There's more to it. Even if the sports-book functions as an exchange, holding ~zero stake in the outcomes, they still want to ban anyone who consistently wins.
That's because if you have a few smart players who consistently win, that means you have a lot of fools who will consistently lose money on the platform - which will drive them away, and impact both betting activity and the spread you collect.
Ideally, you want a bunch of uninformed fools generating huge volume gambling against eachother, while you siphon away spread.
Asian books (not a geographical distinction but a business model) are not exchanges and they effectively pay sharps to bet with them. This is why betting syndicates exist, they set prices, and the business model of Asian books is to make it back on volume from having the best prices (and before legalisation, these were the biggest books in the world, they did billions every week in handle).
But the business model is different: retail-facing bookies have to win their customer base back every week so they need to spend more marketing. Asian books also do promos but they tend to be one-time (which are cheaper to run), they don't have a non-sportsbook business typically, and they don't comply with regulators.
Exchanges do not drive away sharps either. Their business model is largely about providing an environment for sharps. The only times were that hasn't been true is when a syndicate has owned an exchange (this happened with Matchbook). The exchange provides an incentive to invest for people to invest in price discovery, which happens. There is no way for the business to run without someone being incentivized to discover prices. People randomly gambling against each other isn't a business model.
I mean, yes, obviously being a bookie where you can set a crazy spread on convoluted bets is more profitable than being an agnostic, fair betting exchange - but I was pointing out that even a fair betting exchange has every incentive to kick winners off its platform.
The price on most betting exchanges is unbeatable without significant resources (it is set based on Asian books, they will open lines to sharps before betting exchanges list the market).
The price on parlays, with the huge spread, is far more vulnerable because there is no large market for these events. Prices for large events are mostly gathered from third parties, parlays will tend to be priced in-house.
This is part of the reason why bookmakers control who can bet on what on their site. If they opened parlay line with $100k limit to anyone, they would be bankrupted by the end of the day. The purpose of these bets is to create a product that is exciting for customers and is economic for them to provide...but that requires there to be limit on how much customers can bet.
The most profitable product are the handicap markets and point spreads even though the margin for these is usually low single digits. Asian books usually only provide these markets...but the problem is that customers don't like these as much as parlays. The product is entertainment.
CME is a bad example, because large market participants actually go there to buy stuff like commodities that they need to keep their businesses going, and many trades are often net-win-win for both parties. (The active trader made a buck, the producer/consumer of the commodity got their goods. They might have preferred getting them at a better price, but they are still net positive from making the trade at the price they got/paid.)
The retail day traders trying to play there are, of course, in a win/lose fight.
If we start decrying every industry whose business model is based on information asymmetry we are going to have a lot of uncomfortable folk on this forum
> Might have more to do with exploiting addiction and ruining lives for profit.
Thank you for proving my point. The ad industry and the mobile game industry are both tech based industries that engage in those behaviors just off the top of my head.
If you utilize dark patterns to make a profit and then look down on the gambling industry for abusing addictive behaviors, you are just a hypocrite who wants to excuse their own sins
That's because if you have a few smart players who consistently win, that means you have a lot of fools who will consistently lose money on the platform - which will drive them away, and impact both betting activity and the spread you collect.
Ideally, you want a bunch of uninformed fools generating huge volume gambling against eachother, while you siphon away spread.
It's a deplorable, lose-lose industry.