Updated: Aug 2, 2019
When looking at Vegas odds as an amateur, one can easily be tricked into thinking that all of the games/futures will be very close to the lines given. The goal of Vegas, however, is not to be as close to accurate as possible, but rather to get balanced money on each side of their line, profiting off of the 10% margin.
Example: (-110) Patriots [-7.5] at (-110) Jets
Here the line is at 7.5 points and the ratio of winnings is 10/11 of your bet, or in other words you have to bet $110 in order to win $100. If you bet on the Patriots you will need them to win by a margin of 8 or more to win your bet, and if you bet on the Jets, they just can’t lose by more than 7. If we were to suggest $1.1 million was bet on each side, the bookies will make $100k, regardless of how the game goes.
Vegas insiders may have information which would drastically skew the expected results. Perhaps they know that Tom Brady isn’t going to play, but it has stayed out of the media. If they were to adjust the line to Patriots [-2.5] they would get a disproportionate amount of money bet on New England, than they would on the Jets. Let’s say now $2 million is bet on the Patriots, and only $400k on the Jets. Now IF the Jets do win (or at least don’t lose by 3 or more) then the bookies will only have to pay out about $364k of the $2-million brought in, and will profit over $1.6 million. If the Patriots win by 3 however, the bookies will have to pay out over $1.8 million, while only receiving $400k in revenue. Now you may think “Well I’m sure it balances out in the end!”, but this isn’t always the case. Runs on bookies DO happen, which brings me to my next point:
VEGAS IS NOT IN THE BUSINESS OF GAMBLING!!!
It seems counter-intuitive I know, but this is the cold-hard truth. Vegas is in the business of investing and providing liquidity for regular people to gamble, taking the proven mathematical odds over 50/50 chances. Often in casinos I hear people proclaim ill-informed complaints such as “This game is rigged!!!”. The game is NOT rigged of course, but simply designed for players to not win as much as they bet. For example, Roulette pays as if there are 36 numbers, but has 38 with the additions of 0 and 00. 36/38 is approximately 0.947, which means that the longer you play, mathematically you can expect to keep just over 94% of the money bet, or lose over 5%.
This means if you’re betting $100 per spin, and get 20 spins per hour, then you’re betting $2k/hr, and are expected to lose over $100/hr. Obviously there are varying results. You may lose it all very quickly. You may win thousands. But with hundreds of roulette tables open, thousands of people playing, and static mathematical odds, that is how much the casinos expect to make.
Sports betting is a little bit more complicated because there aren’t the static mathematics, so they have to continually adjust the odds and payouts. To avoid taking big hits, the lines are established based on bettor psychology, and adjustments are made based upon actual cash flow. If with the original line far more money was coming in on the Jets, they would start “moving the line”, or making the Patriots less of a favorite, as well as provide incentives for betting on the Patriots by changing their payout from -110 (bet $110 to win $100) to perhaps +105 (bet $100 to win $105).
Now that we know how the lines are established and adjusted, let’s look at how we can find value in these lines.
The first step, before looking at the Vegas lines is setting up your expectations for each of the teams. Delve into their coaching changes. How is Kliff Kingsbury going to affect the Cardinals win total? Look into player changes. Can Le’Veon Bell really make the Jets relevant? And most importantly look at their schedule.
What I did for my bets is all of this for each of the 32 teams, and then made full record predictions for each one. Some takeaways from my paper ‘Mock Season’ are the Rams going 13–3, the Panthers back with double-digit wins in a crazy NFC South, the Raiders with the worst record in football at 3–13 with the toughest schedule in football and the incentive to punt the season for draft picks before they move cities, and the Browns making playoffs for the first time in what feels like forever, winning the division at 9–7. I will post my full breakdown elsewhere on www.deplorablesportsmedia.com or you can hear me talk about it on Episode 1 of the Deplorable Sports Podcast.
After deep research and enumerating my expectations, I THEN look to a sports-book to see what the lines are, looking specifically for large variations between what they have and what I came up with. Here specifically I want at least a 1.5 game difference to consider betting it.
Upon looking at the lines I find out that about 2/3 of the teams I have predicted exactly, or within half a game if Vegas is leaving it with a half point. This makes it much easier for me to narrow down which teams to look for. I notice that the highest over/under is set at 11.5 for the Patriots (whom I have finishing 11–5) but that no other teams are set as high as 11 wins, when assuredly multiple teams will finish with at least that number. On the low end, the lowest win total is set at 4.5 for the dolphins (whom I have finishing at 5–11), but most of the lows are set from the 5.5–7 range, when assuredly some teams will finish much lower than that. This tells me that there could definitely be some money made by taking the over on some of the highs, and the under on some of the lows, with a seeming ‘average-favor’ disparity in the lines.
Looking still for the biggest differences between the Vegas lines and my predictions, the largest disparities are:
Now my prediction on the Panthers could be overtly bold. They have a difficult schedule and missed playoffs last year, but a 3.5 game disparity is huge, and I feel VERY comfortable taking the over! But it is still important to diversify, especially in sports betting where you’re always one injury away from losing your bets. So, I chose the 3 bets I’m most confident on to bet a higher amount, and the 3 2nd tier bets which I’m confident on but to a lower degree to bet a lower amount. If working with a $500 budget this would have the tier-1 bets being enough to win $100 (about $110-$130 per bet) and the tier-2 bets being enough to win $50 (about $50-$60 per bet).
If you’re new to sports betting go through my process, and at least figure out what you’d like to bet, or what surprises you the most about the Vegas lines. Then even if you don’t bet, keep track of which lines you would have chosen, and see at the end of the season how accurate your predictions are! You will have tangible proof of my predictions, so we will see how well they age.
As always, my writings are not financial advice, but simply my opinions and views on the financial opportunities of sports betting. Do not bet more than you can afford to lose, and if you are having gambling related problems, call 1–800-GAMBLER.
- Eric Waisanen
Deplorable Sports Media