Weighing the Odds in Sports Betting
King Yao is the author of Weighing the Odds in Hold‘em Poker. 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.
Sports betting can be attacked intelligently. Smart sports bettors do not gamble the same way as tourists play roulette or retirees play the slot machines. Instead, smart sports bettors are making bets that they have thought through carefully with supporting logic and/or research. The purpose of Weighing the Odds in Sports Betting is to give you tools to succeed at sports betting, to show you how to evaluate, compare and view sports betting from an analytical perspective, not from a gambling perspective.
Weighing the Odds in Sports Betting should be used as a guideline to sports betting rather than a blueprint. The sports betting market changes and adapts quickly. The underlying principles shown in this series of articles should help you adapt and continue to make good bets even when the market changes.
Weighing the Odds in Sports Betting is for you if you want to think analytically about sports betting. It is for you if you do not want to be spoon-fed supposed winners, but want to get some ideas to improve your game. You battle bookmakers and line makers constantly; betting sports is a game of maneuvers and adjustments. You can use as many weapons as possible in this continuous fight.
There are few quality books on sports betting. The first sports betting book that I recommend is Sharp Sports Betting by Stanford Wong. There are many knowledgeable sports bettors who have the ability to write quality books on their craft. Why have so few of them written books on the subject? Unfortunately, the financial reward they expect to get from writing a book is probably not worth the effort. Instead, writing a book may hurt a sports bettor’s future winnings if disseminating his secrets decreases his future betting opportunities. You implementing the author’s ideas means more competition to make the same bets as the author. Most bettors who have the knowledge to write quality sports-betting books decide it is negative EV to give out information when the expected royalties from a book are relatively small compared to the size of their wagers. In addition, it takes time and energy to write a book. Instead of writing a book, skillful sports bettors may sell information in the form of picks, which will probably net them more income than royalties from a book. Selling picks does not require any explanations, so they do not have to reveal their methods.
When I wrote my first book, Weighing the Odds in Hold’em Poker, I did not have to think about the possibility that I would cost myself money by giving out information. If you use some of the ideas I wrote about in my hold’em book, it is unlikely to affect me directly since there are so many poker players, so many hold’em tables and so many poker rooms.
Sports betting is different from poker in that it is a worldwide market similar to a financial market. If someone in New Zealand makes a large wager, it is possible that his wager can affect me directly by moving the line on the game around the world, thus denying me the opportunity to make the same wager at the same line. The sports-betting marketplace has similarities to the financial world. I was able to transfer my training and experience in trading options and other derivative products to sports betting.
I have analyzed and bet on sports for a long time, but it was after finishing writing Weighing the Odds in Hold‘em Poker that I turned my main focus on sports betting. There are many different ways to approach sports betting, and the more I delved into it, the more interesting and challenging I found it. You can approach it from a handicapper’s point of view and try to make a better line than the line makers and the market. Or you can approach it from a relative-value player’s point of view and make distributional, correlated and derivative bets. Or you can approach it from the point of view of a scalper or middler. There are numerous ways to attack the sports betting market and find positive EV..
Why Sports Betting?
I enjoy following, betting, and thinking about sports more than I enjoy following stocks, thinking about interest rates and trading in the financial markets.
Making money in sports betting is just as challenging as making money in the financial markets. My enjoyment of sports made it easy for me to choose sports betting over trading in the financial markets. Being my own boss, waking up when I feel like it, and traveling frequently to Las Vegas all helped tip the scale towards sports betting.
I view and explain the sports-betting market as if it were a financial market by applying skill sets from my background in derivatives trading. I wrote from the perspective of a trader and a bettor, not from the perspective of an academic researcher. The trader/bettor looks for data that can be used to make money (or avoid losing money), and does not necessarily demand a high level of statistical significance.
Conclusions reached by research of historical sports data are results from limited sample sizes. The smaller the sample size, the less reliable the data are in predicting the future. On the other hand, results from large sample sizes are well known and usually embedded in current betting lines. Bettors who do a good job interpreting data from small sample sizes have an advantage. While reading subsequent installments, be aware of the sizes of the samples. The smaller the sample size, the greater margin of error you should associate with the results. The larger the sample size, the more you should expect the results are already reflected in current betting lines.
You are more likely to get paid on a winning bet made in Nevada than anywhere else. The industry is somewhat well-regulated in Nevada, and there is an avenue for you to voice grievances if you feel the sportsbook has treated you unfairly. Justice may not be served all the time, but it is better than wondering how to get your money back from a tiny outfit in the Caribbean Islands.
A wager that is made in Nevada usually cannot be retracted by the casino once the bet is made. This is not the case in other places, where sportsbooks sometimes cancel wagers after they are made if they feel they put up a bad line. Some notorious Internet sportsbooks have canceled wagers after a game was played, presumably due to having a big imbalance of action and their side losing.
This is the first of an occasional series of articles.
Excerpted with permission from the e-book version of Weighing the Odds in Sports Betting by King Yao, edited for this format.
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