The most successful scams always seem to launch when things are new. Consumer advocates report that early 2022 has already been dominated by cons targeting cryptocurrency, the coronavirus, recent disasters (like the war in Ukraine) and online payment systems such as Zelle or Venmo.
Gaming is not exempt. Sports betting has been around since Fred Flintstone took the odds that his Triceratops would score an upset win against the heavily favored Tyrannosaurus Rex. Sports wagering’s lengthy history should have weeded out most betting fraud even before the Wire Act was passed in 1961. However, today’s rush to attract players to new betting sites has opened the door once again for abuse. Nearly nationwide betting, combined with new sites and jurisdictions blossoming like flowers in the spring, have created countless opportunities for gamblers to “beat the system” and take advantage of some questionable promotions.
When will we learn? Infamous casino promotions offered decades ago provided cash to bus patrons willing to ride from Philly to Atlantic City. This marketing scheme spawned a whole generation of professional travelers who had little interest in playing slots or table games. They’d make multiple trips each day/night, spending their “four-hour” casino visit reading books in the hotel lobby or strolling the Boardwalk. It was a boring, but profitable, way to earn cash.
Non-redeemable slot credits/tokens/tickets were an early solution to that problem, only to be countered by patrons who discovered betting both sides of basic roulette outcomes could easily turn non-redeemable credits to cold cash. And that’s not to mention all the promotional dollars often squandered on pro video poker players who loved getting 3% to 5% returns while they played games holding 1% or less.
It’s perhaps unfair to characterize those who took advantage of such opportunities as “scammers.” They simply used our poorly conceived promotions in a completely legal manner to make a personal (but unintended) profit.
Of course, the industry eventually corrected and countered most of those “mistakes,” but not before some painful (and expensive) lessons were learned. As it is often does, history repeats itself.
This month, Bloomberg Businessweek (April 4th edition) did an excellent piece by author Keith Romer called “Taking the Gamble Out of Sports Gambling”. It’s a little surprising that this article appeared in a prominent news magazine so soon. This latest scheme has been floating around advantage player websites for a few months, but it’s now gone mainstream (you can read it on Bloomberg.com).
Essentially, by taking advantage of promotional betting offers on one site, a player can place a bet on a certain sports outcome. Then by placing another bet on a different site for the opposite outcome (hopefully with another promotion attached), you can’t lose. Depending on the odds and basic math, you’re a guaranteed winner! The article cites an example of an $11,000 bet with Caesars on the NHL’s Dallas Stars to beat the Montreal Canadiens, matched by an opposite $5,000 “risk free bet” on DraftKings. This wager would win $3,000 no matter which team was victorious on the ice.
It’s just basic math. In case statistics was never your strong suit in school, don’t worry. There are plenty of online sites that will do these numbers for you and spot the opportunities. “DarkHorseOdds.com” is one of those helpful tutoring sites that will give you a free trial to test the system (which works perfectly) and will keep feeding you tips for just $39/month. This “can’t lose” strategy is commonly called “matched betting” as described above.
Just like our former colleagues in Atlantic City who funded those professional bus riders for months and months before backing off, today’s executives are claiming that future gains will outweigh any potential for abuse. Caesar’s CEO Thomas Reeg (who is regarded as one of the sharpest financial minds in our industry) recently said during an earnings call, “The customer that you find in the first quarter post-launch is worth something in the neighborhood of two times what you find afterward. So, there is a method to the madness here.” He is absolutely right about risking higher acquisition costs to obtain lifetime customers.
However, there is also a cautionary, but often-forgotten, corollary to that marketing axiom: “Don’t underestimate the number of scammers eager to take advantage of any new strategy.”
Some believe that good data, combined with today’s artificial intelligence, can combat and stop this problem. As an example, operators could use algorithms to spot “matched” bettors and drop them from their promo lists.
Unfortunately, blackjack card counters defeated that type of deterrent years ago, even before AI became an acronym. They simply used teams of players to separate the counters from the bettors. That made it difficult for us to spot counters who only raised stakes when decks were positive. In the case of sports betting, how would you spot teams using matched betting when those bets come from multiple sources, in varying amounts and on different sites? The simple answer is you won’t.
Likewise, the proliferation of new sports betting sites and the frenzy of activity in the segment has also given a rebirth to older schemes such as “fixing” games or bettors using “insider” information.
Currently, most books use collective services such as Sportsradar, Genius Sports, U.S. Integrity or others to spot suspicious activity. A recent example was when several Nevada bookmakers noticed a sudden surge of betting Superbowl futures on the Tampa Bay Buccaneers. The money poured in just a few days before the announcement that Tom Brady was cancelling his retirement. Clearly, someone knew of the QB’s plans ahead of time and was hoping to cash in on the long odds on the Bucs winning without Brady.
This month Paula Lavigne, an investigative reporter at ESPN, quoted Matthew Holt of U.S. Integrity saying, “We saw tens of millions of dollars come in overnight” against a favored college team well before the news broke that several players, including starters, would be sidelined by COVID-19 protocols. The leaker in that case turned out to be the equipment manager.
Andreas Krannich, the managing director of Sportradar’s Integrity Services, said recently, “While the amount of sport collapsed in 2020 as a consequence of COVID-19, we discovered a massive spread in the cancer of match-fixing. In the past, match-fixers have targeted those sports and leagues where the profit and turnover is biggest, such as football, tennis and basketball. But now they have diversified.”
He wasn’t kidding: In June 2021, six “Valorant” players for the team Resurgence were suspended for fixing match in September 2020. (“Valorant” is a Microsoft video game popular on esports). In Thailand, there were 17 basketball matches in 2020 that are suspected to have been fixed. In May 2020 Egyptian tennis player Youssef Hossam received a lifetime ban for match fixing. Table tennis went from one suspicious match in 2019 to 20 in 2020. Sportsradar also reported that in 2021, “Soccer has the highest frequency of suspicious matches at a rate of one in every 201 fixtures. It is followed by esports with one in every 384.”
Things could get worse before they get better. Several more states will either enact – or perhaps vote to authorize – sports betting sometime this year. California will be watched closely, as it could become the country’s biggest site pending a “yes” vote in the November elections.
Hopefully, these new (along with the established) operators will not keep seeking market share at any cost. History says that we should eventually make the necessary corrections to create better acquisition strategies.
In case we don’t, go ahead and sign up for DarkHorseOdds.com.
