My understanding of the way these are set is that they are designed with the sole purpose of having an even amount of money on each side of the bet, thus guaranteeing a profit to the bookies. This would seem to suggest that it is possible for the spreads to be consistently wrong, both in general and about specific factors, if the popular conceptions about these are wrong. For example, if the favored team was more likely than not to win by more then the spread, the spread might still remain in place because it was the point that attracted the equal betting. An example of specific factors would be if the masses of bettors believed (on average) that one should allow three extra points for home field advantage, the point spread would have to reflect this as being the difference, even if the true advantage was different then this.
I am under the impression that the point spread in general has been shown to be accurate. But I wonder (if this is true and) if there is any reason why this must be so? Also, if there are any specific factors that have been tested against the spread? (My theory – it may be that the teams with fewer big stars will, more often then not, cover).
I don’t know enough about it, but as everybody would suspect, the odds makers aren’t in business to loose money.
I haven’t read it but 'The New Gambler’s Bible" by Arthur S. Reber has a whole chapter on sports betting. Looks pretty informative. This guy is a professor of phychology at Brooklyn College and CUNY specializing in gambling, so I would imagine he’s published if you’re interested in ‘scientific data’ (quotes only because I’m unfamiliar with any of his research).
Basically, he says the book has an edge of almost 5%, which is all it needs over the long run. I’m not sure if this in with regards to beating the line on the score or the books making extra $ with the juice.
Not to me it doesn’t - I have no idea what your point is at all, as relates to my question. My suggestion was that the bookies make money by having an even amount of money on both sides. Therefore, if it takes a “wrong” pointspread to atract an even amount of money on each side, this is the pointspread at which the bookies will make money. As a practical matter, this means that someone who made a serious statistical study of the point spread might find a way to tip the odds in his favor (To use my example, it may turn out that by betting on the team with fewer Pro Bowl players you will beat the spread more often than not). But if enough people did this, the point spread itself would be shifted as a result, and the bookies would continue to make money.
Are you assuming that the bookies themselves have specific factors in mind when they set the spread? I ask because they might just be changing it in real-time based on the type of the incoming bets. In which case it would be nearly impossible to actually divine the motives of the bettors.
I used to write some programs for a sports handicapper that had a 900 service. What he did was to create a set of statistics that would attempt to forecast what the line should be for a given game. When the official line was noticably different, he would give that as a “good pick.”
The better he was at projecting what the line should be, the better he was at telling when the line was being adjusted just to keep the money equal. The typical things that moved the line from what it should be, were things like “sweet heart teams” (teams that people would bet on no matter what the odds), local favorites, impact of injured players, and streaks/slumps.
So, I guess I’m saying, you are right that the line is pretty accurate, but there is some adjusting going on and recognizing the adjustments is how gamblers and handicappers make money.
Izzy-I guess what I was trying to say is the the point spread is accurate. The books put a lot of thought into this, a lot more than the average bettor.
But as long as the line gathers fair bets, the bookie wins. Let’s say that the books are giving odds where half the bets fall on one side of the line. Isn’t that what you’re saying a line is (or should be)? A “wrong” point spread will be smelled a mile away be hardcore bettors. That means all the bettors that pick the winning team will win; the bettors on the losers lose their money plus the juice. This juice gives the book his profit.
Juice is usually 10% and that drives the profit. If the book loses half the bets, he still gets 5% given equal money wagered on both teams. A local bookie may claim he’s not taking any more bets (or the odds have changed), all kinds of BS may go on.
Judging from your post, this makes sense, doesn’t it?
Booking sports is a big business. Your local bookie is probably quoting Las Vegas odds. How many regular bettors does he have that have the sophistication to run serious statistical analysis with software that outperforms the shit the oddsmakers have in Vegas?
Even if so, I would think a ‘wrong’ point spread where money is to be made is news that would spread like wildfire among hardcore bettors.
A “wrong” point spread will be smelled a mile away by hardcore bettors.
This is true.
That means all the bettors that pick the winning team will win; the bettors on the losers lose their money plus the juice. This juice gives the book his profit.
This is the usual case and unrelated to a ‘wrong’ point spread.
The basic premise of the OP is correct - bookies tend to set lines that balance action on both teams. When that happens, the bookie is guaranteed a profit no matter who wins, even if the line doesn’t reflect the true odds.
There are several problems with this, however. First, if the bookie thinks the public is seriously wrong, he may keep the line where it’s supposed to be. Then he’s essentially gambling. Second, fast communications between all the various sports books means it’s harder to find errors in the line, because if one place has a line that doesn’t match what other books are offering, they run the risk of being ‘middled’ by savvy bettors. (A ‘middle’ is when a gambler bets against one team with one sports book, and against the other team with another. If the lines are significantly off, the gambler can assure himself a win, or at least cut his risk substantially).
The way the sports book makes its money is by charging a commission on the bet. Typically, you have to bet $1.10 to win $1.00. Thus, you have to be able to beat the ‘spread’ more than 52.5% of the time in order to show a long-term profit.
It can be done, and there are a number of professional sports bettors kicking around. But it requires a huge amount of money to make a living at it, and it’s getting tougher and tougher all the time, because the books are getting better data and talking to each other more.
One way you can make a killing sports betting is if you have some acquaintances who want to bet with you, and they don’t know what they are doing. I’ve had people be willing to bet even money with me for their favorite team, when Vegas is offering 2-1 odds or more. In theory, you could bet half of your entire net worth with the guy, then bet your entire other half in Vegas on the opposing team. Then if the guy wins the bet, you win the bet in vegas and make a 100% profit. If the guy loses, you take his money and break even. There is no way you can lose.
That is, if you are willing to take such bets from personal acquaintances. I won’t do that.
The purpose of the line is to assure the bookie that he has the same amount of money bet on each side of a contest. He takes the money from the loser, and gives it to the winner, (along with the winner’s original money) less 5 to 10% the vig. Bookies don’t gamble, it is not a game, it is a business. Bookies that do gamble don’t stay bookies for long, gambling implies the chance of losing, and their CFO doesn’t appreciate red ink on their ledger.
That’s simply not true. Whether or not to balance the line is just one of many decisions a sports book makes. As I said, if they always let it be moved by public whim, they’d be open to people middling them for big bucks.
The line is usually going to be ‘correct’, in that it represents the true odds of the game. It’s not very common that public sentiment will vary so much as to move the line significantly away from where it ‘should’ be. And when that happens, the book will often bet against the public by leaving the line alone.
The only surefire way to beat the book is to be better at handicapping than they are. Many bookies use Roxy’s lines. If Roxy is missing some information you might have, you might find enough of an edge to bet against the spread.
This is one reason why many pros stay away from high profile events and tend to bet things like College Basketball. There are so many games in College Basketball that a bookie can’t hope to study them all. So if you focus on a specific game and scrutinize it, you can sometimes find something the bookmakers missed. Or, you may follow a team closely enough to have a better feel for how it performs than the sports book, which has to look at all teams.
What difference does it make to one bookie what bets a person is placing with another bookie? As long as this particular bookie’s bets are balanced, it would seem to be in his interests.
This sounds strange, considering the public’s ability to predict events in other areas. In particular, sports seems to be very hype driven. I would imagine that someone who did a serious study of the matter might find that various factors tend to be given more or less importance than they should be by the betting public, which probably uses too much gut instinct and emotion. The earlier post by JimB seems to suggest this as well.
One of the fundamental principles of sports betting is that the public is usually right. Just like the stock market, when you get enough people involved, and the lines are set by professionals, everything tends converge on the correct number.
If it wasn’t true that the public was right, and if the bookies tended to always move the lines to balance the action, then the lines would usually be wrong and they would know it. If that’s the case, they’d bet with their own money, becauase there would be a fortune to be made. And professional sports syndicates would make millions.
The fact is, a professional sports bettor often has to evaluate dozens of games before find one where the line is off enough to offset the bookie’s vig.
The best sports bettors in the world maintain accuracy percentages of no more than perhaps 55-57% against the spread (50% being the coin-flip result). This means that the lines the bookies post are only going to be wrong perhaps 2-5% of the time. And it’s still up to you to have the knowledge to figure it out.
**I’m unsure of your math on this. I’ll try an example:
Suppose the public believes that the home field advantage is worth 3 points, and allowing for this in the spread will attract even betting on each side. However, the bookie has done advanced studies of this, and is convinced that the true worth of this advantage is 7 points. Setting it at 3 points will result in the home team covering 70% of the time. Setting it at seven points will result in the home team covering 50% of the time, but will attract 70% of bets on the road team.
If the bookie lets the spread stand at three points, he will attract, as mentioned, even bets on each side. He will make and lose the exact same amount of money for each outcome (making his living off the “vig”). 70% of the time he will pay the home bettors and keep the road bettor’s cash – 30% of the time the other way around, but it’s all the same to him.
If the bookie decides to stick to his beliefs and set the spread at 7 points, he will, as mentioned, attract 70% of bets on the road team. 50% of the time the home team will cover, and he will pocket the 40% difference between the road team bettors and the home team bettors. But the other 50% of the time the home team will not cover, and he will lose the 40% difference between the road team bettors and home bettors. So he makes the exact same amount in the long run, but has a riskier livelihood. Not much going for it. The only way to tilt the advantage in his favor by using the true odds is by finding some midpoint (say, 5 points) at which the majority of the bets will be on the side that is less then 50% likely to cover, and even this method has some short term risk.
Looking at it mathematically, I would put it thus:
Let X equal the amount by which the likelihood of Team A covering the spread is greater than 50%.
Let Y equal the amount by which the percentage of money placed on Team B is greater than 50%.
The bookie’s take of the total money at stake (besides the vig) is (.5+X)x(.5+Y)+(.5-X)x(.5-Y) = (.5+2XY), and the bookie’s advantage is 2XY. In the two endpoint examples that I gave earlier, either X or Y are 0, reducing the advantage to zero, as discussed earlier. But suppose, to use my example, setting the home field advantage at 5 points would give 60% of the money on the road team while having the home team cover 60% of the time. This would set X and Y to 10% each, giving the bookie a 2% long-run advantage, at the expense of the increased risk involved in taking a loss 40% of the time. (In actuality, X and Y would be functions of each other, and the maximum advantage would be a calculus maxima function).
So I wonder if the way you describe it is actually the way it is done.