ESPN Gone bad: This is how we do it
Not long after the final whistle had blown in Baltimore this past weekend, it became apparent that the trading department that governs ESPN's sportsbook had made the mother of all fu** ups. The internet is awash with many theories about why they decided that a promo with no limits on the Ravens -9.5 @ +110 was the right decision.
I'll be as clear as I can from this point onwards. Having been in the sports betting industry for the best part of 20 years, I cut my teeth on the trading floor during the 00s. Think of a world where odds were decided from the brain of a human rather than a collection of odds bounded together to produce an average as is done now. You set the odds, monitor the lines, and are entrusted with making the right decisions. I can tell you now that whoever was responsible for approving what happened this past weekend no longer has a job, and for good reason. The most plausible reason is that they took a lot of action on the Texans and took the extreme decision that they did to balance the book.
That isn't the worst decision you can make to offset liability. However, they would have seen action simply by putting themselves out of line with the market (Going -8.5 at the same price). Let's be honest here: There are many ways to have achieved their prerogative; however, they destroyed the market as a whole and put themselves in one of the worst positions I have ever seen. By the time kick-off arrived, I can guarantee that their book ran into hundreds and thousands of losses on both sides of the handicap, and to top it all, they didn't even stipulate a max bet, which is an absolute sin in this industry.
There is no reason why this happened. It created an outstanding value, arb, and if some are to be believed, around 1 million dollars worth of action on this promo alone! Nobody thought this was a lot of action (more than we've ever seen), and if they did, why was the plug not pulled? If there was that much action on the Texans' pre-promotion, could they not have hedged with numerous other books?
Even worse was to come as the Ravens ran out easy winners and also covered the handicap, meaning had ESPN been run like a pro sportsbook should be, they would have been throwing press releases left, right, and center, telling all who would listen that they laid the Texans and at the end of the game walked off into the sunset with wheelbarrows of cash due to their shrewd trading. In the end, they've attached themselves to the worst trading decision of all time and now have to go through the process of making the brand reputable again when it comes to their offering. This will never be forgotten, and for a company that has just arrived at the table, it couldn't have happened at a worse time. Whatever the losses were, it will take them considerable time to fill that gap on the finance report.
I sit here now, still open-mouthed that this was allowed to happen. It has put ESPN on the front pages for all the wrong reasons. Lastly, it is reported that the Texans/Ravens was the most-watched NFL game of all time. Let me give you one guess why…..