Back to the Futures Pt. 2: How NOT to bet futures wagers
In the first part of this discussion on we talked about the right way to bet futures. In part 2, we’ll talk about what not to do. Some of this is just sports betting “common sense”, but there are some pitfalls that are unique to the genre. Let’s start with something I mentioned briefly in part 1, but bears repeating:
Don’t bet at the first place you look: In other words, shop around for the best price. This is essential to all aspects of sports betting, but especially important with futures wagers. You’ll find more disparity between prices from book to book on futures than any other betting proposition. From a theoretical standpoint, a little work can yield much better value. From a practical standpoint, that means a higher payout should you win. Here are a few examples–in part 1 I mentioned an associate of mine who got a position on the Calgary Flames to win the Stanley Cup at 40/1. At the time he made the bet, other books were dealing prices that were all over the map–10/1, 12/1, 25/1. At this moment I’m looking at baseball futures. In one window, I can bet the Atlanta Braves to win the World Series at 13/1. If I click on another window, another book has them at 20/1. Should the lowly Kansas City Royals win the AL Central one book will pay me 90/1. Another book will pay 150/1.
One thing should be apparent just by looking at the examples above–the differences between books on higher priced dogs like Kansas City is especially pronounced. Now, I’m not planning to bet on Kansas City to win the AL Central and chances are they won’t. If I did want to take a position on them, however, and they did end up winning there’s a huge difference between 150/1 and 90/1. Even at lower prices for teams with a more realistic shot of winning the differences can be significant. Should Calgary win the Stanley Cup–not beyond the realm of possibility–my associate will pocket an extra 30/1 payout just because he took a few minutes to do some line shopping before he placed a bet.
The reason for this is that individual sportsbooks’ aren’t as worried about what the other guys are doing as they are with most other bets. Once the futures “market” is set books move the lines almost exclusively on their own financial position. Furthermore, the market doesn’t respond as quickly to futures wagers as it does to individual Game lines. If the Don Best screen shows a book with a line that is significantly different than other books, chances are it’ll be adjusted quickly–either by bettors taking advantage of the value it presents, or sometimes just so the book’s number will be more in line with action elsewhere. This isn’t the case with future wagers, so it is essential to do the extra work to get the best price on your proposition.
Don’t try to pick the winner in a competitive marketplace: This may sound sort of counter intuitive since the general idea of betting on futures is to determine the actual winner but it’s really not. Like everything else, its essential to always be mindful of the value you’re getting. In a futures market with several legitimate contenders at the top the price offered is seldom high enough to properly compensate for the risk you’re assuming. Here’s an example: we’ll return to the NCAA hoop futures that we talked about in the previous installment where Duke is +200 to win the national championship. They’ve certainly got a shot, but at a payback of only 2/1 its hard to justify a wager at this point with the potential for so many interceding events that can make a championship more problematic. Such events as injuries, a tough Tournament draw or even just going into a slump at the wrong time can happen to any team but when you bet a higher priced team–like Illinois at 15/1–you’re getting “compensation” for assuming the “risks” of betting on a proposition with so many unknown variables.
To put this in more theoretical terms, the “true odds” of Duke winning the NCAA Championship are almost certainly higher than the price we’re getting. Obviously, determining the “true odds”, or actual probability of a future event is an inexact science but think of it this way: if the 2006 NCAA Tournament was played 100 times would Duke wind up winning 50 of those? Given the number of other good teams and the propensity for upsets along the way, I seriously doubt it. For the sake of argument, lets say that Duke has a 30% chance to win the Tournament. In fractional terms that would translate to 3/10, so that would convert to a moneyline of +333. That means that I wouldn’t consider a bet on Duke to be a good value unless I was getting a price that a) accurately reflected the true probability of their winning and b) gave me some compensation for assuming the “risk of the unknown” inherent in taking the position so far in advance. At +500 I might be interested, but at +200 the value just isn’t there.
Note that the more competitive the market, the more difficult it is to find good value on the favorites. since you can make a case for quite a few teams to win the NCAA Tournament at this point this particular futures market is clearly a very competitive one. In a less competitive marketplace it might be possible to “pick the winner” and have it be a good value though you will pay a price for this. Here’s a (thankfully) hypothetical example: let’s say the PRIDE mixed martial arts promotion in Japan decided to hold a one night round robin Tournament with 5 competitors. Competitor #1 would be the man who is arguably the best stand up martial arts fighter in the world, Wanderlei “The Ax Murderer” Silva. The other Four competitors would be professional figure skaters Elvis Stojko, Rudy Gallindo, Brian Boitano and Evgeni Plushinko. Even if he didn’t bring his “A Game”, Silva would be essentially have a 100% certainty of beating the Four untrained fighters, who also happen to be rather effeminate. If a sportsbook installed Silva as a -1000 favorite a bet on the Brazilian Muy Thai Kickboxing specialist would still be theoretically a good value. It’s always difficult to risk so much to win a little, but from a strictly theoretical standpoint its a good play.
Don’t get seduced by big underdogs: Sports betting is not a place to make the “big killing”. It may happen occasionally, but more often it doesn’t. We’ll pick on the Kansas City Royals again, who are +60000 to win the World Series at Pinnacle. On a practical level, there’s probably nothing wrong with throwing a few bucks on a wager like this with a huge payback if the impossible occurs. My only problem with this is that making too many bets like this just perpetuates bad sports betting habits. If you’re strictly a recreational player, no big deal. If you aspire to bet professionally, or at least want to pursue it with some degree of seriousness I’ve always maintained that you need to develop discipline that’s not situational. In other words, if you want to be a serious sports bettor you need to approach it with a consistent level of seriousness at all times. If you want to chase a huge, life altering jackpot go to Las Vegas and play the Megabucks slots or buy a Powerball ticket.
On a more theoretical level, a big price alone is no way to justify a wager. The concept of value works the same at the bottom of the barrel as it does at the top: make sure the price you’re getting on an underdog accurately reflects their “true odds” of winning. I’m not going to do the math on this one, but even at +60000 I doubt the price reflects the actual probability of Kansas City winning the World Series.
As a footnote to this concept, there’s a big difference in getting a good price on a team that could win a championship under the right set of circumstances–like Calgary in the example above–and one that doesn’t really have a shot. If my friend had told me he had bet the Washington Capitals at the same 40/1 price I’d have told him he’s losing his edge. If you can’t make a valid case for a team, or at least come up with a potential scenario in which an underdog could prevail, don’t make the bet.
Don’t bet one-sided futures or propositions: Though many of these are not futures per se, a lot of sportsbooks offer silly propositions on nonsport events as a way to get publicity, or just to be funny. It’s important to make a distinction between this type of “silly” bet and more realistic nonsport propositions which frequently present good wagering value. I’m talking the really outlandish stuff here. Right now CRIS has a prop on Jennifer Love Hewitt posing for Playboy before 2/1/06. To be fair, the magazine doesn’t have to hit the newsstands in the next few days but Hugh Hefner or some other Playboy representative needs to formally announce that JLH will be laying down for the skin mag. Long story short, it ain’t going to happen and certainly not by the first of February. The “NO” price basically reflects this at -200000. And what, you may ask, would be your payback should Jennifer Love Hewitt decide this weekend that she absolutely must pose for Playboy and that it must be announced to the media immediately? How about +100 for your trouble? What would really suck is if you bet the “YES” and she announced she was posing nude for Hustler or some other skin mag. The way the prop is worded, that would be a loss.
At least CRIS is offering the opportunity to lay the huge price on “NO”. Not too long ago, a sportsbook posted a line on Martians landing on earth and painting the White House red by the end of the year. The “YES” was +2500 or thereabouts, which is far from reflective of the “true odds” of this unlikely event. Even if you’re the type that collects classic Art Bell shows on tape and believes in UFOs you wouldn’t place the probability of this happening at more than a fraction of a percent. The book only offered the “YES” side of the proposition, meaning that you couldn’t lay even a huge price on the more likely outcome. Another book had a futures offering for what would happen first with Ashton Kutcher, Demi Moore and Bruce Willis. All of the options were very unlikely–Ashton and Bruce fighting on PPV and my favorite–and the longest odds–Ashton, Bruce and Demi hopping in bed together and releasing a porno video documenting the event. You’d receive a sizable payback if any of the events ever transpired, but I’m not exactly sure how to compute the “true odds” on “a snowballs chance in hell”.