Season Wins Prop Bets
Sharp Sports Betting is a tool for those interested in winning money at sports betting. The book explains the most common sports bets, what all the numbers mean, and the mathematics behind the numbers.
Prospective sports bettors should know the basic principles of sports betting. All other types of casino advantage players, including blackjack players of all skill sets should have good working knowledge of Expected Value as well. You should not be betting online or anywhere else without this fundamental knowledge.
Time Value of Money
When you bet totals, you must consider the time value of money. You will be making your bets before the season starts, and if you have winning tickets you will be cashing them in after the season ends.
Your NFL season bets will tie up your money for four months. Bets on season totals in major-league baseball, pro basketball, or pro hockey, will mean holding tickets for six months before being able to cash winners.
You won’t be able to cash in winning tickets early. Suppose, for example, you bet on an NFL team to have more than 5.5 wins, and your team starts off the season with six straight wins. You have a certain winner, but you will have to wait until the season ends before cashing your ticket. The reason is if anything happens that results in the season’s being aborted, all tickets such as yours will be refunded. Thus your team winning its sixth game has not really given you a certain winner, just an almost-certain winner.
Suppose you buy an NFL season-wins ticket in August and it wins. You finally get to cash it in late December. The sportsbook has had the use of your money for four months plus. Baseball is even worse; you buy your ticket in March, cash it in October, and in the process give the sportsbook use of your money for more than six months.
The way to handle that is to expect a higher win rate from tickets that must be held for extended time periods. Ten percent return is great for letting a sportsbook hold your money for a day; but a ten percent return may not be generous enough if your money will be tied up for many months.
Expect the same return for the use of your money from long-term bets as you would expect from other long-term uses of your money. You expect compensation for three things. You expect compensation for the time value of your money. You expect compensation for the loss of liquidity waiting for the investment to mature. You expect compensation for the risk you are taking.
A Certificate of Deposit (“CD”) is a use of your money that involves loss of liquidity for the term of the CD, but zero risk. What return would be sufficient to entice you to invest funds in a CD? Expect the same from a sports bet as far as compensation for the time value of your money and the loss of liquidity, and expect more expected return on a sports bet to compensate you for the risk involved because you may lose the bet.
Theoretically you should not expect too much return for the risk involved in futures bets because that risk is diversifiable. If you get heavily involved in sports futures, making bets on a variety of teams, your overall risk will be considerably lower than if you were to bet that total amount of money on only one team.
Would you make a long-term investment that promises a certain 10 percent per year but must be held at least six months before you can cash it in? Perhaps you would. If not, how about 20 percent per year? If not 20, how about 30 percent per year? There must be some number that would entice you to make a riskless investment that you could not cash for six months. Decide for yourself what that number is. Then add in an amount of your choosing to compensate you for the risk involved in futures bets. The result will be an expected return per year that you can use to evaluate all long-term bets. Make only those bets that meet your own personal requirement for expected return.
Suppose you require 30 percent per year, just to pick a number out of the air. That means a bet that could be cashed in six months at the earliest would need to have an expected return of at least 15 percent. A bet that could be cashed in four months at the earliest would need to have an expected return of at least 10 percent. If you find a season-win bet that promises to return only five percent, you ought not to make that bet if the season is longer than two months.
Requirements by Sport
The NFL regular season lasts four months. Thus NFL season-win bets are four-month investments.
Other major bettable sports have six-month seasons.
When you bet season totals for baseball, basketball, or hockey, you are making six-month investments.
This is part of an occasional series of articles.