What Should I Bet On? (And Why It’s OK to Bet on the Expected Loser)
Goal Progress — 0.08%
$45.80 / $58,000
What to bet on?
Unless I come across something interesting in my analysis that can give an edge, the plan is to bet on the moneyline.
What’s the moneyline?
Betting the moneyline is betting that a team will win. As simple as that. This is in contrast to betting the spread where you can bet a team to win by or lose within a certain number of points. The tradeoff with the moneyline is that you are paid more for underdogs winning and less for the favorites winning.
Why the moneyline?
With the moneyline, we just need the team that we are betting on to win. Ours and the team’s interests are aligned. As opposed to betting the spread where we want each team to score a certain amount of points and in reality both teams are simply trying to win.
Keep it simple until complexity is justified.
Ok great so we just need to predict the winner and we’ll be profitable?
Absolutely not.
We don’t have to predict a team to win, we simply need our model to be closer to the probability of them winning than what Vegas has them priced at even if that means we expect them to lose.
Without getting too much into the math just yet, Vegas makes the most money by setting their lines where they have equal money bet on both teams, not by setting the lines exactly at a team’s win probability. This conflict can open up opportunity when money is being placed or is expected to be placed more heavily on one side than it should be from a probability perspective.
Simple Example:
- Vegas has the moneyline on Team A set at +233. These odds imply that team A has a 30% chance of winning and would pay out $2.33 for every $1 bet.
- Our model is predicting that Team A has a 40% chance of winning.
If this game plays out 100 times, Team A will still lose most of those games. Both we and Vegas can agree that Team A losing is what is most probable. The crucial point is that Vegas has them priced to lose 70/100 games whereas we believe they will only lose 60/100, which gives us an opportunity to make profit over the long run.
Summary
In order to make money sustainably, the goal isn’t to pick the winner every time. We’re in it for the long haul, and because of that, we’ll be picking the undervalued.
I’ll post those undervalued suggestions here: