MW Why the NFL draft is one of the only sports events where bettors have the upper hand over sportsbooks
By Weston Blasi
'Handicapping the NFL draft is one of the most difficult things that we do," one DraftKings executive said
There's a saying in gambling that the "house always wins," meaning that in most cases casinos have better odds to win than bettors.
That philosophy also applies to sports betting where sportsbooks generally make a profit on most events ranging from the Super Bowl to March Madness to the NBA playoffs. But one major sports-related event is different. It's the one time when bettors may be able to outmaneuver the sportsbooks: the NFL draft.
Gamblers have been getting the better of sportsbooks on the draft for years, but sportsbooks continue to offer the service in order to satisfy customer demand.
Tens of millions of dollars have been wagered on previous drafts, with more likely to be bet this year as additional states have legalized sports betting. Bettors can wager on who will be selected No. 1 overall, which player will be the first running back taken, and which players will be selected in the top 5 - there are hundreds of available bets like those on legal U.S. sportsbooks like DraftKings $(DKNG)$, Caesars $(CZR)$ and FanDuel $(FLUT)$.
But why is the draft unique? It's mainly because in most sporting events, sportsbooks have more information than bettors. They have enormous databases on every player of every team, team trends, and tendencies of coaches and referees, among other things. But the draft is not a live sports game, so people are betting on people making decisions in a draft room.
"For instance in the Super Bowl, we have so much data, there's so much information, that we're so confident that the Rams should be 4.5 point favorites over the Bengals," Jay Croucher, Head of Trading at the PointsBet sportsbook, said during a 2022 interview with NBC. But he added about the NFL draft: "This kind of market, I really can't tell you with much confidence who should go number one, or who will go number one."
Put simply, sports drafts are considered soft but volatile markets, meaning betting odds and probability can change drastically based on a new report, a social media post or a rumor.
For once, sportsbooks and bettors are on a level playing field.
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Bettors and sportsbooks don't have to prognosticate complex games with several dozen people involved and numerous moving pieces, they simply need to learn the tendencies of a team's general manager, the person who often makes a team's draft pick.
Here's one recent example of how bettors can get the best of the sportsbooks when wagering on the NFL draft.
In the lead-up to the 2021 draft, NFL Network Insider Ian Rapoport reported that "most people" believe the Atlanta Falcons will draft tight end Kyle Pitts at pick No. 4. Rapoport is one of the most informed NFL news breakers with millions of followers on X, formerly Twitter. So when Rapoport or other well-known insiders tweet information like that, the betting markets move immediately.
Nine days before the 2021 draft, the Falcons' odds to select a tight end (Pitts' position) was +160, but the morning of the draft the odds were -250. The change was an implied probability move from 38% to 71.4% in a matter of days, according to odds from William Hill. If bettors were fast enough, they could have cashed in when the Falcons indeed drafted Kyle Pitts a little over a week later. You can find an explanation of how betting odds work here.
Sportsbooks have million of data points to help them handicap a game, but in this instance, bettors didn't need a giant database to intelligently be able to bet on the Kyle Pitts selection, they just needed to be following Rapoport on X (and maybe have notifications turned on).
Croucher admitted that when it comes to drafts, sportsbooks basically rely on the same information as public bettors, indicating the draft is one big probabilistic guess.
"Alleged text messages from someone who might be a cousin of someone who might work at the Jags, this is the stuff that drives the market...it's mock drafts, it's sources, it's things that get posted on Twitter," Croucher added.
The Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in 2018, allowing individual states to legislate sports betting. Some states that have legal betting, such as New York, don't allow betting on non-game outcomes like the draft or award winners like MVPs.
And some bookmakers readily concede that they don't always make money accepting bets on the NFL draft.
"From a bookmaker's perspective, handicapping the NFL draft is one of the most difficult things that we do," Johnny Avello, the Director of Race & Sportsbook Operations at DraftKings, told MarketWatch via email last year. "In this particular instance, I would move the needle towards the bettor. It's been tough for us to make money in the draft."
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The 2024 NFL draft kicks off on Thursday at 8 p.m. EST, and will air on simultaneously on ABC $(DIS)$, ESPN and NFL Network.
Read on: How DraftKings figured out NBA player Jontay Porter was betting on games
-Weston Blasi
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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April 25, 2024 12:18 ET (16:18 GMT)
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