Kirk vs. the Sportsbooks: What’s a Fair Complaint, and What’s Not

Last week on "Circle Back," Geoff Feinberg and I had a back-and-forth about limiting bettors, specifically when you’re down at that sportsbook. Geoff made the claim that these books should not limit you while you’re down, while I said the books have incentive to limit you if they think you’re a winning bettor and will make money off them in the future. The vast majority of commenters disagreed with me and agreed with Geoff. I am here to tell you why you are wrong. And if you are thinking that it’s unfair that I’m writing my opinion and giving Geoff no way to counter, well, this is Kirk’s Hammer. If you want his opinion, go look at Geoff’s hammer.

OK, now let’s set the ground rules. Obviously, you can complain about whatever you want, but what I am trying to suss out is legitimate gripes we can have against sportsbooks versus unreasonable whining we see on Twitter every day. Before I get into it, I just want to clarify that I’ll be referring to legal, regulated American and Canadian sportsbooks here; the standards are, of course, very different for PPH or offshore books.

So, what’s the actual distinction between someone whining and a legitimate gripe? I would break it down into two different facets. First off, these sportsbooks all fall under the jurisdiction of a gambling regulator and the law, so if a sportsbook is not in accordance with the rules of the regulator or the law, that is a legitimate gripe. Second, would your argument even help winning bettors? There are so many complaints out there that, when taken to their logical conclusion, would actually be bad for winning bettors. If your argument would hurt winning bettors, it is not a legitimate thing to complain about.

Also, let me say this: I’ve heard many times during legalization that a license to a sportsbook is a “license to print money.” This seems to have been mostly untrue. FanDuel and its parent company, Flutter, have dominated, and the stock is trading well above 2021 levels, while DK, MGM, CZRS, and PENN are all trading below or well below the 2021 highs. I know these companies do a lot of different stuff, and it’s not all the sportsbook, and macro factors affect the stock, and blah, blah, blah; my point is that it hasn’t been the money-printing machine it was expected to be. The reason to me is pretty obvious: running a sportsbook is hard. A casino with table games may have a small edge on its players, but that edge is stagnant (other than card counters and maybe a few other edge cases). Sports betting is different; the true odds are unknowable, and you have to combat that, and that’s expensive and hard to deal with.

Limiting Bettors (Even When You're Down at That Book): Illegitimate

Let’s start with my argument with Geoff. Geoff took the position that it’s unfair for sportsbooks to restrict the bettor before winning, and my counterargument was: why would these books care at all about fairness? The books will do what’s in their best interest. I don’t believe businesses have morals; I think humans have morals. Businesses, especially public billion-dollar companies, are trying to make as much money as possible. It is clearly in the sportsbooks' best interest to limit a bettor that they believe has the expectation of being profitable in the future.

Using our test, there is no regulation or law that I’m aware of prohibits sportsbooks from restricting players' bet sizes. More importantly, most bettors would suffer from universal limits. We already have books with universal minimum limits: Pinnacle, Bookmaker, Circa, BetOnline (kinda), BET105, exchanges. You know what else these books have? No SGPs, tiny prop menus, very small prop limits, sharp lines. People don’t want universal limits; they want universal limits on the current offerings at these books, and that simply is a fantasy.

Aggressive Advertising Practices: Legitimate

Now, this is the part that Geoff gets into that I totally agree with. I think sportsbooks' ads, specifically on television, fall into two issues: the relentlessness and the messaging, and I think it’s fair to have a gripe with both.

First off, the amount of gambling ads has reached an incredible level. I listen to a political podcast, and every episode starts with a BETMGM ad. I don’t necessarily think that is bad itself, but it just points to the wide breadth of these ads. I think the main issue with the wideness of the gambling ads is how sports have now become entirely associated with gambling, especially for kids. Any child who watches their favorite team is now inundated with sports betting ads. Six states already have laws that ads can’t be targeted at minors, yet somehow all six of these states allow ads during sporting events.

Now, onto the second issue: messaging. I just went to YouTube and typed in sportsbook ads, and the first ad that popped up was a Hard Rock ad that focuses on winning big and ends with “big payouts for every kind of player.” That type of ad is not an outlier; it’s the norm, and it shows the absolute uselessness of the regulators in the space. These practices are both predatory to the vulnerable, convincing people they can win big, while also outright lying about what a sportsbook will allow you to do. Anyone reading this is well aware that big payouts are not for every type of player.

Going back to our test, this is about as obvious as it gets for false advertising—again, something that is supposed to be regulated. However, I do think it’s important to say that, as predatory, annoying, misleading, and wrong as these advertisements are, I do not think they pass the second test I introduced. These ads suck, but the sportsbooks obviously believe they make money from them, and for winning bettors, more money in the ecosystem allows us to have more to take. That being said, I still think overall it’s a legitimate complaint.

“Predatory” Pricing: Illegitimate

This is probably the complaint I see that boils my blood the most. I’ve said on Circle Back many times that a lot of sharp bettors, specifically OddsJamers, seem to believe that sportsbooks aren’t businesses trying to make money but are instead financial institutions that owe them EV. The complaints of “predatory” pricing are when I feel this the most. If you don’t know what types of tweets I’m referring to, here is a tweet from @stimsimm (a Twitter account that is a massive culprit of bitching about dumb stuff) talking about the pricing on Wemby’s quad-double. Here’s the link.

With limiting I can at least see where the complaints are coming from; it’s extremely frustrating to get limited at a sportsbook. However, these complaints I just don’t understand at all. No one is being forced to bet these lines! You can click through SGPs on any game and get to a bet that’s 99% negative EV; these straights are easier to price than that, even for those who don’t price at all. It’s much easier to conceptualize how likely Wemby is to get a quad-double in a game than it is to understand the correlations between 10 parlays in the same game. So why are there complaints about one-off markets that are bad prices?

Now, to our tests: if the pricing got ridiculously predatory, maybe it could become a regulatory issue, but again, that is far more likely to apply to SGPs than straight markets. Then is it good for the bettor for books to offer fewer wagers? OBVIOUSLY NOT. This isn’t like the limiting example where it’s an externality that would affect bettors; this is a direct cause and effect. A winning bettor wants the book to offer as many options as possible, especially odd or unique markets that other books don’t have.

Sportsbooks' Deposit and Withdrawal Practices: Legitimate

I have deposited into many sportsbooks and have been privy to many others' deposits as well. I have heard of six figures in total deposits on accounts; I’ve heard of a string of 100 straight $20 deposits into losing $2k in the online casino in an hour. I’ve heard of tens of thousands lost in the online casino from a person who hadn’t ever held a job. I have NEVER heard of a sportsbook suspending an account for any of these practices. However, I would estimate that at least 50% of sportsbooks have suspended my account for “KYC” or “proof of funds” when I’ve withdrawn. This is pretty cut and dry; this practice would go against the regulators' anti-money laundering standards, consumer protection laws, and responsible gaming practices.

It’s a deplorable practice that again shows the uselessness of the regulators (unless there is something being done, I am not aware of). It also highlights the true paradox of the gambling industry: books are supposed to monitor responsible gaming, yet they make their money off addicts going broke.

I’ve gotten a lot of criticism for being “a shill for the books.” I understand that complaint; a lot of people want to just complain because the books are limiting them, and that sucks. I try discussing it from as unbiased an angle as I possibly can, and I think that sportsbooks do a lot of shitty things. But I also understand that it’s a shitty industry, and these businesses need to make money. So going forward, let's complain about the real bad they’re doing, not that you arbed with them for a month and shockingly got banned.