Strategy

Oscar mania: Is there a future for specials betting in the US?

New Jersey broke new ground recently by allowing sportsbooks to take bets on the Oscars. So just how popular was the red-carpet event with gamblers, and could it be the stepping stone to eventually offering a full array of specials markets and, more importantly, political betting?

On Sunday, February 24, Hollywood’s glitterati gathered at Los Angeles’ Dolby Theatre for the 91st Academy Awards, better known as the Oscars. This year, though, there were armchair viewers almost 3,000 miles away taking more interest in the contents of the famous gold envelopes than in previous years. That was because it was the very first occasion legal sportsbooks anywhere in the US had been allowed to take bets on the glitzy ceremony after New Jersey’s Division of Gaming Enforcement (DGE) gave the green light. Not even gambling-mad Nevada has ever allowed wagers on the Oscars.

New Jersey’s dozen online sportsbooks seized the opportunity to broaden their appeal to movie buffs and offer existing bettors something different to the usual menu of US sports. Almost all operators offered at least the ‘Big Six’ categories: Best Picture, Best Director, Best Actor, Best Actress, Best Supporting Actor and Best Supporting Actress, while playMGM outdid the competition by pricing up 23 categories. However, all odds across the board quickly vanished before mysteriously re-appearing. The reason was never made clear by the DGE, although it’s thought the Academy of Motion Picture Arts and Sciences had complained to the regulator.

Despite some objections to allowing betting on pre-determined events (even though only two partners from accountancy firm PwC know the results), the Oscars certainly caught the imagination of New Jerseyans. William Hill US sportsbook director Nick Bogdanovich says business was “off the charts.” “We wrote an absolute ton of tickets. It drove people to the casinos, and we did endless interviews about it; the publicity was excellent, and we got all sorts of coverage from it. It was all positive – it was win-win-win.” He says the average bet size was $22, yet there were “two or three” requests from customers to place bets above the maximum stake limit of $500. “That was definitely the exception. The norm was the $20, $40, $50 bets.”

New Jersey-licensed online operator PointsBet also experienced a partial stampede from customers keen to put their movie knowledge to good use. The average bet size was an eyebrow-raising $100, while clients typically placed more than one wager on the Oscars. “Despite so many short-priced favorites – particularly in the major categories – there was still a lot of activity,” says PointsBet US CEO Johnny Aitken. He adds: “Obviously some of these markets had the potential to be a lot more volatile than typical sports betting markets so it was incumbent on us to manage the book with close control.”

False rumors

That close control Aitken references was most apparent in the hours before the awards ceremony when there was a spectacular gamble on outsider Yorgos Lanthimos in the Best Director category. It seemed to be sparked by an offshore bookmaker tweeting about new accounts placing maximum stakes on him to win. Speculation of a possible leak led to others jumping on the bandwagon, which caused his odds to crash across all the regulated New Jersey sportsbooks from around +4,000 at one point to just +250 as layers ran for cover. “We definitely took plenty of bets on him in New Jersey. Someone drank the punch and believed it,” says Bogdanovich.

In the end, heavy odds-on favorite Alfonso Cuarón took the gong. Some social media users suggested it had all been a deliberate ploy to spark a gamble on Lanthimos and manufacture a better price for Cuarón. That does seem somewhat improbable bearing in mind many bookmakers set modest win limits of $1,000. Whatever the reason for the price collapse on Lanthimos, the fact the favorite won was a good outcome for the integrity of the Oscars and would have allayed any fears the DGE harbored as the gamble unfolded.

When announcing pre-event Oscars betting could take place in 2019, the DGE stated that it would be “for this year only.” At this stage it’s unclear whether the regulator will give the go-ahead for betting on next year’s event. It makes sense to do so seeing as offshore bookmakers in Central America and the Caribbean have been happily taking bets on the Oscars from Americans for years. Bringing some of that business back onshore seems a sensible move.

There is also hope New Jersey will eventually permit not just Oscars betting but all kinds of ‘specials’ markets. In the UK, for example, specials betting sits cheek by jowl with traditional sports within betting sites and apps. It first took off almost 40 years ago when William Hill broke rank and set odds on who shot JR in hit 80s show Dallas. Today, Brits can gamble on markets like reality shows, the weather, the sex of a royal baby or which actor will land the role to play the next James Bond.

While stakes are typically limited, operators ostensibly serve up these exotic bets to generate publicity and acquire new customers. “Assuming the process would allow for it,” says Aitken, “we would welcome the opportunity to offer more entertainment markets like The Bachelor, or political markets, or bitcoin futures – anything that’s been offered by offshore operators for years. Our goal is to compete with the offshore sites.”

Go to the polls

One market Aitken mentions – political betting – would almost certainly be hugely popular. Take Betfair’s exchange outside the US as an example: a total of £200.5m was matched on its ‘next president’ market alone in 2016, making it still easily the biggest event in terms of amount matched in the exchange’s 19-year history. For sister brand Paddy Power, which is considered by many to be a pioneer of novelty betting, the 2016 presidential election was its most popular political betting market ever.

The Irish bookmaker took a greater volume of bets on the election than it did on any of golf’s majors that year. “A lot of stuff that people would think as being the cornerstone of a bookmaking operation suddenly took a back seat to a US presidential election,” says Joe Lee, head of Trump betting at Paddy Power. Yes, you read that right; the company employs someone to handle and promote betting markets on the controversial 45th president of the United States. “When it comes to the plethora of markets we have had on Trump, we’ve had everything from him deciding to paint the White House gold to tweeting the confirmed size of his hands,” Lee explains.

Traditionally, political betting in the UK and Ireland has been the preserve of a more-savvy type of bettor. However, Trump’s unorthodox style has made political betting appeal to casual bettors too, says Lee. “He essentially opened it up into a mass-market proposition, for people who are not only interested in the outcome of elections but what he will say next, what he’ll tweet next, who he might offend next. That, I guess, is the mass-market appeal and the divide he has assisted us in crossing somewhat.”

All the leading UK bookmakers price up major elections, who will next lead certain parties and much more. And because elections are difficult to manipulate – or fix – betting limits are often very high. If New Jersey or other states where sports betting is legal allow wagering on the 2020 presidential election it would surely be a high watermark for political betting turnover globally.

“We missed that one [2016’s election] but this next one could be interesting,” says Bogdanovich. “Half the country is with Trump and the other half despise him. If they take that to the betting windows it would be of massive interest.” Right now, it’s a case of wait and see as to whether the DGE will deem Oscars betting as a success and allow bookmakers to expand their offering. The US, or more specifically New Jersey, has taken its first tentative steps with novelty markets and if Oscars betting is anything to go by, specials and political markets would be a phenomenal hit.

New Jersey | Sports betting | Strategy

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