Sports Betting World is funded by one group of people and the other group of people takes a profit.
We must understand, that 97% of all people lose on actual sports betting and they just bring money to the online sports betting World. A small % of people and their businesses take a huge % of the money invested in betting.
We will answer these questions:
- Who are participants of the online sports betting world and how you can recognize them?
- How do they make money and what is the strategy behind their online sports betting business?
- What is their risk?
- Do they actually make money from sports betting?
- Do they benefit from the betting world or not?
There are eleven main groups of people or services that are involved in the online sports betting world:
Table of contents
Use the links bellow to jump to each section
Table of contents
We put them in 2 simple categories. Those who benefit from sports betting and those who don’t benefit from sports betting. We also check what is their risk of being involved in the betting industry.
- WINNERS = They profit or somehow benefit from online sports betting World
- LOSERS = They lose in the sports betting world and they fund all other groups
Sportsbooks, bookmakers, betting sites, betting exchanges,…
Sportsbooks, online betting sites, betting exchanges, and bookmakers are services and companies that take bets.
Those are the biggest players in the online sports betting world and they take the biggest piece of the cake.
The main idea of these companies is:
- create hype, communities, and opportunities for bettors (so they can bet on their favorite sports and leagues)
- offering non-fair odds (their advantage with the margins, juice, or vig)
- balancing odds with the intention to make a profit to their advantage
- building the liquidity, bringing more players with great marketing
Many sports bettors think that they pick a sport, but in reality, they picked a market that was selected by bookmakers for them. Online sports betting sites know exactly how an average sports bettor thinks and they offer them what they want.
They have time, they have marketing, they have experts and they have the advantage. They don’t care for the tiny 3% that win, because they know the other 97% will lose.
Bookmakers can lose against a single smart bettor, but this is a tiny loss because overall, they always win against the whole group of sports bettors.
- Bookmakers = Big winners of sports betting World
- How they are funded: from people who bet on sports
- Online sports betting sites definitely benefit from betting industry
People who don’t actually bet on sports but work in the betting industry industry
Online Sports Betting World is a huge machine. This is why all these online sports betting companies must hire other smart people and betting experts, who work for them.
Developers, data scientists, marketers, mathematicians, betting experts… and many others are needed to run the online sports betting world.
This is the group of people that are not involved directly in betting (they don’t place wagers). They just do their job and are paid by companies that make a profit in online sports betting.
Every time you see online sports betting sponsors on a match in any professional League, every time when you see nice sportsbook banner with their bonuses and promo codes, every time you visit any gambling sites with great design,… this was all created by people who were hired for this purpose. To attract more sports bettors, who don’t have betting skills, so they can make big money.
These people are directly paid from the money that was lost from sports bettors all over the world.
THEY ARE WINNERS (BENEFIT) – They benefit from the betting World.
Affiliates – Sports betting affiliate programs
Affiliate marketing is the process of earning a commission by promoting online sports betting sites.
US affiliate marketing spending increases annually by 10.1% and it’s expected to reach $6.8 billion by 2020 (Source: Digital Global).
Usually, when we see sites, that promote sportsbooks or their banners, those are the sites, that take a commission from bettors. Typically, they provide some info about bookmakers, reviews and they even give some exclusive bonuses.
Their main focus is marketing, SEO, and copywriting in the betting industry. They understand perfectly gambler mentality and that most bettors are looking for quick money, shortcuts, and betting tips.
Betting commissions can be a share of profits (% of sports bettors’ loss) or based on turnover. Bigger sites are also paid by bookmakers just for marketing and promoting them on their sites.
Sports betting affiliate marketing is such a huge business and a community, that they even run their own conferences and seminars on how to run successful sites, attract players, the psychology of gambling, and more. In 2016 there was an article about Paruyr Shahbazyan, who makes millions just by sending players to bookmakers sites.
- Risk level = none (Affiliates will always make money in terms of actual betting. No risk.)
- Reward = big to huge
- They are winners.
- How they are funded: indirectly from people who bet on sports
Online sports betting portals, forums and gambling chat groups
Beginner sports bettors usually start looking for betting information on the internet.
They usually find sites like Covers, Bettingadvice, SBR, Vegasinsider, and many similar.
These sites are very interesting for new bettors because they get quick gambling info, some very valuable info too, they can connect with other sports bettors, they can even share their sports picks and they can have a great time there because they are directly in the betting communities.
At first look, these sites look like free betting sites, but there is of course a strategy behind their business and you should understand how this works.
Once you run a site like Covers, you must hire a lot of people (developers, designers, copywriters, sports handicappers,…) and these people must be paid somehow. They are all paid by their visitors, who are there for “free”.
They are either paid directly (selling sports picks/bet services) or indirectly (for example with Covers site):
How does this work in reality?
Some random sports bettor comes to Covers…
- He starts reading the content, shares his picks, has fun, and connects with other gamblers…
- He also visits recommended bookmakers/sportsbooks, because they are there.
- These sportsbooks are sponsors of such sites (directly or as affiliates)
- He loses money (because there is a big chance he is not a skilled bettor)
- Once he loses, bookmakers share part of the profit with Covers
Such big betting portals know that most bettors are not skilled bettors. They also know that most sports gamblers are there just to follow some sports picks and bet on sports. Most of them will lose in the long run.
The strategy is simple – bring as many as possible online sports gamblers to the site, create interesting content (not necessarily the most valuable betting content) so they stay longer on the site, sign up with bookmakers, and later share profits with bookmakers.
Sports betting communities are bigger and bigger because more and more people look at how to get winning sports picks. With the internet and user-friendly apps (FB, Twitter, Instagram, telegram,…) it is even easier to connect all those bettors. Once you have community, you can either sell your product or take a commission from bookmakers.
My perspective – Is this wrong?
I don’t see anything wrong if such big portals recommend reliable bookmakers and give an honest opinion about the best online sportsbooks. At the end of the day, if you bet you should find a betting site that can be trusted. And most of them share honest info about bookmakers. Many betting blogs and betting-related sites use bookmakers as sponsors because this is another income stream and it can support their work.
Nothing wrong with this. The problem is not this, but something else.
Most bettors are involved in sports betting just because of fun and money. Anyone who thinks that he will win in such a tough market, where only 3% win, just by following picks or putting in very little effort, is naive. It is up to every single bettor if he learns betting skills or he just takes betting as fun. And these visitors don’t see this. They are focusing on the sports picks – and following sports betting picks is direct action on betting sites and the money for bookmakers.
The only small problem I see here is…
…is that such sites compete against each other in SEO and marketing, which makes sense, because once you have many people hired and if they are paid by bookmakers (read: by bettors who lose), then you must bring more and more of them every single month. At the same time, they don’t educate them how to win, because that wouldn’t be a profitable business model.
The result of this competition between big betting portals and forums is many times very bad content and information that is not useful for sports bettors (shady betting analysis, bad bet predictions, outdated and wrong betting theories, worthless game opinions, picks based on gut feeling, useless betting trends,…).
Any professional sports handicapper can recognize that many articles are not written by true betting experts, but by people who were hired as copywriters or SEO experts. The only goal was to find what “dumb gamblers” are looking for on google and how to rank higher. This means more players, this means more losers, this means more profit sharing with bookmakers.
Despite they look free… no site is completely FREE.
Some of them offer also sports picks services, but the main idea of these “free” sites is to create betting communities and redirect players to bookmakers.
- Risk level = none
- Reward = good
- They are winners.
- How they are funded: indirectly from people who bet on sports and click on their affiliate links and banners. Or directly from selling their services (sports picks,…)
THESE SITES ARE WINNERS (BENEFIT) – They benefit from the betting World.
Sports Picks Monitoring Sites
Selling sports betting picks and other bet advice services is growing. Because of this so-called monitoring sites were born.
They try to monitor sports picks from betting picks services and paid sports handicappers.
How do they make money?
- Sell picks subscriptions and share the profit with tipsters
- Sponsorship from sportsbooks (affiliate or agreement)
- Charging tipsters for their service
They charge handicappers and pick services to monitor their picks. And this money comes indirectly from sports bettors (again).
Some betting pick monitoring sites sell sports picks too. One of the problems with those sites is that we are never sure if they are honest. There were many complaints in the past that they work together with sports handicappers.
So, if sports handicapper pays them more, they would rank him higher and manipulate the results. Not to mention all other manipulation with bookmakers odds, yield, not tracking clv,… Monitoring service is simply an imperfect service because of these reasons.
- Risk level = none
- Reward = small to medium
- How they are funded: indirectly from people who bet on sports.
They benefit from the online sports betting world – they are winners
Sports Handicappers, Touts, Tipsters and Betting Services
Sports handicappers or touts as we like to say, sell sports betting picks via their online sports betting sites or presence on social media. Sports bettors pay for their picks.
Those are the services or sites, that sell so-called betting predictions and sports picks. Most popular are betting services and sports handicappers, who create followers and sell sports picks subscriptions. This business is bigger and bigger and it is a huge opportunity for many.
In general, we can divide them into two groups.
The first group are very good marketers and their business model is based on marketing and creating hype.
We could say, that they use Tout’s Pareto principle – 80/20. In other words, 80% of their work is based on marketing. 20% is based on actual betting analysis, researching the market, and knowledge.
They are usually betting portals that sell sports picks, social media handicappers or any other variation of sports handicappers who sell picks.
The problem with this group is that many of them are just a product of survivorship bias and not actually skilled bettors. After first lucky success, they start usually selling picks. Because they don’t have the edge on the actual betting market, the betting results start dropping with a bigger sample size. They figure out that selling picks is much easier than actual betting. This is why they turn into marketers. Many of them stay successful marketing sports handicappers for many years and they never show detailed results or betting knowledge.
How can we recognize them?
Every time when so-called “betting expert” is creating hype based on a small sample size of bets (“We are on a hot run of 37-14 in last 51 games”, “boom boom winners yesterday”,…) it is almost always marketing.
If we understand that the sports betting market is similar to the financial market and that the odds are basically prices that we pay, then we must also understand that there is no such term as a “winner”.
Criticism of selling picks
Buying sports picks usually ends very badly and there are a couple of reasons for that:
- Most sports handicappers are not skilled bettors, they just focus on short-term results and create marketing hype. (Talk about results should start with the results on 1000+ bets, not before that)
- Most sports handicappers that sell picks don’t make money by actual betting, but by selling sports picks
- Anyone can sell picks, but not many of them show a level of knowledge and skill.
- On the other side we also have a huge problem, because sports gamblers who buy these sports picks don’t have enough knowledge or experience to identify who are skilled sports handicappers.
- In dynamic sports betting market, where the value, beating the closing line and time of the bet are very important, following picks or even buying picks almost makes no sense anymore.
- Always judge sports bettors based on their knowledge. Not by their results. Selling picks is in most cases pure marketing and a much easier task, than being a +EV bettor.
Most sports handicappers that sell picks don’t make money by actual betting, but many of them benefit from online betting World and selling picks.
- Risk level = Small to none
- Reward = medium to big
- They are winners.
- How they are funded: directly from people who bet on sports and pay for their service
Not everything is so dark of course, because there is also tiny group of people, which are in the second group among such betting services.
They are honest,
they show a good level of knowledge,
they provide betting projections and calculated probabilities based on sports betting models (which are crucial),
they talk honestly about all problems of the sports betting World and they also show detailed results including closing line value.
They spend much more time for actual betting and researching than just marketing.
Most of those in the second group are unattractive, and boring and they don’t create enough illusion and hope for most gamblers out there. Just imagine one betting picks follower, who dreams about living from sports betting, making a lot of money and then this group of people told him the ugly truth about the online sports betting world.
The fact that sports betting is much harder than most people think is not really attractive.
To make a quick conclusion about both groups that sell sports picks…
The whole idea of paying and following sports picks (free too) is imperfect and is almost not possible to find anyone, with such an edge where paying for the service, plus following his sports betting tips (and dropping odds) can still be profitable. Anyone who doesn’t understand this will be disappointed a the very end making a summary of his betting career.
Most of these services (no matter if good or bad) are just a waste of time and money, selling something that can be hardly achieved by anyone. Not to blame anyone. The model of selling sports picks is simply too bad for an average sports bettor without a deeper understanding of how the whole thing works (probabilities, odds, market efficiency,…)
- Risk level = small
- Reward = small to medium
- They are winners.
- How they are funded: directly from people who bet on sports and pay for their service and some part of their betting winnings (profit from betting on sports)
Those are professional sports bettors or semi-pro bettors that bet for themselves and create extra income with betting in their life. Usually, those are very smart people, who usually probably have a strong background in math, and statistics,… (after all sports betting has more in common with finance and statistics than with sports alone).
The term “sharp” is used too many times in the sports betting world from the people who are creating a wrong illusion for foolish people.
Anyone can tell that he is professional, sharp or that he is a +EV bettor, but at the very end, bookmakers are the only ones who really see who took their money.
What do bookmakers say about them?
Pinnacle’s Head of Trading Marco Blume has made it clear that a reliable indicator of whether a bettor holds long-term profitable expected value – that is to say they are sharp – is whether they can beat the closing line.
Sharp bettors are sports bettors that simply outsmart the market. Bookmakers will pay them their profits. And from all the losses that everyone else (losing bettors) brings to the market, this is just a tiny amount of money.
After all, bookmakers need them too, because they can balance the price, learn from them and create an efficient market.
- Risk level = medium to big
- Reward = medium
- They are winners, if they work hard and smartly re-invest money to lower risk business as well.
- How they are funded: directly from bookmakers
Social media Sports Handicappers
In the last 10 years, social media becomes a huge marketing beast. Not only from sports betting perspective, but in all other businesses. Social media becomes the main tool for marketing and businesses to build their brand.
People spend less and less time reading books, reading articles, or doing any other “hard work” and they find much more pleasure in social media apps that are easily accessible with the phone. I like to say that we turned from readers to scrollers.
Those flashy things on monitors create a lot of pleasure. People create wrong illusions about many things and their brains become addicted to the things they don’t have but want to have.
All big and famous social media sports handicappers understand this well.
If you have a million followers and you can sell anything. It’s a numbers game in marketing. This is why such sports handicappers sell millions of picks, despite they don’t have an advantage in the sports betting market. We never see their results, we never see their betting models, analysis or any “true” sports betting content type.
Those handicappers (like many above – portals, tipsters,…) use words like “guaranteed sports picks”, “winners”, “boom boom”, “whale plays”,… just to create the perfect environment for dopamine.
They even create false hope of passive income, which sports betting is NOT.
Hope and pleasure are what people buy. This is the phenomenon of modern society, which brings on one side a lot of wealth for some people and a lot of pain by all kinds of followers.
Anyone whose only source of information is a mobile phone with all the social media like Instagram, Facebook, telegram, discord, etc… has a very small chance to win by actual betting on sports.
- Risk level = small to none
- Reward = small to big (depends on marketing skills, not betting skills)
- They are winners because they take some money betting world
- How they are funded: directly from bettors – followers
Most of the groups above are not scams. Sports tipsters, sports handicappers, bet portals, even most of the social media handicappers are not scams.
Many of them were simply lucky and are the product of survivorship bias. Some of them truly believe they are skilled bettors, despite they are not. They just need more bets to make and more time to see. I don’t blame them.
But there are also true scams. Gambling frauds that intentionally steal money from people.
Those are people who lie, who sell something that doesn’t exist. Their intention is to steal money from people and then run away with fake accounts.
In the last 20 years, I saw a couple of such scams, but with social media, those people have a couple of tools now that makes their job easier:
- They can access to large number of people with fake social media accounts
- They also know that more and more people are affected by illusion and dopamine and with good marketing you can sell them anything.
- There were couple of exposures about those scams, I even saw some journalists who made a deeper research…
So how these gambling frauds work?
The pattern I saw is that these scams usually come from poor countries, where instinct for survival is much bigger and many of them would do anything to survive and make that extra money. Some of them contacted me through social media too. They all struggle with money and this is the last hope.
Scamdicappers usually offer:
- Fixed games
- Sure games
- Guaranteed games
- Games – No Chance to lose
- Winning Systems that win 97-98% of times
The process is very interesting…
First they build a group of followers,
mostly on social media and then they say they have a fixed game and the 100% winner. They also say that they will send them this winner for free, so they prove that they are not scams.
The next step… they split this group of followers into 2 (it can be more) groups. And let’s say that we have a baseball game between Boston and Yankees for our explanation.
They will send messages with BOSTON bet to one group and YANKEES bet to the second group.
One team wins (of course), so one group is convinced that these scamdicappers have “winners” and the second group lose.
Then they block the second group.
But they still have the first group of people, who got “the winner”.
Then they tell them that they have another “100% sure winner” but this is one not free anymore.
If they want to get this “winning sports pick”, now they need to pay $100 for example. Of course, those followers who created the wrong illusion about them will pay, because they are sure about the next winner.
Scammers simply split this group into another 2 groups again and send them different bets. And they can do this until they are out of people. Then they can close accounts and create a new one.
The whole thing is ridiculous. But this is how they do it and it is a combination of naiveness of people, social media and false hope, pleasure, and dopamine.
- Risk level = small to none
- Reward = small
- They are still some kind of winners, because they always find some foolish people and take them some money
- How they are funded: directly from bettors – followers
Who Are Losers?
Those are people who bring money into the sports betting World. They don’t benefit from online sports betting – they bring money and all other participants are paid by them)
The word “losers” is not there to describe their characteristics or even if they are wealthy in their life.
Many of them run successful businesses, they are successful family people, and students,… but we want to see who are the people, who bring the money to the market and how this market which is expected to reach more than $90 billion USD in the next years is basically funded.
The definition is very simple – their lifetime balance against the betting market is negative.
This is why we use term “losers” for the purpose of this explanation.
The obvious question is…
Who are those people who pay bookmakers, handicappers, tipsters, affiliate marketers, betting portals,…and even scams.
A winning month in sports betting is not a success if you keep betting and then die with a negative balance. I hope we all agree.
This is why the whole thing about making hype about the last 100 games, last day, last bet,… is crazy. It is pure marketing, wrong illusion, wrong celebrating or even wrong panic. Not many people see the bigger picture.
Most bettors are happy that they had one positive season, but they keep betting and their life balance is negative. In the very end, they bring more money to the market than the market brings them.
First, we divided “losers” into three groups (recreational bettors, gamblers, and followers), but because many sports picks followers are also sports gamblers in most cases, I think classification into two groups is completely ok.
Recreational sports bettors
Recreational sports bettors are those who bet for fun. They are probably the most sympathetic group here.
They control their money, they bet only what they can afford to lose. They don’t read betting articles, they don’t follow or pay other handicappers for advice. They are not even in sports betting groups, sports betting chat forums. They are more sports fans, who just have fun with their friends and don’t make a big deal of it.
They simply bet their games and then brag about their winnings with their friends. They know they will not win on the long run, but the pleasure they get from betting on sports is worth the money. After all, people spend money for different things, excitement and pleasure.
Why not sports betting?
They fund the market. At least one piece.
The only difference between them and the group below (followers and gamblers) is that they control their money and they only pay bookmakers. No one else.
Sports picks followers and gamblers
This is the group of people who basically fund everyone and makes sports betting huge.
They are the main reason why the betting market will reach more than $90 billion USD in the next years. They are the reason why so many sports handicappers, services, marketing experts, profitable sharp bettors, developers, and all others that are involved in the betting world have salaries.
They are also the reason why winning bettors are paid by bookmakers. If online sportsbooks would not get the money from them, they would be out of business. Because of all that, they are the most vulnerable group in online sports betting.
The question is why?
Most of those bettors/followers/gamblers (I will call them followers) are heavily affected by false hope, dopamine, which is created through social media and they are connecting with other similar followers.
With all this, they start creating this hope and looking for get-rich-quick schemes, which sports picks basically are. The human mindset is set so, that we always look for shortcuts and how to minimize the amount of money/time put into something, but at the same time, we profit the most.
“Just give the winning picks and say how much I need to pay you. I don’t want to learn to bet, I don’t want to deal with betting analytics,… I just want the Money”
Isn’t this the same mindset of average sports picks followers?
Sports handicappers (most of them don’t have results history and the edge anyway) push the button on their brain system with amazing marketing:
- “Join our winning team – we won yesterday again”
- “Joe Sharp is 46-17 in last 63 games and is the hottest handicapper out there. Join now and start winning”
- “Guaranteed pick = $75″
This is what is promised these days through social media or on some betting sites and portals. And this article will not change this, because most followers will not read the whole article anyway and will not get this message.
On the other side, I will probably get a lot of hate from people whose business is based on marketing…and their survival depends on those followers.
However, if we go back to the topic… those followers bring the most money into the betting World, because of a couple of reasons:
- They bet without any understanding about the sports betting market, about bet probabilities and with no edge
- They focus always on sports picks. If you’re actively looking for betting picks and ask yourself all the time what other people bet (no matter if paid or free) – you are a follower. Those who think they are following successfully don’t have big enough sample size or are just product of survivorship bias and it is only a matter of time when they start losing. By constantly following sports picks and looking how other people “win” (most of them don’t win anyway) you motivate your brains even more to do irrational things. But the knowledge level and the actions of followers are almost never aligned with their dreams. You can not make millions by spending 10 minutes on your mobile phone as a follower per day and following other people’s hard work (no matter which business).
- Their brains are always targeted by huge marketing beast from all sides (bookmakers, handicapping services, affiliate marketing,…)
- They act like most followers who fund rich people (celebrities, businesses,…), that means that they fill their brains with quick hope and pleasure on social media or other groups. Either by looking at someone who is successful or in our case “had so-called winning betting tips”.
Some sports handicappers will tell you that the only thing you need to win is to open their email (and of course pay them). This makes no sense of course, but once you are affected by marketing and dopamine even the smartest guys fall.
Many of them become addictive gamblers, which is a very dangerous thing.
We can see the first signs of addictiveness in social groups when followers obsessively look for sports picks when they start acting very emotionally no matter if they win or lose. Once you can not sleep because of sports betting it is usually too late.
They also never see the big picture, which must be basically a “lifetime record”, but quick and short-term results, which is typical of dopamine, pleasure and addiction.
Recreational bettors from the group above (#1 group of losers) who bet for themselves and are not affected by social groups, forums, and all kinds of betting picks are also not affected by false hope and dopamine like this group.
This is why true “problem gamblers” are so-called followers. Not only that they fund bookmakers, but they also fund portals, social media groups, and handicappers,…
Followers are the main source for all participants of the sports betting world.
If you become a winning bettor and if your lifetime record is positive, you were paid by recreational bettors and followers. I hope we all understand this now.
You didn’t beat bookmakers.
They needed you and you are just part of the equation.
Bookmakers are paid by both recreational bettors and followers/gamblers
All other participants are funded by followers only. Followers will build most of the $90 billion markets in the next few years.
The average follower will always look for sports picks, because they represent the dream of quick success, where you don’t need to do anything, just open an email. Most of them don’t see any passion in math, statistics, or investing combined with sports. Most of them like the dream about a better life and quick money. They don’t love betting.
Whole betting communities were built on sports picks and followers.
But who can judge them or who can blame them for that?
At the very end, the foolish average Joes get what the foolish average Joes deserve.
They fund the whole betting World.