Posts
The Odds Shift
How Betting Got Worse for You
The House Always Wins, Post 3 | February 6, 2026
Post 1: The House Problem — The NFL owns the house
Post 2: The Data Advantage — NGS data enables unfair odds
Post 3: The Odds Shift ← YOU ARE HERE — House edge doubled since 2019
Post 4: The Real-Time Edge — Lines move before you see the play
Post 5: The Historical Pattern — NFL has hidden revenue before
Post 6: The Regulatory Gap — Why no one stopped this
Post 7: The Legal Exposure — Class actions, antitrust, consumer fraud
The Baseline: How Sportsbooks Used to Win
To understand how much worse betting has gotten, we need to establish the historical baseline.
Nevada has been the testing ground for legal sports betting in America since 1949. For decades, it was the only state where you could legally bet on sports. And Nevada sportsbooks operated with a remarkably consistent house edge:
5.4% hold rate.
That means for every $100 wagered, sportsbooks kept $5.40 as profit and paid out $94.60 in winnings. This was the industry standard. It held steady through the 1980s, 1990s, and 2000s. It was baked into how odds were set.
The 5.4% edge came from the structure of traditional bets:
- Point spreads: You bet on whether a team will win by more or less than a certain number of points. Odds are typically -110, meaning you risk $110 to win $100. The extra $10 is the "vig" (short for vigorish) — the house's cut. Over many bets, this creates roughly a 4.5% house edge.
- Moneylines: You bet on which team will win outright. Odds vary based on the favorite/underdog split, but the house edge is built into the difference between what you risk and what you win.
- Over/Under totals: You bet on whether the total combined score will be over or under a set number. Same -110 odds structure, same ~4.5% edge.
These bets are straightforward. The outcomes are independent (one bet doesn't affect another). The odds reflect reasonably accurate probabilities with a small built-in margin for the house.
5.4% was the cost of doing business. Bettors understood it. Sharp bettors could beat it by finding mispriced lines. The house won over the long run, but the game was beatable in the short term.
That was the old model.
The New Normal: 9.3% Hold and Climbing
In 2024, the national sportsbook hold rate was 9.3%.
That's not Nevada. That's the average across all states with legal sports betting. Some states are higher (New York frequently exceeds 10%). Some are lower (Colorado and Iowa hover around 7%). But the national average is 9.3%.
Let's do the math:
Historical baseline: 5.4%
Current national average: 9.3%
Increase: 72%
The house edge has nearly doubled.
Even Nevada — the state with the longest history of legal sports betting and the most experienced bettors — has seen its hold rate creep upward. Post-PASPA (the 2018 Supreme Court decision that legalized sports betting nationwide), Nevada's hold has risen from 5.4% to 5.7%.
That's a small increase for Nevada. But nationally, the shift is dramatic. The house is winning at nearly twice the historical rate.
Why?
NEVADA (HISTORICAL BASELINE):
Hold rate: 5.4% (decades-long average, pre-digital era)
Bet types: Point spreads, moneylines, over/under totals
Typical odds: -110 (risk $110 to win $100)
House advantage: Built into vig (~4.5% per bet)
NEVADA (POST-PASPA, 2018-2024):
Hold rate: 5.7% (5-year average)
Increase: +5.6% from historical baseline
Why: Slight uptick from in-game betting and parlays, but Nevada bettors are experienced
NATIONAL AVERAGE (2023):
Hold rate: 9.1%
NATIONAL AVERAGE (2024):
Hold rate: 9.3%
Increase vs Nevada historical: +72%
Increase vs Nevada current: +63%
STATE VARIATIONS (2024):
• New York: Frequently exceeds 10%
• Most competitive online markets: 8-10%
• Colorado, Iowa: 7% (lowest among major markets)
• No state below 6% hold
WHAT THIS MEANS:
For every $100 bet nationally:
• Old model (5.4%): House keeps $5.40, bettors get $94.60
• New model (9.3%): House keeps $9.30, bettors get $90.70
• Difference: Bettors lose an extra $3.90 per $100 wagered
AT SCALE:
$35 billion wagered on NFL in 2024 × 9.3% hold = $3.26 billion in sportsbook profit
If historical 5.4% hold: $1.89 billion in profit
Extra profit from higher hold: $1.37 billion
Bettors are losing an extra $1.37 billion per year on NFL bets alone
compared to historical odds.
The Parlay Explosion: 20%+ House Edge
The primary driver of the increased house edge is the proliferation of parlay bets — and especially Same Game Parlays (SGPs).
A parlay combines multiple bets into one wager. All legs of the parlay must win for the bet to pay out. If even one leg loses, the entire bet loses. The appeal is higher potential payouts — because you're combining multiple outcomes, the odds multiply.
But the house edge multiplies too.
Traditional parlays (combining bets from different games) have always had higher house edges than straight bets. Nevada historical data shows parlay hold rates around 30% — meaning the house keeps 30 cents of every dollar wagered on parlays.
That's why sharp bettors avoid parlays. The math is terrible. You're giving the house a massive edge in exchange for the thrill of a big payout.
But Same Game Parlays are worse. Much worse.
SGPs allow you to combine multiple prop bets from a single game. For example:
"Patrick Mahomes Over 275.5 passing yards + Travis Kelce Over 75.5 receiving yards + Chiefs -7"
These outcomes are correlated. If Mahomes throws for 300 yards, Kelce probably caught some of those passes. If Kelce has a big game, the Chiefs are more likely to cover the spread.
Sportsbooks price SGPs using NGS data to model those correlations (Post 2 explained how). And they price them aggressively.
Industry estimates put SGP hold rates at 20%+. Some sources suggest they can exceed 25%.
Let's compare:
- Straight bet (point spread, moneyline, total): ~5% house edge
- Traditional parlay: ~30% house edge
- Same Game Parlay: 20-25% house edge
SGPs are four to five times worse for bettors than straight bets.
And they're wildly popular.
ILLINOIS JUNE 2021 (EARLY SGP ERA):
PARLAYS:
• Handle: $101.1 million
• Revenue (sportsbook profit): $22.8 million
• Hold rate: 22.5%
BASKETBALL (mostly straight bets):
• Handle: $126.9 million
• Revenue: $8.6 million
• Hold rate: 6.8%
THE COMPARISON:
• Parlays had 20% LESS betting volume than basketball
• But parlays generated 2.6x MORE profit for sportsbooks
• Why: 22.5% hold vs 6.8% hold = 3.3x higher house edge
FANUEL 2022 DATA (Q2 EARNINGS):
• More than 80% of FanDuel players place parlay bets
• Parlays account for 24.4% of total handle
• But parlays drive 53.7% of gross revenue
TRANSLATION:
Less than a quarter of betting volume generates more than half of sportsbook profit.
Why? Because parlays have 20%+ house edge vs 5% on straight bets.
DRAFTKINGS 2024 DATA:
• Gross margin (profit as % of revenue): 38.1% (up from 33.8% in 2022)
• Revenue growth 2021-2024: 7x increase ($615M → $4.77B)
• Margin improvement driven by “product mix shift” (more SGPs, fewer straight bets)
THE PATTERN:
• Genius Sports deal: April 2021
• SGP launch: Late 2021
• Profit explosion: 2021-2024
• DraftKings margin improvement: 2022-2024
• 80%+ of bettors now playing high-margin bets
THE RESULT:
Sportsbooks engineered a shift from low-margin straight bets (5% edge) to
high-margin parlays (20%+ edge). The shift was enabled by NGS data (which
powers SGP pricing). The NFL owns the largest stake in the company that
distributes NGS data. The NFL profits when sportsbooks profit. And sportsbooks
profit when bettors play the worst-odds bets available.
How Sportsbooks Pushed Bettors Into Parlays
The shift to parlays didn't happen by accident. Sportsbooks engineered it through product design, marketing, and psychological manipulation.
1. Product Placement: SGPs Are Front and Center
Open the DraftKings or FanDuel app. What's the first thing you see?
Same Game Parlays. Featured prominently. Pre-built SGPs for every game. One-tap betting. The apps are designed to funnel you toward parlays.
Traditional straight bets are still available, but you have to navigate through menus to find them. The default experience is parlays.
2. Marketing: "Parlay Insurance" and "Profit Boosts"
Sportsbooks offer promotions that make parlays seem less risky:
- Parlay insurance: "If one leg of your parlay loses, we'll refund your stake (up to $25)!"
- Odds boosts: "Get +200 odds instead of +150 on this SGP!"
- Free bet tokens: "Place a $10 parlay and get a $5 free bet!"
These promotions create the illusion that parlays are a good deal. But the math doesn't change. A 20% house edge with a small refund is still a terrible bet.
The promotions are customer acquisition costs. Sportsbooks lose money on the promotions but make it back (and more) on the higher hold rates once bettors are hooked on parlays.
3. Gamification: The "One Leg Away" Phenomenon
SGPs are psychologically addictive because of near-misses.
You place a 5-leg parlay. Four legs hit. One leg loses by half a point. You were "so close."
This creates the illusion of skill and the belief that you can win if you just try again. Sportsbooks exploit this by showing you how close you were: "You were one leg away from winning $500!"
But "one leg away" is a loss. It's the same as being five legs away. The payout is $0.
The psychological effect is powerful. Bettors chase the near-miss. They place another parlay. And another. The house edge compounds.
4. Social Proof: "Everyone's Doing It"
Sportsbooks display trending bets and popular parlays. You see: "76% of bettors are taking Chiefs -7 in their parlays."
This creates social pressure. If everyone's betting parlays, maybe you should too.
But 76% of bettors can be wrong. And on parlays with a 20% house edge, the majority of bettors will lose.
The "wisdom of the crowd" doesn't apply when the crowd is being manipulated by apps designed to maximize house profit.
PRODUCT DESIGN:
• SGPs featured prominently in app interfaces
• Pre-built parlays for every game (one-tap betting)
• Straight bets buried in menus (require navigation)
• Default experience funnels users toward high-margin bets
MARKETING TACTICS:
• “Parlay insurance” (refunds up to $25 if one leg loses)
• “Odds boosts” (inflate potential payouts to create perception of value)
• “Free bet tokens” (loss leaders to acquire parlay bettors)
• Celebrity endorsements (athletes promoting parlays on social media)
PSYCHOLOGICAL MANIPULATION:
• “One leg away” notifications (near-miss effect drives repeat betting)
• Social proof (“76% of bettors are taking this parlay”)
• Gamification (leaderboards, achievements for parlay betting)
• Loss-chasing incentives (apps suggest new parlays immediately after losses)
THE RESULT:
• 2019: SGPs didn’t exist
• 2021: SGPs launch (enabled by NGS data)
• 2022: 80%+ of FanDuel bettors place parlays
• 2024: Parlays drive 53.7% of sportsbook revenue despite being 24.4% of handle
THE MATH:
Sportsbooks successfully shifted bettors from 5% house edge bets to 20%+ house
edge bets in under 3 years. The shift was enabled by NGS data (which powers
SGP pricing). The NFL owns the company that distributes NGS data. The NFL
profits when sportsbooks profit from high-margin parlays.
The Timeline: When Did This Start?
Let's map the key dates:
April 2021: The NFL signs Genius Sports as its exclusive official data distributor for sports betting. The deal includes distribution of Next Gen Stats (NGS) to sportsbooks. The NFL takes equity in Genius as part of the agreement.
August 2021: DraftKings announces its partnership with Genius Sports will enable "new and exciting features like single-game parlays." DraftKings CBO Ezra Kucharz explicitly links NGS data to the SGP product launch.
Late 2021: FanDuel and DraftKings roll out Same Game Parlays across NFL games. The product is heavily marketed. Adoption is immediate.
2022: More than 80% of FanDuel players are placing parlay bets (Q2 earnings data).
2022-2024: Sportsbook profit margins improve. DraftKings gross margin increases from 33.8% (2022) to 38.1% (2024). The shift is attributed to "product mix" — meaning more bettors playing high-margin parlays.
2024: National sportsbook hold rate reaches 9.3%, up from 9.1% in 2023. Parlays now drive 53.7% of gross revenue despite being only 24.4% of handle.
The timeline is clear:
Genius Sports gets exclusive NFL data → NGS becomes available to sportsbooks → SGPs launch → Bettors shift to parlays → House edge increases → Sportsbook profits surge → NFL's Genius equity stake appreciates.
Every step was designed. And every step benefited the house.
PRE-2019: THE OLD MODEL
• Nevada historical hold: 5.4%
• Bet types: Straight bets (spreads, moneylines, totals)
• Parlays exist but are niche (sharp bettors avoid them)
• No Same Game Parlays (technology doesn’t exist to price correlated events safely)
2018: PASPA OVERTURNED
• Supreme Court legalizes sports betting nationwide (May 2018)
• States begin legalizing one by one
• DraftKings, FanDuel, BetMGM launch sportsbooks
• Early focus on straight bets (replicating Nevada model)
APRIL 2021: GENIUS SPORTS DEAL
• NFL signs Genius as exclusive data partner (deal through 2027, later extended to 2030)
• NFL takes equity in Genius (becomes largest shareholder)
• NGS data becomes available to sportsbooks via Genius
AUGUST 2021: SGP LAUNCH ANNOUNCEMENT
• DraftKings announces Genius partnership enables SGPs
• Ezra Kucharz (DraftKings CBO): “New and exciting features like single-game parlays”
• FanDuel follows with SGP rollout
LATE 2021-2022: THE PARLAY SHIFT BEGINS
• SGPs heavily marketed (app interfaces redesigned to feature them)
• Promotions push bettors toward parlays (insurance, odds boosts, free bets)
• Adoption explodes: 80%+ of FanDuel bettors place parlays by Q2 2022
2022-2024: PROFIT SURGE
• DraftKings gross margin: 33.8% (2022) → 38.1% (2024)
• National hold rate: 9.1% (2023) → 9.3% (2024)
• Parlays drive 53.7% of revenue despite being 24.4% of handle (2024)
• Sportsbook revenue on NFL betting: $3.26B (2024, up from ~$1.89B at historical 5.4% hold)
THE RESULT:
In 3 years, sportsbooks shifted the majority of bettors from low-margin straight
bets to high-margin parlays. The shift was enabled by NGS data. The NFL owns
the company distributing that data. Bettors lost an extra $1.37 billion in 2024
compared to historical odds.
What This Means for Bettors
If you're betting on NFL games in 2024, the odds are significantly worse than they were five years ago.
The house edge has doubled. The bet types being pushed on you (SGPs) have four times the house edge of traditional bets. And the sportsbook apps are designed to funnel you toward the worst-odds bets available.
Here's the math on a typical bettor:
Let's say you bet $1,000 over the course of an NFL season. If you're betting straight bets at a 5.4% house edge (historical Nevada rate), you'd expect to lose $54 over the long run.
But if you're betting parlays at a 20% house edge (current SGP rate), you'd expect to lose $200.
That's nearly 4x more in losses — on the same $1,000 wagered.
Scale that to the $35 billion wagered on NFL games in 2024. At a 5.4% hold, sportsbooks would profit $1.89 billion. At a 9.3% hold, they profit $3.26 billion.
The extra $1.37 billion comes from bettors. It's not new betting volume. It's higher house edge on the same activity.
And the NFL profits from every dollar of that increase — because the league owns equity in Genius Sports, which earns revenue when sportsbooks profit from NGS-enabled bets.
The Data Advantage Became a Profit Machine
Post 1 established that the NFL owns the house. Post 2 showed how NGS data gives sportsbooks an information advantage. Post 3 quantifies the result:
House edge doubled. SGPs have 4x worse odds than straight bets. 80%+ of bettors now play the worst bets. Sportsbook margins improved. The NFL's Genius equity appreciated.
The system is working exactly as designed. And the house always wins.
Post 4 will show how the house wins in real-time — how sportsbooks see plays 20-54 seconds before you do, and how lines move before you see what happened on the field. The information asymmetry isn't just in the data. It's in the timing.
WHAT’S CONFIRMED (Primary Sources):
• Nevada historical hold 5.4%: Legal Sports Report, industry data covering decades of Nevada sportsbook operations
• Nevada post-PASPA hold 5.7%: Legal Sports Report, 5-year average 2018-2023
• National hold 9.1% (2023), 9.3% (2024): ESPN, Legal Sports Report, American Gaming Association data
• Illinois June 2021 parlay data: Illinois Gaming Board public reports — $101.1M handle, $22.8M revenue, 22.5% hold
• FanDuel 80%+ parlay adoption: Flutter (FanDuel parent) Q2 2022 earnings report
• Parlays 24.4% handle, 53.7% revenue: Industry reports from July 2024 data
• DraftKings gross margin 33.8% → 38.1%: DraftKings public earnings reports 2022, 2024
• SGP hold 20%+: Industry estimates from OddsIndex, sports betting analytics firms
• Traditional parlay hold ~30%: Nevada historical data, confirmed by multiple sources
• $35B wagered on NFL 2024: American Gaming Association industry estimate
WHAT’S CALCULATED (Showing Math):
• 72% increase in house edge: (9.3% - 5.4%) / 5.4% = 72% increase
• $1.37B extra profit: $35B × 9.3% = $3.26B | $35B × 5.4% = $1.89B | Difference = $1.37B
• 4x higher house edge on SGPs vs straight bets: 20% / 5% = 4x
• 2.6x more profit from parlays (Illinois example): $22.8M / $8.6M = 2.65x
WHY THIS MATTERS:
The quantified impact proves the mechanism documented in Posts 1-2 translated into measurable harm. House edge doubled. Sportsbook profits surged. NFL’s Genius equity appreciated. Bettors lost an extra $1.37 billion in 2024 alone. This isn’t theory — it’s math.
No comments:
Post a Comment