The Hudson River shimmers below the Manhattan skyline on a still Sunday morning in October. The world outside the PointsBet office in Jersey City, N.J., is calm, serene. Oddly, so is the world inside the offices, which feels strange given how much is at stake on this NFL Sunday for PointsBet—a sports betting operator attempting to make its mark this side of the Hudson River, in the state of New Jersey, where a battle is taking place with hundreds of millions of dollars on the line.
PointsBet, an Australian online bookmaker, is just two years old, one of several new industry players in New Jersey, where the sports gambling market has been exploding since a U.S. Supreme Court decision in May 2018 paved the way for legal, regulated bookmaking in the Garden State. Today, at PointsBet’s New Jersey 17th-floor office, employees have packed a glass-encased room nicknamed the “trenches.” It’s two hours before the 1 p.m. kickoff of today’s slate of football games, and the young analysts, most wearing matching black shirts with the PointsBet logo stretched across it, are monitoring the bets coming in and comparing lines from other bookmakers.
One Burgundy chair sits taller than the other black swivel ones around it. Jay Croucher, PointsBet’s 29-year-old Director of Sport Analytics, sits there tracking six computer monitors at a time at his battle station, along with looking up at two rows of four television screens apiece plastered up in front. His polished appearance, mixed with a strong Aussie accent, fits right in with PointsBet’s youthful and globally diverse office. Croucher is in charge of overseeing the entire operation on Sundays and has final call on accepting the biggest wagers—whether or not, for example, to take a big bet from a sharp. It’s a decision that can change the fortunes of a bookmaker like PointsBet on a given Sunday.
It is a key role for a company that is looking to find any edge it can in the New Jersey market, which is at the forefront of the sports betting movement across the country. PointsBet is competing in a New Jersey betting market with several bookmakers that had a head start on it, including DraftKings, FanDuel, William Hill and MGM. While each book is looking to emerge as the top dog among New Jersey’s betting options, the state itself has materialized as the biggest new player in the U.S. sports betting landscape. In September of 2019, New Jersey accumulated a $445.6 million handle, which trailed Nevada’s $546.4 million, per Legal Sports Report. New Jersey, however, has significantly shrunk the gap between the two states. In September of 2018, just four months after the Supreme Court overturned PASPA, New Jersey’s handle was $184.0 million and Nevada’s was $571.0 million. And New Jersey actually edged Nevada in betting handle in July and August of 2019. So as the gap continues to close between the two, this football season serves as an indicator for what state is generating the most action.
Despite everything that’s about to unfold on Week 6 of the NFL season, despite the exposure PointsBet has today, Croucher appears as calm as the waters outside the windows. Among his six personal screens, he’s constantly monitoring the betting market for where each bookmaker has its current pregame and in-game lines set. Another one always displays the “Intercept”—a screen where traders can manually approve bets that exceed typical liability limits and monitor potential risk in real-time.
“I’ve never been a big gambler. I’ve got a lot of faith in the market and the market prices,” Croucher explains. “I know that gameday, sharp liquidity in the NFL is stronger than me thinking that the Eagles defensive line is going to overwhelm the Vikings offensive line. All that stuff is generally priced in.
“I’ve always been interested in gambling by the market dynamics and the market psychology of why does the public think this when I think that? And what biases are coming into this? Why are lines progressing through the week—is that real information or is it just public bias? The psychology behind that I find really interesting and I find that more interesting than potentially losing money.”
Croucher started at PointsBet from the get-go as one of the first traders hired when the company launched in Australia in 2017. Croucher was just finishing law school before being brought on, so he worked in PointsBet’s legal team, in addition to helping set the odds. He moved to the U.S. in late June of this year and is now wearing many hats as the Director of Sports Analytics—whether it’s handling risk, changing prices to align with the rest of the market or overseeing everyone else’s roles in the trading room.
Croucher’s decisions will help shape PointsBet’s fortunes on this NFL Sunday, and every Sunday this fall will help shape PointsBet’s fortunes in the larger gambling landscape that is changing at a breakneck speed. In a crowded market, PointsBet is an underdog, an unknown from the land down under with the odds stacked against them. So why does it think it has a chance?
In September of 2018, PointsBet announced Johnny Aitken, its former Chief Operating Officer, as the U.S. CEO to head its expansion efforts. His first mission: to make headway in New Jersey. Aitken came over from William Hill after managing a trading desk of over 100 and a betting handle in the billions. Aitken, like Croucher, grew up in Australia, and developed an interest in U.S. sports at a young age, asking for a Patrick Ewing No. 33 Knicks jersey for his eighth birthday. He estimates that 40% of Australia’s betting activity is on U.S. sports, while Europe is 3-4%.
So while that immersion helped when he moved to the U.S. to build out PointsBet’s American clientele, he was starting from scratch in a New Jersey market with several competitors that already had brand awareness and, in some cases, a preexisting userbase. PointsBet was going up against these very bookmakers for a coveted deal at the Meadowlands that ultimately would allow it to operate in New Jersey. PointsBet had to pitch why it deserved a seat at the table. In betting terms, PointsBet landing the deal it ultimately did was initially considered such a longshot, that the odds probably would have been off the board.
“We did face a huge uphill battle going into a market where FanDuel and DraftKings have, estimated, invested one to one-and-a-half billion dollars worth of marketing,” Aitken says. “We’re also going up against casino-resort such as MGM and Caesars. William Hill was the first European bookmaker, so when they set up here in the U.S., they had an advantage on us as well.
“When you’re coming into a market where you have zero percent brand recognition, zero percent database, don’t own any resorts, we really are starting from scratch. Even when we won our first deal last year in June, we didn’t have a bank account. I was working out of a lobby from a hotel.”
PointsBet—and every other new operator—must find ways to differentiate their business from the competition. Aitken’s key strategy for getting PointsBet’s name out there was “rocking the boat” on price and promotion. PointsBet offers a -105 vigorish or juice (bet $105 to win $100) on its pregame NFL spreads, whereas its competitors are at -110 (bet $110 to win $100). While that difference in price has attracted more bettors, it puts more pressure on Croucher and the rest of the traders since PointsBet is working with smaller margins.
PointsBet launched its online sportsbook in New Jersey in January of 2019, and one week later, Aitken saw a prime opportunity to put its name on the map via promotion. Millions of dollars bet across the country were swung on the infamous Nickell Robey-Coleman non-call in the NFC Championship Game between the Saints and Rams. PointsBet announced shortly after that every Saints bet would be refunded as part of its “Good Karma Payout” initiative. Several outlets picked up the story, giving PointsBet P.R. traction and more brand awareness.
Now in the midst of its first NFL regular season, PointsBet’s Jersey City office manages the markets in New Jersey and Iowa, and has market access to 10 states overall. PointsBet now has over a 5% market share in New Jersey, per Aitken, which ranks third behind DraftKings and the leader in the state, FanDuel.
Unlike its competitors, PointsBet wants to keep its operation lean and its trading room small.
“It’s funny, when we have people come into the office, there’s this Hollywood image in their head that it’s going to be like Wall Street from the 1980s with guys throwing pieces of paper at each other and there’s that old-school trading floor mentality,” Aitken says. “Now, modern trading is a combination of technology, data science and trading. Rather than us hire 100 traders and have them all come in and have their own opinions of pricing and how to trade, we like to use a lot of automation, a lot of technology, a lot of data science and still have really smart people at the wheel like Jay [Croucher] in New Jersey and Australia.”
PointsBet has nine traders in its Jersey City office and another 15 in Australia. There are six on duty inside the N.J. trading room with the second half of Panthers-Buccaneers underway in London, about 90 minutes before the 1 p.m. EST kickoff. PointsBet’s traders are in their twenties and thirties, with about a third of them from abroad. What they may lack in experience compared to the folks in the desert that have been doing this for decades, they certainly make up for in mathematics-based backgrounds.
“It’s long departed from the Vegas archetype of older guys kicking back with cigars and talking about what the line should be,” Croucher said. “It’s a lot more model-driven now. A lot of our prices come from our quants.
“We recruit traders based not only on deep understanding of the sport, but they also need an understanding of probability and odds. We’re looking for guys who understand numbers. If you know numbers, you understand them and then you’ve got the deep understanding of the sport, then that’s all we need to mold a trader. So that’s why they skew younger, we’ve got a lot of guys who come from finance services, commerce, guys who understand the market. Because that’s what gambling is, it’s the market.”
A four-figure in-game bet comes in on the Intercept for Panthers/Buccaneers under 61.5 points. The game’s total was 47.5 before kickoff, but with the score at 34-18 early in the fourth quarter, the in-game total is 14 points higher than where the market closed pregame. Senior sports analyst Matt Pollett approves the bet on the Intercept, but the live in-game total moves to 62 just seconds later, meaning the bettor didn’t get the best number.
The teams exchanged punts before the Panthers padded their lead to 37-18 with 7:56 left following a 29-yard field goal from the Panthers’ Joey Slye. That bettor can’t have more than 6.5 points scored the rest of the way, or else his under is finished. The Bucs then drove 75 yards, including a fourth-and-one conversion in the red zone, to score a touchdown on a Dare Ogunbowale three-yard run to paydirt with 4:47 remaining. Head coach Bruce Arians opted to go for two in a 13-point game, giving the under 61.5 bettor one last chance. Those hopes soon evaporated after Jameis Winston scrambled into the end zone to make it 37-26, which ended up as the final score.
Next on the docket: the early afternoon games. A five-figure bet came in this morning on Eagles +3.5 at the Vikings, and it’s identified in the Intercept as a sharp client. While the term “sharp money” may be misconstrued nationally, PointsBet has categorized two different types of sharps that it deals with—steam chasers and market makers.
“Sharp money can be taking a price that’s best price in the market,” Croucher says. “So it’s just someone looking at a board of all the prices and we happen to be sitting above for whatever reason, so they’re betting with us. If you’re taking best price in the market over and over again, then the margin’s generally going to be in your favor and you’re going to win.
“Or there’s the other type of sharp money where you’re generally betting early, and then the closing price is moving in your favor. So it’s very difficult to beat NFL gameday prices, because there’s so much sharp liquidity in the market because all the sharps have bet early week and they’ve told the market where the price should be. But if you bet early week, then the lines are less solid. If we find that people are consistently beating that closing price with the price they took early week, then they’ll be considered as sharp accordingly.”
Since it’s gameday versus early in the week, the five-figure bet on Eagles +3.5 doesn’t move the line, but rather shifts the price of Eagles +3.5 from -105 to -110. Croucher explains that PointsBet would need significant activity to come in on the same number in order to shift the line so close to kickoff, especially on a key number like +3.5.
Around 90 minutes before the start of the early slate, NFL teams announce which players will be inactive. Typically, bettors have a general idea beforehand of who will be playing and who won’t be, so the game lines won’t shift much from inactives unless something very unexpected occurs. For instance, when Chiefs wideout Tyreek Hill’s return against the Texans was announced after a five-week absence, the line and total stayed put at Kansas City -3.5 and 54.5.
Where some of the more under-the-radar inactives could have a role in the betting market is player props. When the Ravens ruled out rookie receiver Marquise Brown against the Bengals, there was activity on the first touchdown scored prop. Fellow Baltimore pass-catcher Miles Boykin was originally listed as a longshot +600, however after a few bets were taken, that number jumped to +250, where he now had the seventh-best odds on the board to reach the end zone first.
One of the biggest prop bets of the day also came from the Ravens-Bengals game. This was on Ravens quarterback Lamar Jackson’s rushing prop, where a bettor secured over 60.5 yards. That grabbed the attention of the person in charge of the Intercept at the time, senior sports analyst Nick Welch. Welch was able to verify that the price was in-line with PointsBet’s projections, despite Jackson’s well-known rushing ability, so the bet was accepted.
Another prop that appeared in Intercept caught Welch’s attention, although not because of the amount.
“This just came in: [Cowboys wideout Michael] Gallup to get nine-plus receptions at [+2000],” Welch said. “It was a small bet, but it was me looking at the price and thinking ‘That’s a good price, we don’t have to lay that +2000 for the rest of the day.’ So that’s why I’m just rolling it to +1600 now.”
The traders spend a lot of time during the week preparing and discussing where to set pregame player props at. They huddle up early in the week to discuss the previous week’s results and what they’re looking for in the upcoming week. They’re also keeping a close eye on who is placing these bets and the amount. They have to be able to identify why certain props are drawing big money consistently, and adjust quickly accordingly. But Croucher actually surmises that taking these “sharp” bets are overall a net positive, as they give him and the PointsBet traders more intel about the market.
“We pinpoint things that we’ve noticed our sharper clients are betting on,” Croucher said. “We noticed early on that Patrick Mahomes his passing yards were too low earlier in the season. They were being set at 300, 305, 310, which is more in line with last season’s average.
“Just with that Chiefs team and they’re a bit more banged up this year, they’re running the ball less and they’re also not blowing out teams as much because Mahomes’s numbers last year were so skewed because he wasn’t playing in the fourth quarter when they were blowing out the Bengals by five touchdowns. Now, the market has reflected that and Mahomes this week is at like 320.5 yards. So it’s little things that we point out like that that we’re noticing early week.”
Not every notable play cashes, though. The Eagles lost 38-20 to the Vikings. The Boykin first TD prop lost on the first play of the game, as Bengals returner Brandon Wilson brought back the opening kickoff 92 yards to the house. Gallup finished with four catches. Jackson, on the other hand, crushed his rushing total prop, as he accumulated 152 yards on the ground.
As 1:00 p.m. EST rolls around and the games kick off, the early focus shifts to monitoring in-game bets on Intercept that need to be approved. Welch, along with all the other traders, has a screen that lists the current live odds at every other bookmaker, allowing him to scope out any discrepancy between PointsBet and the rest of the market. There are bettors with access to this information as well, and they are ready to snipe quickly if PointsBet’s live line is off from market standard.
When the Chiefs, up 7-0 at the time, were facing third down in the red zone after recovering a Carlos Hyde fumble in the first quarter, PointsBet’s in-game line was at Texans +13. The Texans closed as 3.5-point underdogs, and other bookmakers had the in-game line at Texans +11.5. But Welch attributed the contrast in lines to the third down being a “swing play,” where bookmakers’ models are programmed differently to account for third downs. Some models are more aggressive with how they price in-game lines right before swing plays based off of bookmakers’ different implied probabilities for converting. So Welch approved that Texans +13 live bet, even though he knew that bettor was getting the best of the number compared to what the rest of the market was offering.
As most of the games go into halftime, this is when all of the traders in the room are sprung into the action. While second-half lines or totals are largely automated, the traders have discussions regarding live player prop lines and, by default, second-half player prop lines. While the player’s talent and the pregame line are aspects in setting those props, the most important factors are game flow, projected opportunity and general market consensus.
For example, the Texans led the Chiefs 23-17 at halftime. Since Kansas City was down and the game was high-scoring, the traders assumed that Patrick Mahomes would throw a lot in the second half. As a result, Mahomes’s adjusted live passing yardage line and second-half passing yardage line will be more in line with half of his pregame passing yardage prop of 320.5, since the market was already anticipating a high-scoring, close affair between the Chiefs and Texans.
On the other hand, the Vikings led the Eagles 24-10 at halftime. Kirk Cousins had 209 passing yards after the first two quarters, and his pregame passing yardage prop was 250.5. The traders, however, are anticipating fewer throws or less of an opportunity for Cousins in the second half because the Vikings are up two touchdowns and because Minnesota will likely go into more of a conservative gameplan. So unlike Mahomes, the traders will not be using half of Cousins’s pregame passing yardage prop to dictate his adjusted live passing yardage line at the half, and instead have to come up with a new number on the fly.
As Aitken alluded to, while PointsBet’s operations are so dependent on technology, there’s also a human element needed in order to strike the perfect balance. All of the traders are involved in a discussion for creating adjusted live/second-half player props right before the half of the early games, including Chiefs-Texans.
“Alright, so Deshaun’s at 139. Prematch was effectively half that.”
“I think since Watson is at half of his prematch now, that price is gonna hold the rest of the game given he’s still gonna be clearly throwing the ball. So we’re just gonna go back up with his prematch price, 275.”
“So Mahomes is 232.”
“And he’s gonna be throwing.”
“I’d say 385. 390.”
“Prematch he was 320.5. I’d say take half of that again. So 392.5.”
“Eighteen yards. Four targets.”
“They’re giving him nothing.”
“Add 30 yards on that? 35?”
“But it is Hopkins.”
“52 on [one bookmaker].”
“He was 81.5 pregame. So slightly less than half of that given the coverage.”
“Only 48 then? 49?”
“Let’s call it 50 just to make it round. 50.5”
“So 42, which is basically exactly half his prematch price. Effectively double that.”
“What about Tyreek?”
“He was 74.5 prematch. He’s at 66 yards, but there was a 46-yarder in that. He’s been targeted eight times.”
“101.5 on [one bookmaker].”
“Would you back under or over on 101?”
“I’d back over.”
“Yeah, he only needs one catch.”
“He’s been targeted eight times. Yeah, 106.5.”
Oddsmakers are always looking at discrepancies between their lines and other books. The one that caused the biggest stir in the room was Hopkins. PointsBet opened the Texans wideout’s live game yardage prop at 50.5 at the half. A different bookmaker opened theirs at 52 and shifted to 51.5, while another one surprisingly opened it at 79.5. The price on that over 79.5 quickly shot up to +200, while the under went from -115 to -278.
Oddsmakers are setting these lines hoping for even action on both sides. On that specific Hopkins live yardage prop, the fact that there was a huge discrepancy in the market was clearly taken advantage of by some bettors, since the price on that Hopkins under 79.5 yards line went all the way to -278.
One prop that PointsBet adjusted based off the market was Mahomes’s passing yardage. There was a double-digit differential there between PointsBet and multiple bookmakers, so Croucher shifted it from the original 392.5 to 400.5 in the middle of the halftime break.
Hopkins finished with 55 receiving yards in the game, while Mahomes only notched 273 passing yards—largely due to the fact that Kansas City had just three possessions in the second half.
Adjusting the player prop market isn’t even the toughest level of improvisation that traders have to pull off.
“On Sundays, I think the biggest difficulty is responding to unexpected injuries or weather during games,” Croucher says. “So much of the in-play pricing now is automated based off the prematch closing price. But if Drew Brees gets injured in the second quarter against the Rams, then that prematch price, which I think was Rams -3, that goes out the door completely. You have to react in that circumstance and there’s no model that can answer for what the difference is in that specific situation between Drew Brees and Teddy Bridgewater coming off the bench for the rest of the game.
“And that’s where trading now really comes into it, where you just have to take a calculated best guess. Or in games, mainly with total-related markets, it’s usually when there’s a lot of rain expected and it just never comes, and then the totals are all out of whack and you have to adjust those on the fly. Those are the two most difficult aspects, just dealing with unexpected things in play that throw everything to hell basically.”
The traders were tested early in the third quarter of Seahawks-Browns. Baker Mayfield was taken to the locker room, which suspended the in-game line. The Browns, who closed as one-point favorites, were leading 20-18 at the time, with the Seahawks taking over possession at their own 42-yard line. While Mayfield’s status for the rest of the game remained unknown, PointsBet still had to put up a new in-game line.
“In-play modeling is heavily tied to the prematch closing price,” Croucher explained. “When there’s a game-altering injury and prematch pricing becomes obsolete, the model’s prematch closing price needs to be altered to account for the new situation, thus informing more accurate in-play pricing. In this case, a Baker injury would skew the closing price back toward Seattle being favored.
In an adjustment to Mayfield’s injury, PointsBet opened its new in-game line at Seahawks -4.5, with its pricing more aggressive than other bookmakers. William Hill put its new in-game line up at Seahawks -3, while Bet365’s -3.5 live line was quickly bet up to -4.5. Seattle scored a touchdown on that drive to make it a 25-20 game, however Mayfield jogged back onto the field and didn’t wind up missing a single play. Croucher estimated that even with Mayfield’s early-season struggles, the sophomore quarterback’s value to the line compared to backup Garrett Gilbert would be 4-4.5 points.
As the early games wrap up, the New Jersey traders’ responsibilities this Sunday are winding down as well. Most of them stay in the office until halftime of the late afternoon games, before handing off control to the trading team in Australia. Croucher, the last vacate the room, departs from his Burgundy chair and heads home to his wife and child. While the war that is the NFL season still has a long ways before concluding, another Sunday battle has been carried out in the trenches.
There are two states on everybody’s radar for sports betting in 2020. New York does have legalized sports betting, however bets can only be made in person at four upstate casinos. Without mobile betting available, that leaves NYC residents much more likely to venture to New Jersey to place their action. On the West Coast, the wheels are starting to churn in California. In November, Native Americans proposed an initiative for the state’s 2020 ballot that would legalize sports betting in certain locations in California. This comes months after Senator Bill Dodd and Assemblyman Adam Gray introduced a bill that would also give California citizens the opportunity to vote to legalize sports betting on the state’s 2020 ballot. If California were to implement it, that could have a major impact on Las Vegas and Nevada.
PointsBet, though, has its sights set on a different state to further build its brand. Colorado became the 19th U.S. state to legalize sports betting on Nov. 6, however the bookmaker already had zeroed in on it as the next step of its expansion.
Like the deal with the Meadowlands that allowed PointsBet to begin in New Jersey, the bookmaker struck a partnership with Double Eagle Hotel and Casino that will permit it to launch a retail and mobile sportsbook in Colorado. PointsBet also will have a new office in downtown Denver. Aitken is already out there, along with most of PointsBet’s U.S. executive, legal and social teams.
But why Colorado? PointsBet is convinced that given the state’s immense support for its four professional sports teams, that developing an interest in sports betting will be an easy process. Additionally, PointsBet has already been working with Colorado’s university systems to recruit the schools’ top tech students to bolster its efforts in that department.
PointsBet is aiming to have 200 employees in its Colorado office, which is scheduled to open in April of 2020. After starting from scratch in New Jersey, PointsBet’s next goal is to become the top sportsbook in Colorado. And it’s not stopping there.
“[Our goal] is to have a national footprint. Once we’re in 10, 12, 15, 20 states hopefully within the next 3-4 years, we’re a national brand,” Aitken said. “If you asked anybody, ‘Would PointsBet enter the market in New Jersey without any brand awareness and achieve over 5% market share over six months?’ they’d think you’re crazy. We’ve done that now, and for us, within 5-10 years, ultimately we do want to be number one in the entire country. We have the capability to do that, with our technology, our people and our complete focus on the U.S. market.”