A gambling math question/debate, maybe Comptr Bob has some thoughts?

[WildBill]

So I had an interesting discussion with a guy who serves as something of a data scientist at MGM corporate this afternoon. He's got a business degree but he's very math wonky and believes every bit of gambling math is set in stone. So the discussion got around to sports betting. I told him I know the standard math is you need 52.38% winners on 11/10 to "win" but that I don't think that applies for the savvy bettor. For the house is may or may not, depending on how well they set their lines and how sharp their bettors are. He totally disagrees, the math is the math. He said if you ran queries on their sports events that had 11/10 odds the net hold is nearly exactly the 4.55% they expect, its only about 20 basis points low were his words. So they are holding 4.35% is what I assume and he just assumes as time goes on they will get closer to 4.55%. He feels like bettors who think they can get away with less are fooling themselves because even if I switch from book to book, the odds reflect an inherent house edge that I have to beat.

But then the theory question I have that is what if as in my situation, I have 14 sports books to bet into, including some offshores that have slightly different lines? I always shop for best price so do I still need to hit 52.38%? Like I told him today, I bet Arizona +118 at Superbook when almost everyone else was giving between +100 and +105. St Louis at most books was around -120 to -125. Isn't my math in this case like betting into a 2-cent line? He said the math is the math, that I better pick winners at effectively 52.38% or maybe in hockey 51.2% since Superbook uses a dime line on NHL.

What do others think? What effective percentage do I have to hit if I'm betting games (not doing arbs) and always shooting for the best number? Or is the math set in stone? My thought is this guy's thoughts are why casinos sometimes do get beaten and why they hate winners because it ruins their story of we'll make this set percentage or else every year.

 

[John Kelly]

I'd sooner lay -110 into soft numbers than -108 or even -105 into sharp ones.

It's all about the efficiency of the point spread offerings.

 

[FairWarning]

I'd sooner lay -110 into soft numbers than -108 or even -105 into sharp ones.

It's all about the efficiency of the point spread offerings.

Same. I always laughed when countless posters would swear they were beating Pinnacle in its heyday, even at -105.

 

[Fezzik]

51.5% vs. Market lines likely will win for you solidly with lots of outs.....

 

[cheapseats]

For me, it depends on the basis and consistent use of your measure to determine what is sharp or soft. If the ATS # comes into play less than 5% of the time then 105 is the number you should seek, especially if you have your own #'s and abide by them 100%. If your measure is book to book, then I'd say stick to the higher #, something similar to chasing steam or agreeing with the market at large and greater weight. I for the most part rely upon the book to book method with greater weight to the market......10 minutes or less to game start. 5 to 15 cents for me is okay as I do not lay 110 for 100. I'll gladly take a few cents less.

 

[ComptrBob]

Profit in sports betting for a capper (over the long run) depends on bets being at a net positive expected value (+EV). That's the math, but generally its difficult to demonstrate that a certain bet is +EV. However, its clear in WildBill's example that there is value in betting a line at +118 when only +105 or less is WA, especially if you think +105 is close to +EV in itself.. This reduces the win% necessary to breakeven (also increase the amount won).

Consider that even 52.38% vs -110 is a not a winner, but a minuscule loser since the breakeven is more accurately 52.3809%. Unless you have many betting outs with different lines, you must exceed this to win at -110, you must exceed this by a fair amount to win a large amount given a reasonable bankroll. Sportsbooks generally don't set perfect lines, e.g. a ML should be -213.5 will get reduced to -210 and they don't exactly balance their action so typically they will never have an exact hold of 4.55%.

Also obvious is that generally a "soft" spread at -110 yields better EV than a "sharp" number at -105 depending on the sport and the spread. Same rule is used to determine if buying the "hook", buying points, or teasing is +EV. Same rule to determine betting a ML or a spread, same rule for a RL in baseball vs the ML. Its all about the probabilistic value of the points (or run)

 

[Dell Dude]

51.5% vs. Market lines likely will win for you solidly with lots of outs.....

No comment.

 

[GameBred]

So the discussion got around to sports betting. I told him I know the standard math is you need 52.38% winners on 11/10 to "win" but that I don't think that applies for the savvy bettor.

The bold should read, “10/11.” While I know what you mean, the fraction traditionally reads:

Return / Risk.

He said if you ran queries on their sports events that had 11/10 odds the net hold is nearly exactly the 4.55% they expect, its only about 20 basis points low were his words. So they are holding 4.35% is what I assume and he just assumes as time goes on they will get closer to 4.55%.

He’s a little confused.

The Market Overround is 4.55% and the HOLD is 4.35%.

Two different things.

Theoretical Hold is derived from the Market Overround and is always less.

He feels like bettors who think they can get away with less are fooling themselves because even if I switch from book to book, the odds reflect an inherent house edge that I have to beat.

Not necessarily. In theory they do but not always practically speaking.

But then the theory question I have that is what if as in my situation, I have 14 sports books to bet into, including some offshores that have slightly different lines? I always shop for best price so do I still need to hit 52.38%?

It depends on your average odds. If you are hitting 52.38% then look for the inverse of your average odds to be greater.

1 / .5238 = 1.91 (-110)

If you’re purchasing odds that are on average > 1.91 the only thing separating you from profitability is time.

Let’s say on average that you’re bagging 1.95 (-105).

1 / 1.95 = .5128

You only have to win 51.28% of the time as opposed to 52.38% to be profitable.

Which translates to:

1.95 / 1.91 = 1.02

Yielding 2% on Turnover.

This is assuming 1.91 is FAIR and market prices are often below FAIR.

Like I told him today, I bet Arizona +118 at Superbook when almost everyone else was giving between +100 and +105. St Louis at most books was around -120 to -125. Isn't my math in this case like betting into a 2-cent line?

I guess but I wouldn’t think of it like that. I’d think I’m getting 2.18 about a ~2.05 chance and thus working an approximate 6% edge (if 2.05 is indeed FAIR).

He said the math is the math, that I better pick winners at effectively 52.38% or maybe in hockey 51.2% since Superbook uses a dime line on NHL.

The math is the math if you’re always betting into 1.91 (-110) FAIR lines. You better hit at least 52.38% just to tread water. You line shop to increase the average odds you’re betting into which will, as CB mentioned, lower your required Break Even Win Rate and increase returns.

What effective percentage do I have to hit if I'm betting games (not doing arbs) and always shooting for the best number?

See Above. It depends on the average odds procured.

 

[WildBill]

Good stuff here. I guess to each his own. You can bet based on teams or you can bet based on numbers, but if you bet either "bad" teams or "bad" numbers you'll lose more than your fair share. I struggled making very modest money betting into offshores over almost the last decade because at the end of the day there really wasn't much variety in their mostly quite sharp numbers. Year one of betting into much softer Colorado books with a huge variety of numbers my results have shot up significantly. And because I have done well I have opened up and taken a lot more positions than I used to. Even though I didn't make any changes to follow his methods specifically, I feel like its sort of has followed along with what Ed Miller said in his sports betting book that sports betting is beatable as long as you bet into markets with a range of numbers that effectively reduces the edge against you.

 

[trytrytry]

also consider even if you cant shop or dont get a line break, Certain types of -110 bets if you know them are better or worse than a coin flip costing you -110 when you lose, yes most lines are efficient, efficient markets but not all.

maybe a way to think about it is you look at parimutual horse racing say with a 20% house takeout. The data shows long term if you bet every favorite you lost 16% (ie not 20%) if you bet every longest shot on the board you lost 24% (not 20%) . even with the same house take out there are situations where a person finding the more value situation can do better than house take MATH. and some cases where you can do worse than House Take Math. now can you do enough better than house MATH as the MGM guy says to make a profit.

in the horse racing situation its just a case of one way is just losing slower or faster than MATH suggests even when both are betting win bets on same market.

 

[John Kelly]

Good point, Try3.

Steve Klein, in his 2005 book The Power of Early Speed, showed that betting 2/5 shots at the racetrack produced losses of only 8%.

You only lost eight cents on the dollar at the 2/5 price compared to losing 15-20 cents on the dollar on most other prices.

The huge longshots were the worst bets.

Klein used the DRF database to study over 100,000 races.

 

[GameBred]

Good point, Try3.

Steve Klein, in his 2005 book The Power of Early Speed, showed that betting 2/5 shots at the racetrack produced losses of only 8%.

You only lost eight cents on the dollar at the 2/5 price compared to losing 15-20 cents on the dollar on most other prices.

The huge longshots were the worst bets.

Klein used the DRF database to study over 100,000 races.

Favorite-longshot bias.

 

[WildBill]

Good point, Try3.

Steve Klein, in his 2005 book The Power of Early Speed, showed that betting 2/5 shots at the racetrack produced losses of only 8%.

You only lost eight cents on the dollar at the 2/5 price compared to losing 15-20 cents on the dollar on most other prices.

The huge longshots were the worst bets.

Klein used the DRF database to study over 100,000 races.

I remember reading a book decades ago that said if you bet the under even money horses to place you supposedly would come out slightly ahead. Too much money was chasing the show pools, although of course you get the occasional edge due to the minimum returns, while most bettors would fill up the place pools with horses they liked, but were afraid would lose to the favorite. Game has changed a lot for sure, but it seemed like sound thinking. No one goes to the track to win $2.80 on $2 bets but it probably has the best chance to beat the huge takeout over time.

 

[ComptrBob]

The Market Overround is 4.55% and the HOLD is 4.35%.
Two different things.
Theoretical Hold is derived from the Market Overround and is always less.

Just to clarify , the Hold% is defined for a balanced book (thus theoretical) as the net profit/total bet. This is (cash in - cash out)/cash in or (so for equal $110 bets at -110), hold = ($220-$210)/$220 = 10/220 = 4.55%.

The overround is the sum of the two (or more for a multi-way bet) breakeven percentages - 100%. For a -110 line, this is (52.38% + 52.38%) - 100% = 4.76%.

 

[GameBred]

Just to clarify , the Hold% is defined for a balanced book (thus theoretical) as the net profit/total bet. This is (cash in - cash out)/cash in or (so for equal $110 bets at -110), hold = ($220-$210)/$220 = 10/220 = 4.55%.

The overround is the sum of the two (or more for a multi-way bet) breakeven percentages - 100%. For a -110 line, this is (52.38% + 52.38%) - 100% = 4.76%.

Yes, very good clarification.

The Overround is the sum of all the event implied probabilities, which is known to us. A Books Handle and thus Hold. is unknown to us but we can derive their Theo Hold from the Market Overround.

If the Market Overround is 4.76% then the Theo Hold would be 4.55%.

1 - (1 / 1.0476) = 0.0454

If the Market Overround is 4.55% then the Theo Hold is 4.35%

1 - (1 / 1.0455) = 0.0435

I get what you're saying though, I fucked that up as I erroneosuly assumed Bills SB contact didn't understand that Overround does not equal Hold. A dumb assumption considering the guy runs a Book

I'm one of those guys who thinks the Hold is none of my concern but I do think one should be conversant with it.

 

[Fezzik]

Almost every book says handicap the card, find the games you like, and then shop for the best numbers.

The RIGHT way to bet is to read the entire board, and be open to make bets......

20 years ago at the Hilton (Westgate) I saw an NFL game lined at 3.5, with a ML on -150 on the favorite......

I bet -145 and +3.5-110........... JK was sitting next to me, I told him about it............. He didn't bet it......

 

[WildBill]

Almost every book says handicap the card, find the games you like, and then shop for the best numbers.

The RIGHT way to bet is to read the entire board, and be open to make bets......

20 years ago at the Hilton (Westgate) I saw an NFL game lined at 3.5, with a ML on -150 on the favorite......

I bet -145 and +3.5-110........... JK was sitting next to me, I told him about it............. He didn't bet it......

I do some of this too along with picking off some easy arbs and attempt an occasional middle. With all the offers by books today I take some of those that make sense, although more and more I am seeing some bets that are just terrible odds but they are selling naive patrons that they are "boosts". I mean if FoxBet says the real price on something that doesn't really have a price is +180 and they are giving you +220 it must be a deal right?

Still games I bet that I capped myself are the majority of my volume. I mean that's what most of us enjoy doing as a hobby I think, even if its not extremely lucrative in the end.

 

[FairWarning]

Almost every book says handicap the card, find the games you like, and then shop for the best numbers.

The RIGHT way to bet is to read the entire board, and be open to make bets......

20 years ago at the Hilton (Westgate) I saw an NFL game lined at 3.5, with a ML on -150 on the favorite......

I bet -145 and +3.5-110........... JK was sitting next to me, I told him about it............. He didn't bet it......

There are people on the forums who bet every number that is off, no matter what side they like.

 

[John Kelly]

Almost every book says handicap the card, find the games you like, and then shop for the best numbers.

The RIGHT way to bet is to read the entire board, and be open to make bets......

20 years ago at the Hilton (Westgate) I saw an NFL game lined at 3.5, with a ML on -150 on the favorite......

I bet -145 and +3.5-110........... JK was sitting next to me, I told him about it............. He didn't bet it......

I've just been used as a prop.

Dammit!