As sports betting in the United States continues to grow, so does the audience of bettors. What the industry is trying to understand is just how much of that group of bettors cares about being successful and sharp. There are very vocal sharp bettors on Twitter, but is this a vocal minority or an indication of the average sports bettor?
SBC Americas spoke with a trio of people very familiar with sharp betting in the industry. Captain Jack Andrews co-founded Unabated, a site offering tools to help bettors improve their results. Jake Benzaquen is the co-founder of Prophet Exchange, a peer-to-peer betting exchange live in New Jersey. Alex Monahan is the co-founder of OddsJam, a site that offers advice and tools for bettors looking for advice on their wagers.
These three spoke from their immense experience to define sharp bettors, gauge the scope of the sharp audience, and discuss how operators like DraftKings are being myopic in how they approach sharp bettors at their books.
What does it mean to be sharp?
Jessica Welman: Let’s just start with the broadest question: The word “sharp” means a lot of different things to different people. How do each of you define sharp?
Captain Jack Andrews: A sharp bettor is someone who is trying to get an edge at, in this case, sports betting. A sharp consumer is anyone who’s trying to make sure they’re not overspending in whatever consumption of a product they’re into. When you carry that over to sports betting, somebody that doesn’t want to overspend for their betting dollar, whether they’re thinking they can win, or whether they’re just trying to lose less, anytime you are actively trying to make the best of it for yourself, you’re attempting to be sharp.
Jake Benzaquen: There’s a spectrum, as Captain Jack said. There are the super sharp bettors, like Captain Jack who have been doing this a long time very successfully. Then there are people who want to be sharp, make some money sports betting, or be a better sports bettor. So I’m not sure if there’s a specific definition, but people who probably have a little bit of sophistication, are line shopping, and are trying to get an edge over the books without just betting with their gut.
Alex Monahan: I think these guys hit the nail on the head. It’s probably both a combination of mindset and [being] results-oriented, and there’s levels to it as well. Whether it be price shopping or trying to figure out your best staking methodology, managing your bankroll, or just trying to get an edge on any particular outcome, I think there are a lot of different ways you can apply being sharp to your own mindset and approach.
Is being sharp about a mindset, results, or both?
Welman: I’m a poker person by trade. In poker, a lot of the ways we define pros is that you make your living off of it, you play a certain level of stakes. Is being sharp in sports, betting less about what your results are, how big your betting unit is, and is it more of a mindset?
Andrews: Just like you come from poker, I come from the casino background. And being an advantage player is very much a mindset, it’s very much like, “Can I get an edge? How do I sustain that edge? How do I manifest that edge?”
I’m fond of saying there’s the science of sports betting and then there’s the art of sports betting. A lot of people have solved the science of sports betting, very few people have solved the art of sports betting. Those that I know that are very successful in sports betting tend to take an approach as this all-encompassing pursuit. It’s a huge logic puzzle that everyone’s trying to solve. And it doesn’t come down to who’s going to win the game. It’s going to come down to how efficient is that line on the game and what can I do to get an edge? Or I can’t beat the line on the game but maybe I could beat this prop on this player in the game.
I’ve been a card counter, a hole carder. I’ve done things in casinos that I won’t mention for many more years to come. Sports betting is the one where I’m constantly finding new ways to find an edge to attack the market because it is this growing market. It’s almost like how you can go about it many different ways in the financial markets. To have this mindset of “I’m a sharp bettor” I want to always be looking around the next corner. That’s what makes it so hard for an operator to defend all the surface areas because there’s so much to do when it comes to sports betting and there are plenty of ways to get an edge.
Benzaquen: I could open up a can of worms on variance as a topic, but I won’t do that here. So I’m gonna describe more the mindset side of things. It’s definitely not 100% mindset or 100% results. But a lot of the time that mindset translates to results. A lot of times it doesn’t though. That doesn’t mean that the mindset is wrong. I think it’s very case by case.
As Jack mentioned, a lot of operators have to defend a lot of surface area. As an exchange, we don’t defend surface area really at all. We try and facilitate surface area actually if that makes sense. It’s not a one-stop approach at all shops or operators because the art of sports betting is something that applies more to a sportsbook than an exchange, I would say. So I think it’s very much a case-by-case basis. And the blend of both and how successful you are is up to variance, of course, but definitely leads from the initial mindset of the end user.
How big is the sharp sports betting market segment?
Welman: The industry talks a lot about the sharp bettor, but how many people are taking the sharp approach? You see that four of every five FanDuel users have placed a Same Game Parlay. So are sharps a small minority of the industry? I think maybe the more interesting question too is how big is the pool of sharp bettors compared to how the industry perceives them?
Benzaquen: I think that SGP example is actually a perfect way to frame this just because obviously I would say you know 80-90, even higher percentage of the time users who are engaging in SGPs are not what I would call sharp. But, at the same time, there are definitely users out there who have found edges in FanDuel’s SGP tools or other SGP tools as well. So I think that’s a good way of looking at things specifically when talking about that example.
I think it’s a tough one to get right. I don’t necessarily know what people’s expectations are. I think there’s an expectation that there’s kind of a sub-1% group that actually cares about winning. I would say it’s much larger. We see on our platform that almost all of our customers are price sensitive. We get to see that firsthand. To me, it really equates to what people believe and how people look at things because you can mention something such as betting SGPs. But at the same time, maybe one out of every 100 users is betting an SGP because they think it’s a positive expected value bet. Maybe it’s two, maybe it’s three, maybe it’s zero. It’s a really hard question to gauge. But I would like to think given the growth that we’ve seen since we launched that it is the larger subset than most people believe exists.
Andrews: I think I have constantly overestimated how many sharp bettors are out there ever since I got started in sports betting years ago. I just always feel like, “Oh, come on somebody else’s solved this too, right?” I continually overestimate it. And I think the operators overestimate it. I call it the meaty middle, I think there is a large swath of bettors that are tired of losing, they want to lose less, they want to win, but they’re never going to be able to have the discipline or the resources to win long-term. So maybe they just pick up some promos and bonuses and things and pat themselves on the back for that. But they’re actually good customers for operators to have.
If you had a distribution bell curve of sports betting and on the far fringe are the sharp bettors that are going to always be able to beat you some way, when you get towards more the peak of the bell curve, they’re the guys that are going to lose 0-6% organically just on based on their own lack of self-discipline or their desire to be a sports fan first and a market-beater second. But I think a lot of sportsbooks view that meaty middle of guys that aren’t losing 10% or aren’t playing the SGPs as a toxic asset. In fact, that’s the word that I’ve heard operators use when it comes to sharp bettors. They’re a “toxic asset”. And I think that’s probably the wrong approach because they could be a profitable asset. And hopefully, we’ll get to in our discussion, they can be of benefit to a sportsbook in terms of signal.
Monahan: I’d agree with Captain Jack. I definitely don’t I don’t think most people have the discipline or care to know the process. I think people like feeling sharper. They’re following advice that may be good for a given day if they’re betting something, but I don’t think most people have the discipline to actually learn how to find profitable bets on their own. So I think there are people, as Captain Jack alluded to, who maybe can take advantage of some profitable promos and stuff, but if you put them versus a sportsbook and they had to do it on their own, I don’t think they’d be able to make money due to resources, and also just due to desire to actually learn. I still don’t think that many people care about line shopping and are price sensitive at all.
Welman: To follow up on that Alex, do you think that the average person at least wants to feel sharp even if they don’t necessarily want to do the work?
Monahan: I think people want to feel it. I mean, we give out plays and stuff and what we noticed is people maybe grab two they like and then maybe they’ll put it in a parlay with two others that their gut is giving out. People want to feel like they have an advantage, but people don’t actually want to put in the work. People don’t want to sign up for multiple books, it’s a hassle. People want the easy results still, for sure. Learning concepts is not easy, and it requires putting in some time.
I think too, Jake alluded to variance. It’s really hard to know, over the course of a week if you have an advantage or not. So people can place really good bets, really profitable. They really figure out what they’re doing and they could have a horrible first week, first month. And that’s frustrating, right?
Looking back and seeing over a large sample size what your results are…most people don’t even track their bets. So it’s really hard to even know if you’re winning or losing, if you’re not tracking your bets.
Benzaquen: I was just gonna say it’s super easy to want to be sharp, super hard to do. I think the picking and choosing of whether it be topics or you’re taking two plays that are given out individually and putting them in a parlay, a lot of people probably don’t know that that’s going to tank their expected value over time.
DraftKings and limiting winning bettors
Welman: DraftKings CEO Jason Robins gave an interview with iGaming Next and basically said that thanks to the size and scale of the company they are not only limiting sharp bettors are consistent winners, but they were doing so in a very efficient way. I’d love to hear your reaction to the news. How widespread do you think this practice is? What kind of impact does it have on the industry?
Andrews: Jason Robins says the quiet part out loud a lot, and I’m sure there are a lot of people at DraftKings or other industry operators that are like, “Don’t poke the bear. Don’t tap the fish class.” Look, anyone that relies on AI or some kind of algorithmic-based way of beating the players or detecting sharps is absolutely gonna get beat. There’s just too much surface area. And there are too many people out there like myself that view this as a challenge.
I could tell you what DraftKings does to profile bettors. I could tell you the scale that they profile on. There are a lot of employees that like to leak stuff like this. I’m not going to disclose that because I don’t want them to know that I know. But the way they’re approaching it is very beatable. They take such confidence in their algorithmic approach that you just have to basically fool them for long enough that they go, “Well, we don’t have to worry about Jack, Jack doesn’t know what he’s doing.”
That’s the trouble when you view sharp action as a toxic asset, you just try to eradicate it from your system. Then after you’re done scrubbing you go, “Okay, everything’s clean and I’m out of here. We can turn our back on this.” That’s not what sharp action is. Sharp action is when you close the door, they’re gonna come in through the window. You have to deal with it, you have to find a way to take this sharp action and say this signal of what the sharp side is. How do we react to it? I’ve written articles in the past where I talk about how if they were to just accept some sharp action, they could then shape their lines to use that as a way to have sharper lines. The rebuttal I get back from our operators is, it’s easier for us to watch the odd screen and see what Pinnacle, Bookmaker, and Circa are doing and just change our lines when their lines move rather than try to get ahead of that.
If you’re always going to be reactionary, you’re always going to be reactionary to the rest of the market forever. And that’s what DraftKings has found as they’ve played second fiddle to FanDuel for all of this time. They will continue to do that because they don’t want to take a proactive approach. FanDuel, on the other hand, is quietly building a very, very effective trading team. They’re starting to both move algorithmically in reaction to sharp money as well as move proactively ahead of it. You don’t hear as many people saying that FanDuel is limiting me to pennies. There are still gonna be detractors out there, but for the most part, DraftKings has kind of made this bed and they’re laying in it. And they’re getting abused because the sharp bettors have figured out that DraftKings has been very myopic in how they approach sharp betting.
Benzaquen: I think one man’s trash is another man’s treasure. This is not just DraftKings. Robins is the one who’s being quoted, but at the end of the day, this applies to PointsBet, MGM, Barstool, any Kambi book. I would agree that FanDuel was probably the best of a bunch of the New Jersey-based operators. Saying the quiet part out loud is one thing, but I continue to encourage it. Is it good for the industry as a whole? No. But from an exchange perspective and what we offer and what we bring to the market, this is our bread and butter. If you can’t get action down elsewhere and you want to place a bet, you can not only come into our platform and bet on existing odds that other user set, but request your odds. You’re able to make markets you’re able to place bets. So operators being as myopic as they are is actually to our gain right now. Do I think this stops anytime soon? No. If you look at the UK, this has been in practice for decades. I don’t think that anything happens over here, unless you get some regulator who’s going to be on their high horse and looking at it. I think we can all say from Twitter discussions that there’s no one-stop solution that makes everyone happy. I think we’re just going to continue to see it, continue to hear it. And that’s exactly why we’re doing what we’re doing over here at Prophet.
Monahan: I guess I’m shocked he said it out loud, but that’s about it. No really new news. I agree with Captain Jack. If you take some action from sharps, you can move lines, have more advantageous pricing, you can maximize value of your square customers better. I come from the financial world and kind of view it as payment for information. You want to trade against some smart people because that helps you make smarter decisions going forward. So I think books just kind of are along that spectrum of wanting zero information. And then some like FanDuel are willing to accept more and accept the fact that they’re going to be beat occasionally, but probably have stronger pricing than the rest of the industry.