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World Cup: Why sportsbooks aren’t scared of an 8-figure loss if the U.S. goes all the way

Though the U.S. Men’s National Team (USMNT) qualified for the knockout stage of the World Cup on Tuesday, not everyone wins when America prevails on the soccer pitch.

According to Caesars Sportsbook (CZR), the sports betting company paid out a sum in the “seven figures” to Team USA bettors following the match. And if the U.S. were to reach the finals and win it all, sportsbook operators stand to lose even more.

“An 8-figure liability staring us in the face is ominous, but I'm not going to get worried about it at least for another few matches,” Adam Pullen, assistant director of trading at Caesars Sportsbook, told Yahoo Finance.

Team USA, which entered the World Cup as a long shot to win, is currently four wins away from capturing the title.

USA fans before a group stage match against Iran during the 2022 World Cup at Al Thumama Stadium in Qatar on November 29, 2022. (Photo: Danielle Parhizkaran-USA TODAY Sports)
USA fans before a group stage match against Iran during the 2022 World Cup at Al Thumama Stadium in Qatar on November 29, 2022. (Photo: Danielle Parhizkaran-USA TODAY Sports)

'Nobody wants to be in a deep negative'

Caesars’ pre-tournament odds for the U.S. winning the World Cup were roughly 100 to 1, meaning that a $10 pre-tournament wager on Team USA would fetch $1,000 in winnings. One New York bettor placed a $5,000 wager on those odds and could net $500,000.

These kinds of winners aren’t uncommon in tournaments, as some bettors root for underdogs, but the volume of those potential winners in this World Cup is significantly higher than normal.

“Because [the U.S is] the home country, there's nothing like it,” DraftKings Director of Sportsbook Operations Johnny Avello told Yahoo Finance. “Everybody wants to be on the side of the home country, root for them, and get pretty good odds because, remember, the USA is an underdog in most matches that they play.”

At least 90% of customers that bet on Tuesday's result at BetMGM (MGM), Caesars, and DraftKings (DKNG) wagered on the Americans. For DraftKings, the match was the most bet-on game and accounted for the most bets on a single team thus far in the tournament.

Sportsbooks aren’t surprised by the liability, though. In fact, Pullen said, it’s expected when the U.S. is in the tournament, and operators aren’t scared of the potentially large bill looming either.

“If the general public is going to bet USA, that's fine,” Avello said. “And if USA wins the whole thing, we're going to take a bat. And that's fine too because that means that an underdog won this whole thing and the home country of course.”

“Nobody wants to be in a deep negative,” he added, “but hey, that's what we're in the business for.”

Christian Pulisic of the U.S. scores the first goal against Iran on November 29, 2022 in Doha, Qatar in the World Cup. (Photo: REUTERS/Wolfgang Rattay)
Christian Pulisic of the U.S. scores the first goal against Iran on November 29, 2022 in Doha, Qatar in the World Cup. (Photo: REUTERS/Wolfgang Rattay)

‘It’s not like it’s the Super Bowl’

Investors in the sportsbook operators shouldn’t be worried about large downside risk yet, according to Chad Beynon, a senior analyst at Macquarie covering gaming stocks.

Companies and some Wall Street analysts view the first World Cup with widely legalized online gambling as a net-positive customer acquisition moment due to potential new customers drawn in by the event.

Having the U.S. in the tournament helps drum up interest, according to the sportsbooks. With football and basketball in full swing, USMNT participation helps keep the World Cup in news headlines and at the forefront of bettors' minds, therefore driving up the amount bet on the tournament.

Beynon noted that the amount placed on a U.S. win is roughly equivalent to a week’s worth of NBA action.

So while the potential payout for the U.S. winning the World Cup is large, the individual matches along the way haven’t added up to significant losses yet for sports betting operators.

“While you’re giving a little bit up, it’s not like it’s a Super Bowl event over and over again,” Beynon said. “It’s just one game where you’re getting this extra inflow.”

Josh is a reporter and producer for Yahoo Finance.

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