The Economics of Pick Selling in Sports Betting
At SportsGrid, we do not sell betting picks. The vast majority of our content is free, including our 24-7 video network, dozens of podcasts, our betting models for the NFL and NBA, plus all written content on the SportsGrid website.
As a business, we make money through distribution partnerships, advertisements, and referrals with sports betting operators. While the latter (referring bettors to operators) is sometimes frowned down upon by bettors, it is important to note that in all of our referral agreements with betting operators we receive a referral fee for each sign-up and never receive payments based on whether a bettor wins or loses on that platform.
Regardless of how our model continues to evolve, SportsGrid does not sell picks. But with the explosion of the sports betting market in the US, there have been a variety of questions about the ethics of pick selling.
What is a Pick Selling Service?
Simply put, a pick selling service allows bettors to purchase “picks” from analysts or touts in exchange for a fee. The fee might be charged per pick, per sport, per season or per month. There are hundreds of services that provide such offerings, whether it is transparent or masked with a variety of other offerings. Fundamentally, these sites are trying to convince you that by purchasing picks from them you will become a winning sports bettor or improve your sports betting results.
Should I buy sports betting picks?
There is no black and white answer, though if there was, we would lean towards no. Whether or not you should purchase betting picks depends on a variety of factors including your individual goals, bankroll, and sports betting ability. To that extent, there are a few important aspects to consider:
If you are actively considering purchasing betting picks, chances are you are a fan of sports wagering and enjoy reading about it, thinking about it, and sweating the games.
When I was in college, I used to print out the Bill Simmons articles every week to read his humor and take in his extremely poor betting advice. Despite the fact that Simmons picks offered no financial value, I would gladly have paid $5 a year for nothing more than the entertainment of his writing. If you are purchasing picks for entertainment and experience, there is nothing wrong with that, but the vast majority of pick sellers’ market their product based on performance.
The majority of pick sellers market their products based on performance. They are pitching that their ability to pick winners will allow you to be a profitable sports bettor.
Many will do this with misleading tactics, small samples, isolating things like a “10-1 MLB STREAK” instead of focusing on long-term performance, or by flagging individual bets with terms like the “NFL GAME OF THE YEAR” or “5-STAR WHALE PLAY!”
The challenge with this is two-fold, one you need to trust that the tout or analyst that you are purchasing from is actually a long-term winning sports bettor, and two you need to understand if that even matters based on your bankroll.
We’ll unpack more on the economics of pick selling performance below.
The last piece to consider is your ability to implement the picks that you are purchasing. For example, if you are subscribing to a pick service that only offers advice for Bet365, but they don’t operate in your state or country, it would not be possible to bet the picks. Similarly, if a place releases a “BET” on the Patriots -7.5 but your sportsbook is offering -9.5, you don’t know whether or not that is still valuable information.
One of the flaws that sharp sports bettors poke in even successful bettors selling picks is that if the picks are that good, the markets will move, which removes the value of the pick. For example, let us say you convinced the best sports bettor in the world to start a pick selling service:
- In September, the service launches and you are the only customer. You can place all the bets that get released immediately. This would be a valuable service. You are betting $100 a game, so nobody is really any wiser and you tell a few friends.
- After a few weeks, your friends have told their friends, and now there are 100 people betting $100 a game, so immediately upon release of the betting picks $10,000 are being bet on the same team/side. Depending on the timing of those bets, the accounts used, the sport being bet and site this becomes noticeable.
- In October, ten high profile customers sign up and start placing $5,000 wagers using automated software to alert them of the play release and help place the wagers. Upon being hit for $50,000 in bets upon release of a play, the sportsbooks immediately move the odds. You and your friends are now betting against a worse line.
For tout service critics, many will point to these as flaws of the business model. Good pick services will become popular, move lines, and fail to offer real value that can be implemented by most of their customers.
Still, it is important to consider how the economics might impact you.
The Economics of Pick Selling and Performance in Sports Betting
Consider the following as general rules of thumb or buckets of players:
Joe Public. If you blindly pick games, you should be able to pick winners around 50 percent of the time.
Break-Even Bettor. If you are betting games against the spread with on average -110 pricing, you need to win 52.5% of the time in order to break even.
Required Win Rate for Price Shoppers. If you are betting games against the spread with on average -105 pricing (can be achieved via careful price shopping or low fee sportsbooks) you need to win 51.5% of the time in order to break even.
Pro Bettors and Sharps. The best sports bettors in the world may win 52.5-55 percent of the time, while in niche markets with really selective betting it may be possible to win 55-60 percent of the time.
If you are a $100 NFL bettor, who bets 2-3 games a weekend, over the course of the regular season you will bet between 34 and 51 games, wagering a total of $3400 to $5100.
- A 50 percent pick bettor would expect to lose $270 over the course of the season
- A 52.5 percent pick bettor would expect to win $13.50 over the course of the season
- A 55 percent pick bettor would expect to win $297 over the course of the season
Pick sellers are essentially touting their ability to move you from #1 to #2, or #2 to #3, but does it even matter?
If you are a break-even sports bettor who is betting $100 a game, you could expect an extremely good and honest pick seller to create $285 of value over the course of an NFL season. A quick scan of many pick sellers shows their products marketed for as much as $750 to $1500 (or even more!) over the course of an entire NFL season.
Even using the low end $750 price here, for a break-even $100 bettor even purchasing extremely valuable picks from winning gamblers would still net more than a $450 loss over betting the games yourself.
Flipping a coin and betting games blindly would cost you $270 on the season. Purchasing a $750 pick package and betting all of those games would cost you $450 ($750 package – $297 profit). You would still lose $180 compared to just flipping a coin and betting games blindly.
In summary, for a $100 bettor betting 3 NFL games a week, you will lose $180 to $450 by purchasing betting picks. This is assuming an extremely high performance of the picks you are purchasing, something we are skeptical of.
The Devil’s Advocate arguments to this would be that pick selling could theoretically offer value if you scaled up the size of your wagers or if the cost was lower. A $250 bettor would recoup the value of the package and a $500 bettor would turn that into a profitable venture. Similarly, if the cost of a package went down from $750-$1500 to something closer to $100-$200, a $100 per game bettor could find that valuable.
Value = Benefit – Cost
As with anything, whether or not you should make the decision relies on a value equation. The value to you, the bettor, is the benefit minus the cost.
The benefits of paying for a service could be entertainment-oriented, through research tools or data, or through actual quality, winning advice or “picks” in this case.
Given our skepticism of most people’s long-term records and the low-quality marketing tactics that are used, we strongly recommend looking for entertainment and information/tools in any service that you choose to subscribe to.
To that extent, a service like Action Network which offers a combination of tools, advice, entertainment and a cheaper entry price can more easily return value to a casual bettor than purchasing $1500 packages from PreGame like touts of the world.