On Monday night, Mike Smith made his season debut for the Edmonton Oilers. In it, he stopped 27 shots and helped the Oilers knock off the Ottawa Senators 3-1. The very next night, Mikko Koskinen tu. Ignition Casino Overall. Ignition Casino was established in 2016 by Lynton Limited, the same company behind Bodog, Bovada, and Ignition Poker.Envisioned as a US-friendly online casino, Ignition Casino has a lot to offer to its players, from game selection to a strong bonus and nice promotions.

I’ll admit right now that I am not an expert sports bettor. Yea, I can write up basic tips articles and sportsbook reviews, but I’m not the guy to go to for picks and advanced arbitrage betting strategy. However, I do know of one method of cheating that actually works. It requires no knowledge of sports betting and very little effort.

Sound too good to be true? I’ll let you decide for yourself.

Note – Cheating online sportsbooks is a good way to get yourself sued or murdered.

The Basic Scam

It’s actually pretty funny how easy it is to cheat online sportsbooks. The basic idea is that you create an affiliate account with a couple of online sportsbooks and then place a large wager on both sides of one bet. Let’s say there’s a big boxing match. You bet $20,000 on Boxer A at the first sportsbook and then $20,000 on Boxer B at the second sportsbook.

What’s going to happen here is that you will break even on your wager minus the juice. I’m not going to get into math (I hate math) so forgive me for skipping the juice calculation. Anyways, you’ll end up with $0 at one sportsbook and $40,000 at the other. You’ve broken even minus whatever the juice was. Except now you have a real solid chunk of earnings in your affiliate account.

How it Works

Affiliate programs are how people like me get paid to promote online sportsbooks. Anyone can sign up for an affiliate program for free by visiting a sportsbook and looking for a link somewhere on the page that says “affiliates.”

As an affiliate, you get paid a percentage of the losses of all people you send to that sportsbook. The percentages vary, but they are around 20-40%. So let’s say all the people at your sportsbook manage to lose a collective $100,000 on a 35% deal. You would be paid $35,000 for that month. It doesn’t always work like that, though, because your sports bettors don’t always lose money.

Anyways, what you do is sign up for an affiliate account at two different sportsbooks. Let’s just assume you get a 35% deal at both books. By now, I bet you can see where this is going.

Now you will have a friend sign up through your affiliate link so he is tagged as one of your bettors. From that point on, you will get to keep 35% of all his losses. Tell your friend to sign up for an account at both sportsbooks.

(If you friend wins money, your affiliate account goes negative but you don’t actually owe anything. You’ll just sit at a negative number until your bettors bring you back to positive again. That doesn’t really matter though, because this is just a quick scam.)

Now, you give your friend $40,000. Tell him to deposit $20,000 at each sportsbook. Now, tell your friend to pick an even money bet and wager $20,000 on each side of the bet. Let’s just say it’s a boxing match this time. Your friend will now have $20,000 on Boxer A and $20,000 on Boxer B.

After the fight concludes, your friend will have $0 at one sportsbook and about $40,000 at the other sportsbook. He has broken even. You, on the other hand, have just cleared a tidy profit. Assuming you are on a 35% deal, you will have just earned $7,000 at the sportsbook that booked his losing bet. Your other affiliate account will be negative, but that doesn’t matter.

How to Get Caught

Online sportsbooks are well aware of this scam, so proceed with caution. I don’t know every trick they use to catch people who cheat online sportsbooks, but I do know of a few. First of all, you will be caught if you try to run this scam all by yourself. Sportsbooks don’t let affiliates sign up through their own links and place bets. You have to get someone else to sign up and place the wagers.

Secondly, you will be caught if your friend lives in the same city as you. The sportsbook will find it quite suspicious if someone from the same city as you signs up and deposits twenty grand. That doesn’t happen very often.

Third, you will be caught if your friend doesn’t work his way into betting big amounts. Sportsbook s are very cautious about these things. When someone signs up and makes a large deposit then suddenly wagers it all on one bet, they are going to investigate to make sure everything is legitimate.

Fourth, you will be caught if you try to run this scam at two sportsbooks that are connected. For example, Sportsbook.ag and PlayersOnly.ag are both closely related sportsbooks. They will know instantly if you try to sign up for an account at both books.

Sportsbooks take notice of their big players and pay close attention to them. Sportsbooks want to treat their legitimate VIP players with the utmost care while also protecting themselves from cheaters. You have to make it all look as natural as possible. If you run it right, though, you just might be able to develop a long term, positive thing.

What Happens If You Get Caught

Oh boy. Don’t get caught.

You will either be in trouble with the law or you will be in trouble with the mob. That’s why I strongly recommend you don’t try this scam. That’s also why I feel just a tad leery even writing about this subject. I’m just posting this for information purposes though. Most hardcore sports bettors already know about this scam, so it’s not exactly the biggest secret in the world.

If you didn’t already know about this scam, you definitely shouldn’t try it for yourself. The problem is that if you want to get paid, you have to give them your real information… unless you can find a way to create an entirely fake identity. But if you’re smart enough to have that ability, you probably don’t need to be running sportsbook scams in the first place.

Tagged with: cheating

How to Invest in Sports Betting — 10 SPORTS BETTING STOCKS TO KNOW

by Tim Maloney / Updated June 30, 2020

Sports betting, broadly speaking, is the act of betting on the outcome of a sporting event. For most people, even those who choose not to participate in sports betting, the notion that one can bet on sports shouldn’t be that foreign. With that said, the idea that investors can now bet on sports betting is relatively new, especially for US-based investors.

Between 1992 and 2018, sports betting was illegal at the federal level in the United States (with a few exceptions, notably Nevada). In May of 2018, the US Supreme Court found that the Profession and Amateur Sports Protection Act of 1992 (PASPA) violated the 10th Amendment of the U.S. Constitution. While this didn’t legalize sports betting in the United States, it did open the door for individual states to legalize sports betting within their borders.

Thus began a process of legalization across the individual states comprising the country, with 18 states already there, 6 in the on-deck circle (including D.C.), and 24 more moving towards legalization (per ESPN as of June 9^th). It is for this reason that sports betting is increasingly relevant to investors: unregulated sports betting cannot materially impact publicly traded companies in the way that legal sports betting can!

Source: ESPN (as of June 9, 2020)

(As an aside, the US is simply one example, albeit a large one, from a broader trend towards legalization on a global basis).

In this post, we look at the investment landscape for sports betting, a category we’ve broken down into four primary categories: Sportsbooks, Casinos, Technology, and Lead Generation (plus a bonus fifth category for those who keep reading). We provide examples of publicly traded companies in each category for reference.

Disclaimer: the companies listed below are simply examples and are not recommendations to buy or sell securities.

Sportsbook

Sport Betting Online

Simply put, a sportsbook is a place where people can wager on sports. The landscape for sportsbooks has evolved fairly rapidly in recent years, driven in part by legal changes across the globe. As regulation allows, sportsbook operations continue to migrate from “brick and mortar” to online. Sportsbooks are typically structured such that bettors must risk more capital than they stand to win (i.e. bet $110 to win $100), resulting in positive gross gaming revenues. However, sportsbooks are generally less profitable to the operators than casinos, which further favor “the house”.

Below we highlight three companies that we assigned to the “sportsbook” thematic relevance category, while noting that companies in this category often have traits of other categories built in.

Flutter (FLTR LN)

Market Capitalization: $20.3 billion

Flutter Entertainment is a global sports betting and gaming operator with a portfolio of leading international brands and operations. The company's assets are allocated across four primary divisions: US (FanDuel, TVG, Betfair), Australia (SportsBet), PPB Online (Paddy Power, Betfair, Adjarabet) and PPB Retail. Flutter acquired The Stars Group, the parent company of PokerStars in 2020.

FanDuel: A well-known sports betting brand within the US, FanDuel got its start as a provider of daily fantasy sports (DFS) in the US. Using the argument that DFS is a game of skill, FanDuel and its primary competitor, DraftKings, proliferated in the 2010’s as a viable alternative to more traditional sports betting.

PaddyPower: Founded in 1988 in Dublin, PaddyPower started as a merger of three Irish bookmakers. In addition to its sportsbook, PaddyPower takes bets across other game-types in-person, over the phone, and online.

Betfair: Founded in 2000 in London, Betfair operates the world’s largest online betting exchange and was the first betting company to sponsor an English football team. Betfair listed on the London Stock Exchange prior to merging with Paddy Power to form Paddy Power Betfair in 2016.

DraftKings (DKNG)

Market Capitalization: $11.7 billion

DraftKings is a publicly traded daily fantasy and sports betting company headquartered in Boston, Massachusetts. Like Flutter, DraftKings leveraged the brand it built with consumers of DFS to move into sports betting more broadly in 2018, when it became the first legal mobile sports betting operator in the state of Jersey. The company continues to expand its digital footprint into iGaming via DraftKings Casino.

DraftKings became a publicly traded company in April of 2020 when a special-purpose acquisition company (SPAC) named Diamond Eagle Acquisition Corp. executed a reverse merger involving DraftKings and SBTech Global, a prominent sports betting technology provider.

SBTech: Founded in 2007, SBTech offers full-service sports betting and iGaming with global scale, operating in 20+ regulated markets and jurisdictions. The combination makes DraftKings the only US-listed vertically integrated sports betting company, while offering a possible channel for increased global expansion given SBTech’s footprint.

William Hill (WMH LN)

Market Capitalization: $1.5 billion

The oldest of the three companies included in this section, William Hill has offered sports betting services since it’s 1934 founding in London. Notably, gambling was not legal in Britain at the outset. Today, William Hill offers sports betting and online gaming across the globe and is America’s largest sportsbook operation by location count, serving 100+ locations across the country and growing.

In 2019, the company announced that then CEO Philip Bowcock would be replaced by former chief digital officer Ulrik Bengtsson as a part of its broader initiative to increase focus on online and international opportunities, citing the evolving US sports betting landscape as a key opportunity.

Casinos

Traditional casinos are well positioned to capitalize on the opportunity presented by the legalization of sports betting across the country. The operational experience associated with running sportsbooks historically where legal combined with the extensive network of gambling properties in states where sports betting either was recently legalized or will be legalized in short order offers a distinct advantage versus upstarts. Additionally, strong brands within gambling and existing customer bases should help cultivating a digital sports betting presence over time. Casino operators tend to earn their highest margins on table games and slots versus their sportsbooks.

Penn National (PENN)

Market Capitalization: $4.2 billion

Penn National Gaming is a diversified operator of gaming and racing properties and video gaming terminal operations. The company offers sports betting at its properties in Indiana, Iowa, Mississippi, Nevada, Pennsylvania and West Virginia, and operates an iGaming division through its subsidiary, Penn Interactive Ventures. In February 2020, the company completed the acquisition of a minority stake in Barstool Sports, a leading digital sports and media platform.

Barstool Sports: Dave Portnoy founded Barstool Sports in 2003, operating as a primarily print enterprise until 2007 when it launched on the internet. The company’s initial publication offered gambling and fantasy sports projections in the city of Boston, so suffice to say Barstool’s roots are very much in the sports betting arena. Penn plans to rebrand their retail sportsbook as the “Barstool Sportsbook” and launch an online sportsbook app in the near future.

Eldorado / Caesars (ERI / CZR)

Combined Capitalization: $12.2 billion

In June of 2019, Eldorado Resorts (NASDAQ: ERI) and Caesars Entertainment (NASDAQ: CZR) announced they would be merging to form the largest U.S. gaming company, citing “complementary national operating platforms, strong brands, strategic industry alliances, and a collective commitment to enhancing guest service and shareholder value”.

Both companies have existing sports betting properties, Eldorado with William Hill US and The Stars Group and Caesars with ties to the NFL, Turner Sports, ESPN, and DraftKings. Exactly how the combined entity manages their sportsbook over the longer term is yet to be ironed out.

The transaction is still awaiting regulatory approvals from a few major regulatory bodies, having most recently received approval from the Federal Trade Commission (FTC).

Eldorado: Founded by Don Carano in 1973, Reno-based Eldorado Resorts operates 26 properties across 12 U.S. states. Anticipating a market opportunity in sports betting, Eldorado entered into an agreement in September of 2018 to acquire 20% of William Hill US (the US-arm of the UK-based sportsbook) in exchange for market access across its portfolio. The company subsequently entered into a second sports betting partnership with The Stars Group.

Caesars:Private-equity backed Caesars Entertainment operates 34 properties across nine U.S. states, predominantly under the Harrah’s and Horseshoe brands. In addition to their U.S. operations, Caesars has a presence in five countries internationally. Perhaps more importantly, the company maintains a database of casino customers via its Caesar Rewards program, an invaluable asset as sports betting and gaming more broadly increasingly transition online.

Technology

Technology plays a crucial role in maintaining a compelling sports betting offering. To that end, there are companies that offer turn-key solutions to gaming companies interested in building and maintaining a competitive offering in the space. Betting technology are the “picks and shovels” of the industry, and may operate under long-term, B2B contracts.

GAN (GAN)

Market Capitalization: $737 million

GAN - or Game Account Network - is a global technology provider to the online gaming and sports betting industry. Founded in 2002 and listed on the London Stock Exchange in 2013, the company got its start providing technology for games-of-skill, later expanding to offering full gaming software systems and becoming an industry leader in online gaming. The company owns and operates GameSTACK™, a white-label platform for iGaming, sports betting, and virtual simulated gaming. GAN’s most notable sports betting partnership in the US is with FanDuel.

Kambi (KAMBI SS)

Market Capitalization: $684 million

Kambi provides sports betting technology, including player account management, to both online and traditional brick-and-mortar sportsbooks across the globe. The Malta-based company became publicly traded in Sweden when it was spun out of Unibet in 2014. Kambi’s client list, which used to include DraftKings prior to the merger with SBTech, includes Penn National ahead of the expected roll-out Barstool Sports sports betting roll-out.

Lead Generation

Lead generation for sports betting and iGaming is essentially what it sounds like, though the practice itself is considerably more complicated in reality. Lead generation, broadly speaking, is the practice of identifying or cultivating consumer interest in a product or service and selling this information to third parties. The practice raises both data privacy issues, as well as a host of other issues specific to sports betting and iGaming. With that said, lead generations companies operating in compliance with the relevant regulations provide a valuable service to sportsbooks and other online gaming companies.

Catena Media (CTM SS)

Market Capitalization: $140 million

Catena Media is a Malta-based lead generation company focused on online gaming. The company was founded in 2012 and expanded both organically and via acquisition over time, eventually going public in Sweden in 2016. The company believes their business model is both “scalable and applicable to many other industries”, a belief bolstered by their prior experience and decision to grow their financial services lead generation business.

Better Collective (BETCO SS)

Market Capitalization: $628 million

Danish company Better Collective is a leading sports media group that generates the majority of its revenue through affiliate marketing, a form of lead generation. The company’s US-arm utilizes a business model focused on user subscriptions, sale of picks (i.e. tips) and brand advertising. Following the recent acquisition of two U.S. based sports betting websites in 2019 (VegasInsider.com and ScoresAndOdds.com), the company is shifting its business model to the affiliate marketing strategy the parent company is better known for.

How To Hack Into A Sport Betting Site

BONUS - How to Invest in Online Gaming (iGaming)

While the focus of this piece is sports betting, we thought we’d introduce one more company from our universe and provide a bit of context on where sports betting sits within the world of online gaming. Online Gaming, or iGaming, “is having a bet on the outcome of an event or game online.” Our universe includes companies exposed to sports betting regardless of the forum, as well as companies involved in iGaming, more broadly.

Evolution Gaming Group (EVO SS)

Market Capitalization: $10.8 billion

Evolution Gaming offers Live Casino services to casinos and other gaming companies. Live Casino is a form of online gaming where the “dealer” is an actual person streaming over the internet. This differs from other forms of online gaming where a random-number generator is used to drive game-play. In June 2020, Evolution announced the takeover of NetEnt in an all-stock deal.

Summary

As highlighted above, there are various publicly-traded stocks that provide exposure to the sports betting ecosystem. Below is a summary of the ten companies we highlighted.

Selected Sports Betting Stocks

How To Hack Betting Sites

Best Online Sports Betting

For more information, please visit roundhillinvestments.com or follow us on twitter @roundhill.