Comparing Sportsbook Company Valuations to Investiing in Pizza Companies
Sports handicapper Steve Fezzik offered his take on today's financial analysts and their grading of sports betting companies.
"All these Financial Analysts try to compute valuations of Sports Book Companies based on Earnings, Customer Aquisition Costs, Growth, Etc. Yet, NO ONE even bothers to look at how sharp they are at setting lines. Would you invest in a pizza company that makes lousy pizza??"
All these Financial Analysts try to compute valuations of Sports Book Companies based on Earnings, Customer Aquisition Costs, Growth, Etc.
— Steve Fezzik (@FezzikSports) July 8, 2023
Yet, NO ONE even bothers to look at how sharp they are at setting lines.
Would you invest in a pizza company that makes lousy pizza??
Inside The Pylons was quick to point out that Domino's stock price has done pretty well over the past decade in terms of growth. We won't go there. Certainly there are folks who find their pizza amazing. Those of us from the New York City/New Jersey area who know good pizza might think otherwise.
Tom Freeze tweeted:
"How many sports book companies set their own lines? You can call me whatever kind of bettor you want but I been making sports bets in Vegas for a long time and they have always been in cohoots with each other cuz the lines rarely differ enough to make a difference."
Mike Jones offered:
"Does mcdonalds do food well? These firms are all marketing firms. Judging a sportsbook on how sharp their lines are is like me judging females at 16 based on how well intelligent they were. Ultimately, that's the wrong metric."
NBA Follower writes:
"Company A invests billions hiring top math & data science pros coming up with sharpest lines in history, puts them out. Company B sees those sharp lines, uses them, adding some extra juice. Company B is invested in UI, customer service, marketing instead."
And this from Live Rendition:
"Because they aren’t making money off of the sharp players. They make money off the losers. Investors don’t care if you make good pizza or not they just care about how much money you are making off the pizza."
Most of the sentiment pushed the notion that many pizza chains (Domino's), fast food chains (McDonald's) and sportsbooks (DraftKings, Barstool Sports) all seem to have one thing in common. They are marketing companies.
"McDonalds is a realeastate company that makes shitty burgers.. The LTV:CAC ratio is high enough for the FD, DKs etc that cater to hobby/social bettors in the 21 to 30 age range. Look @BSSportsbook. TERRIBLE lines, but people take them for the social aspect."
- Gilbert Horowitz, Gambling911.com
