PointsBet - The Best and Worst Thing That Happened to the Sportsbook
Up until recently, if you wanted to place a sports wager in the United States you either needed to be within driving distance of the Las Vegas, know somebody who knows somebody, or open an off-shore gambling account whose operations could be suspended at a moments notice and whose owner could wind up dead. These options were unappealing for most Americans, yet it was assumed that Americans wagered hundred of millions of dollars, if not more, on sports. State governments across the country recognized the unsanctioned market left their constituents susceptible and wanted to provide oversight to ensure a level playing field...that, or they saw a money-making opportunity where sports gambling would generate tremendous revenue for their state. Regardless of the reason, thirteen states have full-scale legalized sports betting with many more on the way.
With a new untapped legalized market, sports betting in America became the new Wild West. New Jersey was the second state to legalize sports betting behind Las Vegas. DraftKings and FanDuel were the first to enter the game in the Garden State, both grabbing a large share of the market. Although neophytes to the industry, both companies had tremendous previous success in Fantasy Sports. Their name recognition and innovative sign-up bonuses and wagers overcame their inexperience and initial glitches in their applications.
William Hill, perhaps the largest global sportsbook, also set up shop in New Jersey. Other sportsbooks founded brick and mortar establishments and online applications, but almost all of them became secondary, if not tertiary, contenders in the market. Perhaps, it was too late for other companies to truly compete with DraftKings, FanDuel, and William Hill. It would take a truly innovative approach, marketing campaign, and luck to breakthrough. PointsBet, an Australian sportsbook, had all three.
PointsBet: Reduced Vigorish and Props
Offering reduced vigorish, (-105) on all NFL and NBA sides, PointsBet caught the attention of many experienced sports gamblers. The five cent disparity may not seem like a lot, but it is the difference between needing to win at 52.38% and 51.19% to make money. This subtle discrepancy is a huge advantage over the long run. PointsBet also offered an overwhelming amount of unique player and game props that rivaled , if not surpassed, William Hill, DraftKings, and FanDuel.
PointsBet: Marketing Endorsements
To help garner even more attention, PointsBet hired Allen Iverson, Darrelle Revis, and other professional athletes to endorse the company through specific bets. Most recently, they have a Fade Rovell bet, which offers increased odds if you fade a specific play from want-to-be sports bettor, Darren Rovell. If you have never heard of Darren Rovell, here is a quick synopsis: he is a loathsome individual who flamed out at ESPN and currently creates obnoxious videos on Twitter while working for the Action Network. There may not be one person that actually enjoys Rovell's presence, takes, or videos and, certainly, no one should take his betting advice. But this makes him exactly the right hire for PointsBet. Rovell is LeBron James on the Miami Heat. He is the villain everyone loves to root against. If Rovell loses his PointsBet play, he is required to do an absurd feat. His past penances required him to pretend to be a naked cowboy in New York City and taking ice baths. All of which, have created a cult following that doesn't seem to be going anywhere any time soon.
There is another marketing compaign, perhaps gimmick or ploy may be more appropriate, that PointsBet also utilizes to separate itself among other sportsbooks: PointsBetting. It is easiest to understand PointsBetting through the lens of mortgages. When purchasing a home, a fixed rate mortgage is safe. You understand how much you are going to be paying from the time you sign the papers until your last payment. There are also adjustable rate mortgages where the interest rate on the loan fluctuates. By signing an adjustable rate mortgage, you are running the risk of paying more or less for your house. This type of loan can create great variance and can either save people a lot of money or could cause it to end in foreclosure. PointsBetting works exactly the same way. A traditional bet is a fixed rate, which usually is a -110 vigorish. PointsBetting is the adjustable rate of sports betting. Depending upon how good or bad your play does determines the amount of money you make or lose. Much like an adjustable rate loan, this risk comes with very grave consequences.
To truly understand PointsBetting, lets look at a few examples:
Let's say that you bet $10 on the Philadelphia Eagles -1.
Example 1: The Eagles win by 3 points. The difference between the bet and the result is 2 points. To determine the wager result, we take the original bet ($10) and multiply it by the difference difference between the bet and the result (2). You would win $20 on a $10 bet.
Example 2: The Eagles win by 21 points. The difference between the bet and the result is 20 points. To determine the wager result, we take the original bet ($10) multiplied by the difference between the bet and the result (20. You would $200 on a $10 bet.
As you can see, the math gets a little confusing, but both of these scenarios are a fantastic outcome for the bettor. Most bettors want to spend a little bit of money to make a lot. Much like parlays, PointsBetting accomplishes this feat. If you go to the PointsBet website and watch the video explanations, they paint a similar picture. They show examples and illustrate how the bettor can make money through PointsBetting. Every example is a winner. Every win is spending a little bit of money to make a lot. If this seems too good to be true, it is because it most certainly is.
Let's take a look at a different example in which PointsBetting can turn ugly fast.
PointsBetting: Player Props
Let's say that you bet $10 on Drew Brees over 300 passing yards.
Example 1: Drew Brees throws for 250 passing yards. The difference between the bet and the result is 50 yards. To determine the wager result, we take the original bet ($10) and multiply it by the difference between the bet and the result (-50). You would lose $500 on a $10 bet.
Yes, you read that correctly. You only bet $10 and you lost $500. That is an awful loss, but it can get much worse.
Let's say that you bet the same $10 on Drew Brees over 300 passing yards, but he gets hurt the first play of the game:
Example 2: Drew Brees throws for 0 passing yards. The difference between the bet and the result is 300 yards. To determine the wager result, we take the original bet ($10) and multiply it by the difference between the bet and the result (-300). You would lose $3,000 on a $10 bet.
Most sports bettors aren't expecting to lose $3,000 on a $10 bet, which begs the question: Is it the responsibility of the PointsBet to explain the inherent risk of PointsBetting to their customers?
PointsBetting: Email Marketing
Recently, PointsBet sent out an email to their customers offering a "Risk Free" PointsBetting wager on the quarterback yardage totals on the Minnesota Vikings / Green Bay Packers Monday Night Football Game. Within the email, there was no fine print, reference to the terms and conditions, or explanation of PointsBetting. When customers went to place a PointsBetting wager, PointsBet offered a "stop loss" of between 50x-125x the wager. A stop loss limits the risk up to 50x the amount of the wager. For example, if an individual bet $10 with a stop loss of 50x, the most they could lose is $500, which is still an insane amount of money considering the initial wager.
On Monday Night Football, the total for Kirk Cousins was listed at 250 passing yards. He fell short of that number by 128 passing yards. If you made a $10 wager on Cousins over 250 passing yards, you would potentially be on the hook for 128x your original wager. Even if you put the stop loss of 50x, you still would lose $500. This exact scenario happened to significant amount of PointsBet clients on Monday Night.
Remember, the original email stated it was a "risk free bet", yet money was taken out of the accounts of PointsBet customers and replaced by a bonus bet. Bonus bets are commonly misunderstood. They are great when they are given to a bettor, but they are not the same as actual money in bettor's account. Bonus bets are not real money. They cannot be withdrawn from a player's account. A bonus bet has the potential to turn into real money with one caveat: you need to win a bet first. This is the crux of the "risk free bet" debate. When a player receives a bonus bet, it most certainly is not risk free. It comes with incredible risk. In the aforementioned example, the bettor is down $500. They need to win a $500 bonus bet, just to get their money back and that does not take into consideration the game's vig. Since the email only stated "risk free bet" and did not elaborate on terms of condition or the extent of the free-ness (if there really is such a thing), it can only be determined that PointsBet was being disingenuous or ambiguous, at best. PointsBet customers were hoodwinked with the promotion.
The Good, The Bad, The Ugly
PointsBet continuously needs to take inherent risks in order to keep up with the larger, more established sportsbooks. This need for innovation provided enticing reduced vigorish, an abundance of game and player props, and a uniquely appealing marketing approach, but it also instituted a level of deceptiveness that leaves their customers at risk for unrealized potential losses. In an extremely cut-throat industry, should PointsBet be held accountable for their overly deceptive approaches? The question is certainly up for debate. Regardless of one's perception, one thing is undeniably true: PointsBet has broken through as real players in the sportsbook community.