All Law

Sportsbooks are a business, but should they be banning smart bettors

Not exactly a newsflash here, but the point of running a business is to make money. That goes for any business. Normally, there isn’t a situation where a business is directly opposed to the success of its customer. That’s not the case in gambling and wagering on sports. The house is literally going against its customer. Logic follows that the house wants its customer to lose. The more the customer loses, the more the business makes. There is going to be an influx of legal gamblers as the legalization of sports gambling spreads. That means more customers! That’s great! Except, as David Purdum of ESPN reports, many books are already making sure that some customers can’t use their service. They are simply too good at making sports bets.

Casinos and sportsbooks can refuse service to anyone they want. This isn’t news. Some gamblers have been banned for creating an advantage. The house always wants the advantage. Table games, slots, and sports gambling are designed specifically so the house wins more than it loses. There is a reason that there are giant shiny buildings built in a desert town in the middle of nowhere. That should be the end of the story. Again, sportsbooks are business. They are designed to generate a profit. Cutting off professionals or ‘sharps’ helps them make money.

It might not be fair though. There could be a case where a gambler simply catches fire. He hits on every bet for a month. He rarely loses. He gets cut off. That’s not fair. Furthermore, it should be the job of the book to be ahead of the gamblers analytics. Many of them already use sharps’ information to move their lines. There has to be some level of transparency. It’s not fair to use a piece of information to gouge normal customers while also severely cutting off the person who is the source of information. If a bettor has inside information, they aren’t allowed to bet and in some cases can be prosecuted. If a house has inside information, it’s perfectly fine. There’s just a general disconnect. At some point, this could turn into really bad PR for the book.

The fact that each state is going to create its own gambling laws only further complicates the issue. The reason gambling is becoming legalizes is because states are finally recognizing that legalized gambling can add to their coffers. It can be financially beneficial for a state to scrape a tax off the amount bet at sportsbooks. The argument is that these books are a business and not a public good . . . but that logic is difficult to reconcile with so much government involvement. Customers have rights. If they aren’t doing anything outwardly wrong or illegal it’s not fair. It’s an odd way to look at customer protection statues, but if the state government is going to be part of the process — which they are — then books need to be prepared for lawsuits. There will be lawyers.

There’s no easy answer. Books can’t take on uneconomical bettors because they hurt their bottom line. If those bettors aren’t doing anything illegal or don’t have inside information and are simply winning because they are smarter than the books well the books should get smarter. Hire the sharps. Work with them and adjust lines. Makes things more difficult. A downright ban doesn’t seem right or fair. Government involvement only complicates things, but they need to be involved since they are the ones regulating and benefitting from the sin tax. Leagues and teams will want to keep a close eye on things because they are associated with these companies and as we saw with DraftKings and FanDuel, bad PR can easily roll onto the folks that are closely associated.

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