Account Limits vs. Risk Management: Sports Betting Future Could Hang In The Balance

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Behind every story of a massive, lottery-esque parlay doling out a huge win, there are dozens of cautionary tales. Tales where some sports bettors are bogged down by account limits and the inability to bet on certain markets with little to no warning. Conversations about account limits in sports betting are growing by the day.

This is where we dive into a touchy — albeit necessary — topic that pins a sportsbooks’ responsibility against a casual player’s ability to compete. Interestingly, the question is built within the business models of different sportsbooks.

As industry professional Capt. Jack Andrews described it,

 “(Some Books) operate as a sharp (professional) book, where they use sharp players to shape and refine their lines… While others operate as a recreational book, not wanting any sharp money or play. If they identify a sharp bettor, they take whatever precautions to limit the risk.”

Sportsbooks like DraftKings and BetMGM frequently offer casual players fantastic promotions and booster odds. However, if you get to the point where you are making a living off of sports betting, you might be in a position to look at a professional book like Circa Sportsbook, SuperBook, or Pinnacle Sportsbook. These books offer significantly fewer promotions, deposit bonuses, and booster odds.

The $20 Bet That Raised Questions

In my encounter with PointsBet (below) — I had a bit of a different experience than most players. If you can’t tell by my unit size — I am not — and have never been a professional sports bettor.

 

Many people were up in arms to see a sportsbook reject my action and move a line accordingly on a $20 bet. I would love to say that I am such a sharp bettor that they need to move every line that I bet but frankly that’s not the case. This bet was placed when I was writing the Gaming Today NFL Futures Prop Bets (Justin Herbert looks plenty live to win the MVP btw).

If a sportsbook does not want to accept action that they view as sharp, that is their business. However, the practice of rejecting a bet from someone they view as sharp and moving the line accordingly is a particularly troublesome practice. Many people took to Twitter to comment on the bizarre interaction that picked up plenty of steam in September.

 

While Plus EV Analytics is being hyperbolic here — this is not theft in any capacity, sportsbooks can do as they please — this practice might not bode well for the future. From a morality standpoint, this procedure should be considered unethical.

PointsBet Admits A Mistake And Makes It Right

PointsBet recognizes that this practice is not fair to its users. Loyalty Manager, known to me simply as Jacob from PointsBet, reached to me directly about the problem.

“Hi, Erich- this is Jacob from PointsBet. I’m reaching out regarding the poor experience you had earlier in the week. We apologize for any inconvenience and have spoken to our risk team to ensure that it won’t happen again. I’ve added a $20 free bet into your account that you can use on the Najee Harris Most Regular Season Touchdowns future at +3300. Sorry again for the troubles and if you have any questions please let me know.”

This was an excellent way to deal with the situation. Unfortunately, a few days later, Zack Price reached out to me with a similar issue. Although, these are with much larger bets and bigger numbers. That is much easier to swallow as $20 vs. $2,000 is a huge difference when talking about risk management. The point remains the same, sportsbooks should not be rejecting bets and moving the line just because they view the action as sharp.

Why Sportsbooks Need To Enforce Risk Management

I have zero issues with risk management in the industry. If you do, I would argue that you are also against legalized sports betting in the United States. Without risk management, sportsbooks would likely have a difficult time staying afloat.

Consequently, the industry is in its infancy here in the United States, bookmakers will have this market running like a well-oiled machine in near future.

Matt from Plus EV Analytics On The Need To Manage Risk…

“My personal belief is that limiting/closing accounts is a necessary evil. As a book, you are expected to post lines for every game, every sport, every day and bettors are free to choose to bet either side or not bet at all. This vulnerability can be addressed in one of two ways, by being really good at bookmaking (“sharp books”) or by kicking out winning bettors (“soft books”). If books weren’t allowed to limit or close accounts, there would only be a handful of financially viable sportsbooks in the world, and that would be bad for everyone.”

Matt raises an important point. Sportsbooks need to manage risk or they could go out of business within a single bad string of weeks. Risk management is one of the most important — yet semi-taboo — topics in the industry. But if you like having legalized sports betting, then you must agree that risk management is important to keep the industry healthy.

The Need For Clearly Defined Sports Betting Account Limits

Sportsbooks are gaining licensure in more states and users are flocking to download their apps at a moment’s notice. States are eager to reap the rewards in the form of massive tax dollars. The tax revenue that states get from sports betting is fantastic for everyone involved. Nevertheless, the burden will fall on regulators and sportsbooks themselves to correct issues that could lead to problems longterm.

Take sports bettor Reed Wallach for instance. I talked to him as he was attempting to place a futures wager similar to mine. Instead of rejecting the bet, DraftKings lowered his maximum wager to $.05. Unfortunately, the minimum bet on a given market is $.10 so he is unable to place a bet on this market entirely.

Reed went on to say. “It’s very bizarre and I’ve gotten zero feedback. I’m not sure why they would post this number, not change it, and not accept action on it.”

There is a sportsbook that could be the model of how to correctly handle situations like these. The last thing we need is to disallow play for users like Reed. Having clearly defined limits on certain markets would help us avoid this situation entirely, leading to a healthier and stronger market.

Circa Sports Operations Manager Jeffrey Benson On The Need For Transparency

Jeffrey Benson is the operations manager for Circa Sportsbook. Circa Sportsbook recently went live in Iowa and has been live in Nevada and Colorado for some time. Circa Sportsbook is mostly considered a professional sportsbook with clearly defined limits each week, weekend, or month — depending on the market.

He is quite opinionated on the subject of sportsbooks needing clearly defined betting limits.

Circa Sportsbook Operation Manager Jeff Benson said,  “I think it is important for sportsbooks to have fair limits that value their players’ time and effort that they are putting into betting with them. It is wrong to hang a number and have someone bet into it, reject the bet and move the number based on the information the bettor gave to you. I believe sportsbooks should be obligated to write the bet and then move the number.”

Benson continued, “As a business, you have a responsibility to take a fair bet to anything you put on your board – to put something on your board and not give a standard limit to anyone who walks in off the street is not a free and fair market.”

My situation aside, sportsbooks should have understood limits to avoid future problems. The worst thing that could happen in this industry is bettors who are dissatisfied with the product from a moral standpoint.

How To Solve A Growing Problem

To be certain, most players will not deal with issues whatsoever regarding account limits or account closure. However, the model that Circa Sportsbook has put out is the way of the future. As sports betting grows into massive states like New York, California, and eventually Texas, this industry is going to continue to grow incredibly quickly. The process in which sportsbooks deal with successful bettors does not appear to be malicious but needs to be refined.

All parts of this industry should be subject to review and change going forward. The only hope can be the industry that I follow so intimately takes seriously the areas that it can improve. That way every player can enjoy the benefits and interaction that sports betting brings.

I reached out to PointsBet and DraftKings about this topic and they declined to comment at this time.

About the Author

Erich Richter

Erich is a New York-based freelance writer and gambling expert specializing in the sports industry. His work is featured in numerous publications. Erich is a diehard Mets, Giants, and Knicks fan (it’s been tough). Twitter: @erichterrr

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