The Logic Of Sports Betting

1. Sports Betting Is a Multiplayer Game, Not Solitaire

"If you can't spot the sucker in your first half hour at the table, then you are the sucker."

Competitive landscape: Sports betting is a multiplayer game where you compete against the sportsbook and other bettors. Unlike casino games where you play against fixed rules, in sports betting, you're up against human decision-makers who actively try to beat you.

Information asymmetry: Sportsbooks have significant advantages, including access to betting histories and the ability to move lines. However, bettors can gain an edge through specialization and superior analysis of specific markets or sports.

Zero-sum game: Remember that for you to win, someone else must lose. This dynamic creates a highly competitive environment where only the most skilled and disciplined bettors can consistently profit.

2. Understanding Break-Even Percentages Is Crucial

"Convert everything to break-even percentages."

Key concept: Break-even percentage is the percentage of time a bet must win for you to neither win nor lose money over time. It's based on the payout odds, not the true probability of winning.

Calculation methods:

• For positive American odds: 100 / (100 + odds)
• For negative American odds: |odds| / (100 + |odds|)
• For decimal odds: 1 / decimal odds

Application: By converting all odds to break-even percentages, you can more easily compare different bets and identify value. This skill is fundamental to long-term success in sports betting.

3. Market Making Drives Line Movement

"Sportsbooks copy their lines from other sportsbooks."

Line origination: Most sportsbooks don't create their own lines. Instead, they copy from a small number of market-making books that use price discovery to set initial lines.

Price discovery process:

1. Market maker posts initial lines with low limits
2. Sharp bettors place early bets
3. Lines move based on betting action
4. Process repeats until lines stabilize

Implications: Understanding this process helps bettors identify weak lines and potential opportunities, especially in less popular or newly opened markets.

4. Sportsbooks Have Different Business Models

"Market making has a few benefits. First, you don't have to pay a vendor for your lines—you make them yourself."

Market makers:

• Create their own lines through price discovery
• Accept bets from all customers, including sharp bettors
• Operate on thin margins with high volume
• Face significant risks but have more control over their odds

Retail books:

• Copy lines from market makers
• Often limit or ban winning bettors
• Focus on recreational customers
• Use higher holds and marketing to drive profits

Implications: Understanding a sportsbook's business model helps bettors identify potential weaknesses and opportunities in their offerings.

5. Attack Weakness, Avoid Strength in Betting Markets

"You want the ass bets."

Market strength factors:

• Multiple market-making books
• Large betting limits
• Widely available information
• Lower hold percentages

Market weakness factors:

• Few or no market-making books
• Small betting limits
• Limited available data
• Very large public interest

Strategy: Focus on weaker markets where sportsbooks are more likely to make mistakes or have less accurate lines. Avoid heavily bet, efficient markets unless you have a significant edge.

6. Exploit Correlated Parlays and Derivative Markets

"Sportsbooks are often very restrictive about allowing you to parlay derivatives and props—and for good reason."

Correlated parlays: Bets where winning one leg increases the likelihood of winning another. These can offer significant value if allowed by the sportsbook.

Derivative markets: Secondary bets related to main markets (e.g., first half, player props). Often less efficient and more prone to mistakes.

Opportunities:

• Look for sportsbooks with loose parlay rules
• Identify mispriced derivatives, especially those not tied to liquid markets
• Exploit gaps in sportsbook knowledge or modeling of specific situations

7. In-Play Betting Offers Unique Opportunities and Risks

"The way to win at in-game betting is to spot the situations where the line feed has made an error making the line and bet those."

Key considerations:

• Bet only during timeouts to avoid delays and information asymmetry
• Look for mistakes in game state, important factors, or fundamental modeling
• Compare different sportsbooks' in-play lines to identify discrepancies

Common errors:

• Incorrect scoring or game situation
• Failure to account for injuries or strategic changes
• Modeling errors in specific situations (e.g., end-of-game scenarios)

8. Leverage Sportsbook Marketing to Your Advantage

"A dirty secret of professional gambling is that a very substantial proportion of the win comes directly and indirectly from the casino or betting operator's marketing budget."

Promotional opportunities:

• Deposit bonuses
• Risk-free bets
• Odds boosts
• Referral programs

Strategy:

• Open accounts at multiple sportsbooks to access more promotions
• Carefully read terms and conditions to maximize value
• Use arbitrage or low-risk betting strategies to clear bonus requirements

Long-term perspective: While promotions can provide short-term profits, developing sustainable betting skills is crucial for long-term success.

Last updated: November 8, 2024