Saturday, October 10, 2009

Sports book rule No.1: Never place a bet that pays less than even money. No.2: Don't be afraid of longshots (sometimes they actually win!)

My MLB database, which I have never claimed to be definitive, representative or anything else-tive, confirms everything I have been saying since Peter Punter and I first started working together on this sports book project.

And while it is inevitable that someone out there will accuse me of the baseball equivalent of Monday morning quarter-backing, the truth is that I have been ruthless in keeping my analysis of the numbers objective and uncontaminated.

Translating my protocol to real life would result in a scenario that goes something like this:

AFTER YEARS of frustrating ups and downs playing table games in casinos all over the USA, Bob Bettor (Pete's first cousin) decides there has to be a better way to make a living as a gambler, and for the first time in his life takes a look at the sports book.
HE KNOWS ZIP about baseball, basketball, hockey or football (or golf, horse-racing, NASCAR or underwater motorcycling), but he's been a numbers guy all his life. So he can look at any day's lineup of sports events and assess odds without getting all emotional about teams, players, pitchers, coaches, stats or the difference between home and away.
FIRST OFF, he recognizes that while backing favorites might result in more winning tickets than losing ones, the odds offered on the likeliest winner in any match-up are too short to permit a long-term profit.
THE NEXT potential hazard to pop up is that flat-betting the same sum every time is unlikely to succeed in the long run, and enabling a variation of target betting by placing just one wager a day is certain to be fatally boring.
BOB SUSPECTS, but can't be certain, that maybe the best way to go is to select at least four underdog prospects in each sport every day, splitting them into separate lines, series or streams, and using target betting to determine each day's wager values.
KEEPING IT SIMPLE is essential, because he won't be able to take his laptop into the sports book every day (he doesn't know why, but that's the rule), so he settles on four lines a day, and calls them Green, Blue, Purple and Yellow.
HE ZEROES IN on baseball as his sole sports interest for the time being, and places his first four bets on August 12, 2009, betting the same way every day until the MLB season officially winds up on October 4.
BOB CAN'T BE SURE yet, but he reasons that "dogs" with relatively long odds (more than $140 paid on every $100 wagered, for example) might not win often enough to justify a large bet on them, so he looks for odds in the even-money to 1.3 to 1 range whenever possible.
HIS LONG-TERM AIM is to quit playing blackjack, baccarat and other casino "house games" and move his money to a milieu where no one will be looking over his shoulder or tracking his play, and what other players do can't hurt him.
HE'S NOT WILDLY OPTIMISTIC, but then Bob never is. He just hopes that this time, Cousin Pete has come up with a viable way to make money in a casino without having to endure smoke, spilled drinks and dim lighting. Hell, he has sports books by the dozen within a half hour's drive from his front door, and he can get a whole day's betting squared away by mid-morning!
IF BETTING "DOGS" proves profitable, the sky's the limit on bets, because even though small books have low caps on wagers, an occasional large bet can easily be spread across as many tickets as it takes to get it covered.
THERE'S A CHANCE, he thinks, that sports betting could turn out to be more reliably profitable than any other form of "speculation" he has tried in a lifetime of bucking the odds (and that especially includes ventures involving Wall Street and/or foreign exchange!).
PROFITABILITY could further be enhanced by creating what might (for the sake of a good pun) be called a Sports Betting Pari-Mutuel Fund, with at least half of all winnings being ploughed back into the bankroll every day, enabling the minimum bet value to grow proportionately. More about that some other time!
THE QUESTION that has yet to be answered involves the outside chance that there is something unique and unrepeatable about 737 MLB outcomes that I used for my first database (731 bets in all when cancellations were deleted). Do 731 games constitute a "representative" sample? It depends whom you ask...

To finally cut to the chase, all four of Bob's lines ended up making money for him in spite of the fact that less than half of their combined 216 picks were winners.

The GREEN line won $1,330 or 15.61% of total action, and had a loss to date (LTD) of $195 unrecovered and therefore "pending." GREEN went just $100 in the hole before recovering!

BLUE won $1,845 overall (13.95%) with a LTD of -$405. BLUE dug a hole $1,160 deep before its dogs got back on track.

PURPLE was $690 or 5.5% ahead, with no LTD left hanging, and exposure of $2,765.

YELLOW had a final win of $695 (7.45%) after completing a recovery, falling $1,345 at one point before being rescued by its slate (sled?) of dogs.

The four lines COMBINED had a win of $4,563, with the GREEN and BLUE LTDs of $600 awaiting turnaround.

Flat bets of $100 on the 216 selections "woulda" achieved a win of $1,188 or 5.5% of the four-line combined action. The maximum exposure for the flat bettor was a skimpy $160, presaging its relatively modest overall profit.

For those of you who prefer visual aids, here's what the MLB results look like expressed in colors and wiggly lines:

One handy thing Bob and I learned from this exercise is that we were both wrong about "long dogs," or dachshunds, as we now think of them.

The range applied for the test described here was from even money (+100) to 1.4 to 1 (+140), with an occasional exception.

With bets limited to four a day, that gave us an overall flat-bet win of 5.5% in spite of there being more lost dogs than won ones.

Removing the four-a-day limit and betting every dog within the range would have resulted in 459 bets from August 12 through October 4, with 188 winners (41%) and 271 losers.

In spite of the fact that most dogs didn't have winning days, flat-betting $100 a pop would have brought in a 54-day profit of $1,750 or 3.8% of total action.

Making +140 the lowest acceptable number instead of the highest, and placing a bet on any dog rated +140 or higher "woulda" reduced the number of wagers to 273, leaving the win percentage pretty much unaffected at a paltry 40%.

The happy surprise is that the win value woulda jumped to $3,520 or a hefty 12.9% of total action, thanks to win payoffs ranging from 1.4 to 1 to 3.1 to 1.

Dogs rule!

As I see it, the bad news is that I now feel obliged to key in outcomes and odds from the entire 2009 MLB season, then moving on to NFL and NHL stats.

That's a lot of work. But worth every minute, I suspect.

An important reminder: The only person likely to make money out of this blog is you, Dear Reader. There's nothing to buy, ever, and your soul is safe (from me, at least). Test my ideas and use them or don't. It's up to you.