Regulated sportsbooks gear up for the Tokyo Olympics

At PointsBet USA, odds on the Nigerian men’s basketball team to win the gold medal at the Tokyo Olympics moved from an opening price of +15,000 to +4,000. The line on Japan to win gold in baseball also shortened significantly, from +350 to +130.

Nigeria, a team comprised largely of reserve-level NBA players, shocked the USA men’s squad, 90-87, in a pre-Olympics exhibition match. Meanwhile, PointsBet opened the Japanese baseball team at longer odds than some other sportsbooks.

Still, the traders adjusted these betting lines based on wagers from bettors they respect. Money from professional gamblers will keep bookmakers across the US on their toes throughout these Games, which were postponed last summer due to the Covid pandemic, since Olympic betting markets are not nearly as efficient as those for the country’s more mainstream sports.

“There are sharps who’ve waited five years for this, where they’ve studied the events extremely closely,” Jay Croucher, head of trading at PointsBet USA, tells EGR NA. “We’ll trust our traders to put out numbers that are as solid as they can be, but there will be more sharp activity on the Olympics than there would be on an NFL weekend. That’s just kind of the nature of it.

“It’s not like the NFL, where prices are just rock solid and you can be so confident taking big bets,” Croucher added. “With the Olympics, there’s a lot of movement in prices. There’s a lot of niche markets, and these markets are not always liquid…for some random heat in a fencing event, we’re going to put up the best price that we can, but we’re going to move very quickly and aggressively off informed money that comes in.”

There also have been plenty of early line moves at SuperBook USA, which operates in Nevada and Colorado. For example, the markets on total gold medals for Australia has been adjusted from 11.5 (-110) to 12.5 (over -130) and for South Korea from 10.5 to 11.5 (under -125).

Sharps get involved in “anything where they think they have an advantage,” said Ed Salmons, VP of risk management at the SuperBook, and those opportunities certainly present themselves during the Olympics.

For the 2016 Summer Games in Rio, the first Olympics on which Nevada sportsbooks were allowed to write bets since a regulation banned the activity in 2001, Salmons estimates his shop took a small loss. With the Olympics being a relatively small piece of the book’s overall business, though, “as long as you don’t lose a crazy number, it’s fine,” Salmons says.

Factors impacting handle

As a 35-year veteran of the industry, Johnny Avello had been booking the Olympics in Nevada long before the ban went into effect in 2001. While he says handle for a typical Olympics has been minimal in that state, he expects it to pick up for the Tokyo Games at DraftKings, the multi-state operator he joined in October 2018, a few months after the Supreme Court struck down PASPA.

“I booked a lot of Olympic events. I put a lot of time into it and it didn’t write a lot of money in Nevada,” Avello explains. “It did okay. For us at DraftKings, I’m expecting more. Being in as many states as we are, I’m expecting people to a wager on it, and we have a lot of offerings.”

There are some factors working for and some against the potential handle the US sportsbook industry may see on these Olympics. In the former category, the Games come at a slow spot on the sports calendar and will be among the few options for bettors from late July through early August. The dearth of sports has Croucher and his team believing handle will be strong.

With the NBA Finals, the Stanley Cup Playoffs, Euro 2020, Wimbledon, and the golf majors all behind us, “the people only now are kind of turning their minds to the Olympics,” Croucher said. “There’s Major League Baseball and WNBA, but NBA will be done, NHL is done. We’re in the window just before college football and NFL, so it’s going to be close to the only show in town, and there’s just not going to be a lot for the US public to bet on.”

Last year, when the Covid pandemic shut down sports in the US, bettors still found ways to play, as sports like table tennis provided the excitement they craved. Table tennis, in fact, continues to be popular among US gamblers – it was the fourth most bet sport in Colorado in May and the sixth most bet over the 12-month span ending in April. Interest in these peculiar sports could carry over to the Olympics.

“People during the pandemic got accustomed to betting on things that are a bit more unusual and a bit less mainstream,” Croucher says. “Table tennis at the start of the pandemic was more than 50% of our handle, just because there was nothing else going on and people really took to it, and it has had staying power. It’s not like when MLB and the NBA came back table tennis betting just stopped. There was a residual effect from that.”

The time difference between Japan and the US, however, is not ideal. While the USA men’s basketball team’s opening game against France tips at 8am EDT Sunday (9pm in Tokyo), most events take place while Americans are still asleep.

“If (events start) anytime between six in the morning and nine at night, then you get a little more action,” Avello said. “If it’s middle-of-the-night type of stuff, that may kill the action.”

Both PointsBet and DraftKings will offer live betting on the Olympics, but the time difference figures to impact this segment of the companies’ business particularly.

Croucher says: “We’ll be offering as much live as we can. About half of our handle comes live. I suspect the Olympics is going to be much more pre-match just because of the time zones and there’s just not as many people up.”

State to state

As with pretty much any regulation related to sports betting in the US, those overseeing the Olympics vary from state to state.

Among the states PointsBet operates in, New Jersey, Illinois, Colorado, and Michigan have approved the full menu of events. Several Olympic events had not been approved in Indiana at the time of writing, while in Iowa, no events can be offered if they include any participant under the age of 18. In New Jersey and Indiana, the names of athletes under 18 cannot be listed as betting entries, and in New Jersey, markets are voided if an individual competitor under 18 wins an event or if a team completely comprised of under 18 athletes wins an event.

“We were worried that it was going to be a bit more fractured than it ended up being, and operationally, it makes it much more manageable when there is consistency across states,” Croucher says. Some states are just more comfortable than others being aggressive in terms of the markets they allow sportsbooks to offer.

“It’s just been that way. When you look at some of the things we offer – hot dog eating contest and Oscars – some have taken it initially and some haven’t, but then some would take it the next year once they’ve seen that somebody else took it and did well with it,” Avello says. “I think that’s the way it’ll be with the Olympics, too. Some will be conservative at first, but then next time around will take more offerings.”