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Betting Odds

betting ticket
“Betting Ticket” by Leon Chan

My latest hobby is betting on NFL games. I spent a lot of time watching football games and digging into player news and injuries over the past few months. I figured I can turn that knowledge into profit with sports betting.

I picked up several books on gambling to aid in this pursuit.  I’ve found tons of fascinating information, especially with the math involved in gambling. I am going to share what I’ve learned in a series of posts, starting with this one. It’ll be a great way to solidify my reading.

American Odds

The first topic is the odds that sportsbooks offer. Since I reside in US, bets are offered and placed with American odds. These odds are centered around winning or wagering $100 on any given bet. For example, a sportsbook might offer the Los Angeles Lakers at -200 to win their next game. Another bet could be the Kansas City Chiefs at +150 to win the Super Bowl.

Let’s break down what these numbers mean. I’ll start with the negative numbers or what I call minus odds. Minus odds are used when an outcome is favored or more likely to happen. The number shown after the minus sign is what you have to risk to win $100.  This means the amount risked is more than the net winnings.

Let’s say I like the Lakers to win their next game at -200 from the example above. I would go to the sportsbook offering that bet and give them $200 for a ticket. If the Lakers win, I will redeem the ticket and receive $300. My net winnings would be $300 minus $200 for $100. I am risking $200 to win $100 at -200 odds.

The bet does not have be $200 but it makes the math easy for this post. I could bet $60 on the Lakers instead of $200. However, if they win, I would receive a net winning of $30 instead of $100.

On the other side, the positive numbers or plus odds indicate an outcome is unlikely or an underdog. The number after the plus sign indicates the amount won per $100 risked. This translates to the net winnings being more than the amount risked.

Once again using the example from above, I want to bet on the Chiefs at +150 to win the Super Bowl. I would go to the sportsbook and hand over $100 for a ticket. If the Chiefs end up winning the championship, I would cash that ticket for $250. My net winnings would be $250 minus $100 for $150. I am risking $100 to win $150 at +150 odds.

However, if the Chiefs do not win, the ticket is worthless and I would have lost $100. The same situation also applies in the Lakers’ example. However, I would have lost $200 in that bet as I paid more for the minus odds.

Implied Odds

There’s more to these minus and plus odds than just conveying the net winnings of a bet. The numbers can also be translated to a probability. This probability can be used to evaluate whether the bet is a good one.

Let’s start with minus odds. Remember, these are favored outcomes, so the probabilities should be higher than 50%. To calculate these probabilities, take the odds and divide it by the odds plus 100. For the -200 Lakers bet, the implied probability is:

200 / (200 + 100) = 200 / 300 = 67%

I would need to believe the Lakers are going to win the game more than 67% of the time if I want to be profitable with that bet. Another way to think about is: if the Lakers played this game 100 times, are they going to win more than 67 times?

The implied odds for plus numbers are calculated with a similar equation. These outcomes are unlikely, so the probability should be less than 50%. To calculate these probabilities, divide 100 by the odds plus 100. For the +150 Chiefs bet, the implied probability is:

100 / (100 + 150) = 100 / 250 = 40%

I would need to trust that the Chiefs win the Super Bowl more than 40% of the time to make money with this bet. Another way to put it is: if the season was played out 100 times, would the Chiefs win it all at least 40 times?

Its that easy?

As shown in the examples above, understanding the odds and the implied probabilities makes it easier to evaluate a bet. However, you won’t beat the sportsbook with only that information. You’ll need to come up with your own probabilities to compare it with the sportsbook’s lines. And this is hardest part of profitable sports betting.

Categories
Thoughts

From Water to Wine… to Smoothies?

drinks
“Drinks” by Leon Chan

We’re back to our regularly scheduled writing this week after going out of the box the last two weeks. My favorite thing about the NBA is obviously the game of basketball itself. I love watching high stakes playoff games, where a miss or make determines the team’s entire season. A close second is the culture surrounding the NBA. I enjoy reading the petty comments players make, looking at all the memes that come from Reddit and Twitter, and learning about how these world class athletes take care of their bodies. Last year, I shared a story about the NBA’s love of PB&J. It seems that story caught fire because more articles have been featuring the relationship between the NBA and food.

What I Read:

The NBA’s Secret Wine Society| ESPN The Magazine – This story takes an esoteric look into the culture within the NBA culture. I’m not a huge wine drinker myself but reading this article made me download the app Vivino. I appreciate the deep thought and knowledge that NBA players take into the wine world. Their obsessive and competitive instincts seem perfectly in line with what it takes to become a wine aficionado.

The Bottled Water Obsession Taking over NBA Locker Rooms | Bleacher Report – We go from what the players drink when they unwind to what they drink when they are on the court. I don’t personally believe the hype that alkaline water is significantly better than any other water. But then again, these athletes are looking for any edge they can get. And as the article states, the best benefit might just be the placebo effect.

Looking at this from a wider perspective, I’m glad that NBA players are pushing water over soda and other sugary drinks. There are millions of kids around the world that watch these games and admire these players. If they learn that their favorite players prefer to drink water over soda, they might do the same. This leads to healthier children and better overall human health. I might be overly optimistic but I’d like to think that the NBA makes a wider impact on the world than just a form of entertainment.

Rajon Rondo’s Secret Stuff | The Ringer – This article came out right around the first round of the playoffs, when Rajon Rondo’s team swept their opponents. All the NBA talking heads were praising “Playoff Rondo” and his ability to weave incredible passes to his teammates. Could it be because of the smoothies and change in diet? Unfortunately, his team ran into the defending champions in the second round and got bounced in five games. So maybe not?

What I Heard:

Rom-Com | This American Life – This year’s Valentine’s Day episode of This American Life centers around the typical plot development of a romantic comedy. There’s the meet cute, the run, and some happily ever afters. I thought the overall theme of the episode was exceptionally clever. The stories themselves are also terrific and I can see why they were chosen to be included in this episode.

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Thoughts

Unmotivated

meh
“Meh” by Leon Chan

A couple of days ago I was feeling slightly depressed or “meh” about my life. I came home from work tired after countless hours in the office but did not feel accomplished. I must have spent about half the day reading articles, working on my fantasy lineups, and watching the NBA to see how those lineups would perform. Spoiler alert – they did poorly and I lost about $5. I was feeling guilty about wasting company time and not producing profit with that time.

I figured I was feeling “meh” not just because of the lack of productivity at work, I’ve had those days before. So I started looking into other areas of my life and noticed I’ve been pretty stagnant lately. I haven’t published an essay in over three months, I haven’t hit the gym in about 2 months, and my guitar hasn’t left its case since August.

After sulking for a while, I decided to turn around one of the things listed above instead of trying to change everything at once. I made up my mind to limit the distractions at work and focus on getting at least one task done each day. If I completed that one task, I should feel like I’ve won the day. By doing this, I’m hoping to hold myself accountable and to set a higher personal standard. I’ve put this into practice over the past few days and was able to get a good amount of work done. I feel better leaving work in the evenings and hope to sustain the momentum.

Sorry to all my readers who look forward to the reading recommendations. This issue was on my mind and I wanted to share my thoughts. I’ll return next week with the links and hopefully publish an essay before the end of the month.