Thursday 11 January 2024

Fun Versus Maths

Posted on Sportshandle yesterday, an interesting look at betting attitudes / philosophy in the USA observed since it was broadly legalised in 2018 and how betting may evolve over there. Are the edges in US sports about to erode?

Is America Lousy With Bad Sports Bettors?

One hedge fund manager thinks so, but 'bad sports bettors' is a loosely defined term

by Jeff Edelstein

Thanos: Supervillian capable of wiping out half the world with the snap of his fingers.

Chanos: Super hedge fund manager capable of boosting the stock price of DraftKings while simultaneously ticking off nearly 100% of the sports betting public.

So yeah: Jim Chanos is a longtime, soon-to-retire, and famed — he called Enron going belly up — hedge fund manager. His specialty is, and remains, short-selling.

And DraftKings was in his crosshairs. He started shorting the company in May of 2021, according to a Financial Times article. But then this past July — and after taking a $10 million profit — Chanos dramatically shifted his position. The man who made a living betting against companies turned bullish on DraftKings — and on sports betting companies in general.

“The betting numbers have continued to be strong in the U.S., stronger than we thought they’d be,” he told the Financial Times. “The thing that we underestimated — that I think is going to be a benefit for all these companies for a while anyway — is what bad bettors the U.S. gamblers are.” 

Ooof. Snap.

Parlay away

When it comes to “bad” betting, Chanos may have a point. A look at the volume of parlay wagering, for instance, paints a picture of Americans who aren’t exactly looking for +EV opportunities on their betting apps.

Now to be clear, most states don’t break down parlay numbers. But those numbers that are available say plenty.

In Colorado this past October, 21.1% of money wagered at sports betting sites was on parlays. That’s up from 17.4% the previous year. Same for September, from 16.6% in 2022 to 19.3% in 2023.

Indiana? A similar story. More than 33% of handle in October 2023 was on parlays, up from 28.3% a year earlier. September’s numbers were close to those, 30.4% vs. 28.4%.

And make no mistake — more parlays equals more money for the sportsbooks. Overall hold percentage, according to the Financial Times article, is around 9% across American sportsbooks, up from 6% or so when PASPA was still the law of the land.

Or take this nugget from New Jersey, as highlighted by ESPN’s David Purdum: New Jersey bettors, through November of this year, wagered more than $2.5 billion on parlays — and the books won more than $486 million on those bets, for a hold of (avert your eyes) nearly 19%.

So of course — of course! — Americans are bad bettors, just like Chanos says.


Well, it depends on what your definition of “bad” is. Also, of “bettors.” 

Terrible, just terrible

“Are Americans bad bettors? Right now, probably.”

That’s Jeff Benson, the director of sportsbook operations for Circa Sportsbook, which, since its inception in 2019, has been the North Star for the sharp set.

As to the why?

“I think many people nowadays have the ‘bet a little to win a lot’ mentality, while viewing sports betting as more of an entertainment product,” he said.

And that, right there, is a major dividing line between how people — both inside and outside the industry — view sports betting. Is it a serious income-generating endeavor? Is it a fun and inexpensive hobby? Is it somewhere in-between? Is it both? Is it neither?

“What even is a bad bettor?” wonders Alun Bowden, senior vice president for strategic insight at Eilers & Krejcik Gaming. “It’s a silly concept. Are slot users worse gamblers than blackjack losers? Is losing 5% good and 9% bad? It’s an insane way to look at this.”

Bowden thinks trying to bridge this divide between serious bettors and 14-leg single-game parlay wish-upon-a-star-ers is better left to the philosophers.

“You can’t frame gambling utility and entertainment from the perspective of a winning, +EV bettor,” Bowden said. “It’s like the Wittgenstein thing of talking to a lion. You just don’t understand each other because your frames of reference are so different.”

And if the lion, in this case, is the +EV bettor?

“America is a nation of horrible gamblers — ignorant of the odds, ignorant of the science, ignorant of the math. They always have been,” said Capt. Jack Andrews, a professional gambler for a quarter-century and co-owner of Unabated, which seeks to educate sports bettors.

“If Jim Chanos didn’t realize that until just recently, then he missed Atlantic City in 1978, Mississippi in the early ’90s where they couldn’t build the casinos fast enough to meet the demand, Foxwoods and Mohegan Sun in the mid-’90s where they literally couldn’t count the money fast enough and had to resort to weighing it rather than counting it. All fueled by bad gamblers. 

“Here’s the thing,” Andrews continued. “The richest nation in the world, the nation with the most discretionary spend, combined with a nation that believes they can make something out of nothing, anytime they want. It’s a toxic recipe.”

And while that “toxic recipe” can mean recreational gamblers will lose in the long run by making bad betting choices, Andrews also thinks it’s to the long-term detriment of the sportsbooks themselves.

“Bad gamblers are not sustainable gamblers,” he offered. “Chanos and the bag holders of gaming stocks all think there is an unending supply of bad gamblers in the U.S. However, the ghosts of A.C. and Tunica show us that despite being bad with money, when Americans have no money they gamble less and they gamble more infrequently. They go from wagering $1,000 a week on a variety of games to wagering $50 a week on a variety of moonshot SGPs.”

To the moon!

“Americans do — and have always — liked the longshot of a little risk and a lot of reward. But it does not mean they are bad bettors,” said Las Vegas-based consultant Brendan Bussmann of B Global Advisors. “It just means they look at the opportunity differently and that will continue to evolve.”

Adam Levitan is one of the founders of Establish The Run, a site dedicated to fantasy sports, but he sees the same thing as Bussmann.

“If everyone just bet straight major market sides and totals, close to the start of games, and simply shopped two or three books for the best price every time, they’d only lose the juice. Their win/loss record would be close to even,” he said. 

If you sense a “but” coming …

“But the overwhelming majority of bettors don’t want to do that. Because it’s not fun. So they bet parlays and SGPs and gimmicks and other bets the books shove down their throats,” he said. “Bets that they’ll lose 5 percent, 10 percent, 20 percent in the long term. And that’s fine, not everyone is trying to profit. Some people are just trying to have fun.”

Tock, tick

So why here, why now? Why have American sports bettors embraced the moonshot? Connor Allen, the sports betting manager for 4for4 Fantasy Football, has a theory.

“I think a lot of this coincides with the rise of certain social media channels glorifying the idea of ‘get rich quick.’ TikTok, Reels, Twitter channels are oftentimes focused on making money quickly, which inevitably [in the sports betting world] increases the sportsbooks’ hold, because they are taking bets that have a much lower chance of hitting,” Allen said. “Even personally, if I tweet out a bet that is -110 with great reasoning vs. a fun parlay that is 50-to-1 or something, the 50-to-1 parlay gets significantly more engagement. I think that’s representative of a lot of the U.S. betting market.”

Ryan Sigdahl, an analyst at Craig-Hallum Capital Group, wholeheartedly agrees with Allen.

“Americans are drawn to low-probability-but-high-potential-payout bets,” he said. “It’s why the lottery is so popular. Same thing for why Americans love sports-betting parlays. Small dollars bet to get high entertainment, and the sportsbooks are able to hold a higher theoretical win rate. Both player and house are happy. Win-win.”


The big question — at least for the sportsbooks — then becomes whether this a sustainable way to run a business. Is Chanos correct in thinking the hold percentage will remain in the 10% range instead of the 5% range?

“I think it’s sustainable, as the recreational bettor loves a longshot and doesn’t bet enough to care that they lose a few bucks,” Sigdahl said. “The entertainment value is higher.”

Bussmann isn’t sure.

“The market continues to evolve,” he said, noting America’s newfound love of the parlay. “I think we need to see what all settles in before we can wrap up the American bettor in a pretty package.” 

Robert Walker spent a career managing sportsbooks such as the Stardust and MGM Mirage. He thinks it’s too early to pigeonhole American sports bettors and to make grand pronouncements about future hold percentages.

“It’s very early in the game,” Walker said. “I would expect the hold percentage to level off — or even decrease — as novice players become a little more sophisticated. I think the Nevada model — and I’m very biased — is an illustration of that.”

Of course, Walker’s assessment has a major unknown: Will America’s sports bettors wise up? Do they even want to?

“A little education goes a long way,” Capt. Jack Andrews offered. “Shop for the best price before you bet and you likely cut the house edge in half. Look for news related to the game you want to bet and you’ll likely cut it in half again. Consult with other bettors to see what you might be missing and it’s halved again. Use tools and resources to identify good bets from bad, and that house edge approaches zero or swings in your favor.”

Simple, right?

“I think we are still in the first inning and consumers are nowhere near educated yet, but once that comes — timing to be determined — then maybe you’ll see a more price-sensitive individual,” said Benson, Circa’s sportsbook manager. 

Sigdahl, for one, isn’t holding his breath for a Great Awakening in the sports betting world.

“The same reason you see people betting the middle of the craps table versus only playing the pass line with odds behind it,” he said. “The odds are materially worse, but [there’s] potential for bigger payouts” and the sense of fun trumps the math.

Andrews still holds out hope that for bettors, brains will win out over empty wallets.

“America was late to this party of legalized betting,” he said. “If we take the cue from other countries we’ll find that bettor education leads to a more balanced approach to betting. There are still plenty of bad bettors in the UK, Australia, and other countries which have been betting for years. However, bettors in those countries have realized that all that glitters isn’t gold in sports betting. It’s a more moderate spend.

“I think a lot of bettors will slowly evolve through attrition to be smarter bettors than they are now.”

Jeff is a veteran journalist, working as a columnist for The Trentonian newspaper in Trenton, NJ for a number of years. He's also an avid sports bettor and DFS player. He can be reached at

Tuesday 9 January 2024

2023 In Review, 2024 In View

Happy New Year! It would appear that my opening post of 2023 could essentially be re-posted this year since not too much has changed. 

Here's what I wrote then:
The India work trip never materialised, with my employer keeping an even closer eye on the bottom line than previously, and travel budgets severely cut, but otherwise my comments from a year ago can be recycled. 

I still have absolutely no incentive to pull the retirement trigger. My responsibilities did increase in 2023 with a new team moving under me which almost doubled the size of my staff, and while there was no adjustment in compensation at the time, I'm hopeful that during the annual performance review in February this will be remedied. If not, or there's not a sizeable increase in bonus / stock options / RSUs, then that might be the catalyst for the much anticipated severance conversation.

Sports Investing

Overall for the year, my betting bankroll increased by 5.9%, with the NFL leading the way for the 7th time in the past 11 calendar years. The Cricket and Rugby World Cups were also nice bonuses, with baseball, NBA, NHL and Tennis also positive. Football wasn't so good with a small loss overall on this sport, which is proving challenging these days, especially the league games. Let's start there.

European Club Football

EPL Draws

In December, we had nine selections with only the all-Big6 clash between Liverpool and Arsenal finishing level. With a little over half of the season complete, the percentage of matches finishing as Draws in the Premier League is currently at its lowest since 1931-32 which is clearly not a good scenario for the Draw System. So far we've had just 28 selections (also a new low), and with only five wins the system is down 10.41 units, and the current ROI of -37% is also the worst on record for the Close Matches. The broader 'no-odds-on' method of selecting qualifiers has a -12% ROI. 


December generated 7.41 units but again overall for the season so far, it's similar in total to the EPL Draws with a loss to date of 10.91 units, although with a far higher number of selections (197) the ROI is much lower at -5.5%. Laying the Bundesliga.2 teams is actually in profit with an ROI of 6.2%, with all the losses in the top division.  

Segunda Draws

A 1.75 unit loss in December from 17 selections means that the season to date is down 6.98 units, an ROI of -7.8%. At one point we were down almost 15 points, so in a way we end the year on a positive note! 

Serie A

All very depressing reading so far, but at least Serie A is positive with December +1.36 units and overall for the season in profit by 4.71 units, an ROI of 19%

American Football

The reason this end of year update is a little late is because I wanted to wait for the NFL Regular Season to conclude, which it did this past weekend. The basic Small Road 'Dog System had a rare losing season for only the third time since 2005, down 5.39 units with a 29-33-5 record, but the Divisional System was in profit by 2.09 units. This system may finally be the victim of its own success with a lot of chatter on social media about home-field advantage being overrated which has been the case for many seasons as long time readers will know.

Fortunately the Totals systems did very well this season, with the basic 'Prime Time' system having a 33-23 record, +8.42 units, and the more selective Conference record up 6.47 units with an 11-4 record so for the NFL we enter the playoffs 11.59 units ahead overall.

With the College results adding another 21.63 units, this sport continues to be extremely profitable. The College finale was last night with Michigan beating Washington for the National Championship, and the NFL playoffs start this weekend with the Wild Card games.


We're not yet halfway through the current season but at the end of the year the two basic systems I follow (away teams and totals) were up 2.82 units and 10.27 units respectively. As I've mentioned, there was a new in-season tournament inaugurated this year, the NBA Cup which was won by the Los Angeles lakers, and early signs are that these games are best not included in the Away System, but we'll have to see where we stand once we have more data. 


At a similar stage in the season to the NBA, we're down 3.37 units as of year's end, although to end the sports piece on a positive, January has turned this red into green.  


Not the first half of the season we were hoping for in football, but saved by the US sports. The situation is worsened in real terms by the imbalance between the time it takes to determine some of the football bets versus the US ones, and it may be time to focus on the big international tournaments (Africa Cup of Nations is here again with the Euros not too far away) and the big club matches both in European competition and the domestic cups and play-offs. 

Financial Investments

As I've mentioned before, betting comprises a very small percentage of my investing portfolio these days, and overall the more traditional financial investments were up 15.6% for 2023. 

Another 1.76% and the high of April 2022 would be surpassed, but with a recovery of more than 30% required at one time, 1.76% seems like a win although it has to be said that 2024 hasn't started off very positively. 

With 16% of my net worth in, or related to, my company stock, it wasn't helpful that the share price declined for the first year since 2008, though by less than 1%

The big individual winner in percentage terms was Bitcoin which was up over 300%, followed by Tesla which more than doubled finishing up 101.7%. In August 2021 I mentioned Chipotle saying that:
One company I've not mentioned before is $CMG (Chipotle Mexican Grill) which I bought last September, primarily because I suspected a stock split might be imminent.
Three plus years later and I'm still waiting for the split, but with the stock up 64.8% this year, my rationale might be wrong but I'll take those returns any day. 

Boeing shares were up nearly 37% and those were the only individual stocks in my play account (+32.6%) that outperformed the S&P 500 Index which was up 24.2%. By way of comparison, the FTSE 100 was up 3.8%, but as long time readers will know, I favour the US Indexes.

I'm also focusing more on increasing my dividend income this year as I transition into old age. I got rather excited when I looked at my December statements in detail and saw that the month had brought in £6,901.09 in dividends. Annualised, I was thinking, this is quite a lot of cash, but unfortunately upon closer examination, a lot of the larger sums in that total are annual payments rather than monthly or quarterly. 

More work to do in this area, starting with trawling back over the year to see exactly what is coming in since most are automatically re-invested, and it's probably something I should have looked at earlier. If anyone has any advice in this area, please leave a comment. 

Health and Fitness

Gains are not always good however, and in the category of weight (or at least fat), I was quite happy to see decent losses over the year. In December I hit my lowest weight since June 2011, and I'm just about in the "Normal" category now based on BMI. Perhaps not that great an achievement since I shouldn't have ever moved out of that category, but I'll call it an achievement. 

A Dry January should see me reach the goal of being "Normal", (my wife begs to differ), and the challenge then becomes maintaining it which will require a mental reset. 

As I close in on 67, my son is encouraging a shift from aerobic exercise (I averaged a little over 7 miles a day on foot last year - 2,561 miles / 5.3m steps in total) to resistance training. That will likely mean an increase in overall weight since muscle is heavy, but I'm preparing myself mentally for it. 

He's also suggested walking backwards would be good and while looking stupid isn't something new for me, I'm not sure I'm quite ready for this activity, but my wife wants to join a gym too so once the January rush is over, we'll be signing up on February 1st and see how it goes. 

I'm also planning to ride my bike more in 2024, which shouldn't be difficult given my total miles in 2023 was a very round number. A climb up Ben Nevis (hopefully to the top) in July will be my main hiking goal this year as that will complete the Snowdon, Scafell Pike, Ben Nevis treble. 

While the benefits of getting out each day and walking a couple of miles are clear, I'm not convinced there's a huge benefit in walking 7 miles versus say 3 or 4 miles, especially of most of those miles are flat. Maybe if I ran a larger percentage, but then after two right knee surgeries and the triple leg break of January 2021, I'm lucky to be walking at all! 


I mentioned the goal of reading more in 2024 and so far I have finished "Elon Musk" by Walter Isaacson audiobook and just started "The Hitchhiker's Guide to the Galaxy" by Douglas Adams, which is long overdue. 

Best of luck in 2024 and thank you for following this blog.