David Hill and Geoff Bennett discuss the business of sports betting on 'Settle In'

William Brangham:

March Madness is in full swing, and it's that time of year when even those of us not inclined to gamble might just toss a few dollars into the office pool hoping to just pick up the right upset and land a big payout.

For our podcast "Settle In," Geoff Bennett recently spoke with journalist and author David Hill. He's extensively covered sports betting for "Rolling Stone" and in his upcoming book.

Here's a brief excerpt.

Geoff Bennett:

One thing I know that a lot of casual batters don't realize is that, if you win too consistently, that sportsbooks can really shut you out.

Tell me tell me more about that.

David Hill, American Gambler Substack:

This is something that American gamblers are growing more and more aware of as we see the expansion of sports betting in America, particularly with the types of companies that are controlling the market right now, what some people would call recreational sportsbooks.

And that's that the larger sportsbooks in America like FanDuel, DraftKings, MGM, Caesars, that they will -- if a player shows any real propensity to win, that they're adept at understanding how to win at gambling, they will limit their bets, that they will limit those folks to betting small amounts of money to protect their own liabilities against those types of bettors.

And this shocks some people. I mean, originally, the bettors who were getting limited in the early days of sports betting sort of growing in the United States, were professionals, people that bet pretty large sums of money and were winning large sums of money.

But, at this point, it's pretty scattershot. I mean, I think a lot of these sportsbooks are painting with a pretty wide brush. And we're seeing that a lot of gamblers who don't bet very large amounts of money, myself included, have found that they have been limited by sportsbooks, down to where they can only bet a penny on a game or something like that, because they maybe won too much money.

Or even -- you don't even have to really win a lot of money. You just have to show that you're able to win at a certain type of bet or a certain type of sport over time.

Geoff Bennett:

Well, tell me about your experience with this.

David Hill:

My experience is that I'm not somebody who bets lots of money. I'm somebody who, if I bet a couple hundred bucks on a game, that was a pretty decent size bet for me.

And I found that in a number of sportsbooks, my bets would -- over time got limited down to where I couldn't bet $5, $10. And sometimes, in some cases, I couldn't bet more than a penny simply because I was winning. I was betting on things that the sportsbook maybe felt like they didn't have as strong of a model or as good of a sense of what the price should be that I did.

And that's essentially what sportsbooks are doing. They're profiling their players to say, if this player seems to understand the bet better than we do, we just won't take their bet. But if the player seems to be someone who is just sort of betting foolishly and is likely to lose, we will let them bet as much as they want.

In fact, the more foolish this bettor looks, the higher limit we will give them. And I think that these two things in combination is a real problem, The fact that you limit people who win, but you will expand the limits for people who lose is a bad recipe.

In Europe, they call this the ban-or-bankrupt model, that you ban anybody that's going to win over time and then you bankrupt all the players who you have identified are never going to win.

William Brangham:

You can watch that full conversation and all our episodes of "Settle In" on YouTube or wherever you get your podcasts.