MAKING YOUR WORK WORTHWHILE
by Nick Douglas
With baseball season underway the focus of many handicappers, especially savvy ones, has shifted to a moneyline sport rather than a spread sport. At first look finding value in spread betting seems to be far simpler than finding value in moneylines. With the spread, you figure out your desired Return on Investment (R) and remember that number when deciding if a play is worth making.
For a quality handicapper, an ROI goal may be 5%. That means that the handicapper expects that 5% of every dollar wagered should be returned to them in profit. To give a real life example, many handicappers put up a goal of about 100 units for basketball season. To win 100 units, 2,000 units would have to wagered over the course of the season, or about 10 units per day, give or take.
Represented mathematically, this would be R = 1.05. Given that the odds (D) on a basketball wager are -110, represented mathematically as D = 1.909, and the fact that winning percentage (P) can be calculated using the formula P = R/D, we then know that we need a 55% winning percentage (1.05/1.909 = 0.55) over the coursee of the season to hit our desired profits. Therefore, whenever we make a spread wager, the ultimate question has to be, Is there a 55+% chance that this team will cover this spread?
55% sounds relatively easy, but take a look at some of these numbers. If a player averages 2 units per play and therefore makes 1000 wagers over the course of a season, a 550-450 record would be needed to hit this goal. Now, how many handicappers do you know that can finish a basketball season 100 games over .500?
In baseball, the numbers become more complex. For that reason I will quickly run through some of the percentages that must be hit to make a 5% ROI at various prices:
-300 -- 78.75%
-250 -- 75%
-200 -- 70%
-150 -- 63%
-110 -- 55%
+100 -- 52.5%
+110 -- 50%
+150 -- 42%
+200 -- 35%
+250 -- 30%
The first response to this might be, So what? Figuring out the percentages needed for a certain ROI is no difficult task; making the data useful is.
Here are a couple of points that I get from all of this.
1) Betting flat is the way to go.
I really believe that keeping your bets for low priced and high priced games the same is important. I see so many folks keep big dogs to 1 unit plays while laying 3 units plus juice on big faves. This strategy is certainly understandable because human nature is to worry about your daily results rather than long term returns, but ultimately it is destructive.
The problem comes from the fact that almost every gambler has a fear of hitting the big fave, losing the big dog and having a losing 1-1 day even though they knew that the fave had the better chance of winning the game. For example, if you play a -170 fave and a +150 dog for $100 flat each and go 1-1 with the fave winning, you are going to lose just over $41 that day. Given that +150 dogs only are meant to hit 42% of the time at 5% ROI, you are going to have plenty of days like this. This frustration must be overcome with the knowledge that in the long term, keeping your bets flat and at the same amounts will maximize your profits and reduce your exposure to huge losses when the bad times do eventually come (and they will, trust me).
2) Huge faves and huge dogs are both tough to play.
Every handicapper has heard warnings about huge dogs and the numbers above only prove the point. How many of us can claim 70+% winning percentages over any type of long term sample betting baseball games at any price? Very few, to say the least.
On the other hand, how many bad teams -- the ones that frequently offer +200 type prices -- end up with winning percentages above 35% against the type of good teams those prices show up against? Again, very few, to say the least. If you look back at the records of teams like Milwaukee, Tampa, Detroit et al, they tend to win against elite teams very rarely.
The one suggestion I would make about playing either huge faves or dogs is to take careful care to make sure a team is playing well before you play them and to make sure the opponent is vulnerable before you play against them. Often times high prices will come out just based on a great pitcher even though the pitcher shows signs of a down cycle or a team that "has to" win a certain game (often to avoid a sweep). In these scenarios the dog can often be a good play even at the large price. Similarly, there are sometimes scenarios where one team is simply overmatched and the chances of them winning are very small, yet the opponent is only a -200 or less favorite because of various factors. In these cases perhaps a large fave can show long term value. Again, though, these spots tend to be infrequent and if you try to make a living on either side of large prices, there is a good chance you will fail.
3) Starting pitchers are not worth it.
The difference between the Diamondbacks of Curt Schilling and the Diamondbacks of Elmer Dessens may be -240 to -120. Arizona must have a 74.1+% chance to bet Schilling and a 57.3+% chance to bet Dessens. Novice gamblers may look at Arizona's amazing record with Schilling on the mound over a half season or even one full season and jump at the large chalk. That is foolish because even the best pitchers tend to have team records that regress back to a winning percentage well under 70%.
At times, riding a hot starter who is an elite ace can be worth it, but public perception must always be factored in. If the entire gambling public knows that Schilling will win tonight, where is the long term value? You may pick up a few quick bucks tonight by overpaying, but if you keep on doing it, your decision to ignore long term value will crush you.
4)Trust your handicapping.
It is hard to stay confident when things go wrong. You keep betting those +150 dogs but your winning percentage on them isn't even approaching 42%. You start to wonder if you are handicapping the right way. You start to think that maybe looking the opposite way for big chalk will give you a profit. Every game seems to have flaws in it. The only thing you can do is continue to handicap the games properly.
There is one asterisk by this idea. Handicapping is such a fluid business that what works today may be obsolete in a year or even less. If your results are poor and the flow of the game is showing that your teams are getting outplayed more times than not, then do some additional research. Take a day off or a week off and look back to find out what is working and what isn't. A personal example I can give is with NHL shooting percentages. I relied heavily on then towards the end of the 2001-2002 season but at the start of the 2002-2003 season, my results took a nosedive. I took some time off from handicapping hockey and looked back to find that the results in games where my shooting percentage parameters were hitting were not good at all. I decided to use shooting percentage as more of a secondary method for handicapping and look to other areas that were working.
5) Be aware of line differentials.
Just because you like a team at -140 (61.25+% required) does not mean that they have enough value to wager on them at -160 (64.6+% required). An extra 3.4%, especially when the winning percentage numbers are already as high as 60%, is tough to hit. There is no shame in laying off a play because a line move lessened a play's value, even if that play ends up winning. In the long term you will thank yourself for maximizing the value in each play you make.
Gamblers often play make undisciplined wagers and ignore line value yet still reap short term profits. Heck, some of them may even reap long term profits. But my proposition is, Imagine the profits that could be reaped if we were more disciplined in the wagers we made and more rigid in our assessments of line value. I believe that many of us, by just following the simple tenets of managing a bankroll and avoiding make up bets can show a small profit in their gambling. But for those who want to cross the line and hit an ROI of 5% or even greater that will really make our handicapping work worthwhile, a greater attention to some of the ideas outlined in this piece is essential.
by Nick Douglas
With baseball season underway the focus of many handicappers, especially savvy ones, has shifted to a moneyline sport rather than a spread sport. At first look finding value in spread betting seems to be far simpler than finding value in moneylines. With the spread, you figure out your desired Return on Investment (R) and remember that number when deciding if a play is worth making.
For a quality handicapper, an ROI goal may be 5%. That means that the handicapper expects that 5% of every dollar wagered should be returned to them in profit. To give a real life example, many handicappers put up a goal of about 100 units for basketball season. To win 100 units, 2,000 units would have to wagered over the course of the season, or about 10 units per day, give or take.
Represented mathematically, this would be R = 1.05. Given that the odds (D) on a basketball wager are -110, represented mathematically as D = 1.909, and the fact that winning percentage (P) can be calculated using the formula P = R/D, we then know that we need a 55% winning percentage (1.05/1.909 = 0.55) over the coursee of the season to hit our desired profits. Therefore, whenever we make a spread wager, the ultimate question has to be, Is there a 55+% chance that this team will cover this spread?
55% sounds relatively easy, but take a look at some of these numbers. If a player averages 2 units per play and therefore makes 1000 wagers over the course of a season, a 550-450 record would be needed to hit this goal. Now, how many handicappers do you know that can finish a basketball season 100 games over .500?
In baseball, the numbers become more complex. For that reason I will quickly run through some of the percentages that must be hit to make a 5% ROI at various prices:
-300 -- 78.75%
-250 -- 75%
-200 -- 70%
-150 -- 63%
-110 -- 55%
+100 -- 52.5%
+110 -- 50%
+150 -- 42%
+200 -- 35%
+250 -- 30%
The first response to this might be, So what? Figuring out the percentages needed for a certain ROI is no difficult task; making the data useful is.
Here are a couple of points that I get from all of this.
1) Betting flat is the way to go.
I really believe that keeping your bets for low priced and high priced games the same is important. I see so many folks keep big dogs to 1 unit plays while laying 3 units plus juice on big faves. This strategy is certainly understandable because human nature is to worry about your daily results rather than long term returns, but ultimately it is destructive.
The problem comes from the fact that almost every gambler has a fear of hitting the big fave, losing the big dog and having a losing 1-1 day even though they knew that the fave had the better chance of winning the game. For example, if you play a -170 fave and a +150 dog for $100 flat each and go 1-1 with the fave winning, you are going to lose just over $41 that day. Given that +150 dogs only are meant to hit 42% of the time at 5% ROI, you are going to have plenty of days like this. This frustration must be overcome with the knowledge that in the long term, keeping your bets flat and at the same amounts will maximize your profits and reduce your exposure to huge losses when the bad times do eventually come (and they will, trust me).
2) Huge faves and huge dogs are both tough to play.
Every handicapper has heard warnings about huge dogs and the numbers above only prove the point. How many of us can claim 70+% winning percentages over any type of long term sample betting baseball games at any price? Very few, to say the least.
On the other hand, how many bad teams -- the ones that frequently offer +200 type prices -- end up with winning percentages above 35% against the type of good teams those prices show up against? Again, very few, to say the least. If you look back at the records of teams like Milwaukee, Tampa, Detroit et al, they tend to win against elite teams very rarely.
The one suggestion I would make about playing either huge faves or dogs is to take careful care to make sure a team is playing well before you play them and to make sure the opponent is vulnerable before you play against them. Often times high prices will come out just based on a great pitcher even though the pitcher shows signs of a down cycle or a team that "has to" win a certain game (often to avoid a sweep). In these scenarios the dog can often be a good play even at the large price. Similarly, there are sometimes scenarios where one team is simply overmatched and the chances of them winning are very small, yet the opponent is only a -200 or less favorite because of various factors. In these cases perhaps a large fave can show long term value. Again, though, these spots tend to be infrequent and if you try to make a living on either side of large prices, there is a good chance you will fail.
3) Starting pitchers are not worth it.
The difference between the Diamondbacks of Curt Schilling and the Diamondbacks of Elmer Dessens may be -240 to -120. Arizona must have a 74.1+% chance to bet Schilling and a 57.3+% chance to bet Dessens. Novice gamblers may look at Arizona's amazing record with Schilling on the mound over a half season or even one full season and jump at the large chalk. That is foolish because even the best pitchers tend to have team records that regress back to a winning percentage well under 70%.
At times, riding a hot starter who is an elite ace can be worth it, but public perception must always be factored in. If the entire gambling public knows that Schilling will win tonight, where is the long term value? You may pick up a few quick bucks tonight by overpaying, but if you keep on doing it, your decision to ignore long term value will crush you.
4)Trust your handicapping.
It is hard to stay confident when things go wrong. You keep betting those +150 dogs but your winning percentage on them isn't even approaching 42%. You start to wonder if you are handicapping the right way. You start to think that maybe looking the opposite way for big chalk will give you a profit. Every game seems to have flaws in it. The only thing you can do is continue to handicap the games properly.
There is one asterisk by this idea. Handicapping is such a fluid business that what works today may be obsolete in a year or even less. If your results are poor and the flow of the game is showing that your teams are getting outplayed more times than not, then do some additional research. Take a day off or a week off and look back to find out what is working and what isn't. A personal example I can give is with NHL shooting percentages. I relied heavily on then towards the end of the 2001-2002 season but at the start of the 2002-2003 season, my results took a nosedive. I took some time off from handicapping hockey and looked back to find that the results in games where my shooting percentage parameters were hitting were not good at all. I decided to use shooting percentage as more of a secondary method for handicapping and look to other areas that were working.
5) Be aware of line differentials.
Just because you like a team at -140 (61.25+% required) does not mean that they have enough value to wager on them at -160 (64.6+% required). An extra 3.4%, especially when the winning percentage numbers are already as high as 60%, is tough to hit. There is no shame in laying off a play because a line move lessened a play's value, even if that play ends up winning. In the long term you will thank yourself for maximizing the value in each play you make.
Gamblers often play make undisciplined wagers and ignore line value yet still reap short term profits. Heck, some of them may even reap long term profits. But my proposition is, Imagine the profits that could be reaped if we were more disciplined in the wagers we made and more rigid in our assessments of line value. I believe that many of us, by just following the simple tenets of managing a bankroll and avoiding make up bets can show a small profit in their gambling. But for those who want to cross the line and hit an ROI of 5% or even greater that will really make our handicapping work worthwhile, a greater attention to some of the ideas outlined in this piece is essential.
