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Fear and loathing in Las Vegas takes on new meaning for bookmakers ahead of Thursday’s 2023 NFL Draft.
This is not a week to thrive, but rather survive for market-making books like Circa Sports and the Westgate SuperBook.
“Based on the number of props and the type of props we’re offering, I don’t want to use the word miracle, but we need a miracle probably,” Circa Sports Director of Risk Chris Bennett told Gaming Today. “It’s going to be almost impossible to win. So, I’m just hoping the loss isn’t too bad. I’m grateful there’s only one draft per year in the NFL, and I don’t know what this market’s going to look like over the long run. I just can’t imagine there’s any operator in the country that’s winning on this.”
SuperBook VP of Risk & Operations Ed Salmons echoed those sentiments.
“I don’t like the draft, but it’s just something that we do,” he said. “You have no control over it. There’s just no control. It’s not like a game where stuff happens, mistakes happen. Teams have an idea of what they want to do, and I’m sure there’s a lot of people that spend way more time on this stuff than I do.”
Salmons estimates that 90% of his NFL Draft action comes from sharp players. In our Twitter-fueled world, the race for information can often be won by those players. Following beat writers and expert mock drafts, as well as keeping current with real news and rumors, helps make sharp players even sharper.
“I consider pretty much all of that to be sharp,” Bennett said. “And those are the types of things where you take a bet, and it’s like, ‘OK, they bet it at -150. I don’t know if this thing should be -200 or -2000,’ and you don’t really know for sure until the betting closes.
“But you have to respect these bets because if you treat it like a game market where there’s more of a concrete probability that the market can agree on, you’re probably going to get absolutely destroyed as the bookmaker.”
It creates an unusual dynamic and vulnerability for these sportsbooks, which close betting on NFL Draft props 24 hours before the actual event per Nevada Gaming Commission regulations. There are no in-draft wagering opportunities on upcoming selections.
That prevents a lot of potential problems related to inside information. You’ve seen the broadcast footage of a player getting notified of his impending selection in a room filled with family and friends. That would provide plenty of temptation if live bets were available.
In a text to Gaming Today, DraftKings Director of Race & Sportsbook Operations Johnny Avello said that his book offers live betting on the draft but “we stay a few picks ahead” to avoid exposure to bets made on inside information.
But what happens when NFL team employees share inside information on selections leading up to the draft?
“I believe that it goes down the food chain, let’s put it that way,” Salmons said. “Someone tells someone who tells someone else, who tells someone else. I mean the No. 1 pick, obviously unless there’s something that happens tragically in the next three days, it’s going to be (Bryce) Young. Outside of that, then the questions begin, are the Texans going defensive, or are they going to take a quarterback, or are they going to trade?”
With the Texans slotted to draft second, Bennett noted inside information could pay in a big way.
“If you are well-connected with the decision makers at the Texans, yeah, that’s definitely something that could be valuable information for the betting markets, but it’s also the reason why sportsbooks probably aren’t going to take a massive bet on any of these things.”
Lower Limits Help Sportsbooks Mitigate NFL Draft Liabilities
When you consider that Circa offers $200,000 limits on NFL sides on Sundays, a standard limit of $1,000 on draft props seems minuscule. Both the SuperBook and Circa each have a $1,000 limit this week.
“That’s something where anybody can get that amount,” Bennett said. “But we’re probably not extending the limits to anybody either, just because of how difficult this is to book.”
There can be a different limit at the SuperBook based on how the props are placed.
“We take a dime at the counter, and based on your phone account, it’s a little bit less than that, based on your category,” Salmons said.
Both books also utilize 30-cent lines for the NFL Draft to help further mitigate risk. Instead of offering 20-cent lines at –110 on sides for an actual game, you’ll find -115 on both sides of many props.
“They’re wider splits,” Bennett. “There’s more of a higher theoretical hold percentage for the book, but the real hold percentage is lower (for the NFL Draft).”
The SuperBook and Circa also make aggressive pricing moves to protect their liability. Bennett used the 2020 “Pandemic Draft” as an example. Everybody and your uncle knew the Bengals were going to take LSU quarterback Joe Burrow with the No. 1 pick.
“Our prop was, ‘Will the Bengals draft a quarterback with their first pick,” Bennett said. “And the ‘yes’ price was like -3000. Nobody bet it. Some of these props where it seems like certainty once the price gets to more than -1000 or so, I don’t think many people want to bet it.”
Salmons won’t hesitate to move big on a price when circumstances dictate at the SuperBook.
“A lot of the customers that bet are known customers, so when they bet something, you’ll be ridiculously aggressive moving things,” he said. “So, someone, let’s just say they bet something like Over -300, you’ll probably just go to -500 or -600 and not just go to -330.”
That’s a luxury that PlayUp US Head of Wagering Rex Beyers does not have relying on third-party software providers to automate props. For the second straight year, PlayUp’s not offering NFL Draft betting.
“I’m not against booking it in the future with better software,” Beyers said. “I did book it offshore before it was legal here.”
NFL Draft Betting in a Nutshell: ‘How Much are we OK with Losing?’
Bennett’s primary sport is baseball, but he’s been in charge of the NFL Draft at Circa on multiple occasions in the past. There was a palpable sense of relief with his focus solely on baseball this time around.
“I don’t really get too enthusiastic about any market where I feel like we have very, very little chance to win any money, and it’s just like how much are we OK with losing?” he said. “That’s really what your perspective should be. And the only way you could truly not have that perspective is if the pricing was just so absurd. You do draft positions, and you make it -200 on both sides, and that’s like why even bother operating something if you’re going to have pricing like that?”
Circa’s NFL Draft props went live on Friday. Salmons was putting up his props at the SuperBook when we spoke with him on Monday.
“It’s definitely a difficult project,” he said. “You try to adjust every year, and make it a little bit better for the house. It’s obviously something that is hard to win on.”
