As the Cincinnati Bengals mounted a potentially game-winning drive in the waning moments of Super Bowl LVI, the stress was rising for Matt Herbstreit (above) and his team of NFL traders at FanDuel.
“That was a difference of many 10s of millions of dollars; however that played out,” Herbstreit told PlayCanada about a drive that ultimately failed on quarterback Joe Burrow’s incomplete pass on 4th-and-1 on the Rams’ 49-yard line, sealing the victory for LA. “There is definitely some stress involved in how the day plays out.”
Nearly seven months later, with the 2022-23 NFL season set to open tonight with the Buffalo Bills taking on the Rams in LA, Herbstreit gave Ontario sports bettors an inside look at the life of a sportsbook trader. The Australian native, who has been based in New Jersey since 2019, is the lead NFL trader for FanDuel.
Tonight marks the first NFL regular season game since the Ontario sports betting market opened on April 4. The NFL is predicted to be the most lucrative sports league for the province’s 26 live operators. Traders are critical to the success of their operations.
What, exactly, does an Ontario sportsbook trader do?
Simply put, Herbstreit said traders are involved in the process that determines the betting odds and the bets offered.
“We’re the ones that are producing the markets and the selections and the prices that go with them that are posted on site,” he said.
A lot of that is trying to deliver what the customer wants and knowing how far to move prices when there is action in one direction or another, Herbstreit said.
He said there is a strong human element in the trading process at FanDuel.
“We do incorporate a lot of analytical tools, but we also use our knowledge of the markets themselves,” Herbstreit said. “We have some incredible tools at our disposal that, ultimately, are all operated by humans. So we really do value the trader input in the process. And particularly live we really want that human element so that we can react in the moment and be topical and use that to our advantage. If our tech isn’t reliable or if we haven’t modelled for a certain situation, we can quickly remedy the markets on the site.”
Inside the FanDuel NFL trading bunker
Herbstreit said during NFL games traders at an office in New Jersey sit in front of six screens, “and one of them is usually devoted to Twitter and you’ve got notifications set for all the main news brokers and beat writers and you’re making sure you’re on top of every slight bit of information.”
The action is most intense about an hour before kickoff, Herbstreit said. “That is the highest peak in terms of handle and customer engagement.”
Traders become more engaged in the lines and bets being offered once the game starts.
“That’s when there’s more emphasis on the trader as opposed to our pre-live modelling. At that point, the trader needs to factor in whether or not maybe pre-live the pricing wasn’t correct or if it wasn’t factoring in certain elements of the game. Maybe there’s been an injury. Maybe the customers are taking advantage of a certain side or perhaps what our models are producing is different to what the market is. So you need to kind of factor that all in at a higher tempo when the games are up and running.”
Herbsteit said FanDuel has some 20 NFL traders in total. They are scattered around the world to take advantage of the different time zones.
“On an NFL Sunday, we will typically have upwards of a dozen traders in New Jersey, but then we’ll also have a presence in Ontario and a presence in Dublin,” Herbstreit said. “We’ll have half a dozen traders in Dublin and then we’ll also have probably another half dozen traders in Melbourne. So, we have that 24 hour coverage.”
At kickoff, heart rates begin rising in the trading room
Herbstreit said once games start, he and his team will kick into a live trading mode, “incorporating that into our proprietary models and delivering prices for customers to bet on.” He said:
“The trader really is, in essence, that human element where we might have models that can produce prices for any event. If there are outliers or breaking news, that can’t necessarily be factored into the equation, that’s when a trader takes over and instills their input into the process.
“We might have two or three traders dedicated to the core spreads and totals. And then, we may have another half a dozen traders looking at prop markets instead. We likely will have some other traders looking at those derivative markets — your first quarter, first half, totals, spreads and just breaking it down from that standpoint.”
Same-game parlays are increasingly popular
Herbstreit said same-game parlays are the hottest trend in sports betting. “Our biggest development this season will be introducing (same-game parlays) as a live product as well so customers will be able to adopt that and do that in play,” he said.
Beyond trying to provide markets bettors want to wager on, Herbstreit said FanDuel also focuses on the tech side. Namely, having the platform up and running as much as possible and providing a quick connection so there are minimal betting delays.
“It’s about optimizing their customer experience, providing the markets that they want to bet on and having the display and the experiences as efficient as possible.”
The NFL offerings are similar in most jurisdictions
Herbstreit said FanDuel tends to treat different geographical markets the same in terms of what lines and bets are offered. Any differences between, for example, Ontario and New Jersey, would mostly be for compliance and regulatory reasons.
Prime time games, like tonight’s tilt between the Bills and Rams, get more focus.
“We will offer more live markets, in particular, because they’re on their own those games. And those games, definitely, we would do more of that bet construction. A good example is our live parlays market where if there’s a certain player on track for a big game, we will immediately construct more markets for that player to reach higher receiving yards, total, or whatever it may be. So it’s definitely those prime time games where there’s more bets being built on the fly. But with the NFL itself, there usually is a pretty high floor in terms of the offering across the board.”
Why the NFL is the ultimate betting sport
Herbstreit said the NFL is the ultimate betting sport because:
- The game is broken down in pieces — quarter by quarter over a 100-yard field.
- It is a match-up based sport that is very player based, with many statistical options and different positions. “People love player-based markets.”
- There are many different ways to score and different points for each scoring option.
- It’s slow and has many breaks, lending itself well to the betting experience.
- Teams are rarely completely out of a game. “And even if they are, there still is a plethora of options to bet on whether they be team-based, quarter-based or player-based.”
How an Aussie become FanDuel’s top NFL trader
Herbstreit landed his first job as a sports trader in his native Australia. He began covering US sports there in 2017. In 2019, he moved to New Jersey to help build FanDuel’s trading department after sports betting was legalized in that state.
“Now that we have more bodies, I’m able to kind of specialize in the NFL… It’s our biggest sport. It has a better lifecycle with that weekly timeframe as opposed to the MLB and NBA and whatnot.”
When he started, sports trading was a niche occupation where most traders had personal betting knowledge. Today, he said the job seems to attract more analytically-minded people that are strong in math. “But that said, most of the human element is very much based on sports knowledge. And you would have a tough time being in a trading room if you didn’t have a high passion for the sports and watching sports,” he said. “I’ve been in the industry for a while now. I love it. I don’t feel it is a job and I think many of those people that come from other backgrounds feel the same way.”
But it’s not a job for the faint of heart, as Herbstreit’s Super Bowl example indicates.
“We’re very much in a similar role to most of our customers where we’ll have good weeks and bad weeks… We, as traders, try to just make sure we worry about the process and leave the results out of it because that’s out of our control. But you can’t help but stress some of the outcomes in each game.”