How To Calculate Edge In Sports Betting
Calculate Expected Value and Perceived Edge in Sports Betting. So you have decided to start taking your gambling seriously and stop donating your money to the bookmakers? Since you have found this article, that seems to be the case, and you have come to the right place. We draw that 52.4% break even number right out of the odds.110 is equivalent to 11/10. That means if you bet 21 games, you’d have to win eleven of them and lose ten of them to break completely even. The green zero and green double zero, of course. The two green numbers provide the house edge. Because there are 18 red, 18 black numbers and 38 numbers overall, it means you have an 18/38 chance of hitting red or black, which translates to 47.37%. In other words, you have a less than 50% chance of it landing on red or black.
- How To Calculate Value In Sports Betting
- How To Calculate Edge In Sports Betting Online
- How To Get An Edge In Sports Betting
- How To Do Sports Betting
Most people who want to place bets on sports are fans to begin with. It isn’t unheard of for a gambler to place some sports bets, especially during big games like the Super Bowl or the NCAA basketball Final Four, but for the most part, sports bettors are sports fans looking to use their knowledge of a game or of a game’s players to earn a little extra cash. Being a fan of a particular sport, a team, a college or professional squad—these are all precursors to placing sports bet. Sports betting is also a way for a fan to get in on the action of the game, with something more than self-respect at stake.
All gambling is mathematics, even games of chance. If you understand the math behind the game, you understand the game and can give yourself an advantage. For many games, like penny slots or poorly placed roulette bets, are so bad that smart bettors earn their advantage by avoiding them altogether. In sports betting, the math is more complicated. Depending on your favorite sport, you may need to think about things like bye weeks, underdogs, quarterback ratings, and injuries with the same fervor other connoisseurs reserve for fancy winces.
So how difficult is sports betting math? The math behind placing a winning bet is fairly complicated, but the way to stay ahead of the bookmaker is rather straightforward. If you collect on 52.4% of your bets, you’ll break even. We’ll have more details on that number later, including why it takes more than 50% wins to break even, but first some general knowledge about sports gambling and the numbers behind it.
Sports Betting Basics
The easiest way to demonstrate the math behind a sports bet is to make up an example. Let’s say you and your buddy walk into a casino, each with $200 burning a hole in your pocket. There’s a big game on tonight, the Cowboys and the Redskins, so you wander into the sportsbook to check up on the latest news about the game. While you’re sitting there, you see the wagering board, with some funny numbers on it. It looks like this:
- 428 Cowboys +175
- 429 Redskins -4 -200 38
Some of this is easy enough to read. The Redskins -4 means the Redskins are favored to win and must do so by at least 5 points for a bet on the ‘Skins to pay out. The next number (-200) is the moneyline, in this case the Redskins are a 2/1 favorite. The last number (38) is the total, the over/under of the expected number of points scored in the game.
More on Placing Sports Bets
Look at that over/under number, in this case 38. If you or your buddy thinks this is going to be a particularly high or low scoring game, based on your knowledge of the team’s offenses and defenses, or information about a hurt player or bad playing conditions, you can place a wager on the total of points scored.
So how is a guy supposed to know how to literally lay down a sports bet? You need to know three things:
#1 – the type of bet you want to make
#2 – the number of the corresponding team you have chosen and
#3 – the amount you wish to wager
Knowing all that beforehand gives the ticket writer the details he needs to write the ticket without having to bend over backwards to process your bet.
Tipping and Sports Betting
We haven’t even gotten to the meat of the sports math yet, and we’re already talking about tipping the staff behind the window? Yep. Here’s why.
If you place two $100 bets, and you win, you’ll collect $440. You should consider leaving a tip around five percent of your winnings. Yes, that’s a $22 tip, but you just made a huge win, and surely you can spring for a twenty-spot for the guy who helped you win it. If you tip around the five percent mark regularly, when you win, you’re way more likely to get free drinks, which is about all you’re going to get comp-wise at the sportsbook.
So, back to the basic math of sports betting. You and your buddy, after much deliberation, decide to each place a $100 bet on your favorite team. What now?
To bet on the Redskins using the point spread, your bet is called “laying the points.” For your bet to pay off, the ‘Skins have to win by five or more to cover the spread. Remember, if the ‘Skins win by exactly four, the game is a push, and both sides recoup their bet. Another alternative is called “taking the points” with the Cowboys. That means the Cowboys have to lose by three or less for your bet to win, or if the Cowboys win outright. So you and your buddy go up to place your $100 bet, and you find out that the standard straight bet at any bookie pays 11/10. That means you have to bet $110 if you want to win $100. You and your buddy pay the bookie $110 and sit down with drinks to watch your bets come in.
These are deceptively simple bets. Deceptively because they make it look like the outcome of the football game is like the outcome of picking marbles out of a bag. Put one black marble and two white marbles in a bag, pull one out at random, and there’s your football game. After all, the odds are the same: 2/1 for white.
But we, as sports fans, know that the mathematics of a sporting event is much more complex. Sports bettors deeply involved in their hobby will subscribe to weather bulletins from major cities that take part in their sport, making huge wagering decisions based on a few mph of wind in one direction or another. Then there’s the unknown—does a player get hurt in the first quarter? Does weather become a factor? Is a particular player “in the zone?”
How Do Bookies Make a Profit?
Just as we finish ruminating on the concept of the difficult math at play in the background of major sporting events, we’re going to turn right back towards the simpler side of sports betting. Bookies make a profit because of vigorish. What’s vigorish?
Look at the above example again. You and your buddy each paid $10 to the bookie to place your bet. That’s what the standard 11/10 odds in sports betting are all about. You bet the Cowboys and your buddy bet the Redskins, a total of $220 bet. The sportsbook has to pay back $210 to the winner, leaving a nice $10 profit no matter what happens on the football field. That $10 built-in profit is called the vigorish, and it’s the final monkey wrench in the gears of sports betting.
Obviously, sportsbooks are going to take more than two bets on any game, but this example is for simplicity’s sake. Looking at the total number of bets on different games over the course of a week and adjusting the moneyline and other numbers is another way the bookie makes a profit. Adjusting the odds a tiny percentage point in either direction will affect the balance of beats and make the book more likely to turn a profit no matter what.
Essentially, a bookie is a person who holds on to money from bettors then pays them if they win and keeps their money if they don’t. That’s what the job is boiled down to its essence.
When a bookie sets odds for games, he will build what bookies call an “over round” into his set of odds. Another slang term used for this formula is “the juice.” For the sake of simplicity, let’s look at a boxing match where both contenders are equally talented, of equal stature, etc. Since they both have an equal chance of winning, a casual bet may be even money. You put $20 on one guy; your friend puts $20 on the other. Whichever fighter wins awards the bettor with the total of $40.
Bookies don’t offer even money like friends in a casual betting situation. In the above example, with two evenly matched boxers, a smart bookie will offer 5/6 odds for each. That way, a $10 winning bet would only return $8.30 plus your stake. What does this do for the bookmaker? He can float an equal amount of money on both fighters, winning no matter which fighter actually wins. If they take $1,000 worth of bets on one boxer and $1,000 on the other, the bookie would take in $1,000 but only have to pay out $830, for a guaranteed $170 profit regardless of the outcome.
Bookies look at the weight of their books all the time and adjust odds and other factors to make sure their books balance. Though it isn’t possible to completely balance a book, bookies that go too far out on one side run the risk of losing money, and losing money in gambling is the fastest way to find yourself in another industry. All of these factors are why bookies generally root for the underdog—too many favorites winning in a sport with a short season (such as the NFL) can cause a bookmaker to lose money, while a bunch of upsets (like you generally see in college football) is a guaranteed profit for the bookmaker.
The short answer here is that bookies making money has nothing at all to do with your betting. It is almost unheard of for a single customer to be allowed to place enough bets to sink a single book all on his own. High rollers in sports betting get special privileges in terms of their maximum bet size, but these privileges often change with the bettor’s luck—maximums get raised after the bettor sees big losses and decreased (sharply) when the bettor starts to get lucky.
In short, a sportsbook’s profits aren’t necessarily impacted directly by the way an individual bet is called. Unlike casino games or slot machines, where it’s you against the house, sports bettors fuel the bookmaker’s business and only rarely is an individual bettor betting against the bookie.
Sports Betting Odds
Remember at the beginning when we talked about the magic number necessary to guarantee a break-even week in sports betting? If you read enough about sports betting, you’ll hear this number repeated often: 52.4%. If a bettor can win 52.4% of his bets, he’ll break even. Where does that number come from?
When betting the spread, you get odds of -110. Sometimes, sportsbooks will offer a -105 line as a promotion or to welcome new business. But for the most part, if you’re betting the spread, you’re getting -110.
We draw that 52.4% break even number right out of the odds. -110 is equivalent to 11/10. That means if you bet 21 games, you’d have to win eleven of them and lose ten of them to break completely even. Even at -105, you’d still have to win an astounding 51.2% of the time just to break even.
If you don’t trust the basic math behind this break-even principle, look at another real-world example. Let’s say you get really into sports betting after your Cowboys cream the Redskins and you go home with a nice fat wallet. You then bet on the next 10 Cowboys games, winning six times and losing four times.
That 60% betting record (with the odds of -110 that is traditional for against the spread bets in football) will leave you with a profit of $160. Think about it—your $600 profit from your 6 winning bets minus the $440 you lost on losing bets leaves $160. It took you $1,100 to win $160, meaning you have to bet $6.87 to win $1 on average. So you see the small differences between a 52.4% winning rate and a 60% winning rate—inside those 7.3 percentage points lies hundreds of dollars in profit.
Now imagine instead that you lost one of those six winning bets, leaving you with a 50% betting record. You spent a total of $1,100, won $500, and lost $550. That means overall your 50% record drained your wallet by $50. That’s where the vigorish will get you. Not even winning half the time is good enough to break even in sports betting.
Professional Sports Bettors
Believe it or not, some people really do bet on sports for a living. Maybe they work part time at a sportsbook or in some other marginal job in the casino industry, but there is a group of gamblers who bet on sports for their life’s work. With all the math swirling around in our heads after the last bit of the article, it’s hard to imagine anyone wanting to do this for a living.
If you know that a 52.4% record will mean you break even, the simplest way to turn sports betting into a career is to bet enough so that a 53% winning record will bring in the kind of money you want to make.
Another example. After your successful Cowboys experiment, you decide to invest $10,000 in sports gambling over the first four months of the following football season. That $10,000 is set aside to win or lose in sportsbooks.
You plan on betting on 160 games during your investment period. You dream of a 55% winning record because your win-loss with a 55% winning record would give you an 88-72 record. That’s an expected profit of +8.8 units. How did we get to that number? To calculate your units, subtract the total of your losses (multiplied by 1.1 to include the vig) from your wins and you’ll get your unit profit.
Placing $460 bets on each of these games, a number pulled from some quick and dirty math about how much you could afford to bet in a single week’s NFL play without blowing your bankroll, would result in a $4,048 profit if you maintain that 55% winning record. Turning $10,000 into $14,048 in just four months is an investment return of 40.48%. I dare you to ask your bank for that kind of return on your savings account.
But that’s all assuming you can pick the winner 55% of the time. Do your research, look into the records of professional sports gamblers. 55%, while not impossible, would place you among the elite sports bettors in the country, if not the world.
Professional sports bettors have to worry about variance more than any other type of gambler. Working against the forces of variance means managing your bankroll over the course of the season to avoid the negative possibilities that could totally empty your wagering account. Professional sports bettors have the time and resources necessary to calculate these variances, and there are even a few pieces of software out there that can help you figure out your ideal bet in the face of negative variance. But the bottom line is that professional sports bettors would dream of having a 55% winning record, simply because it guarantees you’re beating the house.
Pro bettors make their money on bets that sportsbooks offer that give them even the slightest betting advantage. The key to becoming a profitable sports bettor is being able to find advantages, opportunities where the line a book is offering is vulnerable.
This is why many long-term sports bettors are math freaks. Good sports bettors understand statistics, particularly what are called inferential statistics, though any higher math will help when it comes time to place a bet.
Here is what a professional baseball bettor might do in his head. After looking over statistics from MLB (kept religiously by all sorts of bloggers, data archives, and magazines) between the years 2000-2010, he notices a particular statistic pop out. For example: when the home team starts a left-handed pitcher the day after a loss, that team wins 59% of the time. Good sports bettors can do this sort of math in their head or very quickly on paper. From that bit of information comes a new betting theory—look for game situations that mirror the above example and bet on them. That means he’ll only bet games where the home team starts a left-handed pitcher the day after a loss. Does he just jump in and start betting based on this back of the napkin math? No way. More statistical analysis is required—he may find that this was a fluke for that particular decade and isn’t a trustworthy statistics, or he may find an even more advantageous bet based on his original theory.
Pro sports bettors also keep near-obsessive records of their bets. Obviously, no edge in sports betting lasts longer than a single game. Taking proper records will also help you test theories, like the above one about left-handed pitchers and losses. Without taking good records, no sports bettor’s bankroll will last very long.
What Is a Good Record for Sports Bettors
So, at the end of the day, what could you call a “good” record for a sports bettor? Most casual gamblers looking into sports betting see a pro advertising his 1100-900 record and shake their head a little. How could such an abysmal record be something to be proud of? That’s a 55% winning percentage, and it indicates to those in the know that this bettor is actually turning a profit placing bets on sports.
A good record for a sports bettor is any record equal to or larger than 52.4%, because that number or anything higher means you’re not losing money. A 53% winning record, while not impressive on paper, means you’re actually beating the sportsbook and putting money back in your pocket. Ask your friends that play the slots or play online poker how often they end up putting money back in their pocket.
A -110 wager, standard for spread bets in the NFL, gives the house a built-in advantage of 10%. It means that even if you do win, and you line up to collect your $100, some sucker behind you just spent $10 to hand the casino $100.
A good record for sports bettors is any record that ensures they at least break-even. If you bet 16 games this NFL season and you won 9 and lost 7, you probably made money. And taking money away from a casino is always something to be proud of.
Other Advanced Sports Betting Strategy Articles:
» Future Betting Strategy
» NFL Bye Week Betting Strategy
» Parlay Betting Strategy
Sports Betting Break Even Video:
In the video above I go over the break even % for sports betting, and we take a look at the difference between hitting 52% and 53%. I also quickly show the amounts of profits you can expect if you can hit 55% consistently.
You need an edge in the sports betting markets to make money.
Finding An Edge – Sports Betting And Betfair Trading
First off what is an edge in sports betting and trading?
An edge is the reason that you make money from sports betting.
A simple example of an edge that is well documented and used by many is matched betting and arbitrage. Matched betting involves using bookmaker promotions to make frequent profits. Arbitrage capitalizes on bookmakers being slow to move their odds allowing profit to be made on all outcomes.
However the trouble with these edges is that it isn’t easily scalable and it relies on soft bookmakers. Who eventually won’t want your business and limit you to pennies.
That leaves a lot of people searching for an edge that is sustainable over the long term. An edge that offers more scalability and the potential for larger profit.
But what processes can you use to find an edge?
Lets have look at some potential ways to find an edge in both sports betting and sports trading.
Past Data
One way of looking at finding an edge is to analyse past data. This may reveal profitable trends that potentially still exist in the current markets. Which then can lead to a profitable betting strategy.
Two big advocates of this type of analysis are Cassini. The man behind the sports betting blog green all over, who frequently puts up betting systems based on past profitable trends.
Jon Roberts the man behind the software Predictology. Is also a fan of using past data to look at building profitable betting strategies for the current betting markets.
Is there a downside to using past data?
Well just because something has happened in the past doesn’t guarantee it is going to happen in the future.
However it is certainly a good indicator to use and might highlight some area’s that could be exploitable.
Modelling
If you have an interest in sports betting. Then you will have probably come across a few mathematical models that people use to try and find value in the betting markets.
For those that are mathematically minded. Developing a sports betting model might be the answer to developing an edge.
It is thought that many of the largest betting syndicates in the world use mathematical modelling for sports betting.
Lets take a look at a few models which have been used to try and find value in sports betting.
Elo Ratings
The idea of Elo ratings is that each team has a rating. Stronger sides will be given a higher rating compared to weaker sides. For example Manchester United would be given a higher rating then Brighton.
Elo ratings are constantly changing, they are calculated based upon the results of matches. When two sides play, the winner of a match will gain a certain number of points in their rating. The losing team loses the same amount.
The number of points won or lost in a match will depend on the difference in the Elo ratings of the teams. By beating stronger teams a side will increase there points by more then by beating a weaker side.
Poisson Distribution
Poisson distribution is a mathematical concept. Used for translating mean averages into a probability for variable outcomes across a distribution.
This is used in football betting for example to calculate on average how likely a team are to score a certain number of goals.
Here are some good articles on Poisson distribution in betting.
Expected Goals
In football the expected goals model has risen in popularity lately. Being used quite often in post match analysis by television pundits.
Expected goals is a metric which assesses every chance, it is a way of assigning a value to every attempt at scoring a goal. Each attempt is given a value based based on the expectancy of how likely it is to be scored.
For example an effort from less than six yards out in front of goal was given a rating of 0.91xG. It was such a good chance it should be scored 91% of the time.
Using an expected goals model could indicate how “lucky” or “unlucky” a teams results have been. Which could indicate value on teams that may have been performing well on expected goals but not getting the results.
Live Pictures
They say a picture paints a thousand words. Often live pictures can tell you much more about a game then the in play stats.
We live in an age where there are free streams of football games all around the world. On a given day you can watch the Japanese league in the morning, the Romanian league in the afternoon and finish off with La Liga at night.
How To Calculate Value In Sports Betting
There are quite a few football traders for example that swear by trading only with live pictures.
Psychoff may be one of the best known football traders in the world. He has stated on his twitter account that he makes his goal alert trading decisions based on watching live games. Surprisingly also stating that he doesn’t use statistics for these trades.
With live pictures you can pick up on adjustments in tactics. In football games you can read the tempo and flow of a game. See the weather conditions, body language of players. Having live pictures can often give you a lot of extra information when deciding to make a bet.
Combined with knowledge of the sports and teams. Live pictures might be enough to give you a profitable edge in the markets.
Beating The Closing Odds
In sports betting. If you can consistently beat the closing odds at sharp bookmakers. Then its likely that you are consistently finding value.
Major sports betting markets are pretty efficient. There has been quite a few studies which have shown this using Pinnacle’s closing odds as an example.
Because they are so efficient if you are able to constantly beat the closing odds (after the inclusion of vig). Then you will most likely have found yourself a profitable betting system.
In fact the profitable sports betting tool Trademate is based on this very concept.
Trademate scans for odds across a high number of bookmakers. When it finds odds that are higher then those at the sharp bookmakers it advises a bet.
This is also known as value betting.
It is perhaps one of the simplest ways of finding value in the sports betting markets.
If you are looking for high turnover and a proven method of making money. Value betting is probably one of the easiest ways to do this.
The drawback to this style of betting is that it again relies on soft bookmakers.
Experiencing The Markets
This could probably be classed as using past data.
However specifically relating to Betfair trading I think it deserves its own section.
Experiencing the markets over and over can really help you see potential opportunities for profit.
I will use football as an example as this is the sport I trade the most.
A lot of my own pre match trading strategies were created by watching lots of market movements. Noting odds days in advance for games. Tracking what the odds were leading up to game day and eventually noting the closing odds.
If you do this you start to see patterns and understand what moves a market pre match.
Team news is always going to have a big effect on the market. But by watching markets I also learnt that performances mid week for teams playing in Europe will effect prices for games at the weekend.
If there is a question mark on whether a key player is likely to start, early odds movement can often be a good indication on how likely they are to play or not. As people with this information already will get their bets on before its public knowledge.
Caan Berry has also stated that he records all the horse racing markets he trades. So that he can experience these markets again and build better judgments for future markets. Allowing him to react quicker if future markets trade in a similar way to one he has already experienced.
In Depth Knowledge
As noted earlier in this article. The markets with the most amount of money traded are usually the most efficient.
However odds makers don’t put a huge amount of attention on some of the sports/events that don’t attract the big money.
For example the odds in the Portuguese second division are not going to be as efficient as the Champions league. So for a hardcore fan of the Portuguese second division, value might be easy to spot at first glance.
In lesser known sports/leagues an in depth knowledge may be enough to give you a profitable edge.
Contrarian Betting
The sport of mixed martial arts is still fairly young. Betting on the UFC is growing and odds makers are getting better at pricing up fights.
However if you have an in depth knowledge of the sport then there is great value to be found.
Given that you don’t see fighters week in week out. Along with the promotion of UFC being akin to pro wrestling with a narrative often being written. Occassionally you see some lop sided odds as the betting public often follow the narrative being portrayed.
How To Calculate Edge In Sports Betting Online
The best example of this is when Ronda Rousey fought Amanda Nunes.
Rousey was coming back after a year layoff on the back of vicious head kick loss. In a fight where she showed serious flaws in her fighting style.
Nunes was the new champion who had shown to be well rounded and was running through top level competition. On top of that she had shown she was an elite level striker, striking was Rousey’s biggest weakness.
All the media and promotion of the fight was behind Rousey comeback and somehow Nunes was odds of 2.8 as the defending champion come fight night.
The odds were way out of line due to the media being behind only one fighter.
Whenever the media are heavily behind one team/athlete. It is always worth looking at it from a contrarian point of view.
Summary
So we have looked at multiple approaches in finding an edge in the sports betting markets.
Depending on your personality and your own skill set some maybe more viable then others
Often a combination of the methods above will be used to find value.
Finding a long term edge in the Betfair trading or sports betting isn’t easy. But for those that do find them the rewards can be huge.
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