Nevada Sportsbooks Enjoying Profitable NFL Season
Trying to calculate how much money Nevada sportsbooks are making during the NFL season is an inexact science. The official Nevada Gaming Revenue Reports from the state Gaming Control Board don’t provide much insight. These reports are notoriously vague when it comes to their breakdown of sports betting revenue sources. All sports betting is lumped into five different categories: football, basketball, baseball, parlay cards and ‘other’. Since all football betting–college, NFL and even CFL Canadian football–are lumped together there’s no precise way to determine how much of the total is being bet on the NFL.
The most accurate information about the fortunes of Nevada sportsbooks on a micro and macro level comes from the managers in charge of these betting establishments. It has become a popular topic in the sports media to have Las Vegas sportsbook managers to go on record and characterize how they fared after each football weekend. Sportsbook managers view it as good promotion for their properties and more often than not provide accurate information. They’re quoted extensively in articles in newspapers and sports websites. Some book managers including the Westgate’s Jay Kornegay and John Avello of Wynn Resorts are engaging and articulate radio guests. The information that sportsbook managers provide might be anecdotally interesting but otherwise provides little insight. Even the most candid sportsbook managers speak only in general terms about their revenue and profits meaning that it doesn’t help much when trying to get a ‘big picture’ view of the industry as a whole.
It’s also possible to follow a few general ‘rules of thumb’ and determine how sportsbooks fared by looking at pointspread movement. Generally speaking, the ‘public’– recreational players–prefer to bet on NFL favorites and make ‘Over’ totals bets. ‘Sharp’ players or ‘wise guys’ (professional bettors) look to bet the opposite way taking underdogs and the ‘Under’. On balance, the sportsbooks do better when the ‘public’ loses. The problem here is that both the terms and tendencies are becoming outdated to the point where generalities are impossible. Furthermore, with the growth of new forms of wagering such as live, in-game betting it becomes all the more difficult to ascertain who is ‘sharp’ or ‘square’ and how they’re betting.
THE REALITY OF NFL BETTING IN NEVADA
An old timer who spent over 50 years working in Las Vegas sportsbooks once told me “there are few people less sympathetic than a sportsbook manager complaining about a losing day”. The sports betting scene in Las Vegas has changed dramatically over the past few decades but that concept still applies. Sportsbooks–individually or collectively–might lose money on an individual game or over the course of a football weekend. Writers might speculate that sportsbooks ‘got killed’ on a certain weekend. In the longterm, however, the sportsbook always turns a profit. Looking at revenue data for Nevada sportsbooks dating back to 1992 you’ll find that they collectively turned a profit every year. More significantly, they turned a profit in every sport every year during that timeframe. There’s only one negative number to be found during the past twenty four years–Nevada sportsbooks experienced a -1.87% loss in the ‘other’ category in 1996.
The average win percentage in football for Nevada sportsbooks since 1992 is 4.92%. This might not seem significant but consider that during this timeframe over $26.6 billion was bet on football. No matter how you slice the sports betting revenue data you’ll find win percentages in the single digits year after year. The one big exception is parlay betting which is generally beloved by ‘squares’ and avoided by ‘wise guys’. The average win percentage on parlays since 1992 is a whopping 32.01%. You’ll frequently hear sportsbook managers lament that a number of big parlays won on a given NFL Sunday but in the longterm it evens out and then some.
The biggest single betting event for Nevada based sportsbooks is the Super Bowl. Likewise, there’s more analysis and speculation over ‘how sportsbooks did’ on the annual NFL championship game than at any other point of the year. Do some research and you’ll find articles that characterize the Super Bowl being ‘good’ for the sportsbooks in some years while others are ‘bad’ for the sportsbook. None of that negates the fact that Nevada sportsbooks have turned a profit on 25 of the last 27 Super Bowls.
THE 2016 NFL SEASON AFTER TWO WEEKS
On the macro level, it’s almost unheard of for Nevada sportsbooks to not turn a profit. This doesn’t mean that it’s all black ink at individual sportsbooks on a micro level. Individual sportsbooks can and do lose money over a sport’s season or a longer period of time. Sportsbooks have to defend their ‘bottom line’ on two separate flanks. They need to turn a profit on bets made by ‘recreational players’ or the ‘public’. At the same time, they need to run their book in such a way that they’re not getting fleeced by ‘sharp’ players or ‘wise guys’. On balance, they would prefer to ‘beat’ the public even if it means that they sustain a loss by booking ‘wise guy’ action.
Fortunately for the sportsbooks, they’ve ‘beaten the public’ in each of the first two weeks of the NFL season. In Week 1, the books were looking at a small loss going into the Sunday night game between New England and Arizona. The Patriots’ outright win as +8 point underdogs turned things around and the books finished with a small profit. Some books reported that straight bets on Arizona outnumbered those on New England by a 4 to 1 margin. Parlay cards with Arizona outnumbered those with New England by a 7 to 1 margin.
In Week 2, the sportsbooks generally made a killing. There were several underdogs in high profile games that won outright (Tennessee over Detroit, Dallas over Washington, Los Angeles over Seattle) and there was another big upset in the Sunday night game as Minnesota beat the Green Bay Packers as +2 underdogs. Some books were right at ‘breakeven’ before the Sunday night game while others had already locked in a profit. Book managers characterized the day as somewhere between ‘good’ and ‘great’.
BREAKING DOWN THE BETS
NFL lines have a reputation as being the ‘sharpest’ of any sport and that’s evident in the results to date. In Week 1, 7 favorites cashed tickets for bettors against 9 underdogs. In Week 2, it was a perfect split–8 favorites and 8 underdogs winning against the spread. Totals results reflected a similar pattern. In Week 1, 10 games went ‘Over’ and 6 went ‘Under’. In Week 2, it was a 8-8 split between ‘Over’ and ‘Under’.
In both weeks there were enough underdogs winning outright to knock out the majority of parlays. In addition, ‘correlated parlays’ didn’t fare particularly well either. In most cases, a play on a favorite ‘correlates’ to a bet on the ‘Over’. A play on the dog ‘correlates’ to a bet on the ‘Under’. A ‘correlated parlay’ is a two team parlay that reflects this pattern. In each of the first two weeks there were enough ‘favorite/Under’ and ‘dog/Over’ results to keep sportsbooks in the black.
Prop bets and in-game wagering were likely a small loss for sportsbooks in both Week 1 and Week 2. This does require some context–while every sportsbook offers an array of prop bets for the Super Bowl there are significantly fewer books offering regular season proposition wagers. In addition, the books that offer regular season prop bets typically welcome a ‘wise guy’ clientele. Regular season props are almost exclusive to ‘sharp’ players in contrast to Super Bowl props which also capture the imagination of casual bettors. The same is true with ‘in game’ live wagering. It’s starting to attract more recreational players but the majority of ‘in game’ bettors can be characterized as ‘sharp’. ‘In game’ betting is more widely available than regular season prop bets, however, and within the next couple of years you can expect a 50/50 split between ‘sharp’ and ‘public’ play.