A New Type of Wager Emerges
The Baltimore Ravens 59-10 beatdown of the Miami Dolphins was one of the most notable week one storylines, both in NFL and gambling circles. The Dolphins are going to struggle this season, and one person has already cashed in. A bettor in New Jersey won a reported $600,000 by using a new form of gambling wager called “Pointsbetting” or “Spread Betting.” Pointsbetting originated in Australia, but has since found a home in the U.S. and especially New Jersey. Sportsbook PointsBet currently offers the wager in its New Jersey sportsbooks. This new type of wager has been gaining popularity since its introduction in the Australian market and has even attracted Darrelle Revis and Allen Iverson.
A pointsbetting wager acts as a multiple on your bet, increasing your win or loss. It is based on whether the team you choose covers the spread and if so, by how much. The amount above the spread they cover is multiplied by the amount risked to determine the win. However, the bettor risks the inverse situation as well. If the team he chooses fails to cover the spread, the difference is multiplied by the amount risked. Lastly, a bettor sets the maximum win/loss amount, with the maximum being 50 times the wager. For example: the Ravens were favored by 6 points against the Dolphins and won by 49. The bettor placed his max stake at 20 times his initial bet of $30,000, and because the Ravens covered the spread by far more than 20 (43), the bettor’s original $30,000 stake is multiplied by 20 and they walked away with a $600,000 win. Keep in mind the inverse here, that the bettor could have lost $600,000. Pointsbetting offers the bettor the opportunity to win big if they are really right, but also presents the risk of losing big if they are really wrong. Also, a bet of this size with so much risk is an abnormal bet and would only be placed by a Sharp. A bettor can also place a pointsbetting wager on the over/under of a final game score or the over/under for any prop bet.
Cause For Concern?
PointsBet is the only sportsbook that offers the bet and they operate online in New Jersey. This forecloses pointsbetting to everyone outside of New Jersey, even in states like New York where sports betting has been legalized. Pointsbetting and all sports gaming action is tightly regulated by the New Jersey Division of Gaming Enforcement. Pointsbetting is unique in that the bettor is exposed to increased risk. Of course the casino is as well, but they are far better equipped to suffer a large loss than an Average Joe or even a seasoned Sharp bettor is. People will be drawn to pointsbetting because the lure of a large payout will outweigh the risk of a big loss. It is safe to assume that PointsBet will continue to grow and attempt to enter more markets. Pointsbetting will be offered to many more people, further increasing its popularity.
With so much additional risk at play it is worth asking if there needs to be additional regulation or legislative action in this area. States like New York don’t have to worry about pointsbetting at the moment because they don’t permit online wagers. However, they may soon permit them and should be ready with the appropriate regulations. One of the main concerns about sports gambling is that it can be addictive, especially with the ease of mobile sportsbook apps. In a matter of minutes a bettor can expose themselves to a degree of risk that they cannot afford to lose. Pointsbetting could potentially make this issue much worse. In the traditional sense, when a bettor placed $50 on the Ravens -6 they have covered all their risk no matter the outcome. If the Ravens cover, they win $100 and if they don’t cover, then they lose their initial $50. However with Pointsbetting, the win or loss is not determined until the game is over. The bettor is able to place a “market cap” on their stake, which sets a loss limit and also a win limit, but this may not be an effective means of preventing a gambler from going beyond their limits.
As pointsbetting continues to grow, it will become the responsibility of states and their individual gaming divisions/commissions to decide whether or not to permit this form of wager. New Jersey will serve as an interesting case study in determining the potential pitfalls of pointsbetting. Pointsbetting is a feature of the growing “gamblization of sports” – a trend that will only continue to grow as more states legalize sports gambling. Different types of wagers and payouts will continue to pop up and gain popularity as the industry grows, with sportsbooks trying to set themselves apart and attract action. Sports has changed and pointsbetting is the latest example of that.