That’s a big chunk of change
Australian sportsbook Betr – no relation to the one in the States founded by Jake Paul – made its bed last year and now and now it has to lie in it. In a promotion last September, Betr offered 100-1 odds on a AU$10 maximum bet on five events, one of which was the National Rugby League (NRL) championship. About 40,000 customers wagered $10 on two-time defending champion Pentrith Panthers to win their third straight title and to Betr’s dismay, the team did just that over the weekend.
The sportsbook is now on the hook for around AU$40 million, the largest payout in Australian sports betting history. It is so much money that Betr needed to delay payment.
It is also so much money that in the days leading up to the championship game, Betr e-mailed those who had made the bet, encouraging them to take advantage of an early cashout offer. It’s not an unusual thing for a sportsbook to offer – many have it as an option for bets, allowing people to take a smaller payout than if they actually won in exchange for a guaranteed profit. Betr’s offer of half of the potential AU$1,000 payout was certainly an attempt to reduce its potential liability, especially considering Penrith was the favorite.
Though Betr was unable to make immediate payment, the company has promised to put the funds in everyone’s accounts by 5pm on October 6.
Making the best of the situation
It is also very probable that Betr hedged the bets that it accepted through a method called “betting back.” It’s really the same as when customers hedge their bets – in this case, the sportsbook actually places wagers with other books on the same event. That way, it can use winnings on the event to payout a portion of its losses.
Of course, Betr could have done nothing – neither offering an early cash out or betting back – and just crossed its fingers and hoped that Penrith would lose, but it knew it was up against it.
Racing Queensland chief executive Jason Scott, who used to hold the same post with Ladbrokes Australia, made a post online that delaying the payment was a smart business move.
“If you pay on Sunday the withdraw button will get a workout,” Scott said. “If you pay on a Friday evening before Group 1 racing in Sydney and Melbourne plenty will be sent round.”
He later told Financial Review that he was joking in his response to a Twitter post and that the delay likely was so that Betr could gather the funds it needed for the payments. Another industry source did tell Financial Review, though, that it is well-known in the sports betting industry that customers were less likely to pull their money out as the weekend draws near.