US Sports Betting: MLB Morgan Stanley: Opening Day Prices: Similar to Other Recent Major Events, Less Aggressive than 2020 MLB Open

With MLB Opening Day today and Fri, we analyzed NY sportsbook pricing to see how companies are positioning their odds. Pricing is consistent with recent major events and less aggressive than the 2020 MLB start. This is a positive given concerns around recently lower hold rates.

With MLB Opening Day on Thursday/Friday this week, we collected pre-match odds offered by NY sportsbook operators to get a sense of pricing for the opening set of games. We captured data pertaining to the three most popular pre-match bet types: over/under (total), point spread (runs), and money line for a subset of Thursday games (CHI vs. MIL, PIT vs. STL, HOU vs. LAA, NYM vs. WAS).

We then calculated the overround (theoretical take rate or hold) for each bet to compare pricing being offered to customers and compared it to NJ pricing for prior major events (NFL/MLB season openers, prior Super Bowls). A lower number can be read as more aggressive as it represents lower gross win margins (hold) for operators, which is typically intended to lead to better volumes as it reflects a more attractive price to customers.

MLB Opening Day pricing is generally consistent with this year’s NFL Opener (see note) (we captured from NJ as NY wasn’t live yet) and Super Bowl (see note). Positively, operators are offering less aggressive pricing than the 2020 MLB start (see note, we missed 2021) and it appears there’s been a slight shift towards less aggressive pricing over time (2). We pulled the data Wed/Thurs and pricing was steady both days.

We had been concerned that operators had started to use price more aggressively as a tool to acquire customers. In Dec ’21 – Feb ’22, hold rates have been 5-6%, vs. 6-9% the year prior. However, given there appears to be minimal change from operators on pricing around big events, we view this as a positive for the market as it suggests low hold has been a function of player-favorable luck.

Point spread (sometimes referred to as “runs”). Average overround of 4.4% is generally in line with the NFL’s 2020 opener in NJ (4.7%) but less aggressive than the 2021 NFL opener (4.3%) and 2020 MLB opener (4.0%). We would note a couple sportsbooks (PointsBet, Resorts World Bet) only provided prices for a few of the games sampled when we pulled the data. The most customer-friendly pricing is WynnBet with an overround of 3.9%, followed by DraftKings/PointsBet/Caesars at 4.0%/4.0%/4.2% respectively and then Fanduel at 4.5%. BetRivers/BetMGM were the least customer friendly in NY for the point spread at 4.6%/5.5% respectively.

Over/under (sometimes referred to as “total”). Avg over/under overround for our sample is 4.8%. also in line with the NFL’s 2020 opener. There was little differentiation on pricing for this product other than BetRivers, which came in at 5.0%.

Moneyline. The moneyline has the lowest overround of the three bet types, which is consistent with history, and also had the most variation between operators. For this year’s Opener, the avg moneyline overround is 3.9%, below NJ’s 2020/2021 NFL opener (4.3%) but above MLB’s 2020 opener (3.4%). WynnBet is offering the most competitive pricing at 2.1%, followed by Caesars at ~3.4%, then BetRivers/DraftKings/Fanduel at 3.6%/4.0%/4.0% respectively. PointsBet and BetMGM were the least customer-friendly in NY for moneyline at 4.5%/5.0%.

Note some New York/New Jersey sportsbooks may see ~50% of betting volumes as in-play, which is not captured here, so this is not a complete view on price value being given to customers. It is also only a small snapshot, and may not represent an operator’s overall pricing strategy or customer offer. However, as the most visible pricing to the customer, it gives some insight into how much different brands are leading on price.

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