Why we're writing about gambling

I opened this season’s Premier League betting 5-0 over the weekend. (The Championship was down 3, so I’m not letting my big head run away with this.) Long may it continue!

Kim has been asking me to write something for a while, and it’s finally time. Please give me a minute or two of your time to explain something that may strike some of you as odd, especially if you are new to the newsletter.

The online sports betting space feels like a sea of shady touts and money-grubbing bookies. I probably cost myself money producing this weekly analysis and sharing my picks every week, and it certainly takes a lot of time to write these columns…

So Why Create Variance Betting?

I fundamentally view sports betting as a game of skill. This is true at the 2% margins I traded at Pinnacle and it’s still true at the 5% margins Vegas charges. It’s less true at bookie margins above that, and that’s where the greed comes in.

Back in 2008, we started creating in-running lines across most sports at 4% margins at Pinnacle — or less than pre-game Vegas lines — and we were winning. The product wasn’t great, but it was good, it was functional, and it was fair. In fact, we created excellent new products across a variety of different sports, and smart bettors big and small were still able to win tidy sums betting at our sportsbook.

Fast forward 17 years later and the products many of the most popular bookie produce don’t seem fair, they seem predatory. Regular lines hold* 8-9% for a lot of these bookmakers. Single-Game Parlays hold 20% or more! It’s gross. That’s not what I helped create, and it makes me angry.

*hold = how much the bookie keeps in profit on an average bet. 1% hold — which is what we had at Pinnacle on 2% margins — means for every 100$ bet, the bookie makes 1$. 9% means for every 100, they make 9. And 20% is for every 100, they make 20.

So teaching people how to avoid the predatory bullshit and win more from these bookies felt like a net good to produce in the world.

The same is true for the horrible tout space. It’s sort of always been around gambling, but the social media current climate has made it worse than ever. I actually have credibility across both gambling and football, so expressing my opinions weekly to people looking for a signal in the noise also felt like a positive.

Did you know most of these touts make money when the customers they refer lose money? That’s how affiliate deals work, and it’s not even a secret. It just aligns the extended marketing arm of the bookie with their goal of extracting revenue from people who bet. Yes, they provide a service in taking the bets, and the affiliate provides a service by sourcing new customers, but once again, the current climate makes this feel a little more gross.

We have had small affiliate deals here over the last year, and I can tell you that we have made ZERO DOLLARS from customers losses. Because accounts we referred won more money from the bookie than they lost.

That is because the analysis and bets we write up weekly at Variance Betting helped them win. And the education and advice made them smart enough to win more of their own bets too.

Technically, we are incentivised to lose, but fuck that… that’s not what we do.

I still charge for subscriptions because my time has value, and the revenue from that column helps us create the content across the rest of the company, including everything Kim, Neel, and Moe write here, and all of the production that goes into the podcasts.

I pay our talent solid wages. They are great and we want to continue to produce great things.

• I created Variance Betting to make people smarter and help them win more money.

• That was important because the bookie industry feels like it’s gotten a little too greedy compared to what I helped create, and this levels the playing field just a little.

• Last year the bets I shared returned 78% profits on the starting bankroll.
  
  (Example: If you started with $100 and got the same numbers I did, you would have ended the year with $178).
  
  All of those wagers were published ahead of time here or publicly shared before kickoffs on social media.

If you don’t like sports betting at all, that’s totally cool — you still get to appreciate everything else we do around here.

But it’s intrinsic to the way I look at the sport and at transfers, which is no different than how people like Tony Bloom view it either, and it’s not going away any time soon either. You can sign up for Variance Betting and learn how to avoid bad bets here.

—TK