Why Do Bookmakers Restrict Winning Sports Bettors?

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Having your betting account suspended because you’ve been winning is really annoying.

The practice occurs so often that it’s hardly a secret anymore.

But why do bookmakers limit winning betting accounts in the first place?

Read on to find out.

Traditional Sportsbooks 

A traditional sportsbook accepts winning players.

Now, there aren’t that many around, but if you were to name one online sportsbook that accepts winning players, chances are you’d pick Pinnacle.

They are famous for being a sharps’ book as they welcome +EV sports bettors – they even use it as a marketing technique:

Matthew Trenhaile does a great job explaining why this particular sportsbook accepts winning players in an article over at Medium, but here’s the gist.

Traditional books like Pinnacle require a high volume of trades.

The more money wagered, the more money they expect to make.

This makes sense.

That said, in order to get the required volume, sportsbooks must offer lower margins to be competitive.

Using Pinnacle again as the marker, their margins can be as low as 2% on popular markets.

For example, on the NFL:

Bet TypeIndustry Average MarginPinnacle Margin
Spread betting5%2.5%
Moneyline betting5%2.5%
Totals betting5%2.5%

This means that they must have very accurate lines.

If not, sharps will pick them off one by one.

Pinnacle is also very confident in its odds having spent a lot of money data modelling.

As such, it doesn’t make sense for them to turn away sharps and big bettors as they ensure their lines are efficient, keeping the overall proportion of +EV bettors down to the minimum.

Such books may even use winning bettors as ‘consultants’ to keep their lines 

But what about other bookmakers?

Well, they aren’t so confident, which brings us to…

Recreational Sportsbooks

Recreational sportsbooks are those that cater towards lower-staking sports bettors.

The bet sizes at recreational books are a lot smaller as a collective compared to traditional books.

This is down to two reasons:

  1. Traditional sportsbooks offer larger limits on the most popular markets;
  2. Recreational sportsbooks refuse bets from the biggest winners.

They’re known as “recreational” as they only see betting as a source of entertainment, rather than as an investment vehicle or a means to make a professional career from sports betting.

Apparently, this is more than enough to satisfy their appetite.

These sportsbooks don’t put anywhere near as much time and money into their data modelling to create efficient lines; they choose to focus their resources on marketing and bonuses instead.

Now, here’s something really important to make a note of:

While traditional books have better prices and lower margins, that doesn't strictly mean they are easier to beat.

It’s actually easier to find value in the betting lines set by recreational sportsbooks.

This can be for several reasons, including purposeless creating value to attract new customers and to show that they have the best prices in the industry.

Here’s the problem:

They will do all they can to prevent you from winning if you exploit this too often for their liking. 

They also consider price sensitive customers to practice arbitrage betting.

Given that sharp books’ efficient pricing ensures recreationals don’t make long-term profits from arb betting, you can see why recreational books would want to prevent this happening, while sharp books would welcome the activity.

But now, even customers of recreational sportsbooks are getting tired of the limits and restrictions.

The question is: do they have a point?

Let’s look at what a bet is to continue this investigation. 

What Is A Bet?

Bets have always been seen as an consensual agreement between the person offering the wager and another person accepting the wager.

Both parties agree to honor the redistribution of assets based on the outcome of the event and the agreed terms, of which are agreed before the event takes places.

In the UK, this was written into law in the Gambling Act 2005 under the contract law umbrella.

Now, you should understand that contract law allows parties to choose who they create a contract with, without any explanation needed, and whether they can void such a contract, provided they don’t “override any other rule of law that prevents enforcement on the grounds of unlawfulness.”

Unfortunately, being a +EV sports bettor is not a characteristic that has been legally identified as a way to unlawfully discriminate against.

Though it may be considered as discrimination, it is still permitted under current UK law.

That said, other countries are having more success.

Bet365 lost a two-year court case in Spain in 2019 and were ordered to reinstate the accounts of a group of customers.

In Australia, some states have introduced minimum bet guarantees that prevent sportsbooks refusing to take bets from winning players. 

This has actually proved to be quite popular with both the players and the books.

Of course, each country has its own legal system, allowing them to interpret their own opinion on what’s considered discriminatory.

There’s also different cultures to consider.

For example, gambling in the United States has a history with the mafia.

Back in the day, it would have been unheard of for a mobster to refuse a bet from a winning bettor.

In fact, it would have been utterly humiliating.

It’s possible that this heritage has an affect on current US books as they may be more inclined to honor gambling contracts, rather than just banning someone that consistently beats the line.

An Invitation To Treat

This a really important feature of contract law.

An invitation to treat – known as an invitation to bargain in the United States – describes a willingness to negotiate. 

This is different from an offer, which is a promise to be bound on specific terms.

On the other hand, an invitation to treat is just an indication that a person is willing to negotiate with a view to forming a binding contract.

In terms of sports betting, the sportsbook’s odds are an invitation to treat.

The odds attract potential bettors but the sportsbook has no obligation to accept the bettor’s money.

Betting odds are an invitation to treat

If the bettor does not make an offer, or the sportsbook doesn’t accept the bet, then no contract is created.

As long as the odds were not intending to deceive the bettor and other customers can access the same odds, then the sportsbook has the right to refuse bets from people that they consider is bad for business.

It’s this, an invitation to treat, that angers and frustrates restricted bettors.

They argue that sportsbooks should be prepared to stand by the betting lines.

This leads back to the whole recreational vs traditional bookmaker comparison: recreational books don’t have enough faith in their lines while traditional books do.

The Power Of Knowledge

Sports betting, at its core, is an information game:

However, you can only sell knowledge to someone that is willing to pay.

Assuming they have value, bettors will pay fair prices in efficient markets.

On the other hand, recreational sportsbooks don’t require knowledge to profit.

All they need to do is look at how the traditional books or exchanges are pricing their respective lines.

Easy to see what other sportsbooks are doing

So then it becomes a question of what’s the point in paying customers that beat soft numbers when you don’t need their knowledge?

It’s pointless.

After all, as we saw earlier, many recreational betting lines aren’t efficient at all.

So, in theory, they restrict the accounts to conserve profits and prevent spending on unnecessary knowledge. 

The Future

There is a stark difference in the way traditional and recreational sportsbooks operate.

That said, soft books will care about efficiency to some degree.

For example, if they just placed a random price and just restricted everyone that would beat it, well, they wouldn’t have much of a reputation any more.

Even so, both models have an interesting role to play in the future of sports betting.

With new like this in the US…

…sports bettors may fear that UK and European ways of doing things will spread to their books.

Is that so bad?

That depends on your perspective.

If you think sportsbooks should stand by their lines and take risks, or you’re a +EV sports bettor, you won’t be best pleased.

In contrast, if you don’t know to beat the line, or you just don’t care, then there’s nothing to fear.

There’s an argument to be made any changes could be detrimental to the majority of people that use sports betting for entertainment.

Forcing soft books to accept winning players may either see them create more efficient markets or make up for the loss in profits with an increase to their margins.

Either scenario would have a negative impact on most bettors, including those with an edge on the soft numbers.

In the end, the people complaining about restrictions the most may switch to complain about something worse:


The Final Word

Both models allow each other to exist.

Traditional sportsbooks are supported by the influx of money on the wrong side of an arb.

They also show what the fair price is to the rest of the market.

But at the end of the day, all that matters is where the money goes.

It seems that most bettors are satisfied with their recreational sportsbooks.

If they weren’t, surely they’d just use another, right?

Should these people change their minds, there are options out their that are ready to accept them – assuming they’re in the right jurisdiction.

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