Handicapping the Market in Sports Betting
Those most serious about betting on sports for profit frequently engage in a strategy called capping the market. What this involves is shopping odds at dozens of gambling sites in an attempt to spot wagers with positive expected value, which is generally written as +EV for short. This is perhaps one of the most difficult topics to instruct for reason a great deal of the process is intuitive to those who have spent years using it. For this reason, in this article I'll break down the various aspects of capping the market into small chunks so the casual bettor can better understand how it works.
Sharp Book and Square Books
Every sport has what's referred to as sharp book with some sports having more than one. An example is Pinnacle Sports who 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 is 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. The reason they are relevant to professional bettors, is because they are 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 called "square books" or in more politically correct terms "recreational sportsbooks". A good example of this in the US market is Bovada.lv which is an online betting site with a great reputation that only allows United States residents to open online betting accounts. Bovada has no interest in professional players and therefore posts their betting odds much closer to game time than other sites do, offers smaller maximum bets, and doesn't offer moneylines on all markets. As I'll cover in a moment, Bovada, while targeting recreational players, is a great site for lower or mid level players to use.
Now that I've provided you with a brief introduction to sharp books and square books allow me to show you some of the ways this information can be used.
Off Market Prices
One of the easiest uses of the information that some betting sites are sharp and others are square is to shop for off-market prices. 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 my article on buying half-points, here at Bovada Redskins +7.5 -115 is likely close to a neutral expected value bet. Now to 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, I'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 of Milwaukee Bucks -7.5 -105 and Washington Wizards +7.5 -115. You then suddenly notice the line moves at Bookmaker.eu and BetOnline.com 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.com 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. It might be triggered by a highly successful professional bettor such as Billy Walters making a bet; it might be triggered by insider knowledge of an injury, player illness, lineup change or something else. These odds are not moving at sharp betting sites without reason, and more times than not moves are the results of professional bettors using their syndicates to make bets. Obviously our goal here is to use recreational sites to make the same wages professionals are making at the same exact odds they made them.
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. Where the same concept is far more effective is 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.
Now 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 is now worth it 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 I've covered sharp versus recreational sites and some uses of this information it's time to actually discuss handicapping the market. Before doing this allow me to ask you 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 you 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 Patriots are a -EV bet and Bills are a +EV bet. In order to let that sentence sink in a bit, allow me to 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 find the most degenerate gambler you know, find what he's betting and then bet the opposite. This method worked well because most bookies were independent offering their own point spreads and prices geared towards 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 is not a profitable system. The reason for this is the internet has made the market more visible and also allowed the betting limits to increase. You see while local bookies of the past had low maximum limits, today it is very easy to get down six or even seven figures using a combination of sharp sportsbooks like Pinnacle, SBO, and Bookmaker and 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 www.bovada.lv shade their lines in such a way you can often get better value on underdogs and unpopular favorites, they are not shaded so much that +EV betting opportunities exist.
The reason why +EV bets are not routinely found at recreational betting sites is because not only would sharp bettors beat them badly, so would arbitrage players, and those good at shopping odds and/or handicapping the market. You see, it doesn't take a genius to realize if the sites that deal with the largest bettors in the world are offering -275 on a Moneyline while recreational JustBet.cx is offering the other side at +280, that 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 is important to understand how the sharp bookmakers controlling that market operate. The first step in their process is opening the betting lines. For NFL and college football betting the first site to open is www.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 adjusts the lines until they find a line where lopsided action stops. They then keep increasing the betting limits and 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 in 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 a bit more about the betting market let me come back to the question I asked you earlier. The question was 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 in why. I further went on to state that under these circumstance -500 is a -EV bet and +500 is a +EV bet. Many novice punters struggle with this concept because they are disillusioned 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: this means how much a winning ticket would pay. So for example staking $550 on a -550 moneyline is risk $550 to win $100, 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%)
This tells me: at -550 I need to win 84.62% of my bets to breakeven, and betting at +450 I need to win 18.18% of my bets to breakeven. Adding these together I see 84.62%+18.18%=102.8%. The reason the probabilities are greater than 100% is because the bookmaker has vig. To remove that vig 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 I can go to my 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.
I've just determined the fair market price of -550 / +450 is not the +500 / -500 novice bettors might presume it is but rather the fair market price is 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 wins and a 17.68% chance that Team B wins. He then built in 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%, seen it came to an odd number and added a little more to get the clean numbers of -550/+450, but this provides the general gist of how he added juice.
Note: If you scroll up to the top of this section I've included a no-vig calculator that can be used to remove juice without doing any math.
Simple Logic Leads to Profit
Using all 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 holiday in Poland and 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 shocked 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 already familiar with to see which offer PLN currency, and trust me you'll be surprised as even US friendly site Bookmaker.eu offers this.
After shopping the odds you discover Unibet who 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 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 would appear everything is pointing to the fact that Pinnacle is the sharp site. So we then look at their betting odds of -230 / +210 and use the math I already shared in this article to see the fair market no-vig price according to Pinnacle is -216 / +216. Unibet is given us +220 and we suspect based on everything we've now researched this probably a +EV bet.
Just from this small experience betting some random sport in Poland we learned new information we could potentially in the future validate. If we wanted to we could keep watching and see if our analysis that unibet is square, efortuna.pl is squarer and Pinnacle is sharp and 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 where one-off sharp line movement comes from. Equipped with this info we could actually then start learning the sport, reading up on it a bit and following news wires. You see those who understand the betting market well, and can make decisions based on capping the market stand a great chance of winning despite not being experts at the sport.
Now if you are an expert on a sport such as NFL football, equipped with this new understand of the betting market you're now to ready learn advanced football betting strategy. Clicking that 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 this into practice, head back to our gambling homepage to find the highest rated sites for online sports betting.