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.
From my experience in sports betting, I have observed few handicappers that can truly expect to win at a 55% rate or higher in the long run against widely available lines (lines that are easy to find and bet). Any handicapper who can pick at that rate over a large sample size is a truly talented handicapper and among the best in the world. The touts who claim to have winning percentages of 70% or higher are exaggerating or outright lying. See Chapter 21 of the book for more information on how to evaluate handicappers.
Table 1 shows what different win percentages yield for 1,000 wagers of $1,100 each with -110 vig. For example, the 55% win rate earns $55,000.
If it was easy to win at a 55% rate, then many people would be doing it and hurting the sportsbooks. Even with all the square bettors losing their money, sooner or later, the 55% winners would bankrupt the sportsbooks. The mere existence of -110 lines argues against there being many people who pick at a 55% rate. Based on knowledge of the sports betting market, experience betting sports, and logic, I have come to the conclusion that a 55% long-run win rate is not achievable for most bettors.
|Profit on 1000 Bets at Various Win Rates|
The sportsbooks are smart and adjust to bets from sharp money. You do not need to hit 55% in order to win big. A 53% winner can have a profitable activity in sports betting. More handicappers can win at 53% than at the vaunted 55%.
Winning at 54% can be better than winning at 55%. How? It is possible if the 54% winner makes more bets. Here is an example: Assume there are two bettors who can each pick 300 bets per year that win at a 55% rate. Assume they can each pick another 300 bets that win at a 53% rate. One bettor decides to only bet the games that have a win rate of 55%. The other bettor decides to bet all plays that he expects to win at 53% or better.
Here are the results of the handicapper who bets only the 55% plays. Betting $550 to win $500 per game over 300 games means he expects to make $8,250 overall.
Here are the results of the handicapper who bets the 300 plays that he expects to win at a 55% rate, and also bets another 300 plays that he expects to win at a 53% rate. He bets $550 to win $500 per game over 600 total games. He expects to make $10,200, or $1,950 more than the first bettor.
The bettor who passes on the 53% games is missing out on profitable situations. Although the winning percentage of a bettor is important, it is more important to consider the expected profits (assuming the additional risk is accounted for). The second bettor will have a lower win rate and a lower ROI, but will make more money. It is incorrect to look at just the winning percentage; the total number of plays in the record needs to be considered as well.
This is part of an occasional series of articles.
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