I was no great fan of The Last Jedi, but there was one line so perfectly delivered by Luke Skywalker to big bad Kylo Ren, I recall it every time someone says something truly ridiculous:
“Amazing. Every word of what you just said was wrong.” After reading the latest statement from a D.C. Lottery spokeswoman, justifying its horrible sports betting product, I couldn’t help but see Mr. Hamill once again.
The quote read:
Our hold is higher because our mission is to return profit to the District. GambetDC aims at maximizing revenue for the District while still providing competitive pricing and entertainment value to casual sports bettors.”
To the spokeswoman’s credit, there is one facet of that statement that rings true. The hold is higher. Way higher.
“Our hold is higher…”
It doesn’t take more than a cursory glance at the GambetDC app to see that it’s price gouging consumers. This is no more explicit than on the NFL page, where point spreads and totals are being priced at -125/-111 or -118/-118, representing a roughly 7.6% house edge.
Even casual sports fans are acutely aware that Vegas offers -110/-110 on these wagers, with some of the better online books offering -105. Paying $105 to win $100 feels like a tax. Paying $110 to win $100 is more like a tax plus shipping. But paying $125 to win $100 is the equivalent of paying tax, shipping, a service fee, and being forced into a three-year protection plan for something that is shatterproof.
The gouging extends to virtually every line on the site, from in-play lines with a 10% house edge, to major market moneylines, which average a house hold of 8%. The sole bright spot, if it can be called that, are futures, which waver a bit closer to industry standards. But the hold on futures is astronomically high to begin with.
Sportsbooks should not be willing to trade high liquidity for increased revenue per customer. The industry is predicated on volume and keeping customers happy, which is why it has been able to thrive in other markets despite the relatively low house edge. The D.C. Lottery fails to understand this point.
“…return profit to the District”
From the context of the statement, it’s pretty clear that the D.C. Lottery believes inflating prices is a means of increasing revenue.
This line of thinking exposes a fundamental problem with lotteries operating online sportsbooks. No offense, but lotteries specifically target casual and uninformed gamblers, who have a couple bucks in their pocket and a dream.
That’s why the allocation of lottery intake looks something like this:
According to this pie chart, a lottery ticket is worth 63 cents on the dollar, although the lottery proudly claims that the actual return is even lower:
The DC Lottery directly benefits our players by paying out more than 55-percent of annual sales in prize money, which totals more than $3.8 billion to date.
Imagine playing the casino Big Wheel, and instead of winning even-money if the wheel lands on $1, a casino staff member delivers you a swift kick in the groin. That’s about the equivalent of playing the lottery.
By contrast, sports bettors are far more price sensitive. This makes sense, as not only do they tend to be a more informed stock, but the pricing is right in front of their face. I suspect the lottery would lose some customers if its tagline were, “Play the Lottery, and win back half your money!” By the same token, a growing niche of sports bettors are keenly aware of when they’re getting screwed.
Yes, some (many even) won’t care, but with a growing informational pool, professional bettors/player advocates like @capjack2000, @spanky, and @RufusPeabody amassing tons of social media follows, and Ed Miller publishing one of the century’s most influential sports betting books for beginners, does anyone really think that the collective sports betting mind is going to trend toward less intelligent?
The D.C. Lottery does, and it’s dead wrong.
“…providing competitive pricing and entertainment value”
There’s two ways to analyze the first part of this statement. One is from the perspective that the lottery believes GambetDC is the only game in town. The other is that it truly believes its app holds up against other books catering to U.S. players.
Nope. On both counts.
The lottery holds a monopoly over online sports betting in the District of Columbia, this much is true. And while William Hill and others will eventually launch retail outlets in the state, the lottery will maintain exclusivity in the digital world. This is significant because, as we’ve seen in New Jersey and Pennsylvania, markets that offer both retail and remote registration sports betting apps generate an overwhelming share of their revenue from online wagering.
Nearby Virginia is on the precipice of launching its own sports betting industry, complete with allotments for up to 17 mobile sites, and “anywhere” registration. Normally, I believe media outlets overplay the impact of cannibalization by nearby sports betting markets, but D.C. is unique in that it’s a stone’s throw from the Virginia border. Players will be abandoning GamebetDC for greener pastures.
Furthermore, is the D.C. Lottery ignorant to the fact that there are plenty of alternative options for players right now? Offshore books and local bookies hold two major advantages over GambetDC at present: The pricing is significantly better, and they often extend credit lines to consumers.
The offshore industry was here long before states began legalizing sports betting, so it follows that the legal industry has to work extra hard to attract players already loyal to offshore books.
There’s just nothing compelling or entertaining about going 55-45 on 50/50 bets over the course of a season and coming out in the red because the pricing is so poor.