Betting on non-sports events can be influenced by social media
Many in the sports betting world cried foul last week after writer, insider and FanDuel partner Shams Charania posted a tweet that turned out to be false. On June 22nd, Charania posted,
"Sources: Scoot Henderson is gaining serious momentum at no. 2 with the Charlotte Hornets in tonight’s NBA draft. Hornets have been torn over the last week between Henderson and Brandon Miller. Team has final meetings today to settle on the decision."
Victor Wembanyama was a lock to be chosen first by San Antonio, but FanDuel was one of very few books to allow betting on the second pick and for the entire time odds were up Brandon Miller was the heavy favorite. After Charania’s tweet, bets started pouring in on Henderson and the high school player went from a big underdog to the favorite. In the end Miller was chosen 2nd. Charania defended the tweet saying he was just posting rumors, but other gambling analysts and major newspapers said that as a partner of a gambling company, Charania should never have made the tweet. While not specifically stated, the implication was that FanDuel had a large liability on Miller for that market, so Charania may have been coerced into making the tweet to bring in money on Henderson and help balance FanDuel’s book, although there is no proof whatsoever that was the case.
Conflict of Interest
While it is likely that nothing nefarious happened, it does bring up the question of whether anyone associated with a sports betting company should be posting anything betting related that could be construed as a conflict of interest. Almost every sportsbook has writers that provide information and tips to bettors frequenting their sites, but the articles generally provide statistics, scenarios and other useful information that can help a bettor decide who to bet on. The writers may also list what they deem are value bets based on the stats they indicated in the article, but the information is all factual and put up long before the game or event takes place. That was one of the biggest concerns with Charania’s tweet.
At the time the tweet was made, FanDuel had already taken a large number of bets, so the fact that it lost could be seen as a tweet of purposeful misinformation and almost everyone in the industry would agree, perception is just as important as reality. And if bettors felt that FanDuel was trying to cheat them with that tweet, it could ruin their relationship with the sportsbook forever.
Betting on non-sporting events
But the situation also brings up the question as to whether this bet should have been allowed at FanDuel at all. Currently, only six states and Ontario allow betting on non-sporting events like the Oscars, elections, sports awards winners, draft picks, world series of poker, etc., while the remaining states that offer sports betting have either banned or simply not made it specifically legal. So, betting on non-sporting games or events is the exception rather than the rule in the U.S.
Pennsylvania and Illinois for example have created a specific rule that only allows betting on professional or college games. While the states gave no specific reason for the ban, one Pennsylvania gambling analyst told me that the possibility of using insider information to bet on non-sports was a major factor in deciding to disallow those bets. The results of the Oscars as an example, are calculated and known by some people beforehand, so for the right amount of money the analyst said some state legislators felt that those in the know could leak the results to sportsbooks, which is obviously not in the public’s interest. And again, perception is everything. It is also notable that FanDuel allowed betting on the 2nd draft pick. I could find no other regulated book that allowed betting on any pick other than the first pick overall.
This incident was very notable due to the huge line movement after the tweet was made, but it is certainly nothing new. Novelty type bets resulting in large line movements happen all the time. And almost always the rumor that causes the big shift in lines proves to be false.
In 2019 Alfonso Cuarón was listed at 1/20 odds for Best Director at almost every sportsbook that took odds on him after he won every single major award before the Oscars, including the DGA Award. But just hours before the telecast a couple of “insiders” on social media sites stated that Yorgos Lanthimos, the director of The Favorite, was going to win the Oscar. Odds tumbled and within an hour of the "leaked information" the odds on Cuarón rose to 1/3 odds, while the odds on Lanthimos fell from 33/1 to 9/5, as gullible bettors fell for the misinformation. Unsurprisingly, Cuarón won the Oscar. Similarly, in the 2016 U.S. Presidential Election the top online sportsbooks said they got absolutely slaughtered when Donald Trump won the presidency. Even as bets came in on Trump the sportsbooks were assured that Hillary Clinton was a lock and decided not to lower the odds on Trump. One Caribbean sportsbook operator said he kept receiving bets on Trump throughout election day but was told not to worry by two trusted sources and just accept the free money. The sportsbook operator told me after that election that if he found out his sources bet on Trump and wanted to keep the odds high, he would kill them. Again, there is no reason to believe the sources purposely misled him, but even the possibility of a pump and dump was enough to get him wondering. Not surprisingly, in 2020 he did not turn to those “insiders” for their opinions on that election and he slashed the limits on that election to next to nothing, saying that he’ll never take big money on non-sporting events again. Most sportsbooks overseas also said they lost a large amount of money in 2004 when George W. Bush won a second term, with one linemaker at Bet365 telling me that elections are always a loss leader.
Taking bets on novelties is nothing new around the world and many sportsbooks are happy to offer the action simply to keep customers happy. Books like William Hill (UK), Bet365, Paddy Power, etc., take bets on almost every reality TV show, as long as it is not pre-recorded, odds on daily stock market prices, odds for Royal baby namings (Archie was 100/1 odds for Harry and Megan’s first baby), odds to be the next Pope, odds on whether it will snow on Christmas Day, and William Hill even took a bet for a period on whether the world would end on a specific date, offering 1,000 odds for anyone who bet that it would (there was no odds that it wouldn’t). It’s still uncertain how one would have collected if the world did end on that day, which made this the ultimate sucker bet. But these sportsbooks set low limits on the true novelty bets, such as those listed, and cut them off when they have reached the loss limits. They are designed strictly for publicity and are not expected to be money makers. Odds to win the draft, along with the Oscars, sports awards, etc., are not designed to be losing propositions however, and have fairly large limits, so any misinformation that skews odds, allows unscrupulous individuals to take advantage of sportsbooks offering those bets or perhaps to help them.
Regulators are watching
Moreover, government agencies are on the lookout for suspicious wagering or unscrupulous actions by sportsbooks and will be prepared to take drastic action if they deem something nefarious has occurred. Just last year the province of Ontario banned betting on UFC events for a month after it was reported that UFC insiders were betting on the events stateside, following suspicious betting patterns in some states on a particular event. The AGCO eventually reinstated betting on UFC in Ontario when the league was able to convince the government that they implemented new rules to disallow any insiders to bet on competitions again, but just the possibility of cheating and insider manipulation of events was enough to convince the government to act quickly. It was also later reported that other states were prepared to follow Ontario’s lead unless the UFC made changes.
So, it isn’t surprising that many in the industry cried foul when they lost a lot of money after Charania’s tweet. All anyone in the industry wants is fairness and the ability to win a bet without any shenanigans occurring and as I stated numerous times in this article, perception is just as important as reality. And if bettors perceive they were being cheated, they have every right to be upset. No one has issues with writers posting stats or breaking news such as injuries, even if they are partnered with a book, but they should not be posting rumors that could drastically influence odds, since they effectively agreed to be impartial when they took on the role partnering with the site. Hopefully this type of situation won’t happen again, but one thing is certain. With all the fallout after the Charania tweet, it is unlikely that any of the 28 states that do not currently offer non-sporting events will be too anxious to offer them any time soon.