(Sourced from zerohedge.com)
Tiger Woods’ legendary resurgence at the Masters last month has created havoc for bookmakers who are desperately trying to manage their risk heading into the US PGA Championship on Long Island this week. That’s because one in every five wagers at the Masters was on Woods – and he wasn’t even close to being a recognized favorite to win the tournament, according to Bloomberg.
Woods’ large fan base will assure that he attracts even more money from gamblers this time around. This poses a problem for bookmakers: if they try to hedge themselves by pushing bets to other golfers by lowering Tiger’s odds, the bookie risks the bettor moving the action to a different casino.
Getting the odds on Woods right is crucial for bookmakers – it is the quintessential example of the challenge of moving sports betting lines. For those who bet Tiger Woods, the line moves are meaningful: he is a fan favorite and he attracts significant amounts of money.
Adi Wyner, a professor of statistics at the University of Pennsylvania said: “People are willing to overpay to bet on Tiger Woods. Casinos see this as a huge opportunity, but it’s very risky. They can attract a lot of action if they give odds that are closer to the truth, but it can lead to an unbalance.”
The flip side, Tiger Woods’ participation in a tournament can boost the money wagered on the tournament by 20%, according to Jeff Sherman, the vice president of risk management at Westgate Las Vegas SuperBook. As more money comes in, bookmakers also open up a host of proposition bets, like holes in one or whether the winner of the tournament will be wearing a hat or a visor.
Sherman said: “With the interest we’ve seen with propositions, we’re expanding them. That means more Tiger props for the PGA than I’d normally have if he finished middle of the pack in the Masters.”
Casinos can try to alleviate some of the risk by putting higher odds on the rest of the field. That, in essence, creates some “value bets” for golfers like John Rahm, who is now being offered at 18 to 1, but would normally be 16 to 1 if it weren’t for the effect Tiger Woods is having. Those increased odds are luring early “smart money” to younger golfers.
And don’t worry, the Wisconsin man who won $1.19 million on Tiger Woods at the Masters has already placed $100,000 on Woods to win the three remaining majors this season to complete the grand slam.
All told, the problems for bookies may be worth it. Tiger’s recent success has re-invigorated gambling on golf. Chuck Esposito, the sports book director at Station Casinos, said: “It brings guests in which is a win-win. Plus, it was just so much fun seeing Tiger in that red Nike shirt on the back nine again.”