Betting on professional sports drafts is fairly new. Sportsbooks in Nevada weren't allowed to post props on the NFL draft until 2017.
Those sportsbooks might wish that it had remained off limits.
The most interesting story in the sports betting world this year is how bettors have consistently been ahead of the news — and oddsmakers — on draft props. First, NFL draft bettors flipped the odds on Travon Walker being the first overall pick just a few days before he was selected. Walker was an underdog, took most of the bets and on Monday before the draft he finally took over the favorite spot from Aidan Hutchinson. Bettors were right; Walker went first to the Jacksonville Jaguars.
The NBA draft was even crazier. On the day of the draft Jabari Smith was a massive favorite to go first until Paolo Banchero got a ton of late bets to cause a shocking shift in the odds. Banchero went No. 1 to the Orlando Magic and bettors won. Then it happened again for the NHL draft, with Juraj Slafkovsky getting many late bets before he went No. 1 to the Montreal Canadiens.
Once could be a fluke. Twice is a coincidence. Three times is a trend. Sportsbooks have taken note, because it's rare for them to lose. In particular, the way the NBA draft odds moved stunned everyone, including those shifting those odds.
"It's one of those things where you're like, 'Wow, this is not the norm,'" Lamarr Mitchell, director of race and sports at BetMGM, said.
Bettors are 'the experts' in draft markets
Teams with the first pick often want to keep their first pick a secret, for whatever reason. In many drafts it doesn't matter; the top pick is obvious.
In the NFL, NBA and NHL this year, there was debate about the top picks. That led to betting opportunities. Sportsbooks don't have inside information on what teams will do, so they're often exposed when news starts to leak out.
More than half of the money bet on the first pick of the NFL draft was on Walker, and a lot of that money came in when Walker was getting plus-odds. Walker, a Georgia edge rusher who tested very well at the scouting combine, opened at +3000 to go No. 1. Those odds kept getting shorter as the draft approached. A week before the draft, Walker was still +140 to go first. NFL draft bettors nailed many picks in the top five.
“The NFL draft was a success for many BetMGM bettors," BetMGM's Seamus Magee said in April. "Travon Walker to go first overall, Derek Stingley Jr. third overall and Kayvon Thibodeaux fifth overall were bad outcomes for the book."
The NBA draft was wild. In the days before the draft, Banchero's odds were dropping steadily due to bets, even as ESPN's Adrian Wojnarowski reported Smith was likely to be the top pick.
— John Ewing 🦁 (@johnewing) June 24, 2022
Then on draft day, Banchero's odds moved in a way you'll rarely see in any sports betting market. Smith was the big favorite going into draft day, then a report from Wojnarowski hours before the draft said Banchero could be the first pick. The odds swung rapidly. Bettors were ahead of the market and the news.
"The NBA draft is a difficult event to handicap," BetMGM sports trader Christian Cipollini said last month. "Rumors and leaks can cause wild line movement."
Nevada has to take down draft props 24 hours before the event, and that helped sportsbooks there avoid a bigger loss on Banchero. But books in other states had the odds up on draft day and many bettors got Banchero at good odds. Then the same thing happened with NHL draft, which isn't nearly as popular (NHL draft props aren't offered by BetMGM but other books do offer them) but it saw Slafkovsky go from +120 to -160 on draft day due to late bets.
This won't surprise you, but sportsbooks don't like losing money. BetMGM offered fewer NFL draft props in 2022 than it did in 2021 after taking a loss. Then the book took another loss. We'll see how the books adjust next year. With draft betting, sportsbooks are in the rare position of having no edge.
"The players love it," Mitchell said. "They are the experts with this market."
How will sportsbooks adjust?
Mitchell said he didn't think bettors beat the house in three straight drafts this year due to inside information. It's a market in which an attentive player can gather information from news sources and act quickly on it, beating the book to the punch. Then other bettors can react to the steam — which is a flurry of bets on one side, with odds moving to react to an inordinate amount of money coming in — and that causes more exposure for the books.
In the social media age, a key tweet can change an entire betting market.
"20 or 30 years ago, there wasn't the information out there," Mitchell said.
For sportsbooks, being late on the first pick trickles down. The first overall pick market gets the most attention but once that market is obviously mispriced, it makes it easier for bettors to find value on props for the next few picks as well. That's what happened in the NFL draft with bettors nailing many of the first few picks.
Draft betting is unusual because there's no late 3-pointer or pick-six that can cause a bad beat. Once a team makes up its mind on a pick, no random variance is going to change that. Whenever the Magic decided to take Banchero, bets on him were the rare lock. It's just a matter of when that information leaks and bettors acting on it. That's unlike any other market.
"Very, very unique," Mitchell said.
Mitchell said BetMGM will reevaluate its draft props before next year. There will likely be some adjustments — perhaps fewer props offered or lower limits on them — but the sportsbooks will still be exposed as long as they offer props. It has led to a few profitable days for bettors this year.
"That's fun for the players that are winning," Mitchell said. "Not when you're not winning and you have some exposure."