Sports Gambling and Live Markets

Is sports gambling beatable?

Casinos, over the years, have traditionally thought of sportsbooks as an amenity to offer to their customers as opposed to a real way to make money. They cap the bets made on traditional over/unders and to people who consistently win in sports gambling (known as ‘sharps’). The casinos believe that sports gambling is beatable by a select few and just hope that the losses of the masses can wash out the gains of the few. But, the obvious question is: if it is beatable, how does one stay ahead of the market/line-setters?

What if sports gambling was as easy as pushing chips?

Why the Dealer Always Wins

First, a quick word about how lines are set and money is paid out on various outcomes. Lines are set to hopefully establish even money on each side, not necessarily to predict the winner. The sportsbooks then make money no matter which side wins by the small additional odds they charge (called the ‘vig’ or ‘juice’) for an equal payoff. For example, the Patriots (-3.5) played the Giants yesterday (and, unfortunately, lost). This means that the Patriots were laying 3.5 points or were favored by 3.5 points. A bet on the Patriots paid off only if they won by 4 or more. A bet on the Giants won if the Giants won or lost by 3 points or less (they won by 4). Each of these went off at -110, meaning a bet of $110 only won $100. So if they got an even amount of bets on each side, the books won $10 off each losing bettor.

That is pretty much the essence of making money in keeping a sportsbook. But, how does a gambler make money off of a sportsbook? That is a bit more difficult and many books have been written (and fortunes lost) attempting to gain this recipe. This article doesn’t deal with how to win in sports betting, but deals with an even more interesting development in sports betting. The M Resorts Spa and Casino currently encourages sports betting. And, unlike every other sports book in town, they offer live odds on every single event. This could be a strikeout on a single at-bat, an interception on a specific drive, the number of points in a certain quarter in a basketball game, etc, etc. They are able to offer this through advanced algorithms that can determine the odds of every particular event in real time. The sportsbook itself currently feels that they can make money off of the small amounts of vig they gain from each trade and encourage people to try to beat them. As mentioned above, if the odds are correct and 50% of the bets come in on each side, then bookmakers always win. The key is to always have the same money laid on each side, and that is where the complex math comes in.

New Avenues for Betting

This amount of liquidity in gambling allows interesting propositions for gamblers, too. For example, if you bet on a certain basketball player to score 10 points in a quarter at odds of 3:1 and 6 minutes into the quarter, he currently has 8 points, you can then bet that he will only score 8 points. The odds at the beginning of the quarter may have been short, such as 1.5:1, but are now trading off at 4:1! Betting this will guarantee that you will make money with another bucket, either at 3:1 or 4:1 (so long as they don’t get 9). This allows the accurate timing of certain bets the ability to leverage one’s own mistakes and mitigate risks. In this way, much more advanced betting methods can develop!

This is very new technology, and Cantor Gaming feels that they can increase revenue twenty-fold in a few years, which will give them even more accurate live price setting (due to accumulated history of past betting). All of this is very exciting to a math nerd like myself who believes that markets can exist in, well, everything.

Cheers,

Cameron Daniels

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Comments

  1. says

    I don’t think most people realize how much the odds are stacked against them with betting. Many people hope for luck when in reality the odds are simply stacked against them that they’ll ever make money due to how the payouts are structured.

    I’m curious to see how this new betting stuff works. I’m betting it’s just another way people will lose money!

    • Anonymous says

      Few people make money sports gambling, but those who do make a LOT. So much so (as is mentioned above) that casinos generally follow their best bettors, lay off their bets and limit the amounts they can spend on over/unders.

    • Anonymous says

      If there is thin enough volume, or enough “dumb money” pouring in, there will be inconsistencies in any market. Some have mentioned that Notre Dame will always have a ton of supporters/bettors no matter what, meaning a consistent strategy would be to always bet against Notre Dame.

      The amount of data mining that can be taken from sports and statistical history far outweighs the amount of “dumb money” pouring in.

      In essence, what makes poker beatable is what makes sports gambling beatable: You are not playing against the house, you are playing against other fallible bettors, with a slight cut being taken by the house.

      • says

        Notre Dame’s record against the spread the last 12 years? 72-73-2. There are lots of Notre Dame haters, too. 

        The folks who set the lines are some of the smartest people in the universe. The books take in close to 4.5% (1/22) on almost every game. Not bad for 2-3 hours’ work. 

  2. Anonymous says

    Live odds sound very cutting edge. The casino’s computer can just adjust the odd to drive 50:50 betting then right? If the Pats has too much bet, then the computer adjust the odd to favor the Giants for example. Interesting. 

  3. says

    The majority of “sharks” that make a living off of betting bet small amounts, on many games, and try to win 55-57% of the time.  Often they will “overweight” their bets on big spread games like college basketball, especially for a couple of lesser-known teams, with not as much action on them.  I would be there are actually more people out there that can do sports betting than can pick stocks!

  4. says

    Being a bit of a math geek myself, I’m surprised that I never took the time to figure this one out.  I didn’t know that sportsbooks pretty much assume that 50% will bet one way and 50% the other.  Thanks for putting this information out there.  Totally explains why I have never actually cashed out from any of the online sportsbooks I have tried.

  5. says

    The last time I was in Vegas, I noticed a bit more attention being put into the sports book area. Probably the best place I’ve watched a game without being in the actual stadium.  That said if sports betting were more widespread (legal) I wonder if it would offer more liquidity with fan based bets or less with an increase proliferation of “sharps”.

  6. says

    I too think markets can exist in most everything, and with it come the distortions.  Very interesting and yet not so surprising comment above about Notre Dame fans.

    Realistically, “sports betting” ex-horse racing is pretty efficient, really.  With horse races you have to beat a 20%+ rake from the pool from the operator plus state taxes.  At least from what I’ve seen most liquid sports bets aren’t nearly as bad as horse racing.  Even still, I’ll waste far more money on horse racing than any other sports gambling.  

  7. says

    The first time I bet on the horses in Vegas I remember placing my bet early only to watch the odds change drastically as post time approached.  I quickly learned the system is always rigged so the bookies can cover their bets.

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