Betting Big on the NFL Draft

Sportsbooks finally have a reason to smile this week thanks to the arrival of a live event for gamblers to wager on, but that doesn't mean tough times aren't ahead with sports on hold indefinitely.
photo of Leo SepkowitzLeo Sepkowitz@@LeoSepkowitzContributorApril 20, 2020

At long last, a real live sporting event is around the corner: the NFL draft. Sure, there may be no scoreboard, no uniforms, no (certain) winners or losers, but there are pro teams and unpredictability—a welcome mix, good enough for now. Even if you don't care too much about, say, the Buffalo Bills strengthening their front seven, the draft delivers weeks of much-needed talk show fodder and rumors and stuff to look at. It is a wonderful distraction. And for sportsbooks, it is an actual, sellable product, arriving in desperate times. We may not know when the next pro championship will be played, but for the gambling industry, this might be it.

"There's no clarity on when sports will come back, so sportsbooks are all really hitting the draft hard," says Jim Murphy, an oddsmaker and writer at SportsInsider.com. Normally, around this time, the betting public tends to show more interest in the NBA and NHL playoffs. This year, however, the draft owns the sporting spotlight, and sportsbooks are getting creative with their offerings.

Across countless sites, you can bet on which quarterback will come off the board first, and which wide receiver, and where—exactly—Tua Tagovailoa will go. You can wager on how many defensive backs will be selected in the first round (over or under 6.5), how many offensive players (16.5), how many players from the Big 12 (3.5). You can guess exact draft-pick combinations. You can slice it and dice it however you like.

The last true gambling night, for purists focused on major sports, was March 11, five weeks ago. Since then, the NBA season has been suspended, MLB delayed and the NCAA tournament outright canceled. (The last can't be undersold: Per one casino, March Madness produces four of the five biggest betting days during a standard year, the Super Bowl being the other.)

In the meantime, online books have entered the whimsical world of half-sports and pseudo-athletics. It is all they can do to keep up as their primary product—pro sports—remains sidelined.

Esports, which is played by human beings, leads the way, but there are automated Madden and NBA 2K simulations, too, with gambling lines provided. There are two MLB simulation worlds—one lifeless, dystopian "league" where a computer spits out a dry box score, and one that airs simulations of MLB The Show. (Recently, the Mets' real-life broadcasters analyzed one such game, announcing, "For the first time in nearly two years, Yoenis Cespedes is back in the lineup for the Mets." But was he really?) There is not only the good old-fashioned Mega Millions Jackpot, but odds on if and when it will be won by anyone at all. There is soccer still being played in Belarus—against all reason—and you can bet on it.

Sportsbooks are often reluctant to take an abundance of action on the NFL draft with so much information available to the public about it, but with few live events to cover, this year's draft may be the most heavily bet ever.
Sportsbooks are often reluctant to take an abundance of action on the NFL draft with so much information available to the public about it, but with few live events to cover, this year's draft may be the most heavily bet ever.Mark Humphrey/Associated Press

One sportsbook, BetOnline.ag, now posts spreads for pingpong. "Sure as hell, it gets a lot of action," says Dave Mason, the book's brand manager. "Russians and Ukrainians are running these pingpong tournaments on a daily basis—dozens of matches." There is also a rise in wagering on things that are not sports at all: TV ratings, reality show drama, the weather itself. "It sounds silly and frivolous, but you can handicap it," Murphy says of this oddball field. "There's data on it. The media views anything out of the ordinary as kind of a joke and a sign of degeneracy, but it's amazing how many things you can handicap."

So far, offshore books, which primarily operate online and in the shadows, have had some fun scouring the market for strange betting possibilities. Larger-scale operations, like Caesars Palace in Las Vegas, are much more limited. That's mostly because legit sportsbooks based in the United States must comply with the Nevada Gaming Control Board as well as local state laws if they want to set a line on something, and that requires paperwork and time.

When the NBA announced its NBA 2K Players Tournament some 10 days before the event actually began, Caesars was unable to host it; the turnaround was too quick. (In the end, that was for the best, as the event delivered some Vegas controversy after airing on tape delay.) "We could do some of those things going forward, but we need to get the specifics and have a few weeks and know how it's going to work," says Jeff Davis, the head of trading at Caesars. He notes that the company has not yet applied to host any of the new wonky competitions sweeping the offshore book scene. Therefore, he says, "there's very little handle coming in."

And there's yet another problem at hand: Suspended seasons have brought chaos to the market for so-called futures bets—wagers on props like MVP, or champions, or win-total over/unders, placed before seasons begin. In almost all cases, it is stipulated that a full season—or very close to one—must occur for the bets to become valid. With seasons uncertain, however, so too are the nature of those bets.

In some cases, they're being handled at the state level. New Jersey is requiring sportsbooks to pay out futures bets that were settled before leagues were suspended. The Memphis Grizzlies, for instance, have already cleared their preseason win total, and so those winning tickets will have to be paid regardless of how many more games are played.

But suppose that before the season you placed a bet that the Milwaukee Bucks would go over 57.5 wins, tallying 58 or more. When the NBA went on pause, their record was 53-12, a 67-win pace. If the season never resumes, or jumps straight to the playoffs, the Bucks will technically finish with fewer than 57.5 wins. What then?

"The only way we can do it from a book is grade the over a winner and the under a no-action," meaning a refund, Mason says. (Bets that were certain to lose—like the Warriors over—will still be counted as losses.) Mason notes that while futures are technically made with full-season stipulations, this is a unique time, and it calls for unique flexibility. "If you're going to be lenient to the over bettors, you can't grade the under bettors a loss because that's not fair to them. That contradicts the terms, which say 82 games."

In other words, many will either win their bet or have it refunded. That's fantastic news for bettors and a problem for the house, which has been forced to smash the refund button for weeks on end. First the NCAA tournament, mostly recently the Masters Tournament, and soon all MLB futures, once the league gives up hope of a full 162-game season.

"We've refunded so much stuff, and it sucks," Davis says. He is in charge of refunding bettors for voided wagers, including all bets that were made ahead of March Madness. "The NCAA tournament was brutal. I hated to refund it." Davis says that Caesars had to return a dollar figure well into the six figures. "Not my favorite day," he says.

Instead of reaping the rewards of one of the busiest sports seasons of the year, sportsbooks have been forced to issue refunds and find alternative events for customers to wager on.
Instead of reaping the rewards of one of the busiest sports seasons of the year, sportsbooks have been forced to issue refunds and find alternative events for customers to wager on.Wayne Parry/Associated Press

Thus the need for a feel-good, non-refundable event like the NFL draft. Ironically, in a normal year, it is dreaded by sportsbooks, as most of the action is placed by so-called sharp bettors—in this case, amateur scouts. A diligent one can keep closer tabs on prospects and chatter than the oddsmakers can, and books are wary of that role reversal. "We tried our best to avoid doing many NFL draft props last year as, in normal times, it is quite a money loser for the house," Davis says.

This year, of course, is an outlier. For sportsbooks, finances actually seem less important than high intrigue and a return to normalcy, no matter how brief. And as for fans: Well, win or lose, it'll just be nice to once again have a reason to scream at the TV.