Every once in a while it’s best to check in with Jeff Benson and just let him flesh out his 140-character analysis from social media.
Informed, opinionated, and often outspoken, the Circa Sports operations manager has a keen love and critical viewpoint on the legalization of sports betting across several states since the 2018 repeal of the Professional and Amateur Sports Protection Act.
And he’s willing to elaborate.
Following another typically incisive series of tweets about the state of the business, Benson spoke with Gaming Today to go a little deeper.
‘This Industry Sucks’
“If it was the case” is about as disingenuous a response that you could possibly give. This clown is lying through his teeth and it is disgusting to watch. All these recreational shops are a joke. This industry sucks! https://t.co/i4goKCqXiq
— Jeffrey Benson (@JeffreyBenson12) April 4, 2023
JEFF BENSON: “It’s a pointed statement. I think everybody thought that with legalized wagering becoming more accessible to more people, more states came online, that the industry was going to trend in the right direction. I think the right direction is obviously very different for a lot of different people.
But for me, being behind the counter, being somebody who bets, wanting to see the best for the industry, I think it’s going down a dangerous path in a number of different things.
Just from a business perspective, market access fees, just the ability to run a sportsbook. It becomes harder and harder for an independent operator or a small guy to do, which makes it worse for the consumer. Because then, instead of having 10, 15, 20 different options, you’re going to have three, five, seven options.
And obviously the more options for the consumer the better.
I think the right direction is obviously very different for a lot of different people. — Circa Sports’ Jeff Benson
So I think we’re going to see a lot of consolidation in the industry because when you look at these different states, whether it’s New York, or Tennessee … the onerous rules that the regulators put on a lot of these operators make it difficult for them to really put out a fair and competitive product. And if you’re not one of the big boys who have a ton of market share, straight from the outset I think you’re going to see the consumer bear the brunt of that.
I think it’s New Hampshire where DraftKings is the only book that operates. To have legalized wagering in your state and to have only one option, I would just say that’s a frustration or a pain point for a consumer.
And then, on top of that, I think when you look around the industry and you have the Dave Portnoys and the Jason Robins of the world speaking like they’re the preeminent authority on sports betting and what they and their companies are doing is the only way that sports betting can be digested or the only way that a sportsbook can be run, I think it sets a dangerous course for where the industry is headed, given that I don’t really view that type of sportsbook as a sportsbook, and maybe more so as a marketing company.
I think there are a number of different approaches to it. And the way the industry is now, it’s the recreational model or nothing. And there’s not much credence that’s given to the sharp book model. A lot of what we’re doing is trying to change that.”
“The more data we get to understand behavioural patterns and improve our models, the faster we get at identifying sharp bettors that we need to limit or
bonus hunters that aren’t going to create real long-term value.” — DraftKings CEO Jason Robins
JEFF BENSON: “In a low-hold business, volume’s your best friend. When you limit players, you’re actively doing things to disincentivize volume. And to say they’re profitable, I think is a far stretch.
When you incinerate hundreds of millions of dollars every quarter in marketing, and you don’t know how to player-profile, and you grossly overvalue the long-term value of these customers, with what they’re going to bring to your book, once these promos and free bets and deposit matches run out, and/or the customer becomes more educated and they decide they don’t want to bet into same-game parlay at 30% holds, or they don’t want to bet into future pools that have doubled the hold an operator like ourselves are offering. I think once you see some of that stuff, you may see a shift in consumer behavior, but I think that remains to be seen.”
Circa Seeks Out the Savvy Bettor and Consumer
JEFF BENSON: “We’re playing the long game. We’re never going to be able to outspend DraftKings or FanDuel.
For us, it’s just putting out the most competitive product we can, offering the fairest holds, offering the biggest limits, and then ultimately when you have CEOs come out and say ‘We don’t want winning players,’ ultimately that’s great for our business because it’s going to drive them to us.
If the only people who play with us are winning players, you know what? That’s great. I mean, for us, like I said, we’re just trying to grow our business one bettor at a time. We welcome any and all action. Everything for us is a volume game. Whether you’re a board-cleaner, whether you’re a scalper, an arber, whether you originate, whether you just steam-chase, whatever it may be, we’ll take it all and we’ll welcome you back with open arms the next day.”
So Far (34 States Legal), So Fast (5 Years Post-PASPA)
JEFF BENSON: “It continues to grow rapidly. I don’t know whether that’s a good thing or a bad thing. I think you have a lot of people who have their hands in the cookie jar, a lot of people who have opinions on how to run books or how to implement new laws, or what legalization should look like.
And I think you have a lot of people, a lot of regulators, a lot of lawmakers, a lot of executives, CEOs, and things like that have never made a bet in their life. They don’t know the first thing about wagering. They don’t know the first thing about theoretical hold. They don’t know the first thing about variance and things like that.
I think you have a lot of people talking, and they don’t necessarily have all the information and all the facts.”
What a Mature American Sports Betting Market Looks Like
JEFF BENSON: “I still think we’re probably 10, 15, 20 years away from the consumer becoming really educated and understanding a lot of the different nuances. I mean, people play into same-game parlays and they don’t understand the hold that they’re playing into.
I think maybe, once you get more consolidation within the industry and people have fewer different options, maybe that could certainly speed up that process.
For us, it’s just putting out the most competitive product we can, offering the fairest holds, offering the biggest limits. — Circa Sports’ Jeff Benson
But when you look at these companies, nine out of 10 of them are public companies. They have to answer to their shareholders at the expense of their customer and they’re not as concerned with what the customer wants. They’re concerned with what their share price is.
For me and, and what we do here at Circa Sports, we’re not public. And I don’t give a f— about our shareholders [because], obviously, we don’t have any.
For me, it’s about putting what the best product is out there for our players, about being fair, respectful, and treating them the way they deserve, and having a relationship that doesn’t have to be adversarial.”
What if DraftKings and FanDuel Come to Las Vegas?
JEFF BENSON: “We’re just doing our own thing. … We’re going to have some, if not the highest limits in the industry. We’re going to proudly say that winners are welcome. When you come back tomorrow, your limits are going to be just as high, if not higher. I think those are some of our calling cards.
If DraftKings and FanDuel get in here, and they take all the market share and we dry up and, and don’t have any business anymore, so be it. But I think we’re going to continue to operate the way that we feel good about, from not only an ethical perspective but more importantly we believe this is the most profitable way to run a sports book.
While they may have an immense amount of market share, they may have traders who sit in their risk room, and they may look at the Don Best screen or whatever odds aggregator they’re using, and they may have no clue how to set a line, no clue where that line is going, and certainly no clue on how to book it. But they may look at what Circa Sports’ number is [and] certainly use that as a baseline. That tells me all I need to know.”
How Has Vegas Fared 5 Years After PASPA?
JEFF BENSON: “I didn’t really have an expectation one way or the other. Vegas is always going to be the glitz and the glamor. People are going to come for the hotels, the shows, the food, the attractions.
Our business continues to grow year over year over year. I think maybe what you’ve seen is that consumers are more educated because of the legalization in the other states.
So by the time they get out to Nevada, they’ve already made a bet in their home state with whatever sportsbook they use out there. I think the industry here in Nevada will continue to grow even though you see legalization in other states just because Nevada remains such a destination place to travel to and visit. I’m not concerned about the direction of people not coming here to wager.”
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