Online sports betting: As you do well, they cut you off
149 comments
·June 6, 2025arrosenberg
scoofy
Gambling should not be trivially easy to participate in. That's the real problem.
If we're pretending it's entertainment, then it shouldn't matter that winners get shut down... because it's just supposed to be fun. If we're not pretending it's entertainment, then we need to deal with the fact that it's a huge negative payoff vice we shouldn't be allowing to happen easily (make it legal and rare).
The idea that we're trying to create "fairness" in a business that basically wouldn't exist if the operators don't have a guarantee of success is ridiculous. We can either require sports betting agencies to have betting lines that require their bets be balanced or we can basically ban them from becoming a large industry.
kelnos
I personally think of gambling as entertainment, but that's a luxury of mine, as I don't have a gambling problem. On the (infrequent) occasions I gamble, I pre-set a limit and never spend/lose more than that. If it's gone, I'm done. Every now and then I lose that money so quickly that it's not fun, but that happens so rarely that I generally feel like I've enjoyed myself and have paid an appropriate amount for that enjoyment.
Paying for entertainment is a normal activity. People do it every day. But gambling feels different: you can pay a nearly unlimited amount for it. There are usually limits in other forms of entertainment. I can only see so many movies in a theater in a day. I can only go to so many concerts. The number of board games I can buy is limited by the storage space in my house.
I'm sure there are exceptions in some types of entertainment I haven't thought of, though.
incangold
Another example of “entertainment” with scope for unconstrained spending: digital goods in the less scrupulous kinds of video games
jplrssn
Insurance companies are supposed to operate in this way, but some are happy to take your money as long as they believe they can profit and only start enforcing policy violations etc once you've become a net liability.
gruez
>and only start enforcing policy violations etc once you've become a net liability.
No, they'll just hike premiums or refuse to insure you.
const_cast
Yes, but at least we know this is bad and set things up like the affordable care act to try to get rid of this behavior.
skippyboxedhero
That isn't what is happening.
Earlier this year, sportsbooks lost a lot due to punter-friendly outcomes (a series of favourites winning), and they didn't cut people off. Doing this is extremely bad for business because: people won't come back, and you aren't giving customers the opportunity to lose that money back to you.
So what you are seeing when people are limited is not this but arbing line moves between bookmakers, people bearding for someone else, etc.
One of the articles mentions stuff relating to player behaviour - for example, if you bet on Australian Rules Football, you bet every game for multiple weeks then it doesn't matter if you win or lose, there is going to be a limit - there is a grey area, but the majority of people being limited don't fall into this category. They are just people doing stupid stuff (I have done this, I used to arb line moves 20 years ago in the UK, I have been banned everywhere, it is stupid and I should have been banned).
beambot
Why should arbing line moves between bookies be stupid or banned?
This is what market makers doing 24/7 on public stock markets. This is what creates "efficient markets".
skippyboxedhero
Because it isn't the same as public stock markets. The price on different bookmakers is different because the product is different, bookmakers aren't offering an equivalent product to each other (for example, the biggest one is regulation, there is no stock market that invests tens of millions of dollars in stopping people buying stocks, every large bookmaker does this).
It doesn't improve efficiency in any way because the price you are taking is known. If you are betting on the open with Asian books, you are adding to price discovery. By the time most bookmakers open their lines, the price of the risk is known so you placing your $100 bet isn't improving efficiency, it is just noise.
nly
Yeah, I got gubbed everywhere in the UK as well.
When Betfair first came on to the scenes the traditional online (and offline) bookmakers were like fish in a barrel for arb bets.
I still remember when the first major bookmaker (pretty sure it was BetVictor) started tracking Betfair markets automatically. Now they all do it.
skippyboxedhero
Bookies in the UK never set prices, apart from parlays (which are admittedly a growing part of the market). Even in the early 2000s, it was Asian books that set lines and tech just made it easier for them to access. Margins have gone from 20% to 2% (or lower) because bookies can confidently set lines a few days before the event.
Also, their tech even today is still dogshit. It looks like they are tracking Betfair prices but most bookies use third parties for pricing, OpenBet for example, and so it is usually the third party tracking. There is still inherent latency so the main tool has been delays and limiting certain customers. This is why ppl who say they should just take any bet are idiots, it isn't a stock exchange (and most of these third parties also have massive latency in their stack too, naming no names...the stuff I have heard about how they run things is incredible).
1970-01-01
We're just doing it wrong with all-cash betting. We need to change the game to include goods. Don't like your shirt? Go bet it at the casino. If you lose, the casino takes it and goes to sell it at auction. If you win, you get some cash to go buy and own a new shirt.
parpfish
If you bet your shirt, you should only be allowed to win other shirts. Or maybe a matching pair of pants.
SketchySeaBeast
I feel like you've just invented extremely unwieldy chips.
rightbyte
Ye well there is room for improvements.
I have done sports betting like three times, when I realized the odds were bonkers, and retrieving the money after winning was an extreme hazzle that took weeks with photocopies of passports and gas bills and what not. Paying the bets took a minute.
I mean, online betting is a shady business. Physical casinos at least have some sort of brick wall to bang your head against.
gruez
>and retrieving the money after winning was an extreme hazzle that took weeks with photocopies of passports and gas bills and what not. Paying the bets took a minute.
Blame the AML/KYC/income tax regulatory regime. Placing a bet doesn't require KYC any more than spending $10k at a club doesn't require KYC. However once the casino needs to disburse money Uncle Sam suddenly wants his cut and to make sure it doesn't go to Bad People.
const_cast
Right, but elephant in the room: gambling is shady and addictive business. If we let gambling go on under the table, it will probably become worse, not better.
Ideally we probably should have higher barriers to gambling on both sides, kind of like we do cigarettes.
rightbyte
It is not really KYC though since we didn't meet or even talk or chat?
dist-epoch
> retrieving the money after winning was an extreme hazzle that took weeks
that has nothing to do with sports betting. it's the same with trading stocks/forex/..., it's KYC/AML
paxys
Yup I have used these apps, and it takes 10 seconds to deposit and withdraw money. They have every incentive to make it as seamless as possible, otherwise they aren't going to get repeat customers.
PaulHoule
Was watching the Kentucky Derby at a party, thought it might be a hoot to bet the favorite to show [1] on my phone but I didn’t quite do it. I would have won but it could have been a hassle to get paid.
[1] A heuristic to minimize your losses, because favorites are underbet, if you have minimal information
thrance
> In a healthy economy “Tails I win, heads you lose” businesses should not be allowed to succeed.
That's every gambling place/app, should they all be made illegal? Not that I'm disagreeing...
armchairhacker
Polymarket seems OK (or at least unethical for a different reason): the prize pool is entirely from the gamblers’ money, and evenly distributed to the winners.
I don’t think Polymarket does this, but I also think it would be OK if the casino takes a cut of the prize pool, as long as it ensures that winners never receive less than they bet. For example, the casino may receive $losers/n (they pick n, $losers = total bets of losers), and winners receive $bet($losers(n - 1)/n + $winners)/$winners, $winners = total bets of winners, $bet = their bet).
Then it’s “tails = I win you lose, heads = we both win someone else loses, except nobody wins if everyone gets heads but that’s extremely unlikely (especially with more than 2 options)”.
uxp100
That’s not really casinos in the same way as apps. Casinos find the other side of the bet for you and take a cut. They make money in transaction costs. They profit either way, but don’t cut you off for winning (at the sportsbook, other games may be different). Apps sometimes are taking the other side of the bet themselves, and thus will cut you off for winning.
thrance
Yes, however casinos don't need to expell winners*, as the games are already rigged in the house's favor. Slot machines are set to give back 80% of the money invested, the dealer has a small advantage in black jack, etc.
* If you start applying the martingale to roulette, you will quickly be pointed to the exit.
null
david422
I don't disagree - but also realize that the other option is not to play.
gaze
This is such an old moral argument. Do you think society should protect people from the nearly unlimited downside inherent to having bugs in human behavior exploited or do you think that doing this is wrong and that it's in fact immoral to stop people from being punished by their own bad decisions, because that's what they deserve.
singleshot_
I think society should protect me (degree in mathematics, non-gambler) from harm caused by betting companies in the form of increased bankruptcy filings for problem gamblers.
I think it’s immoral to allow their bad decisions to raise costs for those of us who do not care who wins the Big Game.
JKCalhoun
If someone goes into it eyes wide open, sure let them hand over the paycheck meant to buy new clothes for their kids. (Or not?)
When, as has been pointed out in this thread, people are instead being deceived and told the playing field is level, yeah, no we should not allow that.
vintermann
Well, that's a framing that the casinos love.
If you instead ask if people should be allowed to make money on exploiting "bugs in human behavior", whether society should help casinos collect on gambling debts etc, in short whether this is an institution we should allow, it becomes a lot harder to justify.
personjerry
To play devil's advocate, why do you get to decide what's a "bug in human behavior"? If they're happy about it... ?
rxtexit
It is a stupid argument.
The choice is between the mafia or this. This is better than the mafia.
Any other argument is basically utopian.
I love mafia history though so I think many people just don't understand how powerful the mafia was in 20th century America.
Of course, it wouldn't be the Italians this time. It would be the Mexicans. A horrific thought.
mlinhares
That doesn't work for vices in general, there has to be an externally imposed limit.
paxys
Over the last few years watching sports (in the USA at least) has been unbearable. Every other ad is for gambling apps. Broadcasters show live betting odds on TV alongside the game. Announcers and analysts are constantly talking about their favorite parlays. All athletes have endorsement deals with bookmakers and encourage young fans to participate. Sports leagues themselves have close partnerships with the largest gambling companies.
And who ensures everything is happening above board and there is no fixing? Don't worry, self regulation works.
skippyboxedhero
There was match fixing in the US before legalization. In fact, the US is one of the only places where you have had major sports events being fixed due to gambling, despite gambling being legal in many other places.
One of the greatest incentives to stop match fixing comes from having regulated operators who will report unusual betting behaviour. For example, the massive problems with match-fixing in low-ranked tennis has been tackled by bookmakers.
There is an issue with advertising but that is unrelated to the match-fixing one. The latter is one of the absolute oldest lobbying lines the Republicans used when they were getting all their money from Adelson (it was accompanied with some mad intellectual gymnastics about how sports betting at casinos was also magically unaffected by this, same with underage gambling).
zem
the fact that having your game constantly interrupted by ads didn't in and of itself make watching sports unbearable just shows how bad the downward pressure on what is considered acceptable is. gambling ads will probably become the new normal in a couple of years.
MrMember
I'm in favor of legal sports betting but there needs to a serious crackdown on advertising during events and league partnerships. The UFC has an official sportsbook partner. In the UK a book sponsors the second tier of soccer. It's out of control.
pastor_williams
Another good article about sports betting: "The Online Sports Gambling Experiment Has Failed" https://thezvi.substack.com/p/the-online-sports-gambling-exp...
ChrisArchitect
Some related discussions here:
The Online Sports Gambling Experiment Has Failed
https://news.ycombinator.com/item?id=42110194
Legalizing Sports Gambling Was a Mistake
https://news.ycombinator.com/item?id=41659458
Should Sports Betting Be Banned?
devonsolomon
I had deep-access to this industry in a past career - the way online sportbooks talk about their customers in private is all you need to know to know that this isn’t business, it’s predation.
Akasazh
Care to share stories?
bartread
I would guess this is not true for betting exchanges where backers and layers are directly connected to eachother and the exchange takes a small cut of every transaction regardless of which side wins or loses. I wouldn’t have thought it would matter to them if you were a consistent winner because your repeat business helps to provide liquidity to the exchange.
cameldrv
Regular sportsbooks (i.e. non-exchange, they're making the market) don't necessarily want the "liquidity." At least many years ago when I was doing this professionally, there were "sharp books" and "square books."
The sharp books more or less operated the way you're describing. They would try to set the line as close to the true odds as possible. They knew who the sharp bettors were, and they may have limited their bets to some degree, but they would take them and adjust the lines accordingly. You have to be a very good bookmaker for this strategy to work, because every line that's a little bit off is going to get pounced on for the max bet.
The square books' strategy was to keep the sharp bettors out by limiting their bets severely or kicking them out entirely. This also lets them set the lines in a way that makes them more money, because there are a number of biases recreational bettors tend to be subject to. In particular, they tend to overbet on favorites, and they tend to underappreciate the home team advantage. There's also an effect where people will tend to bet on their favorite team, and so teams from large markets get more bets than teams from small markets. By moving the line a few percent one way, they can make significantly more money on average.
dist-epoch
This might come as a surprise to you, but the more volume you trade, the higher commission you pay (in percentage terms) on sports betting exchanges.
BetFair calls it the Expert Fee :))
If you make more than $100k profit, you pay 40% extra Expert Tax on it :)
https://support.betfair.com/app/answers/detail/expert-fee-fa...
bartread
> This might come as a surprise to you
You're right: TIL, so thank you. I've done no more than dip my toe in the water on betting exchanges.
That level of expert tax seems... rude. Really rude.
But I wonder if some goes to the government in lieu of taxes that would not otherwise be payable on winnings from gambling (at least not here, in the UK, since winnings from gambling aren't taxable).
skippyboxedhero
This is how Asian books work, they move prices early, and make it back on volume (this is not a wholly geographical designation, Pinnacle Sports is also an Asian book but operates in the Caribbean...iirc).
The problem in the US is that it is a highly competitive market so you have to acquire your customer base every weekend, and these customers don't actually care so much about prices. So having weaker prices is a more effective way to deliver the product. In addition, US gamblers like parlays, parlays are more profitable, have lower volume per bet, and (so far) the economics of the Asian book don't work for this market (i.e. get syndicates to bet your lines early).
joezydeco
I thought the same thing, and that's typically how pari-mutuel betting works (horsetracks, Jai-Alai, etc).
But if some whale comes in and wants to drop a large bet, I suppose the house doesn't want to sit around and wait for the same amount of action on the other side before they take the bet or the game starts. And now they're exposed if the whale wins.
bartread
No, let's say I bet £100[0] on an exchange. That doesn't guarantee the bet will be matched. Maybe only £10 of my bet is matched. And it's the counterparty or counterparties to the bet that are on the hook, not the exchange. I.e., it works much like a marketplace for other financial instruments, and the situation I'm describing is much like a "partial fill" on a stock order. The exchange takes its commission on the matched value of the bet no matter what, and they don't care which way it goes.
[0] I'm using small numbers because the total value of matched bets on many horse races can be small. If you go in and drop £100k or £10k, or even £1k, especially if you did it all in one go (and assuming the exchange would allow it), there are plenty of races where only a tiny portion of that would be matched. In fact most races have only thousands of pounds or low five figures matched.
natmaka
AFAIK in a pure 'parimutuel' setup ( https://en.wikipedia.org/wiki/Parimutuel_betting ) the house is never exposed, and if this holds I see no reason for someone understanding this to place a non-parimutuel bet.
null
hshdhdhj4444
In a physical betting space, usually located in casinos, I can also get free drinks. There’s also other stuff to do and it requires actual physical effort to be there and bet all the time.
Online sports betting is a mug’s game.
I made a few hundred dollars and have quit for a couple of years now once I learnt that they can kick you out for doing too well.
parpfish
I can see some benefits to in-person sports betting.
Putting money on a game you don’t care about can make it exciting.
Getting a bunch of people watching a game together with money on it is a way to drum up a crowd of enthusiastic temporary fans for any game, which might lead to a fun high energy atmosphere.
The problem is that the crowd will likely have divided rooting interests and things could get… confrontational
blinded
Hard agree. Would never work for a gambling or gambling adjacent company.
parpfish
Too many people are willing to do sketchy stuff if you can frame it as solving fun math/ML problems, and I have to admit that a sports gambling company would have a lot of fun data to play with.
But too often the ability to turn everything into a math problem lets you easily abstract away the reality of what you’re doing
jeffbee
But would you invest in one? The VC firm for which this orange site is the public mouthpiece has backed lots of them.
blinded
Nope. Not directly.
null
paulbjensen
I recently read about a story in my local newspaper (Colchester UK) about someone who stole £13,000 from his girlfriend's phone via her banking app so that he could fund his gambling addiction. He was found guilty of theft and sent to prison.
I wonder if there is any merit in building an app that helps gambling addicts by letting them play the same games that they would play on their phones, with a few caveats:
1 - It's all virtual money, just like a demo account on a stock trading service where you can test it out without real money being involved. You don't use real money, and the app is free to download and play. The goal isn't to make money from the app, it's to help treat gambling addiction.
2 - Where the games would tempt you to place another bet and say "better luck next time?" or "so close" and tempt the player to make another bet, this game would do something different:
- When a player loses on their go, it would say "if you'd staked real money, that would have cost you £2 etc". - It would also remind you of the total balance, and say "if you'd played for real, then you would be down £200 tonight, but because you played this game instead, you've saved yourself £200." - When a player wins on their go, it would say "congratulations on winning, that was your first win in the previous 6 go's".
The idea is to change the cognitive behaviour of the player so that a) they get to play a game that they enjoy playing and find addictive to play, but crucially b) they don't lose any money, and because they are shown the reality of what gambling is like from an accounting perspective, their cognitive association with gambling is changed.
It's better to play a fun game for free then to play a game that drains you of all your money.
How is that idea. Good, bad?
pjc50
Such things exist, but for the gambler the crucial thing is the possibility of winning real money. Also apps that don't make money don't pay for advertising themselves.
(Compare vs gatcha, which doesn't allow you to cash out. Predictably there's also gatcha simulators if you just want to roll for things meaninglessly)
sokoloff
For a while, advertising for-money online poker was not legal in some jurisdictions. So “ParadisePoker.com” (a real money site) couldn’t advertise.
Free-to-play/play money site paradisepoker.net however somehow found the money to advertise extensively. It was a real mystery…
hakfoo
There are plenty of Facebook/mobile "play casinos" which produce a fair amount of revenue by not refilling the customers' "free chips" fast enough to be fun so people will pay for more.
There's also a bunch of fun dark patterns (side currencies, battle pass and leaderboard features, and account evolution you need to play X amount to unlock different games, and once you've played that much you can no longer scale down to very low wagers to make the free tokens last longer.)
At least Genshin Impact has a fairly high quality game with some play value attached to the shitty casino.
PaulHoule
… when I got a real smartphone I wanted to try Fate/Grand Order because I was a fan of the fanart but when I saw the summon screen it used the same visual language as slot machines and I lost interest.
plorkyeran
The only thing worse than gacha slop is games which manage to be pretty good in spite of being gacha.
kelnos
That assumes that the addiction is to the game itself, and not to the hope of winning real money. If you take the real money out of it, I expect many people with a gambling problem just won't be interested.
HK-NC
Some people just want to piss their money away. I know people that spend hundreds, thousands even on opening magic boxes in games which have "rare" items in them, the games dont even have a marketplace to make the money back.
whoisyc
While I am generally against gambling and would like to see more social and legislative action against it, I would advise against forming opinions based on news pieces like the one you mentioned in the beginning of your post, because news has a bias towards reporting only the most extreme events without giving you the full picture of how prevalent (or not) they actually are.
If anything news is like a mirror image of gambling. People vastly overestimate how likely they will hit a jackpot the same way they vastly overestimate how likely they will die in a plane crash.
dole
Virtual money doesn't mean anything, gamblers will bet the max knowing they're not losing anything.
parpfish
What if the app had you drop some amount of your own money into an escrow account, and the. You get it back when you demonstrate “healthy” behavior?
paxys
Plenty of such apps exist. In fact before gambling was legal all apps had to use fake money. And no one used them. Unless you can replicate the rush that comes with winning real cash you aren't really providing an alternative.
Balgair
Prediction: By 2035, a common interview question for hedge-funds and FANGs will be: "Can you make unlimited bets on fanduel and draftkings?"
Goofus: Yes, I bet on them all the time. Why do you ask?
Gallant: I don't really bet, actually. Haven't even downloaded the apps.
Galaxy: Fanduel has me limited to 25 cent bets. Hardrock at 2 dollar bets. And draftkings kicked me off entirely. I'm waiting for a good opportunity for betmgm until I open an account there.
Further, people will pay to be 'mules' for professional gamblers so that those gamblers will wreck the reputation of those people at the large gambling apps, making it seem like the 'mule' is actually a 'sharpe'.
sharkweek
It has taken over the lexicon of most major sports to the point I can barely stand watching most of them now…
NFL broadcasts lean so heavily into betting odds, parlays, prop bets, everything… it’s so obnoxious hearing about X player hitting the over, only to go to a commercial offering some free money if you place a certain sized bet.
I really hope (but am not holding my breath given how much money is involved at this point) they ban sports betting advertising in the future.
gffrd
I’ll go further: I hope they ban sports betting altogether.
It was a mistake, and we should accept that.
lenerdenator
You can't ever truly ban it; there's always a guy who's willing to operate a racket. The question is, can you reduce the harms?
We went wayyyyy too permissive with sports betting by allowing it online. It should be something that you can do at a casino, but on your phone, at home, alone? That's just begging for serious harm to the addicted.
triceratops
They were talking about banning gambling advertisements, not gambling itself. Banning gambling is a terrible idea.
gffrd
Agree. There will always be operators … the goal would be to get numbers as low as possible while also forcing/keeping illegitimate operators out.
I acknowledge this means funneling those left to a small number who will make lots of money … hey look, now I’m describing Vegas.
Agree on permissiveness. I think reducing ease of access would cut users down to 1/5 … though not sure if that’s realistic with the cat out of the bag.
parpfish
It feels like gambling talk has largely replaced fantasy team talk on most broadcasts, and I wonder what role fantasy sports* played in all of this.
Did fantasy sports have a causal role as a gateway that slowly normalized gambling, or were they just reflecting that there has always been a latent thirst for gambling and fantasy sports were the only socially acceptable way to scratch that itch?
* not talking about “daily fantasy” stuff which was just blatant gambling pretending to be fantasy sports to exploit a loophole
mrandish
This has always been true of physical casinos as well. If you win over time, you'll be 'uninvited' - as demonstrated by how quickly casinos will ban anyone they think is card counting in blackjack (which isn't illegal or against to rules).
I guess I'm surprised anyone is surprised that casinos do this and always have. There has never been anything "fair" about a casino's relationship with players. Your only role in the relationship is to, on average over the long run, lose money. Their role is to take your money. A "sharp" player is anyone who consistently plays in a way that, on average over the long run, makes money, breaks even or minimizes your losses below the expected rate of return in the casino's financial model.
Any player who is not a sharp, is a 'valued customer' (aka 'playing like a consistently predictable loser'). Casinos have always been adept at spotting any players who behave in ways more like a sharp than a valued customer.
anthomtb
In the pre-online sports betting days, was there a legal way to bet on a game besides going to a casino and visiting the sports book? I remember newspapers publishing odds but still have no idea how people made wagers (other than physically visiting a casino).
pjc50
UK used to do this via bookmakers, who ran either high street shops or at the race being bet on.
Football betting had "the pools", betting by post across a number of fixtures. Most famous was run by a retailer. https://en.m.wikipedia.org/wiki/Littlewoods
See also https://www.onlinebetting.org.uk/betting-guides/football/his...
paxys
Yup those odds were for entertainment purposes only wink wink
If a casino or sportsbook allow unlimited losers, they shouldn’t be able to cut off winners. Conversely, if they cut off winners, they should be required to reimburse loses above a statutory limit.
In a healthy economy “Tails I win, heads you lose” businesses should not be allowed to succeed.