Won't I get limited or banned?
Rithmm is bringing the power of advanced numerical modeling to the average person. If they were to do this on their own, they’d need to get historical game data, including betting lines, build a model that turns those statistics into a prediction for each game, compare those predictions to the open betting lines, and highlight the games with a positive expected value. That's a lot to do and is beyond the skills of most people. It’s beyond the available time for most others who can do it. I know because I tried to do this a few years ago myself.
Because modeling is not possible for most sports bettors and sports books have dedicated staff to manage their side of the bet, most bettors are left with two options: go with their gut or follow someone else. Rithmm gives people a third option. Now users can make their own models simply and quickly and automate the predictions for each upcoming game. We’ve automated the data acquisition, feature engineering, and making predictions for our users. Evening the tables is a huge value to bettors in the growing legal sports betting market, not just metaphorically, but potentially monetarily too.
One question we hear often is, “Won’t the books kick off your users if they are successful because they use Rithmm?” Our answer is “no” for a couple of reasons. First, most recreational bettors already limit themselves and aren’t worth the books further limiting. Second, and most importantly, market-making books need sharper bettors to get to the closing line faster and more cheaply.
The vast majority of our users (and bettors in general) are small unit bettors who bet recreationally. Right now, they are most likely to be -5% expected value players. This is the standard hold that books take on straight bets today, with a much higher 30% hold on parlays (reference) If our users can become +5% expected value (our overall performance), that allows them to continue to play longer and lose less. But since 80% of people bet $100 or under, the amount this impacts the books is small. Many times books limit winning bettors by capping their bet size to $100 or less. But, since the majority of people are already below that limit, the number of people who will actually be impacted is not as big as some think.
There is also a very good reason why sports books would invite sharper bettors rather than ban them. When an opening line is released, the books have lower limits on bets. They do this to see if the crowd thinks the line needs to move while limiting their exposure. In effect, they are paying for more information to get to the sharper line. Only when they are comfortable with the line do they raise the bet limits to their full limit. With Rithmm, sharper, smaller-bet-size bettors give books the opportunity to have price discovery faster for a smaller cost. Rather than give the boot to these newly sharp bettors, they should promote them as a cheaper alternative to the current set of sharp bettors they use for price discovery.
The result is that more betting markets will become more like the large, liquid markets like the English Premier League and the NFL. These sports have the sharpest lines because they have the largest number of people betting. This mechanic is so well-known that it’s been tried for national security and other predictions. These prediction markets would never boot their best performing users and the sportsbooks shouldn’t either. In fact, some books center this idea in their strategy and are never limiting specific bettors and have consistent limits for everyone.
As Rithmm becomes more widely-adopted and more bettors use advanced tools, lines will become sharper faster. Our users will benefit and the sportsbook will get to sharp lines faster and more cheaply. It’s exciting to see the space evolving so quickly and Rithmm leading the way. Follow us to get more updates along our journey.