For gamblers the biggest news at the Oscars wasn’t the win by Green Book for Best Picture at about 3-1 odds, the surprise win by Olivia Colman for Best Actress at 5/1 odds or higher and it certainly wasn’t the fact that A Star is Born was shut out for everything, except best song. What was the most talked about and head scratching news was the wild drop in odds on director Yorgos Lanthimos for best director and the corresponding increase in odds for Alfonso Cuaron. Make no mistake Alfonso Cuaron was never going to lose the award. He won every major award heading into the Oscars in for his direction of Roma and that was solidified when he won the Director’s Guild Award where only twice did a nominated director at the Oscars lose when they won the DGA Award. So, what transpired in the 24 hours leading up to the Oscars was mind blowing.

On Saturday, the day before the Academy Awards were set to air, rumors surfaced that a student at Penn Sate, whose father had Hollywood connections, got a tip that Yorgos Lanthimos was going to win best director. This info was later collaborated by students at other universities in Virginia and New York who apparently “had family in the Academy” and before you knew it bets started coming in on Lanthimos at New Jersey sportsbooks. The amounts weren’t overly significant since the limits for Oscar bets were quite low in New Jersey, but the volume of bets was enough to convince FanDuel and Betfair New Jersey to lower the odds significantly on Lanthimos. Two days before the rumors Lanthimos was offered at 50/1 and Cuaron at 1/25, but the odds kept shortening and shortening.

By Sunday morning Lanthimos’ odds were less than 10/1 and FanDuel eventually pulled the prop wager mid-afternoon when the odds reached 5/1. Cuaron’s odds meanwhile increased but not significantly. Overseas, however, things were different. As sites like William Hill, Ladbrokes and Bet365 saw the movement in New Jersey they started adjusting their odds also, but unlike FanDuel the odds stayed open until 8 pm ET on Sunday and, more importantly, the swings on all directors were significant. By the time the telecast went off William Hill’s odds on Lanthimos were 9/4, while eventual winner Cuaron was trading as low as 1 to 2. Overseas rules require fair hold percentages on all markets and thus if a market is allowed a 10% hold any major decreases on one contestant must be offset with increases on others. William Hill admits that despite the massive line drop, the vast majority of action was still on Cuaron.

So, the question is, “What in the world happened?”

I spoke to someone at one of the sportsbooks who said after some investigation they concluded it was a clear case of a college gag that turned into a money-making opportunity. In an attempt to game the system, as university students often do by seeing if they can start a rumor and watching fools follow the lie, one student posted about Lanthimos and the other schools spread the lie on social media and by word of mouth. Students at other universities who were in on the gag followed suit saying they heard the same thing and they saw the sportsbooks lower the odds on Lanthimos. However, according to the sportsbook manager it appears that’s when the students realized that Cuaron’s odds were increasing the students set up a network and collaborated with colleagues in Canada and overseas to see if they can clean up by forcing the odds on Cuaron to reach betable odds and then pounding him to win at traditional offshore books and also shorting Lanthimos at the betting exchanges. And, it worked.

The volume of bets on Lanthimos was significant enough to force line managers to adjust the odds on Lanthimos even though most bets on him were generally in the $5 to $10 range. On the other side, when odds reached 1 to 5 and higher max bets started pouring in on Cuaron, which usually were at the limit to win of $200 and at some books even more. According to the sportsbook in the last hour before the market closed there were tens of thousands being bet on Cuaron and against Lanthimos, but the small bets that kept coming in on Lanthimos convinced the books not to raise the odds on Lanthimos or lower the odds on Cuaron. And at the Betfair exchange, where bettors offer odds and other bettors take those odds, some bettors who were convinced of the rumors began offering hundreds of dollars on Cuaron at odds as high as 4 to 5 odds. In the end the books got clobbered on the market and the sportsbook manager said the ones in on the gag were laughing all the way to the bank.

“I guarantee you there are students at universities in the Northeast states, Canada and the UK who made enough to pay off most of their tuition. Despite Lanthimos getting all the action he only received about 3% of the total action while Cuaron was well over 90%. Unfortunately, while the gag pullers made off like bandits, gullible bettors also lost a fair bit of money on a director that never really had a chance.”

Oh well I guess that’s what happens when you wager on non-sporting events. And, to the students who started the gag, all one can say is . . . well done!

Read insights from Hartley Henderson every week here at OSGA and check out Hartley’s RUMOR MILL!