Handicapping the Market in Sports Betting
Those most serious about betting on sports for profit frequently engage in a strategy called capping the market. This involves shopping odds at dozens of gambling sites in an attempt to spot wagers with positive expected value, generally written as +EV for short. This is perhaps one of the most difficult topics to instruct as a great deal of the process is intuitive to those who have spent years using it. For this reason, we break down the various aspects of capping the market into small chunks so the casual bettor can better understand how it all works.
Sharp Book and Square Books
Every sport has what is referred to as sharp book, with some sports having more than one. An example is Pinnacle Sports that, despite not accepting US players, offers reduce juice -104 pricing on NFL sides and takes up to $30,000 maximum bets with multiple max bets allowed for this league. It's well known that Pinnacle Sports is one the most difficult sports gambling sites to beat, even though they generally offer what appear to be great odds.
Meanwhile, Bookmaker.eu (US players accepted) is also in many ways a sharp book. They are relevant to professional bettors, because they were the first to open betting odds, have a great reputation for fast payouts and no personal limit collars, accept US players, and have betting limits of up to $50,000 per bet on NFL football point spreads.
The opposite of sharp books that service professionals are "square books" or in more politically correct terms "recreational sportsbooks." A good example in the US market is Bovada, an online betting site with a great reputation that only allows United States residents to open accounts. It has no interest in professional players and therefore posts their betting odds much closer to game time than other sites, offers smaller maximum bets, and doesn't offer moneylines on all markets. As we cover below, Bovada, while targeting recreational players, is a great site for lower or mid-level players.
Now that you have a brief introduction to sharp books and square books, allow us to show you some of the ways this information can be used.
Off Market Prices
What does it mean that some betting sites are sharp and others are square? Shop for off-market prices, and you'll find out. Let's say dozens of betting sites are offering New England Patriots -7 -105 and their opponent the Washington Redskins +7 -115. We then notice Bovada has the Patriots -7.5 -105 / Redskins +7.5 -115. Of course it would be silly to bet the Patriots at Bovada because this would be taking the wrong side of an off-market price; however, for reasons covered in our article on buying half-points, here at Bovada, Redskins +7.5 -115 is likely close to a neutral expected value bet.
Note: the reason Bovada offers lines like this is because they service mostly recreational players of which the majority will take the fan-favored New England Patriots, regardless of the point spread.
To introduce you to the most powerful concept that comes from monitoring betting odds, we'll give an example of steam betting. For the example, let's imagine every online betting site in the industry is offering betting odds for an NBA basketball game between the Milwaukee Bucks -7.5 -105 and Washington Wizards +7.5 -115. You then suddenly notice the line moves at Bookmaker.eu and BetOnline to Bucks -8 -110 and then at 5dimes to Bucks -8 -108. Meanwhile, you notice all the recreational gambling sites such as JustBet, Bovada, and TopBet still have the Bucks at -7.5 -105. The smart play is to quickly place a wager at one of these websites taking Bucks -7.5 -105 before they get a chance to also move the line.
The reason steam betting is highly profitable is because odds movement is triggered by something: a highly successful professional bettor such as Billy Walters making a bet or by insider knowledge of an injury, player illness, lineup change, or something else. These odds aren't moving at sharp betting sites without reason, and more times than not, moves are the result of professional bettors using their syndicates to make bets. Obviously, our goal here is to use recreational sites to make the same wagers as professionals at the same exact odds.
Sharp Line Movement
Betting steam is difficult to do as the betting odds tend to move quite fast at online betting sites, while slow moving sites are quick to limit collar or ban anyone betting steam too often. The same concept is far more effective by developing the intuition required to spot sharp line movement before steam actually occurs.
An example might be seeing an NFL point spread move +6.0 -110 at Bookmaker.eu when the consensus market price is +6.5 -110 everywhere else. This situation happens frequently when professional bettors from the US make large wagers. Many of these big players don't have syndicates, and the only professional book left in the US market is bookmaker.eu.
Also worth noting: if +6.5 -110 is the fair consensus price with vig, than moving to +6 -110 in and of itself is not enough to make a wager +EV. However, knowing that some sharp bettor somewhere likely made this wager, it's now useful to do your own analysis to see if the +6.5 offered elsewhere is worth the price for other reasons.
How to Handicap the Market
Now that we have covered sharp versus recreational sites and some uses of this information, it's time to actually discuss handicapping the market. Before doing so, allow us to ask a question. Let's say all sharp books are offering moneyline odds on a NFL football game of Patriots -550 / Buffalo Bills +450, yet someone comes along and offers your choice of Patriots -500 / Bills +500. Which of these bets would you take and why?
Although many people would answer Patriots for the sole reason they prefer betting favorites over long shots, most might not realize that under these circumstances, the Patriots are a -EV bet and the Bills are a +EV bet. In order to let that sentence sink in a bit, we move to a new topic before circling back.
In the early days of sports betting, it was possible to profit using a strategy called "Fade the Public." This basically meant finding the most degenerate gambler you know, seeing what he's betting, and then betting the opposite. This method worked well as most bookies were independent, offering their own point spreads and prices geared toward the recreational punter.
If the oddsmaker who capped the game gave the bookie a fair point spread of -6 on a fan favorite, the bookie might offer -7.5. The few clients betting the opposite side simply reduced his risk level, while he booked lopsided action on the side +EV for him and also had the advantage of charging vig.
Fade the Public Less Relevant
In today's betting market, the concept "Fade the Public" in and of itself isn't a profitable system. The internet has made the market more visible and also has allowed betting limits to increase. While local bookies of the past had low maximum limits, today it's very easy to get down six or even seven figures using a combination of sharp sportsbooks like Pinnacle, SBO, and Bookmaker while using peer-to-peer betting exchanges such as Betfair.
Meanwhile, there are a plethora of odds tracker sites like oddsportal.com where anyone can view the betting odds at dozens of sportsbooks. For this reason, while recreational betting sites such as Bovada shade their lines in such a way that you can often get better value on underdogs and unpopular favorites, they are not shaded so much that +EV betting opportunities exist.
The reason +EV bets aren't routinely found at recreational betting sites is because not only would sharp bettors beat them badly, but so would arbitrage players and those good at shopping odds and/or handicapping the market. It doesn't take a genius to realize if the sites dealing with the largest bettors in the world are offering -275 on a Moneyline while recreational JustBet.cx is offering the other side at +280, then JustBet is near certainly offering a +EV bet. Because the Internet allows bettors to shop the odds at dozens of locations with a few mouse clicks, recreational betting sites can change the lines some, but not so much, that the other side becomes +EV.
How Bookmaking Work
To have a decent grasp of the betting market, it's important to understand how the sharp bookmakers controlling that market operate. The first step in the process is opening the betting lines. For NFL and college football betting, the first site to open is Bookmaker.eu which opens the lines early Sunday evening for the next week's games.
When betting lines first open, they are considered rough and therefore have small betting limits. The goal of the bookmaker is to sharpen the odds by taking small bets. As these bets come in they adjust the lines until they find a line where lopsided action stops. They then keep increasing the betting limits making additional adjustments.
Come game time, the bookmaker has long since arrived at a price where the largest and most successful bettors in the world have no interest betting either side. For all intents and purposes, he now considers the lines efficient, meaning if we removed vig, the betting odds given would represent the actual probabilities of each side winning.
No Vig Prices
Now that you understand more about the betting market, let's come back to the question asked earlier: if all sharp online betting sites were offering -550 / +450 on a game, and you had a choice of -500 / +500, which would you take and why? Under these circumstances, -500 is a -EV bet and +500 is a +EV bet. Many novice punters struggle with this concept, because they are fooled into thinking the no-vig price of -550 / +550 calculates to -500 / +500. This is false; money lines cannot be averaged to remove vig.
How to Remove Vig
The correct way to remove vig from a moneyline is to calculate the implied probability of each side. Implied probability is simply how often you must win to break even. So in the case of -550 / +450, starting first with the favorite (-550) how often would you need to win to break even? The math for this is risk/return = implied probability. To specify return means how much a winning ticket would pay.
So for example, staking $550 on a -550 moneyline is risking $550 to win $100, and the return is $650 ($550 stake + $100 win). When betting $100 on +$450, this is risk $100 to win $450, and therefore the return is $550 ($100 stake + $450 win). To do the math and actually calculate the implied probabilities on -550 / +450, see below:
-550 is 550/650= 0.84615 (84.62%)
+450 is 100/550= 0.18181 (18.18%)
Thus, at -550, we need to win 84.62% of our bets to breakeven, and betting at +450 we need to win 18.18% to breakeven. Adding these together, we see 84.62%+18.18%=102.8%. The probabilities are greater than 100% because the bookmaker has vig. To remove it, let's divide each by 102.8%. Here you'll see 84.62/102.8= 0.82315 (82.32%) and 18.18/102.8= 0.17684 (17.68%). Just like that, the two probabilities (82.32%+17.68%) now total 100%. From here, we can go to our odds converter and under the implied probabilities field, plug in 82.32% to see this is American odds -466 and plug in 17.68% to see this is American odds +466.
We have just determined the fair market price of -550 / +450 is not the +500 / -500 that novice bettors might presume, but rather it's actually -466 / +466. Those who thought otherwise simply misunderstood how juice works. When the bookmaker first got the report from his oddsmaker, he discovered an 82.32% chance that Team A will win and a 17.68% chance that Team B wins. He then built into his margin (juice) by adding 2.8% to each probability, arriving at 84.62% and 18.18% for -550 /+450. Perhaps he didn't actually start with 2.8%; maybe he did 2.75% seeing that it came to an odd number and he added a little more to get the clean numbers of -550/+450; but this provides the general gist of how juice is added.
Note: If you scroll up to the top of this section, you'll find a- no-vig calculator that can be used to remove juice without doing any math.
Simple Logic Leads to Profit
Using the information covered in this article, with a little practice you'll be able to start making wise sports bets on almost any given league without even knowing the sport. To use an extreme example, let's say you're on a holiday in Poland and are introduced by a friend to the betting site efortuna.pl. After viewing their odds, you're shocked at how much juice they have, but also that the odds are always closer to European betting sites for one team while way worse for their opponent.
You've just discovered the square site for Poland, and using this information despite knowing nothing about Polish sports, you're now able to quickly spot who the fan favorites are. Your next step is to check out all the betting sites you're familiar with to see which offer PLN currency, and trust me, you'll be surprised that even US friendly site Bookmaker.eu offers this.
After shopping the odds, you discover that Unibet (which accepts PLN currency) is offering Team A -260 / Team B +220. You then find Pinnacle Sports, who also offers PLN currency, has -230 / +210. Great, so between these two sites we're getting a choice of Team A -230 / Team B -220. In deciding which one to take, we notice square book efortuna.pl is offering -300 / +210 on this game which hints that the favorite is the square side.
We also see that Pinnacle Sports has a $5,000 max bet on this game and Unibet has a $500 maximum. It appears that everything is pointing to Pinnacle as the sharp site. We then look at their betting odds of -230 / +210 and use the math already shared in this article to see the fair market no-vig price according to Pinnacle is -216 / +216. Unibet is giving us +220; and we suspect, based on everything we've now researched, that this probably a +EV bet.
Just from this small experience of betting some random sport in Poland, we have learned new information we can potentially use in the future. If we want, we could keep watching to see if our analysis that unibet is square, efortuna.pl is squarer, and Pinnacle is sharp is correct.
We could also keep watching to see which other books are frequently giving off-market prices, where steam plays originate for this sport, and from where one-off sharp line movement comes equipped with this info, we could actually start learning the sport, reading up on it a bit, and following news wires. Those who understand the betting market well, and can make decisions based on capping the market, stand a great chance of winning despite lacking expertise in the sport.
If you are an expert on a sport such as NFL football, equipped with this new understanding of the betting market, you're now ready to learn advanced football betting strategy. Clicking the link and reading articles contained within will no doubt help you win more money this betting season. Alternately, if you are ready to place wagers and put all this into practice, head back to our gambling homepage to find the highest-rated sites for online sports betting.
Author: Jim Griffin
Updated: March 2015
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