to a sports betting app right now they just show you whatever's live or maybe the NBA moneylines for tonight, but presumably in a few years you're going to log on and they’ll know exactly what you want, they're going to spoon feed it to you. And to be clear, it's going to be a way better user experience… Obviously the industry should be incentivized to make a good product, to try and make money, but them making more money means more people losing money, which is generally bad for society. And you can say these people would have spent $100 going out to dinner and now they're spending $100 at the sportsbook, but it's just not the same… gambling is an addictive product.”
Rob: “What you talked about about the products themselves is a pet peeve of mine, why I'm certain we will see consolidation in the betting space. There are so many books in the market right now that don't have a USP, a unique selling proposition. There’s the recreational sportsbooks that are way ahead of the curve with really good products, good apps, in game offerings, and pretty fair to people. Then you have sites like Pinnacle which are low margin, lower Vig, and posted limits. But then you have this cluster of sites, a lot of them originating in the UK, and they come in this instance to the Ontario market and they just run things exactly the same… You go to bet an NFL game and your main option is moneyline instead of spread, and you’ve got to make three clicks to get a spread, when you login you’re getting served live Bulgarian soccer that I've never bet in my life and I'm never going to bet in my life. And some of these sites, it's almost like they're not even trying to make money.”
Me: “I think the UI is another one, where so many of these apps have garbage user interfaces… even the search [function] is bad, and it’s like what are we doing here? [These companies] are spending millions of dollars on advertising, but can’t spend a few hundred thousand to pay better developers?”
Rob: “When you look at the best recreational books in the space, it's fair to assume that a large percentage of the population that has bet on sports has tried one of those books. So if you're going to try to lure one of those players over and you can't compete on product, you're dead in the water. Sure you can try to compete on bonus [and signup offers], but over time people are just not going to like the experience. If I go to live bet and have a quarter of the options, and [the app] lags on my mobile device it's not going to work. And I think you're right, so much money was just thrown at marketing. It’s like, well, we have to compete, get our name out there. But the product is not there, and over time the bigger books are really investing in product, and the smaller ones are screwed.”
Me: “[Products at modern sportsbooks] are insane. In-game same game parlays, live player props on every single player, every stat, it’s insane. And you have that moat, where if [smaller operators] don’t spend a ton of money on this stuff you’re not going to be able to compete. And that’s why you’re going to have that consolidation [as products] get better and better.”
Rob: “Yeah, I do have some experience working on the other side of the counter, in the offshore space, and it's tough to get stuff done. Product is a real challenge to solve, especially when you're working within a book where [the product team] has their own ideas of what they should be building, then the sportsbook team and traders [have different ideas], it’s hard to get everyone on the same page sometimes. But it does seem some of these books have it more figured out than others.”