SYLVIE DOUGLIS, BYLINE: NPR.
(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")
ADRIAN MA, HOST:
Ever since the Supreme Court struck down a federal ban on sports betting in 2018, the industry has blown up. It's now legal in more than 30 states and according to the American Gaming Association, sportsbooks - you know, the companies that take the bets - they brought in more than $3.9 billion in revenue last year.
DARIAN WOODS, HOST:
And for people like Rufus Peabody, gambling on sports has become a livelihood.
MA: How much money are we talking about here?
RUFUS PEABODY: On a given week, I'll have, on average, about a million dollars in action.
MA: Whoa, that was way more than I was even thinking. I was like, he's going to say a high number, and then it just was much higher than that.
PEABODY: It's less sexy than it sounds. You know, it's a grind. You're trying to earn a few percent on that. If I can earn, you know, 3- to 5% on that, I'm very happy. Three to 5% on a million dollars is 30- to 50,000.
WOODS: I would not sniff at 30- to $50,000. That is a lot of money.
MA: And that's a typical week. But this past week was not a typical one for Rufus. And that is because this past weekend was Super Bowl Sunday, which meant a lot more potential winnings.
PEABODY: So the Super Bowl, in a way, is the Super Bowl for sports betting.
WOODS: This is THE INDICATOR FROM PLANET MONEY. I'm Darian Woods.
MA: And I'm Adrian Ma. Today, we're going to learn a bit about the economics and psychology of betting on the Super Bowl. Plus, we wagered some money ourself, and you'll hear how we did.
To better understand how sports betting works, we decided last week to place a wager on the Super Bowl.
WOODS: And to be clear, our betting does not constitute endorsement, but we thought it would be really useful for journalism.
MA: Yeah, for journalism. But only problem was Darian and I were both in Massachusetts last week, where sports betting is kind of illegal.
WOODS: Yeah, or, you know, properly illegal (laughter).
MA: OK, yeah, fine. But do you know where it is legal?
MA: Now, let's gamble some money.
COREY BRIDGES, BYLINE: (Laughter) Let's go.
WOODS: Virginia happens to be where THE INDICATOR's intern, Corey Bridges, lives.
MA: It's kind of come down to you, Corey, to become, like, the accessory to our greed. How do you feel about that?
BRIDGES: I mean, I feel pretty good.
MA: Do your folks know what you're learning in your internship?
BRIDGES: (Laughter) I have not spoken to them about this yet.
MA: If it's not already clear, we are sports betting newbs (ph). Like a lot of people, we saw the TV commercials and the online ads and companies advertising big wins, and we thought maybe that could be us.
WOODS: Now, professionals like Rufus Peabody have a name for people like us.
PEABODY: Squares - squares are considered recreational bettors, people that are - fall victim to sort of these psychological biases and just - they're uneducated bettors, basically.
WOODS: It is fair. We do not know what we're doing. But you know, Rufus, on the other hand, he's one of the people that you would call the sharps.
MA: That's right, the smart money.
WOODS: And for sharps, the Super Bowl is a massive opportunity 'cause it attracts a lot of squares, these unsophisticated bettors. Last week, the American Gaming Association estimated 34 million adults will have bet on this year's Super Bowl between the LA Rams and the Cincinnati Bengals.
MA: And you might think Rufus is completely psyched about the fact that so many people are betting on the Super Bowl and that sports betting in general is attracting all these people. But he's actually a bit leery.
PEABODY: It certainly created opportunities, but I think it's fraught with peril. I think you're going to see a lot of issues with responsible gaming. And if you look at all these advertisements, they're marketing the chance to become a, you know, big winner, essentially a lottery-type mentality, which, you know, is - it's dangerous.
WOODS: Rufus says that the thing to remember about these companies is that they are not in the business of taking risks. First, they take a premium on every bet, and that is called a vig.
MA: Yes, and then they do everything they can to maintain what is called balanced action. And to put it real basic, they manipulate the odds to try and make sure there's an equal amount of losing bets to cover the winning bets. And that way, they get to protect their cut.
WOODS: And these losing bets, I'm guessing, mostly means money going from the squares to the sharps.
MA: I think that is fair to say. And on top of this influx of square money, another thing that makes the Super Bowl a bonanza for professional bettors is just the sheer number of things sportsbooks are letting people bet on, right? Of course you could bet on, like, who is going to win or lose the game or what's the final score going to be, but you could also bet on a lot of stuff you might not think of.
PEABODY: Will there be a safety? Will there be three unanswered scores? What's the length of the longest reception by Tee Higgins - which, by the way, I bet under 24 1/2 yards on that.
WOODS: All right, so there's a little bit of jargon there, but if you're not an NFL watcher, basically you can bet on tiny things on the side of the game, like will the opening coin toss be heads or tails?
MA: Altogether, how many different bets are you placing on just the Super Bowl?
PEABODY: Oh, hundreds, hundreds of unique bets, for sure.
WOODS: And Rufus isn't just thinking willy-nilly, right? He spends hours every day doing research, building statistical models and poring through spreadsheets to help him decide which bets to make. And after doing this full time for over a decade, Rufus says that he can say one thing definitively about what makes him money.
PEABODY: When I watch the Super Bowl, I root for the most boring game you can imagine.
MA: Yeah, you know the ones where, like, nothing seems to happen and the scores are super low. And by contrast, Rufus says most squares tend to wager on, you know, drama.
PEABODY: The public loves betting on things to happen, and they love long-shot bets.
WOODS: So that increases the payout for Rufus, who bets against that long shot. And when that long shot doesn't happen - you know, that touchdown in the last 30 seconds does not occur - he is there to collect his winnings. And over time, he says, that's how he consistently makes money.
MA: I guess the moral of the story is bet boring.
PEABODY: Boring, yeah. Honestly, it may not be that much fun to watch, but it's much more likely to make you money.
MA: We decide to put this advice to the test ourselves. And a few days before the Super Bowl, I go to our show's editor, Kate, and I say, can I get 50 bucks? And she says, for what? And I say, for work.
BRIDGES: OK, time to bet on the Super Bowl. First bet - we're going to place - we're going to have...
WOODS: It's our intern Corey again. He has logged onto a sports betting website, and after a bit of discussion, we place a bet on wide receiver Cooper Kupp.
BRIDGES: Cooper Kupp - so right now, going to place under 105.5. I'm going to place $20 on that.
MA: Basically, betting Kupp would have a slow game, right? Nice and boring.
WOODS: And then we thought, what the heck? We're going to bet on the whole game, right?
MA: Let's go big.
WOODS: But who do we pick to win, the Rams or the Bengals?
MA: So once again, we applied a very disciplined and rigorous analysis.
If you had put an actual ram and an actual Bengal in a gladiator pit together, which would prevail? I mean, I know that rams can head-butt and stuff, but tigers, they're kind of quick and agile, and I think they could get around that. Do you have, like, a more sportsie (ph) take on this?
BRIDGES: The Rams, they are hosting the Super Bowl, actually, so they have, like, kind of like a built-in home-field advantage. But the Bengals - I feel like the Bengals have something special going on.
MA: OK, I'm going to agree with you. I say let's go with that.
BRIDGES: All right. Do you think NPR would let me keep the money (laughter) if we ended up winning something?
MA: That is a good question. I think we might have to, like, kick that up to legal or something.
WOODS: And, you know, legal says no, of course. But any case, this is a moot point because...
(SOUNDBITE OF MONTAGE)
AL MICHAELS: Pass - Kupp. Got it - touchdown.
UNIDENTIFIED PERSON #1: Congratulations. The Vince Lombardi Trophy is staying in Rams' house.
MA: Yeah, so even though our bet on Cooper Kupp - you know, our boring bet - it did pay off. Our bet on the Bengals did not. So basically, it was a wash.
WOODS: Technically, we're a little bit in the red now.
MA: I mean, yeah, OK. But, you know, we got like a slightly cheap thrill. And we also joined the millions of people who made a contribution to the bottom lines of various sports betting companies.
WOODS: And don't forget our friend, Rufus.
MA: You're welcome, Rufus.
(SOUNDBITE OF MUSIC)
UNIDENTIFIED PERSON #2: This episode of THE INDICATOR was produced by...
JAMILA HUXTABLE, BYLINE: Jamila Huxtable, Temple University. Go Owls.
UNIDENTIFIED PERSON #2: With help from...
ISAAC RODRIGUES, BYLINE: Isaac Rodriguez, Berklee College of Music.
UNIDENTIFIED PERSON #2: It was fact-checked by...
BRIDGES: Corey Bridges, the College of William and Mary.
UNIDENTIFIED PERSON #2: Our senior producer is...
VIET LE, BYLINE: Viet Le, Oberlin College.
UNIDENTIFIED PERSON #2: The editor is...
KATE CONCANNON, BYLINE: Kate Concannon, Larsen University, Canada.
UNIDENTIFIED PERSON #2: And THE INDICATOR is a production of...
UNIDENTIFIED PEOPLE: NPR.
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