Lines Getting Sharper?

King Yao is the author of Weighing the Odds in Hold‘em Poker, and Weighing the Odds in Sports Betting. He uses his experience from making millions in financial derivative markets and translates it into gambling. Since he left his trading position in 2000, he has been playing poker and betting on sports. He travels to Las Vegas frequently, especially during football season.

The betting lines in the last few years have likely gotten sharper, most noticeably in the NFL. As more and more educated and sharp players have entered the market, sportsbooks have adjusted. Lines are tighter and it is tougher to win money. This is the thought of many sharp players who have been around a few years. Here is an example of a game line that would have been surprising a few years back.

It’s early in a hypothetical NFL season. The Las Vegas Raiders had a 3-13 record in the previous season and a 4-12 before that. They started this season with three straight losses, covering the spread only once. The Dallas Cowboys made the playoffs two seasons ago, had a poor year last year, and are 2-1 so far this season. The general perception is that the Cowboys, with the “new coach bump”, have a shot at making the playoffs.

Let’s say that in the fourth week of a season, the Cowboys are playing at Las Vegas. What do you think the line should be? Based on the records, it seems that the Cowboys should be considered the better team. Yet the line on the game was Raiders -3. With a typical home field advantage of 3 points in the NFL, this line reflects that the market thinks the two teams are equal in this game. I believe in the same situation in past years, the line would have been around even money.

The line makers have adjusted to smarter bettors. In recent years the line seems to have done a better job of recognizing “must win” situations. This game could break the Raiders’ season. If they lose, they will be 0-4 and their season will appear hopeless. The Raider players know this, and are giving maximum focus and effort in preparation for the game. The Raiders may be a worse team than the Cowboys, but the difference is not that great. Superior motivation for the Raiders in this game is enough to project them to a 3 point favorite.

There are many angles in sports betting. Bettors find these angles and sometimes bet them blindly. But without the knowledge of the line’s starting base, how do you know if the angle is already built into the line? The sports-betting marketplace is fairly efficient, and it learns from the past. It is possible that a successful angle from the past is now known to other sports bettors and line makers. If the impact of the angle is already built into lines, then there is no value in blindly betting the angle. To find out if an angle still has value, you need to figure out what the line should be in the absence of the angle. The question you should be asking is: “What should the line be if the angle were not relevant?” Methods that can help in answering that question come from handicapping and other forms of line analysis. Without an idea of the starting base, you will not know if there is value in the angle. Here are a couple of examples.

College football: returning starters

The number of returning starters on a college football team is a common statistic that bettors analyze early in a new season. Teams with a high number of returning starters have players who know their teammates well and have experience with the playbook and the style of play employed by the coaches. Teams with a low number of returning starters do not enjoy this advantage.

In the first and second games of the season, if there is a large difference in the number of returning starters, the team with the higher number of returning starters has an advantage. You may add some twists, such as giving more credit for a returning starting quarterback and passing on teams with new head coaches.

Starting base and current line

The problem with blindly betting on the number of returning starters is the possibility that the market has already adjusted for the angle. It is possible the angle was a winner in the past, but line makers and bettors learned about the angle and adjusted the lines accordingly. Similar match-ups in today’s market may have different lines relative to markets from years past. If you do not know the level of the starting base without the impact of the angle, then you will have a tough time figuring out whether or not the angle is already built into the line.

Betting the angle

If you have the ability to handicap starting base lines, then you can figure out whether the angle is built into the line. With a good starting base line, you can see if it is still worthwhile to make a bet based on the angle. The sports-betting market learns fast. If you have found a way to make money, other bettors may be looking at the same thing. Line makers catch up too, and that is how sports betting lines become efficient, thus rendering some angles irrelevant.

This is part of an occasional series of articles.