Sun, Jul 26, 2020
Sports betting sites in New Jersey were aggressive in offering attractive odds to bettors on the opening games for Major League Baseball on Thursday, according to an analysis by Morgan Stanley analyst Tom Allen.
Baseball is the first of the major professional team sports to begin play with the NBA and NHL due to resume in about a week. Allen has written earlier that sports betting could hit record levels as major sports resume due to pent-up demand and abbreviated seasons that will magnify the importance of each game.
That projection could be panning out. A spokesman for DraftKings said the number of bets on Thursday night’s game between the New York Yankees and Washington Nationals was the highest for a baseball game in the history of DraftKings Sportsbook. The previous record was the seventh game of last year’s World Series, between the Nationals and the Houston Astros.
DraftKings (ticker: DKNG), which went public through a merger with a special purpose acquisition company in April, and FanDuel, majority owned by U.K.’s Flutter Entertainment (PDYPY), are the two leaders in the New Jersey online sports betting market.
DraftKings shares were up 15 cents Friday, at $36.36, and have doubled since late April. The company has a market value of more than $12 billion, making it one of the highest-valued gambling companies in the country.
Allen found that MLB pricing was “customer friendly” on the point, or run, spread with an “overround” of 4% against 4.3% for the National Football League season opener in 2019. The overround is a betting profit measure with 4% meaning that bettors wagered $104 and got back $100. Allen didn’t find much deviation in odds among the New Jersey operators.
By comparison, Las Vegas slot machines had a win percentage of about 8% in 2019.
“A lower number can be read as more aggressive as it represents lower gross win margins (hold) for operators, though it may lead to better volumes as it reflects a more attractive price to customers,” Allen wrote of the MLB betting lines.
New Jersey has the largest and most important online sports betting market in the country and operators have been aggressive in the state in attracting and retaining customers.
Allen also looked at the money line and over/under betting lines on the MLB games. For money line bets, the average overround was 3.4%, against 4.1% on the NFL opener and for the over/under, the average overround was 4.6% against 4.7% at the NFL opener.
There were no betting allowed on the opening ceremonial pitch in Washington by Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases. His pitch was wild and nowhere near the plate. Those kind of “prop” bets aren’t legal in New Jersey and other states.
Correction & Amplification:
The opening day game between the New York Yankees and the Washington Nationals was a record for the online sports book of DraftKings in terms of the number of bets. It was not a record in terms of the handle, or the amount bet.