Americans fail to price shop for their bets

Three years into legalized sports betting in America and the behavior of finding the best price for a bet hasn’t taken off. The tools are there but the action is missing.

Americans are notoriously price sensitive when it comes to making purchasing decisions.

In all walks of life – from everyday needs to travel and leisure expenditures to standard investments such as homeowners’ insurance – US consumers routinely practice due diligence by seeking out the best price before executing a purchase.

For instance, the process of planning a vacation typically begins with a Kayak or Google Flights search to compare air travel costs, followed by a gander at Hotels.com or Trivago for a quick analysis of the best deals on places to stay.

The list goes on, but the theme is consistent: Americans are savvy price shoppers, an attribute so ingrained in the collective consciousness it’s effectively become part and parcel to all facets of the buyer journey.

Why, then, is that trait conspicuously absent when it comes to placing wagers on sporting events?

The US betting industry, admittedly still in its infant stages, has nonetheless grown exponentially since the Supreme Court overturned PASPA in May 2018, paving the way for more than half of US states to roll out legalized sports betting.

That has led to an eruption of new and first-time bettors, with more entering the fray every day as additional states come online and awareness continues to build.

In competitive markets such as New Jersey, Pennsylvania, and Colorado, bettors have upwards of 15 to 20 sportsbooks – and sometimes more – to choose from, yet very few sign up for more than one account.

For evidence of that phenomenon, look no further than the combined 75% online market share currently enjoyed by the troika of FanDuel, DraftKings, and BetMGM.

Part of that is attributable to the recreational nature of sports betting and the pain points associated with signing up for a sportsbook account.

Most novice bettors (rightfully) only commit a small sum of money toward sports betting, and the various hoops they’re required to jump through – namely Know Your Customer (KYC) protocols, Anti-Money Laundering (AML) checks, bank linking etc. – in order to set up an account can serve as a de facto deterrent to repeating the process multiple times over.

The problem is, by maintaining loyalty to the brand that initially got their business, bettors are leaving money on the table.

More often than not, different sportsbooks will post different odds, with factors such as pricing strategies, risk tolerance and liabilities on a given game contributing to the discrepancies.

That, in turn, can lead to opportunities for bettors to, say, wager on their desired team as 3.5-point favorites when the rest of the market has that team pegged as 4-point favorites.

If the team ultimately wins the game by exactly four (and the efficient nature of markets suggests that will occur more frequently than expected), that’s the difference between a winning bet and a push.

Shop around

Extrapolated out over time, routinely practicing odds shopping can at the very least extend the runway of a bettor’s bankroll, and potentially turn a losing bettor into one who ultimately breaks even or comes out ahead.

In more mature markets such as the UK and Australia, line shopping is part of the betting process for punters of all types and a key component to the strategic gospel preached by the various tipsters and experts selling services.

Indeed, as my father first told me in the 1980s, “Son, it’s a long-term war against the sportsbooks. You should also shop around to find the best odds to stand any chance of winning in the long run.” And that was from a man who started gambling in the UK way back in the 1950s. It still rings true today.

Odds-comparison sites are ubiquitous and some, across the pond, even integrate with operator APIs to allow punters to place bets at multiple sportsbooks without ever leaving the third-party site.

The US betting space as a whole still has a way to go before getting to that point, but the foundation is well established at a user level thanks to the aforementioned price-sensitivity muscle embedded in American consumers.

In practice, it means beginning to collectively flex that muscle in a new way. Instead of depositing $100 at one, how about $20 at five sportsbooks. It means leveraging odds-comparison sites to shop around for the best price on the Lakers game in the same fashion someone would leverage Trivago in pursuit of the best deal on that Vegas Strip hotel.

In short, the higher the baseline education of the consumer, the greater the potential becomes for the entire ecosystem – operators, external stakeholders, and end users alike.

Americans are in the early stages of a veritable sports betting gold rush. It’s just simply not possible to begin mining for the good stuff unless equipped with the proper picks and shovels.

Will Armitage, CEO, Best Odds

Will Armitage is the co-founder and CEO of BestOdds.com, a site that strives to provide education and actionable information to bettors of all types. A former executive for IG Group, Will has also been active in the startup world as an angel investor for over a decade.