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If you click any of the given sports leagues on the left, you will be shown a single pane with the main match betting markets. So almost every game every night the sportsbooks have a liability on one side or the other. Mike My wife constantly points that out to me when we do our annual football picks.
The half point actually comes into play. Steve Well, something to keep in mind about football because this is a great example. Football unlike any other sport has key numbers because of the way scoring occurs. You can make a slight statistical argument from research that the number seven in basketball, obviously football, but in basketball seven some people feel is a slightly key number because it makes a difference when teams start fouling or not with a couple minutes to go to try to stay in contention.
So a slightly more statistical amount of games do land on seven in the NBA and college hoops maybe than other numbers, but not enough where it really matters. So three point games are very common. Seven point games are very common. And it has switched a little bit in the NFL, by the way, because teams go for two more now. But the other side of that is that a dead number like five happens more now in the NFL because teams might go for two instead of just kicking that field goal making six or seven.
But then again they get to the key numbers more often because they can go for two. But long term about 10 percent of the time in the NFL, a favorite is going to win by three points. So it looks amazing in hindsight but then when you really start crunching the numbers, you realize how likely it is.
Well, again, this comes in the greater concept in my mind is literally probabilistic thinking. The event ended and we have this endpoint to look at. Where the markets become this continuous game. And so the process with which you go through making those decisions is incredibly important.
To me, it almost defies believability for me. This is skill. Mike Yeah. Or how does that work? Mike Are they? IBM, other companies are down there. DraftKings just became publicly traded a few months ago. I followed that stock closely. These sportsbooks have been in England for 80, 90 years.
All free, just acquiring users. And of course these companies already have millions of users just from being in the sports world. They just have been licking their chops for this stuff to open up. Rodrigo Can you chat a little bit about those markets that you mentioned, Vegas, the offshore sportsbook, the new U.
How do they vary in Costa Rica? I have no clue. I mean, just going back to the history of the point spread again. As I mentioned, for the last 50 years, Vegas was the only legal game in the U. And you always hear the Las Vegas, the point spread, this and that. So Las Vegas always set the number. They were the biggest and baddest sportsbook out there. That was the mecca of sports betting. The Las Vegas Hilton, which is now the Westgate, they had a huge super book.
That was kind of the other big sports book out there. You have several thousand people entering it. So the Internet has obviously made that easier for people to find out about it. And I have actually stopped playing the Super Contest a couple years ago just due to the fact it was a crap shoot as a lottery ticket. If you could play that every single day for days a year, you might still have an edge.
The TV boom happened in , really crisp money maker, I believe, that changed everything. But the squares that were rushed into the online poker room were easy pickings, and I fiddled with it a little bit for that reason. But, yeah, there was opportunities there. My home state Virginia just legalized it.
The problem is you have to be in your actual state to bet. Although I have a feeling the big boys are probably universalize their lines. You can really start being a true bookmaker and moving the lines based on the action and balancing your book with that 10 percent vig on each side. All the local bookies would just copy and follow it. By the mid s, the offshore books basically were the leaders in the industry.
Vegas was the followers. And once again the reason is because everybody is set up in Las Vegas. Maybe nobody knows what a fish is. But recreational versus professional. But it was always the wise guys were the sharp professional bettors who were respected by the sportsbooks who won long-term. So, wise guys, sharps, professional, all the same thing. Squares, recreational, public, would be the weekend warriors, the guys who are just betting for fun that do not have an edge.
Steve Nothing wrong with that. We talk about the stock market. A lot of these sports bettors are into day trading now because they have nothing else to do. Mike Sport game. I love that. We had a brief discussion about that. I wonder if you could… I found it surprising. The whole point of that is that the externality better be that you enjoy the point of gambling, the free drinks, and you actually have to be a loser. I think that was a fascinating story.
I was ready to go when I turned Being in Virginia obviously, Atlantic City was very close. In fact, the whole reason we have legalized sports betting in other states than Nevada right now is because Atlantic City was not successful. But they did not elect to legalize sports betting.
And up until when this federal law was passed banning all sports betting in other states, they still had a chance to be grandfathered in. They declined to do it in Vegas relies so heavily on the international crowd, the Asian crowd. You go one block from Atlantic City is very dangerous. So they could never overcome that. And he lost about five appeals and finally got up to the Supreme Court. So New Jersey was ready to go within a month. That stock is 60 to 90 cent stock and it really ran.
Rodrigo I fully subscribe to the fact that the fastest bull market rally seen in history is purely due to the fact that the sports bettors have nothing else to do but to listen to Barstool Sports and bet in the moment that sports go live. You say that with tongue in cheek, though, because I think there is a little something to some of the volatility. So anybody out there who wants to track this theory, early August will be when the you-know-what hits the fan if there is any correlation.
But do you have any insights on how do they come up with the line? The game barely ends. Do you have any insights on that? I could get this AM station for some reason out of Ohio late at night and they would have the Stardust line it was called. And they would talk about the numbers they were going to set and then that would actually be the opening NFL line. This was about an hour after the games would end. And what they had back then was a lottery system.
They would have a show on live, talk about the number they would set, and they would have what they called a lottery system. And they could go up there and bet. So the Stardust basically was hanging themselves out on purpose because they wanted to have the number corrected before they opened it to the masses. And then all the other sportsbooks would copy it the next day on Monday morning. This worked up until the early s and then by the early to mid s when I mentioned that Costa Rica took over.
Two or three of them at a time. They might vary by one or so. And the key to all this guys is the limits for low. If you want to just figure out which sport you want to beat, look at the limits. I like watching it. I actually enjoy it. I realized this decades ago. So the limits are two percent of what they might be on game day because first of all they want to get the soft numbers corrected. The closing line is the most accurate line all week.
And when I used to do my research decades ago I was always like should I be using the opening line, the middle line, the closing line? But it varies all day. So run your research and whatnot you want to use the closing line. But another important factor about the closing line is called beating closing line value.
This is how you can tell if you have a long term edge. Historically our plays beat them anywhere from one to two points, which is tremendous. And that is the Holy Grail of sports betting is beating the closing line long term. Mike Love it. What are the key factors that you use or what are the key variables that you are targeting? Steve Well, I think you guys can relate to this being systematic investors and traders. And you see it all the time.
They call it going on tilt. You still have 95 percent of your money even if you have a terrible losing day. You still have 95 percent of your investment the next day. In sports, you either have percent of it or you have zero within three hours. So money management is not ….
Steve The juice. We talked about that earlier and Rodrigo you said it was a big number to overcome. Theoretically if you hit Something to keep in mind with these sportsbooks and the Internet in recent years, a lot of them have what they call reduced juice where you can lay minus each side. You only have to hit about 51 and a half percent to break even.
And now you throw a little bit of an edge, and I feel like I have more than just a little bit of an edge, but you throw a little bit of an edge, you actually have an edge. And then I had to update that a couple years later as well. Money management, and this applies to the financial markets. Number two is shopping for line values. I just said it.
You have five or 10 sportsbooks, by default you will get the best line on every game. You could flip a coin and you will have a statistical edge that season betting on sports. So it amazes me my whole business side of this is based on selling information and selections to people.
Most of them have one. They might get a good line on one game. They might not on another. Rodrigo This reminds me of… you remember that Joel Greenblatt example you used to use, Mike? That little book. I will run it for you. You just give me the money. Or I could give you the signals and you can go ahead and do the trades yourself.
These are the tough things. They can play really well for weeks on end and then they have a bad run and give it all back and more the week after because of the emotional side. You saw… there was a chart yesterday on Twitter showing the amount of people 30 percent or something of TD Ameritrade investors went to cash at the worst possible time. On average… by the way, one of the reasons I release less plays than ever, when I started, I put out anything with an edge because I was playing it.
Mike I want to jump on that a little bit and go a little deeper because you did talk about shopping the line for value. We have talked about selections and picks and how you could have an edge. And finding a sharp book that gives you the real edge, and then trying to compare that information. And then we talked about money management. How much of their bankroll should they be betting?
Walk me through that. Steve I keep it so simple for people. KISS, keep it simple stupid, right? And in this industry…. You got the right audience right here. I just say three percent of bankroll. And Rodrigo, the Kelly Criterion of course transfers to both sports betting. And the gamblers ran with it.
But the Kelly Criterion, I think three percent of bankroll is like if you only have a 53 percent win percentage. I honestly can target 55, 50 percent, six percent long term. I think the Kelly comes out to about seven percent. I rate my games three, four, five percent of bankroll. They get a five percent then it becomes a 20 percent play to them.
So it just there again I err on the side of caution because I want everyone to live to fight another day because I know how statistical runs can go. But, yeah, I keep it simple. I say three percent of bankroll. And if a game has an edge we use it. And the way I look at it, they have a fighting chance if they follow what I tell them. Hopefully some of them do.
And the ones that do have been with me 10, 20 years. And they treat this as a form of investment. It can be bad news when you go on a cold streak but when you get hot you can compound money very fast. I was going to say earlier about someone will call me after a four and two week and then they lost.
We went 67 percent, four and two. Or we go three and three, you get ruined. So my good long-term clients have been with me for decades. They set it and forget it. They take five minutes a day. They get my updates which are sent by email. And they make the plays. Now I do put analysis with my games, as you mentioned earlier. And I like people to be able to get multi uses out of the service, so I back it up with analysis more for those who are doing their own handicapping.
And then they give them more information, they became no more accurate but they became more confident. So you give them much more information and they end up saying they would pick the same winner but they would directionally be more confident because they had this information.
It is just everywhere. Steve Realistic expectations, too. The amateur, the square, is much more sophisticated and knowledgeable and informed than ever in history. But, yeah, right now, I do think the expectations have become more reasonable which is a good thing for some of ….
Everybody I speak to plays a little bit of poker, knows a little bit of the game, has improved. Work on my low cost. You are seeing a lot less people making tactical errors in the market. But at the same time you just see it on Twitter right now. And this is the type of stuff that gets people overconfident. The volatility of the market is going up and down a half a percent a day.
That overconfidence element plays across in all of these. And Mike referenced that earlier. Steve Merril went three and two. One thing I want to bring up too though is the difference between the financial markets and the point spread. It made me think of this as you were saying it is momentum is a serious investing tool where you can ride price action.
Mike Right. I want to get to this which is insider information. Put a marker on that and come back to that. So he gets his position and then he tells you. And that sharp money has the ability to continue its steam, if you will. It has the opportunity to …. Rodrigo It goes from the backend of the newspaper to the frontend over … and all that. Mike Correct. So I get that. But now we have that steamed line where the smarter money came in for a reason.
Maybe you can talk about sports betting inside information, how it differs, and shed some more light on that. The whole reason the NFL injury report exists is because of sports betting. They wanted everything on the out and open. Steve Exactly. Like him or hate him, you got to admit he does things differently and he wins. And he puts 20 or 30 guys on there every week. The injury report in the NFL was kind of a half-ass measure to keep gamblers at bay or inside information.
And this is back in pre-Internet era, keep in mind. Who do you like? I like either team. Their way strategically to play it. I think the bookmakers get it as quick as anybody. And once again, there might be one or two sharps that get a bet in real quick because they see something on ESPN but the bookmakers are in the process of taking that game off the board at the same time. So, yeah, most of the steam action now is just mathematics.
Because if you really look at it from a macro perspective, the smart money should have an edge. And because somebody does know more, I think they should benefit. I deserve to have an edge. I had a smarter bet than the average public and the line is now more accurate because of that. So, yeah, your take on that would be interesting.
Rodrigo I think the risk in both scenarios is the risk of corruption. The risk of actually getting to the source. If there is a penalty for a CIO not putting out the numbers out there, or a whatever, a physiotherapist in a team. And the lines will get brighter as you get closer to the day. I say maybe one time a month you would have a situation where somebody really got privy to an injury.
But now game fixing obviously is totally different. And to be honest, professional sports bettors like myself and the sportsbooks, the sharpest of the sharp, we never know about it.
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The doors were flung open on May 14, , when New Jersey and other gambling supporting states got what they long wanted. The Supreme Court ruled by a 6-to-3 margin to eliminate a federal law — the Professional and Amateur Sports Protection Act — that prohibited nearly every state from allowing sports betting. The decision is now up to each state.
Prior to this landmark decision, the only way to place a legal wager on a sporting event was to fly out to Las Vegas with your buddies for a weekend. Let me cover those numbers again. He won his bet. More states are lining up, especially with the start of the NFL season now less than two months away — and preseason starts in a couple of weeks!
In just the last few days, FanDuel opened a betting store at the Meadowlands Racetrack, which is within walking distance of MetLife Stadium where both the Giants and Jets play their home games. The reason all of these states want in on the action is simple: money. The potential tax revenue is too big and too important to ignore. Everything points to a strong boom in sports gambling following the monumental decision by the Supreme Court.
There are multiple ways to profit that are smarter and safer than trying to build your fortune by joining the actual betting. There are a number of players that can succeed and take a big piece of the growing sports gambling pie. The most obvious would be the casinos that can easily add a sportsbook and attract gamblers who are already on their properties.
Plus, technology is needed to power the gambling experience on land and on mobile. Then there are the bookmakers that have been around for years overseas, and finally we have the leagues and the teams themselves. As you probably know, France won the World Cup, and I have no doubt there was plenty of celebrating in Europe because of continental pride but also because an awful lot of people placed bets.
Sports betting has been hugely popular there for a long time. In fact, one company I just recommended to my readers has storefronts in England that are far more numerous than Starbucks. It also has the lead in sports betting via mobile apps, which is where the majority of bets will be placed in the future.
I just recommended this stock in my Investment Opportunities service, and I see it doubling over time as sports gambling spread here in the U. I like it a lot at current prices. Find out how to get my full analysis here. Many possibilities of betting - mobile, internet, live and so on. Reply Useful 1 Wrong. Okot paul. Answer Useful Wrong. Mambo akimu. Answer Useful 8 Wrong 1. Grand Victoria Ltd.
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