Since the United States Supreme Court struck down a federal ban on sports betting in 2018, it has grown into a legal multibillion-dollar industry for professionals and amateurs alike. Sports betting is now legal in more than 30 states, with Oregon joining the list in 2019.
Outside of purchasing a scratch-it lottery ticket, I had never gambled before this article and possessed little sports knowledge. But I do love podcasts and, earlier this year, NPR’s show The Indicator did a show on the economics behind betting on the Superbowl. The host interviewed a professional sports better and placed a bet, which they lost. My toxic personal trait is thinking I can do better than professionals, and it sounded like easy money, so I decided to use my hard-earned Pioneer Log money to place a $10 bet.
Grace Elkhal ’24, the Economics Student Academic Affairs Board representative, does not gamble, but she does utilize larger trends and economic theory to make choices in her everyday life.
“Once you understand economic theory, at the micro or even macro level, it makes your decisions in life much easier,” Elkhal said. “When you really think about everything economically, it boils our complexity as humans and our behavior really down to a science.”
With my $10 in hand, the first step in my sports betting journey was to figure out what team to bet on. Betting on collegiate games is not legal on the Draftkings Sportsbook & Casino app, so I could not bet on a Lewis & Clark game. This led me to the Portland Trail Blazers, or rather, to consider betting against them. With most of their current roster being either injured or traded, the Trail Blazers have lost more games than they have won in 2022.
It seemed simple: All I would have to do is bet against the Blazers to win big, but I still had some questions.
So, I was off to learn some economic theory. Cliff Bekar, associate professor of economics, describes himself as being “incredibly risk-averse.” While he himself does not bet, he was able to give me some general economics advice and explain to me how sports betting works.
For the companies that facilitate the bets, which Bekar refers to as “Vegas,” the goal is to make money. They guarantee this with a point spread where the oddsmakers make a matchup between two unbalanced teams more balanced by either giving points or taking them away from each team. If the point spread is zero, it implies that “Vegas” has determined that the game is a 50-50 proposition, meaning that each team has an equal chance of winning. By setting the point spread to zero, it ensures that they will accept money on either side, either team at even money: wager $1, winning $2.
According to Bekar, such companies are able to maximize the number of bets that are made by setting the betting line such that the average person will believe their team has an equal shot at winning.
“The important thing to remember is Vegas doesn’t care who wins or loses,” Bekar said “Vegas gets paid as a fraction of the number of bets that come in the fraction of dollars that are actually made … So there’s no such thing as Vegas losing, they only lose when the number of bets hasn’t been maximized. So there’s a saying that it’s hard, if not impossible, to beat Vegas.”
Typically the point spread is set early in the week and then the odds are adjusted until there is 50% of the money on each side. According to Bekar, there is a 50% chance for me to win or lose in the end.
With this advice in mind, I got ready to place my bet. Most sports wagering in Oregon takes place on the state-run DraftKings Oregon app. Run by the Oregon Lottery, the app was overwhelming to me as a newcomer. The home page allows betters to search through types of sports and then advertises different types of bets to choose from. I set my sights on the Trail Blazers’ game against the Phoenix Suns on March 2.
Bekar and I had examined the game’s spread beforehand and the Blazers were expected to lose with a point spread of +13.5.
I placed a $10 bet on the Trail Blazers losing. Then, I waited.
The Blazers lost 90 to 120 against the Phoenix Suns that night. What can I say, I am a winner. Right now I have a check being sent to me in the mail with $19.09 after the app’s premium. I will use it to stimulate the economy by buying some Classico brand pasta sauce. I love Classico brand pasta sauce.
I do want to be clear when I started this process, I was warned by Bekar that gambling of any kind, whether in the stock market, lotteries or sports betting, is highly addictive. Because of this, I think that this will be my last sports betting adventure. However, for a one-time recreational activity to write an article about, it was very fun.
I really enjoy economics and for me, this experience has been more exciting than buying into the stock market or cryptocurrency. Inspired by Elkhal and Bekar, I want to learn more about how economics influences other parts of my life. Maybe in my next article, I will try to only buy groceries products that are women-owned and look into the economics of that.
Bekar’s advice for first-time betters is to understand how odds, moneyline and point spreads are set before betting.
“Watch those evolve a couple of times for a sport that you’re familiar with,” Bekar said. See how they move. In other words, don’t bet blind with respect to how the process works, because that’s the fastest way to get into real trouble.”