lvpro, on Thursday, July 17th, 2008, 1:02 AM, said:
Thank you. I enjoy explaining my thoughts on the subject. It's fascinating to me.I'd like to mention one other thing. Value from sports betting comes primarily from the gap between perception and reality. I'll use baseball as an example. Say we have Team A playing Team B. Pitcher A is toeing the slab for Team A, and Pitcher B is starting for Team B. For simplicity's sake, let's assume they're playing at a neutral field (something that never happens in baseball). Team A is 6 games under .500, and Team B is is 6 games over. Pitcher A is 4-7 with an ERA of 4.6, and Pitcher B is 8-3 with an ERA of 3.15. Team B opens at -110. For the sake of simplicity, there will be no juice in this scenario, so Team A is +110. Well, the public sees this, better team with the better pitcher, only a -120 favorite? And, boy, do they go off. Team B gets 65% of the action. It certainly appears the price is a little short, but let's dig deeper. Team B has actually been outscored by their opponents this year; they've given up more runs than they've scored, but their record in 1-run games is 13-3. Team A has outscored their opponents by 49 runs this year, but their record in 1-run games is an abysmal 2-9. Let's look at the pitchers.Pitcher B's ERA is 3.15, but he's walking a lot of batters, and stranding 83% of the runners he allows to get on. His opponents' Batting Average on Balls in Play (the average not counting strikeouts and homeruns) is a staggeringly low .210. Pitcher A's ERA is 4.6, but his peripheral statistics look great. He's striking out almost 9 hitters/9 innings, and he has walked very few batters. Unfortunately, almost 40% of the runners he allows to reach base manage to score against him, and his opponents' BABIP is .342. As far as the pitchers are concerned, the things the pitcher can control -- strike outs, walks, etc. -- seem to favor Pitcher A. Batting Average Against for non HR and strikeouts is almost TOTALLY uncontrollable by a pitcher; anything way over about .290 is unlucky, and anything way under is lucky. It just means a few balls have dropped in, or snuck through a hole. By all accounts, Pitcher A is more likely to be successful in the future than Pitcher B, and he's just had some bad breaks. His ERA will regress to a lower mean, while Pitcher B's will balloon. Most of the players making a wager in this spot will see what they thing is "Better Team, Better Pitcher, Cheap Price" and hammer Team B. You, me, and the books, however, know differently. There's a huge gap between perception -- that Team B is more likely to win than Team A -- and reality -- that Team A has been unlucky so far this year, but is still the better team. The book uses these gaps to punish square players.Value comes from betting against a severely overvalued squad -- a team on a hot streak, or a team that has been played up in the media lately -- or backing a severely undervalued squad. Sometimes you'll be betting on THE WORST TEAM IN THE LEAGUE, because the public overreacts, and perceives that they are worse ("NO WAY THEY CAN WIN") than they really are ("THIS SUCKS. THE MARINERS ARE SO BAD, BUT EDDIE BONINE SHOULD NOT BE LAYING -180 TO ANYONE. GOD I HATE THIS TEAM."). So just because a team is BAD doesn't mean they can't be the best value on the board. And just because a team is GOOD doesn't mean you there is value in backing them. Always remember that you want to be backing teams that appear to be much worse than they really are, and fading teams playing over their heads. Sometimes, this is tough to do. In that case, I simply trust that the books would never put out a bad number that allows a bettor to have an overlay by taking a super-public side.