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Wednesday's hearing before the Massachusetts Gaming Commission regarding the practice of routinely limiting winning sports bettors was the talk of a small but vocal and powerful group from within the sports gambling community.
Among them: Gadoon Kryollos. You know him better as "Spanky".
He at first commended the FanDuel rep for admitting that sportsbook targets those who engage in arbitrage betting. Spanky seemed to appreciate his honesty, not the practice.
"The Fanduel guy Cory Fox kept it real admitting to limiting customers who simply have a better model or who are arbitraging," Spanky tweeted on Wednesday. "At least one operator didn’t portray the limited customer to look like a cheating criminal."
What exactly is arbitrage betting?
It is the practice of placing one bet per each outcome, usually with different betting companies, often ensuring the bettor can make a profit regardless of the outcome.
A good example would be getting down on a team to cover the spread early at -2. The line then moves all the way up to -3.5, at which point the dog is wagered on. The favorite goes on to win by a field goal. Both bets win.
A more common example perhaps is one we find over at Techopedia:
When looking for arbitrage opportunities, Major League Baseball tends to be one of the best sports. For this reason, we will use it, and moneyline betting in particular, as our example.
Perhaps the Angels are playing the Royals, and the Angels are +110 on the moneyline at one sportsbook. The Royals are +110 at another. Say you bet $100 on the Angels at one sportsbook and $100 on the Royals at the other.
Your $200 in total will result in collecting $210 and making $10 in profit. You will not likely find an opportunity like this, but this helps illustrate the concept of how to bet on MLB and arb easily.
It is more likely that you might see the Angels at -105 while the Royals are at +110. If you bet $107.56 on the Angels and $100 on the Royals, you would guarantee $2.44 in profit. Your $207.56 will collect $210 on one side or the other regardless of the outcome.
To be clear, Spanky believes arbitrage betting should be welcome at regulated U.S. sportsbooks. That won't happen at most, especially based on what we heard at Wednesday's hearing, but the likes of Circa Sportsbook and offshore books like BetAmapola will most certainly accommodate this type of bettor. Both books appear on Spanky's popular odds service.
"I’m reading comments on twitter and heard reasoning from operators today that arbitragers deserve to be limited. Any real bookmaker would not only disagree, but instead roll out the red carpet for arbitrage bettors. It’s alarming how misinformed the betting population is."
Spanky recently teamed up with pro sports bettor Billy Walters to form The America's Bettor's Voice, which looks to give sports gamblers a seat at the table. It was Spanky who pushed for the Massachusetts meeting in regard to the trigger-happy limiting of winners.
Fox, the vice president of product and new market compliance for FanDuel, was one of a number of sportsbook representatives who showed up to take part in the first-of-its kind hearing.
“This is a very limited set of users," Fox said in regard to how many gamblers get their limits cut.
Sarah Brennan, senior director of compliance for BetMGM, claimed only 1% of its Massachusetts customers have been limited by the sportsbook.
Eric Raskin of CasinoReports offered his take, a reference to operators initially balking at the idea of a hearing on this topic, even giving the Commission a one finger salute.
"The headline news out of the meeting, however, was not a quote from Fox or anyone else; it was the fact that FanDuel, DraftKings, BetMGM, Caesars, Fanatics, PENN Interactive, Bally’s, and representatives from two land-based local sportsbooks, Encore Boston Harbor and MGM Springfield, showed up."
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