|
Sports Betting as a Business
By J. R. Miller
I
enjoy being a sports bettor. I can’t imagine a more pleasurable way of making
a living, so long as I use some of the profits for social causes in which I
believe, such as National Public Television and National Public Radio. At the
same time, however, I do not encourage beginners or non-gamblers to pursue sports
betting as a career. I have seen far too many lives ruined and dreams dashed
on the treacherous rocks of Tap City. It’s an extremely difficult profession
to master. I’m convinced that more than ninety-nine percent of those who try
fail. Sports betting can break a man both in bankroll and in spirit, and even
sometimes in character.
To
be successful requires many things, not the least of which is countless hours
of study and research and even formal schooling in the mathematics involved
concerning probabilities, binomial distribution, bell curves, etc., all in pursuit
of understanding the parameters involved, both in winning expectations and in
the requirements of acceptable money management. A man needs the strictest concentration,
self control, and, among plenty of other things, a special ability to integrate
the mathematical and artistic parts of his brain.
That
last requirement mentioned above is perhaps the most obscure but toughest of
the bunch. Any psychologist will tell you that mixing one's mathematical/spatial/objective
brain with one's artistic/imaginative/subjective brain is not a natural thing
to do. We are all predisposed to favor one side or the other. It's a left-brain/right-brain
thing. A big majority of people have no chance at all of doing it, and it's
relatively easy to spot those handicappers that can't do it - or won't do it.
They are the ones who stick strictly to either their mathematical formulas,
or strictly to their assessment of motivational and emotional factors.
The
"math guys" are not comfortable without seeing their predictions in
black-and-white, which are produced rather automatically by their pre-tested
statistical formulas. There's a certain solidity to formula-produced predictions
that can seem to relieve these fellows of the responsibility of making judgments.
A mathematical formula can give one a sense of not being to blame when things
go wrong. It's as though the formula failed, but not the person.
The
"motivation guys" think that all past stats are simply the results
of the motivational factors that were at work at the time. These guys rely on
such subjective considerations as revenge, injuries, must-win situations, distractions,
weather, personal vendettas between players, etc.; - anything having to do with
a team’s desire to win.
By
noting the above conditions I do not mean to say sports betting cannot be beaten.
Of course it can, and there is a relatively simple explanation why it can be
beaten while other casino games can't be beaten.
Casino
games such as craps, roulette, slot machines, video poker machines, bacarrat,
etc., have more-or-less fixed odds against the player. These fixed odds are
ingrained in the rules of those games. A simple parallel would be if you were
calling the toss of a coin and won $1.00 every time you were right, but lost
$1.10 every time you were wrong. With a guaranteed 50/50 probability of winning,
it's obvious that losing 10% more than you win will eventually cost you money.
You might win over the short term, but sooner or later that disparity in your
payoff will catch up to you; - and the longer you play, the more certain it
is that you'll lose. (That's
not to say, however, that you shouldn't play casino games now and then. Of course
you can; they are great fun, and so long as you regard them as entertainment
they certainly beat sitting home watching Touched By An Angel...And who knows?
You could get lucky!)
Sports
betting, on the other hand, like stocks or commodities, has discretionary odds.
The "price" of a sports bet is actually set arbitrarily, much the
same as the price of a stock or a commodity. Prices of sports bets reflect public
opinion, just as prices on stocks and commodities reflect public opinion. The
linemakers' job is to set a pointspread that divides public opinion enough to
get plenty of action on both sides of a bet. (Public opinion does not have to
be equally divided, by the way, which is a widespread fallacy.) In this way,
the bookmaker has minimal or no risk. Technically, bookmakers are not in business
to gamble. Their role is much the same as a Realtor or a stock broker. Their
job is to "hold the money" between those bettors who bet on Team A
and those bettors who bet on Team B. Their profit comes from collecting a fee
for their service.
So,
the odds are not precisely an expert's opinion of which team will win, but,
rather, an expert's perception of the betting public's opinion. The linemaker's
job is to predict public opinion, not to predict the outcome of the games. The
posted line is an expert's opinion, once removed from the actual event itself.
It is arbitrary.
Consequently,
by using statistics, psychology, practice and experience, a good handicapper
can consistently beat the posted odds. Much the same as with our coin-tossing
situation, there will be times when an astute handicapper has losing streaks,
but over the long haul the result is inevitable; - if a handicapper has an advantage,
he will certainly and inevitably win.
Check
this definition of sports betting as defined by my friend Bob McCune in his
book, INSIGHTS
INTO SPORTS BETTING*:
"Sports
betting is a business. There are the oddsmakers who sell their services to the
(bookmakers)...These bookmakers in turn cater to the comsumer market, the players.
The function of the sports betting market is similar in most every way to the
stock and commodities markets. In other words, sports betting is a money exchange
market, made up of advisors (oddsmakers), brokers (bookmakers), and traders
(sports bettors.) The vast majority of those who indulge get ground out of their
bankrolls by the broker's (bookmaker's) commissions (vigorish.) However, the
bookmakers do not get all the spoils...(Profits) are (shared with) that small
percentage of perennial winners, the real pros..."
It
is worth noting that professional-level sports betting is not quite the same
as professional-level anything else. For one thing, anyone can simply declare
himself to be a professional-level sports bettor. No college degrees are required,
no proof of a successful track record is required, there are no "bar"
exams involved, and no licenses are issued by the state or anyone else.
Trouble
is, one does not become a perennial winner by simply declaring it to be so.
I have never met a professional-level sports bettor who hasn't spent years learning
his craft. A real pro continues to study on an almost daily basis. I can pretty
much guarantee you that the skill of a sports handicapper is in inverse proportion
to how "easy" he tells you it is. Those men who claim they can make
you rich with their forecasts - if only you'll let them charge your telephone
bill or credit card $25 for their forecasts - are the bottom feeders of sports
betting. They are not professional bettors at all; they are professional salesmen.
Their "profession" consists of talking you into calling those 900-numbers.
Successul
sports bettors have come to understand every aspect of how the sports betting
business "works," including the probabilities and standard deviations
concerning money management. I am convinced that most sports bettors fail due
to a lack of proper money management rather than to a lack of being able to
call winners. Money management is the most boring aspect of sports betting,
yet it is every bit as important as the handicapping itself.
The
irony is, correct money management is actually relatively simple. Generally
speaking, if you keep your bets all at the same level – and at no more than
about 2 percent of your bankroll - you can't go far wrong; I mean, don’t "jiggle"
the size of your bets up and down. But most gamblers don't believe that, and
most gamblers risk more than 2 percent of their bankroll on their individual
bets. Most gamblers believe they can use the size of their bets as some sort
of pry bar to make more profit than they actually deserve. They use some sort
of cock-a-mamie "1-star, 2-star, 3-star" system, or the so-called
"Kelly Criterion," and they end up surprised when they find themselves
broke.
Successful
sports bettors rarely change the size of their bets, and none would risk more
than 2 percent of his bankroll on an individual bet. Most of those pros I know
risk much less than 2 percent, and they change the size of their bets only after
their bankroll has increased (or decreased) by about 50 percent.
I
know most readers will dismiss the last couple of paragraphs as untrue or unimportant,
but that’s okay. Those are the guys that end up supporting the whole system
of sports betting for the rest of us. The rest of us need losers in order to
be winners.
If
you’re toying with the idea of getting serious about your sports betting, I
suggest you keep very careful records on paper for several months before risking
serious money. Study the sequence and duration of winning and losing streaks,
and apply your money management theories to actual "battlefield" results
rather than using simple overall percentages.
The
math can be tricky. If you flip a coin 100 times, I can guarantee you that you’ll
flip heads (or tails) 4 times in a row at some time during the 100 flips. You
cannot then look back upon that event and think the odds against its occurrence
were 15-to-1. In fact, the odds were not against its occurrence at all; the
odds were dramatically in favor of its occurrence at one time or another during
the 100 flips. The odds are 15-1 only if you flip the coin no more than 4 times.
***************
J.
R. Miller was featured in The NEW YORK TIMES, Business Section, November, 1997,
as one of this nation's top two sports handicappers. He wrote the best
selling book of it's kind, HOW PROFESSIONAL GAMBLERS
BEAT THE PRO FOOTBALL POINTSPREAD, and he edits PROFESSIONAL GAMBLER Newsletter.
Both the book and newsletter are available on the web at http://www.professionalgambler.com
or by mail from Flying M Group, P.O. Box 68, Readyville TN 37149, or by telephone
at 615-409-6789.
Check out AnteUp's other Articles in the Archives
|
