The Current Betting Market
Today, if you bet-off market prices on point spreads routinely at the same online sportsbook it’s highly likely you’re going to get stiffed. This is because reputable online sportsbooks don’t routinely offer off-market prices. However, less than reputable betting sites still operate targeting the public. These websites service recreational players well and will offer lines that should be -6.5 at -7.5 because they service clients who don’t know any better. If you show up and start betting the opposite side – these sites will generally find a way to make sure you never bet with them again. This is often via gross slow pays, or just flat out stealing balances. As the old saying goes “if it sounds too good to be true, it probably is”. These sites will service and cash out the public – but if your betting activity indicates you’re at all sharp, only a fool’s chance exists you’ll ever see a dime of your winnings.
Reputable betting sites make their money by doing the best job possible to arrive at betting odds smart money has no interesting in betting. If they hang out a betting line that is +EV, big money shows up placing maximum bets. Even if this is a reputable recreational sportsbook with a small maximum bet of $1,000 (example Bovada, Intertops etc.) all the maximum bets they receive from smart money and from those using Pinnacle to cap the market is going to FAR exceed the dollars wagered by recreational bettors. For example, if a recreational focused online sportsbook has an average bet size of $55.00 per and a professional can wager $1,100 to win $1,000 – this site theoretically needs 20 recreational punters to offset action from professionals. However it doesn’t even work out this ideal, because what happens is when the lines -7.5 instead of -7.0 only 65% of their bettors are going to bet the wrong side because many recreational punters bet randomly. With this being the case the site might need 60 or more average bettors per one professional. This makes shading the lines to service the public risky.
In summary, “fade the public” no longer works because “reputable” online sportsbooks no longer shade the lines enough that they routinely give away +EV wagers. Now this doesn’t mean they don’t shade them: www.bovada.lv and www.betonline.ag are two sportsbooks that offer great value and are reputable. These two sites deal mostly with recreational bettors and often do tilt lines in such a way there is slightly better value on the non public team, but 49 times out of 50, it’s not enough for this to be +EV. If you read our articles on football betting strategy you’ll learn why these are two of the best sites for both recreational bettors and for bettors who understand even very basic betting strategy.
The Betting Market is Near Efficient
To make sure the main point in this article is very clear; I’ll spell it out one final time. The sports betting market is very near efficient because anytime a reputable online sportsbook offers a +EV wager savvy sports bettors (be it professionals, or those who can cap a market via a line feed and calculator) will be there to bet and keep betting until that sportsbook moves the line to the point smart bettors no longer have an interest. Considering savvy bettors wager much more than recreational ones, the money an online sportsbook stands to lose offering +EV bets is hard to recoup. Now to be clear +EV bets pop up all time as lines open and move towards efficiency; when they are available, 2, 3, maybe 4 people per site can wager the +EV line before the odds are adjusted. A great way to make money is betting with www.betonline.com who offers bonuses, and open betting lines well in advanced, even though they’re not all that sharp. Meanwhile if you understand teaser betting strategy Bovada.lv is a great site to profit from later in the week or on game day.
As much of our websites covers there are MANY ways to win betting sports. If you however get caught up in the notion that fading the public on major markets (NFL, NCAAF, NBA, NCAAB, MLB, and NHL) is a viable means to profit, you’re more than likely going to end up losing to juice and wasting time that could be spent learning actual winning strategy. For some outstanding use of the information contained in this article read the page that contains our no-vig calculator or my article on football derivatives.
Reduced Juice vs. Bonus Offers
Line shopping is one of the most important aspects to winning at sports betting. The best lines are often found at reduced juice sportsbooks. In case you are not familiar with reduced juice or low fees, first understand that the industry standard when making coin flip (50/50) bets is to risk $1.10 for each $1.00 you want to win. Specifically, that is 1.91 decimal / -110 American odds. The reason it is not even money is because of the markup the bookmaker builds into the line to make a profit. This is referred to as his margin, or to the player as vig or juice.
Reduced Juice is when a book operates with lower margins than the risk $1.10 to win $1.00 base.
5dimes(.eu or .com) is the most famous CA. accepted website offering this option. When players first join they are placed on the reduced juice rewards package. On game day only, under the betting menu headers of each sport, a selection option labelled “Reduced” is visible. If you select this for football or basketball you will find point spreads and totals are priced at -105 (risk 1.05 to 1.00). This is a huge savings over the -110 that is normally charged! In this article I explain why reduced juice is far better option than sports betting bonuses and start this off with a comparison.
5Dimes Reduced Juice vs. BetOnline Bonus
Betonline(.ag or .com) is a sportsbook many players use for their unlimited 25% reload bonuses. These are given as 25% of deposit match, issued as free play credits, carry a six-time rollover and are essentially available on any deposit size. To compare let’s say you deposit $400 and get a $100 free play. Your rollover is ($400+$100)*6=$3,000. That is the amount you will need to wager prior to withdrawal. Also note rollover is defined as the lower of the risk or to win amount.
How You Actually Lose on Bonuses
Next let’s say to clear this bonus you first wagered your $100 free balance as $10 to win $9.09 on 10 different bets. As point spreads are 50/50 on average you will win 5 of these bets netting $9.09*5=+$45.45. You will also have met $9.09*10=$90.90 in rollover, leaving $2909.10 remaining. To meet your rollover you make 100 bets of $32 to win $29.09. Again as point spreads are 50/50, on average you lose 50 times for 50*-$32=-$1,600 and win 50 times for 50*$29.09=$1,454.50. To recap your free play bets won you +$45.45, you lost -$1600 and won +$1454.50. That means you have lost a total of -$100.05.
Where Reduced Juice Differs…
When instead betting at 5Dimes the odds are -105. This means the $10 bets are $10 to win $9.52. Here you are betting with cash, so, if you win 50% of your bets as the implied odds state, 5 times you lose $10 for -$50 and 5 times you win $9.52 for -$47.60. That’s -$2.40 in losses. On the other bets $32 @ -105 is $32 to win $30.48. Here 50 times you lose $32 = -$1600, and 50 times you win $30.48 =+$1524. That’s -$76 on top of the -$2.40 we lost for a total of -$78.40.
Check that out! Point spreads are supposed to be 50/50 propositions and therefore is what recreational players should average. Here betting a 25% free play with 6 times rollover at standard juice, a player is expected to lose considerably more than if he bet with no bonus at all using -105 reduced juice.
For winning players the difference is even more significant. Let’s say you pick 54% winners. Using the same examples at BetOnline with the free play credits you win 5.4 of those bets for $9.09*5.4=+$49.09. You then win 54 bets for 54*$29.09=+$1,570.86 and lose 46 bets for 46*$32=$1472.00. If you total those you will see you’re up +$147.95 in profit. If you instead bet -105 5Dimes: 4.6 times you lose $10 for -$46, 5.4 times you win +$51.41, 54 times you win $30.48 for +$1645.92 and 46 times you lose $32 for -$1472. Those four total to +$179.33.
In short, the higher your win percentage is, the more money you will save having reduced juice over standard bonus offers. There is also the fact, when betting with bonuses you often are forced to rollover you balance many times prior to withdraw. When betting with reduced juice there is most often no rollover terms to meet. If you make a bet and win, you can cash out without restriction.
When Bonuses are Best
For serious sports bettors wagering as a source of income, always getting the best line is vital. Knowing how much juice is involved in that particular line is of no importance. This is because we are not using that book ongoing blindly, but rather only using them when the odds offered on that one particular bet are better than can be found anywhere else. In other words only the odds not the juice matter. With this in mind bonuses can be used as leverage.
For US residents, www.bovada.lv offers a 50% initial deposit match bonus up to $250 in free play credits. While their odds are full juice, they also VERY often do have the best line on one team or the other, due to their recreational player bias. When an NFL team is +6.5 at most sites it is not rare to see Bovada having the same team +7. Taking the bonus at their site is fine as there will be many opportunities to meet their reasonable 3-times rollover.
Even If You Jump Around “Whoring’”
Another situation is bonus whoring recreational sportbooks. There are many mom and pop type sportsbooks based in Costa Rica that service only CA players, and accept only Western Union deposits (no credit cards). While the scams are a dime and dozen there are also semi-established ones that do run honest shops. I’m hesitant to give an example as such information becomes outdated quickly, but ONLY at the time I am writing HRWager and 1Vice are examples that come to mind.
These above mentioned sites are ran by owners who I believe have started with legit intentions. They however also probably run on shoe string budgets, and haven’t been around a long time. There is no guarantee these books will last. However, as their bonus offers are large, some players might feel the risks are outweighed by the potential reward. In such cases, quick *in and out* might be best. This can be done by making an attempt at arbitrage betting to hopefully lose the post up and bonus amounts into another website, before rollover is met. There are risks involved with that strategy, some of which are covered the linked article.
Outside of these exception reduced juice is best. If you are going to use one sportsbook only then the decision which to use is a simple one. If you are in CA go with 5Dimes. If you are outside the US, but bet mostly American sports, then Pinnacle is probably best. For those outside CA who bet mostly football (soccer), and perhaps also tennis, basketball, and local sports the best odds can be found with Asian bookies such as SBOBet, 188Bet, etc. But again, it is only when using one single book only (refusal to line shop) that bonuses are best ignored in favor of lower juice.
Intro To Weighing The Odds
When we lecture about “weighing the odds,” we’re using a general term for evaluating possible wagers. Before placing a bet, there should be a variety of factors that bettors consider before ultimately putting their proportion of money down.
How much to bet per game is sometimes an afterthought for sports bettors, and it’s the number one reason that potentially profitable bettors go broke. We present an eye opening look at sports betting bankroll management with our featured author, Jim Griffin.
Jim gives players a realistic look of what kind of a bankroll it takes to profit heavily from sports betting and weighs the pros and cons of flat betting compared to the Kelly Criterion (go to middle of that page for info).
Bankroll management is one of the basic aspects of becoming a winning bettor. Understanding your risk of ruin and growth potential is of the upmost importance to maximizing your EV.
Line shopping, or lack thereof, can be the difference between a winning and losing season. This is doubly true for novice players, where getting the best price is ultra-important. Picking the right side of the spread or total is not nearly as important as getting the best price on your wager.
Becoming an expert handicapper can take years of study and deep knowledge of each sport. However, even the most talented handicappers in the world won’t even come close to sniffing success if they don’t line shop.
The best part about line shopping is how simple it is to do. Anyone can become an expert line shopper and increase their bottom-line profits by thousands of dollars.
Finding value in markets can be tough due to the nature of international sports betting markets. When a legit sportsbook moves their lines on a key number, almost every sportsbook will follow the move within a matter of seconds. For this reason, bettors have to know what to look for if they want to spot inefficiencies within the market.
For beginning to intermediate sports bettors, there is plenty of value to be found in lesser bet markets, such as derivatives (propositions) and smaller market sports. Players can maximize their edges on a contest through these markets and via parlay and teaser betting in many cases.
Purchasing half-points is another area that many bettors have not considered or are employing improperly. Our breakdown of half-point math is among the best online and explains the difference in value of half-points on key numbers across all major sports.
Whether or not you’re chasing steam is another factor to consider when placing a wager. Going against a steam move is usually not advisable, but analyzing a steam move can be difficult. We do our best to examine potential profit opportunities when chasing steam in the above article.
Take Advantage of our Resources
The sport betting guides and articles at 247onlineBetting.ca are the most comprehensive resource online when it comes to all forms of handicapping and sports betting strategy. We encourage bettors to eventually read all of our sections here, starting with betting basics, and moving onto intermediate betting and advanced handicapping content – if you are truly serious about the betting game. If not, carry on.
Evaluating odds and betting markets is something that bettors will have to do each and every day if they want to reach their maximum profit potential.
Bankroll Management in Sports Betting
“I will pay you a penny for the first day you work and I will double it every day for a month” Have you ever heard this? Most people asked if they would do manual labor under those terms say no. They obvious haven’t counted out that the penny doubled every day for 30 day is $10,737,418.23! (This is no lie; do the math!)
The same scenario is common with winning sports bettors. While I’m not sure if he’s a winner, take for example this 2+2 thread where a poster was disappointed to learn someone with a $500,000 bankroll who bets 1% of it ($5,000) per wager, on 30 bets per month with a 2% edge averages only $3,000 profit per month. To him $3,000 a month is a living.
But, “wow a $500,000 bankroll is needed to earn that” (when using what is in his mind “proper bet sizing”). After telling this poster exactly what he needed to know, his last response was “Can someone here offer any real insight?”!
Many other sports bettors do the exact same thing. They have a chance at a penny doubled per day type scenario but never learn optimal bet sizing. Most continue to flat bet because they need to cash out to pay their living expenses or whatever else. But get this! If you started with only $500 and every week increased it 5%, it would take only 3 years to turn $500 into $1,000,000.
Is the above example realistic? Perhaps not and perhaps so, but; how close to $1,000,000 do you suppose you would get if you spent 3 years flat betting 1% ($5) per game, never increasing your stake. Do you see the point? This is why the topic I’m going to introduce is valuable. First let’s make sure we all understand expected value.
What is Expected Value (+EV / -EV)
Expected value (EV) is how much a player expects to profit per wager on average.
If we were to make an infant number of even money (risk 1 to win 1) bets on the result of a coin flip, this is neutral expected value. This is because we’re getting 50% odds and the chances of winning are 50%.
Let’s instead say that on a coin flip we’re getting +150 odds (risk 1.5 to win 1). This an extra 0.5 per win, and we win half the time. In this case we have positive expected value (+EV) of +0.25. If we had odds -150 (risk 1.5 to win 1) we’d have negative expected value (-EV) of -0.25. Note that the EV equation is: (win probability * what you’ll be paid if you win) – (loss probability * amount staked)=EV
This article is written only for the benefit of those who make primarily +EV bets and never knowingly make –EV bets. In other words, this article has no benefit to the recreational gambler. This is because as an investment strategy the optimal stake on –EV bets is zero. There is nothing wrong with gambling for entertainment and that outside chance of striking it big due to luck. However, in that scenario asking how much you should bet is like asking how much you should budget for alcohol or Facebook games. That’s not a question I can answer.
For those new to betting for profit understand that there are many ways to find +EV bets. It is a lot of work, often is not fun, but the rewards can be well worth it. For where to get started see my info on best sports betting books. For those whom already know how to make +EV bets, this is where understanding expected growth is important.
Understanding Expected Growth
Let’s say that we find a 12% advantage on a line that pays American odds +49,800,000,000 (risk $1 to win $498 million). The expected value on $10,000 bet is still $1,200. However, if making this bet once per day, the average American male would need to die and be reborn over 17,952 times to be expected to have averaged just a single win. So 12% +EV but you are not going to win (period). The expected value is +$1200 but the expected bankroll growth is -$1200. This extreme example was just to prove the point.
Let’s now look at a realistic example relative to sports betting. You bet small underdogs at odds +110 that you’ve quantified have a 50% chance of winning. Your current bankroll is $30,000 and you decide to stake 1% of your bankroll on these. Where do you expect to be after just two bets?
Understand there are only 4 possible outcomes.
- Win both bets: Our bankroll was $30,000 we bet 1% ($300 to win $330) and won. This brought our bankroll to $30,330. We then bet 1% again ($303.3 to win $ 333.63) and won bringing our bankroll to $30,663.63
- Lose First / Win Second: Our bankroll was $30,000 we bet 1% ($300 to win $330) and lost reducing our bankroll to $29,700. We then bet 1% again ($297 to win $326.7) and won bringing our bankroll to $30,026.7
- Win First / Lose Second: Our bankroll was $30,000 we bet 1% ($300 to win $330) and won. This brought our bankroll to $30,330. We then bet 1% again ($303.3 to win $ 333.63) and lost bringing our bankroll to $30,026.7
- Lose Both Bets
:: Our bankroll was $30,000 we bet 1% ($300 to win $330) and lost reducing our bankroll to $29,700. We then bet 1% ($297 to win $326.7) and lost again bringing our bankroll to $29,403
The math is such that each of the potential outcomes above have an equal probability of occurring. In other words, with four outcomes each had a 25% chance of happening. To calculate our expected value we take 25% of the ending bankrolls from each. In this case:
As $30,000 was our starting bankroll our expected value is the $30.01 over that. As 30.01/30,000=0.00100033 in a percentage that’s about exactly 1% EV.
But understand this. Making 2 bets that have a 50% probability we expect on average to win one and lose the other. That would be results #2 and result #3 on the above list. Notice both of those have us wining $26.70 more than our starting bankroll, which is an 0.89% increase. That $26.70 win (0.89%) is our expected bankroll growth.
Expected growth is always less than expected value. In this case it is only slightly less because we’re dealing with a small favorite. In the $489 million for $1 example showed earlier even with a 12% edge the gap is near the full amount. In short the bigger the underdog the larger the gap between expected value and expected growth. Vice versa also applies where the bigger the favorite is the less difference there is between expected value and expected growth. I’ll come back to this point.
Introducing Kelly Criterion
The goal a winning sports bettor should have is to grow their bankroll as fast possible without ever going broke. The best way to do this is to bet size based on Kelly Criterion (fraction Kelly is probably ideal).
I provided that link for the geeks who are into all the details, but in short this is a well-known and recommended investment strategy. It is derived using calculus. It’s highly probable that Warren Buffet uses it for investing and Billy Walters uses it for sports. What it does is exactly what I suggested we need. It calculates the proper stake size based on odds and edge to maximize expected bankroll growth.
The formula for calculating Kelly Stake as a percentage is simple. The formula is:
(Prob * Decimal Odds)–1 / (Decimal Odds–1) = Kelly Stake
As many reading this are used to dealing with American odds, you may wish to use our odds converter to get the decimal stake. To give an example: Let’s says American odds are -200 (which is 1.50 decimal odds) and you’ve calculated it has a 70% chance of winning. This plugs in as:
(0.70*1.5)-1 / 1.5-1)= 0.10 and therefore the proper Kelly stake is 10% of your bankroll.
I should warn that Kelly Criterion is very aggressive. If you often over estimate your edge you can go broke quickly. The risk of ruin is also a bit too high for many people’s comfort level. For that reason a lot of Kelly bettors bet fraction Kelly. If full Kelly calculates to 10% then half Kelly is 5%, and quarter Kelly is 2.5%. For new bettors it is probably best starting at around 1/3 Kelly until you learn much more about the topic.
There are many Kelly Calculators on the web, which can be found with simple Google search. This one here is the best – that link will take you to the one coded by now Heritage Sports employee and former SBR moderator Ganchrow. If you start reading more about Kelly betting, his posts over at SBR are for sure the ones you want to pay the most attention to. With these calculators there is no tedious work involved to calculate the proper Kelly Stake.
Kelly Stake Observations
In order to make another point about Kelly Criterion let’s look at a few calculations I did.
- If you have a 5% edge on a -200 line the proper Kelly stake is 10% of bankroll
- If you have a 5% edge on a +100 line the proper Kelly stake is 5% of bankroll
- If you have a 5% edge on a +200 line the proper Kelly stake is 2.5% of bankroll
- If you have a 5% edge on a +300 line the proper Kelly stake is 1.67% of bankroll
- If you have a 5% edge on a +400 line the proper Kelly stake is 1.25% of bankroll
Did you notice the trend? When dealing with favorites you stake a lot more of your bankroll. This is how most that do flat betting operate anyhow in that they risk however many units to win 1 unit. With underdogs most are making a mistake. Here it would be much smarter to risk however many units to win 1 unit, as opposed to the ridiculous overbets people make now with risk 1 unit to win multiple units. Why is this a mistake?
As shown above a 5% edge on -200 has a 10% Kelly stake. If a player makes this same bet 100 times he has expected bankroll growth of +64.7%, a 36.7% chance of making no profit, and a 3.4% chance of losing more than 2/3 his bankroll. This is all good and averages out in the long run. If a player were however to bet the same 10% of bankroll on same 5% edge over the same 100 bet sample on +400 odds he’d have the same 64.7% expectation. But (and this is HUGE!), he’d have a 73.5% chance of making no profit, and 55.8% of the time he’d lose more than 2/3 of his bankroll.
So two points. If you must flat bet, do it “to win that flat amount” as opposed to risking that flat amount. Secondly, back to an earlier topic, the goal is to compound ones bankroll. Flat bettors are often guilty of moving money out of their bankroll more often than they should. Yes we all have rent or mortgage, women that want bags and smart phones, need to eat have fun etc. Just be conscious of the compounding factor. Again, start with $500 and grow it 5% per week, you have a $1 million in 3 years.
Final Kelly Betting Considerations
Kelly betting is actually a much more advanced topic than what has been covered in this article. I decided to write this simply because linking people to Ganchrow’s article is often brushed off and the same questions come up over and over again. His articles are however the ones you want to read to take this further, and hopefully mine here helps draw attention to that fact. Keeping it simple with final points:
Again Kelly Betting is about maximizing expected bankroll growth. Professionals often decide against tying their money up long term even when they’ve spotted a +EV bet. For example regular season win totals, or futures on who will win the super bowl. Even though large +EV bets can be found, the ability to have ones bankroll free so it can be turned over again and again thus compounding while those bets would have been pending is sometimes more ideal.
Also note that if given the choice a professional would much rather bet a 5% edge at -200 then a 5% edge at +400. In fact, when dealing with off market lines, many will focus on looking much closer at favorites than they do for underdogs. This is not set in stone but it is a consideration.
Finally, be very careful of correlated bets. If you are betting a prop that a quarterback will have under X number of passing yards in a game, but also bet that team to cover a large spread, these bets are correlated. The QB winning in a blowout does very little passing late in the game, making it more likely their yards go under. If you bet only the independently calculated stakes on each you are over betting your bankroll. For now just be conscious of this and reduce stake when correlated wagers are involved. As you search and read more about Kelly criterion you’ll learn how to deal with the correlation.
Expert Guide To Derivatives Betting
The derivatives markets have flourished in recent years and are now firm favorites of both recreational and professional sport bettors. After you read this article, we recommend you to read our NFL derivatives article for a more in-depth to betting NFL derivatives.
The term ‘derivative’ comes from the financial markets, where it refers to a financial instrument that derives its value mainly from the price of another financial instrument.
So shares in Ebay, for example, wouldn’t be derivatives, as their value is defined essentially by how well the company itself is doing. On the other hand, if you were to buy Ebay ‘options’ (financial instruments that give you the ‘option’ in the future of buying Ebay shares at a specific price), those would count as derivatives since the price of each options contract will move up and down in line with the value of the shares in Ebay.
How We Use To Place Bets
Derivatives in sports betting markets work in a similar way. But rather than being based partly on the value of another financial instrument, these instead derive their value from another sports market.
First half lines for football, or five inning lines for baseball, are common examples of sports derivatives, as the odds for these bets are derived from the full game prices. The 1st quarter odds in NFL or NBA are also derivatives, as the prices of these are derived from the first half odds. In fact, when you look at it, the vast majority of bets offered by bookmakers are, in fact, derivatives.
This goes even deeper when we get to proposition bets, such as “Who Will Score First?”, or individual team and player props. When we bet on a running back’s number of yards, or a wide receiver’s receptions, or on team totals, we’re actually betting on derivatives of derivatives.
Why Target Derivatives?
Simply put, the sportsbooks are at their most vulnerable when it comes to derivatives. There’s a reason that they accept $20k or more on NFL sides and totals, but have vastly decreased betting limits for derivative markets.
When you bet on half-time lines, you’ll often be limited to a quarter of the money you could have placed on full games. The maximum bet on proposition markets may be no more than $500, with limits sometimes running as low as $100-$200.
These types of bets are geared towards recreational bettors, but the inefficient pricing (and potential for high-value scores) has made them a target for professional type bettors. Keeping track of full game sides, and totals are of the utmost importance due to the popularity and massive wagering that takes place on these markets.
Derivatives aren’t exactly an afterthought for oddsmakers, but their focus is on larger markets. If you’ve ever browsed propositions, alternative lines, and half-time and quarter lines, you will probably have found dozens of bets for each game, especially on popular contests.
Sportsbooks don’t have the time to focus on all of the bets they offer, and the derivative markets aren’t a high priority for them. These derivative markets aren’t easy to price up, though, so inefficiencies will be frequent, and plenty of savvy bettors will be waiting to take advantage.
Unlike full game sides and totals, derivatives will usually be subject to large variations in odds from shop to shop.
When line shopping for an NFL spread, for instance, there’s rarely a difference of more than a half-point between each market. When a line moves rapidly due to sharp action, all other sportsbooks follow, usually rather quickly. While there are still books that are slow to move their lines, or that have a different opinion on a number, catching a line after a key move is tough.
This isn’t always the case with derivatives. Half-time lines and quarter lines should follow quickly, but this often doesn’t happen. Players and team props will likely be slow to move, and, in the case of some shops, may not move at all.
In general, derivatives can offer some pretty stark differences in price compared to full game markets. This is especially true with player and team props, where bettors who are prepared to go line shopping will have an excellent opportunity to take advantage of some highly inefficient markets.
For example, an NFL prop on the total rushing yards for running back Adrian Peterson. A player may find one sportsbook offering a total of 90 yards at over -110/-110 while another book prices this up at 90 yards over +100/under -120. A third book may have a totally different line with different juice altogether, so you might see this prop listed as 92.5 yards over +110/under -130.
The differences between sites can be glaring. There may also be plenty of arbitrage opportunities, allowing you to take advantage of price differences across the books to lock in a profit, and offering the possibility of making money regardless of the outcome.
Manipulating Betting Limits
Derivatives also allow bettors to circumvent betting limits where they have hit their maximum on full game sides and/or totals.
Say you think the Packers -7.5 will win big against the Broncos, but you have already bet the $5,000 maximum your book allows. If you have a particularly strong opinion, you may want to analyze the derivatives with a view to placing further bets.
If you think the Packers will win by more than a touchdown, perhaps you should wager on “over” Green Bay’s total yards, or on the Packers to score first. This allows you to get extra action above and beyond your handicap bet. If you’re keen on a certain matchup in the game, you could take a look at player and team props. A strong opinion can almost always lead you to some appetizing derivative markets, and adding bets in this way is relatively simple.
Now let’s take a popular prop bet from Major League Baseball and see if we can glean insight into how the bookmakers price it, as well as how the prop varies between two books.
The prop bet is “Which team will score first?” This is a derivative of a derivative, with its price based on the first five innings prop. We will use the game between the Philadelphia Phillies and the Los Angeles Dodgers and two popular bookmakers in this example, 5Dimes and The Greek.
5Dimes has the relevant lines for this prop as follows:
First Five Inning Line
Team to score first
Using a no vig calculator we find that these lines imply 54.86% for the Dodgers and 45.14% for the Phillies in the first 5 innings. Since a tie is a push, and the full game line is almost identical to the first 5 innings line we will ignore pushes for this example. For the team to score first prop we come up with the Dodgers at 58.82% and the Phillies at 41.18% with no ties possible since obviously a team eventually does have to score. Using these numbers, there is almost a difference of 4% in these two lines (3.96% to be exact.)
This difference is explained by the fact that the away team bats first in baseball and thus has first crack at scoring first. If the Dodgers score in the top of the first inning, the prop is already over before the first Phillies player steps to the plate. 5Dimes is suggesting this advantage of batting first is worth about 4% for this prop.
For the same game, The Greek lists the lines as:
First Five Inning Line
Team to score first
Again using the no vig calculator we have implied odds of 53.25% for the Dodgers in the first five innings and 46.75% for Philadelphia. For the team to score first the no vig odds are Dodgers 58.35% and Phillies 41.65%. In the case of The Greek, the difference is higher than 5dimes, with a 5.1% weight added for the Dodgers batting first. (58.35%-53.25%).
Notice the better pricing at 5dimes. They use a lower vig, especially on the first team to score prop.
Above All Else, Line Shopping
All of the above advice is basically useless if players don’t properly line shop. It’s the most important part of maximizing your EV. Even if you analyze the prop correctly, taking +110 when you could have easily grabbed +115 at a rival book will cost you money over the long term. You want to maximize your wins and minimize your losses, and every cent matters. Sorting through the lines at multiple books and finding value is an absolute must.
Also make sure the props have the same rules when line shopping. Some obscure props may have different rules depending on the book, and this may explain the price difference. In MLB betting, for example, make sure the props list pitchers as “must start” across all books you are considering. Otherwise, the prices will be slightly different and what you think is good line shopping is just the books properly adjusting based on different house rules.
Become a Student
Maximizing your EV on each bet will give you best chance to win on your wagers, but learning to break down the individual matchups or gameplan aspects of each sport will also benefit players greatly.
Sportsbooks consider many factors when developing lines for derivatives, and have a system for pricing player and team props. However, as we mentioned above, there are sometimes so many markets that the book doesn’t have the time to examine each and every bet in detail.
Knowledge of sports betting is a must, but bettors can help themselves out with a deep knowledge of the sports they are wagering. Using advanced stats and following the league closely can give you an excellent starting point for the bets you wish to target.
Maybe you notice that a certain big name starter often struggles in the early innings in day games before settling down. You also look at prop lines regularly and usually find that when this pitcher starts, his team is a huge favorite. Combining these with line shopping can provide +EV opportunities.
Understanding derivatives is essential to winning at sports betting. This advice goes tenfold for newer bettors, trying to build a bankroll. Attacking these markets will be one of the best ways to jumpstart a profitable sports betting career.
How to Bet the Exchanges
Betting exchanges have been around since 2000 but many novice sports punters, particularly those based outside of the United Kingdom and Ireland, have been reticent to use them because, mistakenly, they think that they are complicated.
Whereas bookmakers offer odds and punters bet against the bookmaker, betting exchanges provide a market place in which punters determine the odds and bet against their peers.
Punters who play with bookmakers can only back outcomes. However, punters who play with betting exchanges can not only back outcomes as they would with a bookmaker but also lay outcomes, assuming the role of the bookmaker in the transaction and enabling one of their peers to take their offer.
Laying the Odds
It is the concept of laying that freaks out novice sports punters so here is an example to explain how it works.
Example: Consider a hypothetical football match between Liverpool and Everton in which bookmakers are quoting decimal odds of 1.85 about the Reds, 4.50 about the Blues and 3.30 about the draw for a bookmaker margin of 1.066.
The odds on the world’s largest betting exchange, Betfair, would be different. For starters, the bookmaker margin on both the back and lay sides of the equation would be lower than 1.066 because of the market place’s competitiveness. That means punters who want to back outcomes are, more often than not, better off doing so through a betting exchange than with a bookmaker, even though they will have to pay a small commission charge on any successful bets that they place.
Where betting exchanges come into their own, though, is the power that they give punters to lay outcomes. For example, a punter may not fancy Liverpool and, rather than backing Everton and/or the draw, wish to lay the Reds at, say, decimal odds of 1.90. The punter can set the stake that they are willing to accept on Liverpool at their nominated odds and use the betting exchange to find one or more suitors.
Before betting exchanges, punters who did not fancy an outcome had to back all of the other options. So, continuing the example, the anti-Liverpool punter would have had to back both Everton and the draw, obtaining decimal odds of around 1.90 by staking to return the same amount regardless of the result. Now that punter can lay Liverpool at decimal odds of 1.90, which is the same as backing Liverpool not to win at around 2.11. Not even commission charges can erode that difference in value.