With only a few of days left until the New England Patriots and Los Angeles Rams take the field for Super Bowl LIII, I have a feeling that sportsbook operators are probably a little more nervous than usual. Given the enormous betting handle on the Super Bowl, a bad result can be disastrous for books. And storm clouds are brewing for this year’s contest.
After opening at close to pick’em, New England is now a -2.5 (-110) point favorite at 12 Las Vegas sportsbooks and -3 (EVEN) at two others (including my personal favorite, the Golden Nugget), according to Dave Tuley of VSIN. While there is still a significant amount of action to come as kickoff approaches, it has become clear that public and professional bettors are aligned, with a vast majority of early money showing up for the Patriots.
Betting update from @CGTechnology_
Spread – 70% of the bets and 79% of the money on New England
Moneyline – 62% of the bets on LA but but 77% of the money on New England
Total – 61% of the bets on over, 67% of the money on under
— Jason Simbal (@jsimbal) January 30, 2019
“I’ve been booking Super Bowls for many many years, and I’ve never seen such a lopsided handle as we have now,” said Tony Miller, Sportsbook Director at the Golden Nugget. “For people who say they are tired of the Patriots and Brady, they sure can’t stop betting them.”
Seeing such a staggering imbalance in a heavily bet game, most novice bettors would simply assume that the sportsbooks will move the line higher in favor of New England until the action is balanced, and simply collect the juice. But it’s not that simple this year.
When the house takes a position
It’s a common misconception amongst the betting public that books are hoping to achieve balanced action on every game in order to eliminate all risk to the house and win the juice. Instead, there are quite a few instances where the house takes a discernible side on a game or event.
One recent example of this was the 2018 fight between Floyd Mayweather and Conor McGregor, where the books pocketed an enormous win after taking a significant position on Mayweather, while the public emptied their wallets on the heavy underdog, and to sharper bettors, the clearly overmatched — in a boxing ring — McGregor.
However, the Super Bowl is one of the rare instances where books ultimately want (and need) more balanced action due to the sheer volume of dollars wagered on the game and the negative financial impact of being on the losing side.
Walking through any random casino, you are likely to hear the classic saying, “This town wasn’t built by letting people win.” Sports betting is no exception, as the books have only lost twice in the history of the Super Bowl: XLII for Giants-Patriots Part I in 2008 and XXIX in 1995 between the heavily-favored San Francisco 49ers and San Diego Chargers. The books narrowly escaped with a $1.17 million win last year, thanks to prop bets, when the Eagles upset the Patriots in LII.
This year, a perceived “wrong” opening line (pick’em or NE +1) that quickly steamed to -2.5/-3 created a dangerous scenario with the game hovering around the “key number” (i.e. a common margin of victory) of 3 points. Veteran bettors know that the books fight tooth and nail to avoid moving a line through a key number in any contest, as the results can conceivably result in a big loss for the house… with an important caveat that akin to last year’s Super Bowl tilt when Eagles spread and moneyline hits were mitigated by wins on prop bets, producing a narrow profit on 0.7 percent of total handle. But the exposure this year, ironically on the Patriots this time around, appears to be much greater.
Recipes for disaster
To better explain the potential impact of the point spread outcome, let’s look at a few scenarios for Super Bowl LIII, based upon early and predicted future betting action.
According to the American Gaming Association, a total of $158.5 million was legally bet in Nevada on the Super Bowl in 2018.
Nationwide legal betting handle is expected to rise to $300 million this year, thanks to new jurisdictions including New Jersey and Pennsylvania. Obviously handle and exposure will vary from book to book. Assuming that approximately $125 million is wagered on the point spread alone, I am projecting the following action breakdown:
- 50% of total dollars ($62.5 million) on New England at pick’em to NE -2.5,
- 20% of total dollars ($25 million) on New England at -3,
- 10% of total dollars ($12.5 million) on Los Angeles at pick’em to LA +2.5, and
- 20% of total dollars ($25.0 million) on Los Angeles +3.
These percentages mean around $87.5 million (70%) will be riding on the Patriots and $37.5 million (30%) backing the underdog Rams. It’s important to note that given the early and semi-recent available betting information, most of the Rams money will likely come in at +3.
- New England wins by 4 points or more: The books would lose about $51 million (after adjustments for juice), losing all bets on NE and winning all bets on LA.
- New England wins by exactly 3 points: Per Sports Insights, 18.69% of games are decided by exactly 3 points. The books lose every bet on NE up to -2.5, win bets on L.A. up to +2.5 and push all bets on NE -3, LA +3. This would result in a potential loss of about $50 million.
- New England wins by 1 or 2 points: The books push all bets at the winning number, lose every bet on New England at pick’em, NE up to -1.5 (if NE wins by 2) and LA at +2 or +3 (if LA loses by 2) and win bets on NE -2.5 or higher. The books would likely achieve a small win or break even in this scenario. This all assumes that the books moved the line quickly before any significant action was taken at the opening and there is not massive exposure at pick’em or NE -1.
- Los Angeles wins: The books will likely have one of the best (if not the best) results on a side in history, netting a win of approximately $51 million on the point spread alone.
After seeing that the books face staggering losses on point spread wagers in two of the scenarios above, some might think that the sportsbooks should simply move the line to New England -3.5 or higher to try to encourage balanced action. While such a move has the potential to mitigate certain losses above, the possibility would loom for the books to get “middled” (losing both sides):
- New England wins by exactly 3 points: The same scenario above PLUS the books would lose all bets on LA +3.5 and ONLY win bets on NE -3.5. This would result in a loss of about $50 million on the Patriots and an additional loss in the neighborhood of $25-30 million on the Rams +3.5, netting a total loss between $75-80 million.
It has become clear that Sunday will be a huge decision for sportsbooks across the country with the key number of 3 serving as a brick wall prohibiting balanced action.
It’s possible the sportsbooks might still eke out a very narrow win like last year, even if the point spread betting goes unfavorably. But there may very well be a rare Super Bowl net loss in the works, and some tears shed on the other side of the counter with a Patriots win by 3 or more. If the Rams somehow pull it off, be on the lookout for sportsbook directors running naked (cover your eyes) up and down the Las Vegas Strip.
New England 27, Los Angeles 17
Tails (it never fails)
Sports Handle contributor Barry McFadden is a co-founding partner of Greathouse Holloway McFadden PLLC in Houston, Texas and has significant experience representing clients in the gaming and sports betting industry. In addition to his legal practice, Barry and a partner finished in 3rd place in the Westgate Las Vegas NFL SuperContest in 2015, besting nearly 1,800 other entrants for a payday of $181,335. Follow him on Twitter @fade_material.