- Regulated sportsbook index exchange company RSBIX and designed contract maker ErisX have partnered for an all-new sporting event contract exchange program.
- The new program allows sportsbooks to sell unique wagers to other sportsbooks and valid personnel.
- This method can help smaller books recover from potential lopsided wagers.
CHICAGO – Sportsbooks now have a new and improved method of dealing with lopsided wagers thanks to a partnership between designed contract maker ErisX and regulated sportsbook index exchange company RSBIX.
The two companies have joined forces to introduce sporting event based futures contracts that can be traded and sold to other sportsbooks and eligible participants.
The product allows a sportsbook to take a betting line and trade the line to another legal sportsbook who would now reap the benefits of the profit or be on the hook for the payouts.
Small Bookmakers Benefit
Futures on sporting events? ErisX filed a product self-certification to introduce fully-collateralized, financially settled sporting event-based futures contracts w RSBIX. Read more here. https://t.co/csfljFgbF0
— ErisX_Digital (@ErisX_Digital) December 14, 2020
The main beneficiaries of the new futures contracts are smaller sportsbooks who cannot afford to take the hit of paying off wagers in a lopsided betting line.
Normally, when sports bettors are leaning heavily in one direction for a given team, the sportsbook will drastically adjust the odds in order to offset the potential loss, as well as motivate sports bettors on the other side of the wager.
Ideally, sportsbooks will want as close to a 50/50 split on both sides of the betting line, but that does not always happen.
“When a licensed sportsbook faces an imbalance it creates an unhedged risk where the sportsbook may make/lose money depending on the outcome of the game,” said ErisX in the official press release. “The sportsbook does not want to be in this position — it wants a perfectly balanced book where it makes its fees for the provision of wager taking services with no relation to the outcome of the game.
Games w/ most lopsided point spread betting @WilliamHillUS:
• 91% of money on Titans
• 91% of money on Saints
• 83% of money on Packers
• 82% of money on Broncos
• 82% of money on Colts
— David Payne Purdum (@DavidPurdum) December 13, 2020
For example, 91% of NFL bettors put action on the Tennessee Titans to cover the spread against the Jacksonville Jaguars this past weekend. Sportsbooks were left with the bill since the Titans covered the spread.
For smaller sportsbooks who cannot afford to take on the losses, the futures contract system allows them to sell that betting line to a bigger sportsbook.
What now happens, is that the smaller sportsbook will get less than they would receive should the Titans have failed to cover the spread, but would avoid paying out all the winnings to the sports bettors.
The larger sportsbook now absorbs the risk, but should the Titans fail to cover the spread, the larger sportsbook would then collect all the winnings.
“ErisX’s RSBIX suite of products will permit licensed sportsbooks to manage their commercial risk by creating a means to aggregate offsetting, independent state-specific books via commonly accessible futures contracts that trade nationally,” said ErisX.
This is the first time a product like this has been available in the legal sports betting world. ErisX and RSBIX’s futures contracts will surely shake up things up moving forward.
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Coming from a background in narrative-based writing, Giovanni strives to write stories that will keep the reader engaged. Although he does pride himself in being accurate, how the story is told is also very important to him. When he’s not keeping readers up to date on sports betting laws and legislation, you can find him writing and recording music, playing videogames, or engaged in heated sports debates with his friends.