Setting the Odds

HomeRunBaker

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You truly are insufferable. Celtics are also the odds on favorites according to the oddsmakers.

This isn't some long shot miracle chance here. Stop acting like it is.

I know I know:..you're smarter than all of us tho!!
My opinion is mine which can be debated........however there are facts in regards to the oddsmakers in play which cannot be debated.

The line that oddsmakers place on an event have literally zero to do with who they feel will win or who they expect to win. The line is made to create equal action on both sides to ensure a profit on the event.......in short, the line is made by the bettors. If the only bettors were in Boston then Hayward would be a HEAVY favorite based on the odds that the publics opinion created. That is of course by no means a true depiction of what the real chances are of Hayward signing in Boston as these odds would greatly differ if the only bettors were from Utah.

Hey, I'd love to be wrong and have the "But Brad!" crowd be right.......my opinion is that it is a longshot in the 15% range. The opinion of others who create the bookmakers odds have no influence in my opinion.
 

Joe Sixpack

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My opinion is mine which can be debated........however there are facts in regards to the oddsmakers in play which cannot be debated.

The line that oddsmakers place on an event have literally zero to do with who they feel will win or who they expect to win. The line is made to create equal action on both sides to ensure a profit on the event.......
It can be debated, because this simply isn't true. Sportsbooks do not always try to set the lines to generate equal action and very often will intentionally expose themselves to one side of a bet.
 

southshoresoxfan

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My opinion is mine which can be debated........however there are facts in regards to the oddsmakers in play which cannot be debated.

The line that oddsmakers place on an event have literally zero to do with who they feel will win or who they expect to win. The line is made to create equal action on both sides to ensure a profit on the event.......in short, the line is made by the bettors. If the only bettors were in Boston then Hayward would be a HEAVY favorite based on the odds that the publics opinion created. That is of course by no means a true depiction of what the real chances are of Hayward signing in Boston as these odds would greatly differ if the only bettors were from Utah.

Hey, I'd love to be wrong and have the "But Brad!" crowd be right.......my opinion is that it is a longshot in the 15% range. The opinion of others who create the bookmakers odds have no influence in my opinion.
Thank you for explaining betting odds to me. Insightful stuff.

My point was plenty of people think he is coming. Betting public. NBA sources. The fact they are a 53 win ECF team in an easier conference with his college coach all adds up to them being the favorites. This isn't the super bowl, there isn't millions of dollars coming in on these lines shifting the odds.

If you truly think it's 15% put your money where your loud mouth is. Give me 4 to 1 odds on Hayward signing here, since you're much smarter than Vegas.
 

HomeRunBaker

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It can be debated, because this simply isn't true. Sportsbooks do not always try to set the lines to generate equal action and very often will intentionally expose themselves to one side of a bet.
This is 100% untrue of legitimate sportsbooks. Maybe the local street corner guy sure......the large corporations who are now prevalent in this industry, including publicly traded companies, do not operate in the manner that you suggest. They aren't in the business to gamble.....they are in the business of always being in a +EV situation.
 

PedroKsBambino

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This is 100% untrue of legitimate sportsbooks. Maybe the local street corner guy sure......the large corporations who are now prevalent in this industry, including publicly traded companies, do not operate in the manner that you suggest. They aren't in the business to gamble.....they are in the business of always being in a +EV situation.
HRB I'm surprised, you should know better! The reason they don't set the initial line to equalize action is precisely because they are serious businesses and know the sharps would pounce if they did so. T

hey start the line at their best guess at the outcome and move it to equalize action. They will, in moving take a small position sometimes but it is based on their initial assessment of what is most probable.

Rocco used to argue the opposite around here (that initial line was based on action, not best guess) and gave up when there were dozens of cites to sources saying precisely the above.
 

djbayko

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HRB I'm surprised, you should know better! The reason they don't set the initial line to equalize action is precisely because they are serious businesses and know the sharps would pounce if they did so. T

hey start the line at their best guess at the outcome and move it to equalize action. They will, in moving take a small position sometimes but it is based on their initial assessment of what is most probable.

Rocco used to argue the opposite around here (that initial line was based on action, not best guess) and gave up when there were dozens of cites to sources saying precisely the above.
Right. Studies have shown that sportsbooks take positions because they are really really good at setting lines...much better than the public. At the same time, I don't necessarily think Bovada (the book I quoted earlier in this thread) is one of those books. Bovada is square and their odds are heavily influenced by the public.

But also, those odds can be used to support either argument. At ~44%, Boston was the favored team over Utah and Miami; but at a combined ~56%, NOT Boston is the favored outcome.

Overall, my point is that it's silly to take a definitive stance on either side, based on those odds. Way too many variables. I just thought it was fun...and they should be directionally correct.
 
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HomeRunBaker

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HRB I'm surprised, you should know better! The reason they don't set the initial line to equalize action is precisely because they are serious businesses and know the sharps would pounce if they did so. T

hey start the line at their best guess at the outcome and move it to equalize action. They will, in moving take a small position sometimes but it is based on their initial assessment of what is most probable.

Rocco used to argue the opposite around here (that initial line was based on action, not best guess) and gave up when there were dozens of cites to sources saying precisely the above.
Right. Studies have shown that sportsbooks take positions because they are really really good at setting lines...much better than the public. At the same time, I don't necessarily think Bovada (the book I quoted earlier in this thread) is one of those books. Bovada is square and their odds are heavily influenced by the public.

But also, those odds can be used to support either argument. At ~44%, Boston was the favored team over Utah and Miami; but at a combined ~56%, NOT Boston is the favored outcome.

Overall, my point is that it's silly to take a definitive stance on either side, based on those odds. Way too many variables. I just thought it was fun...and they should be directionally correct.
I'm not sure if we are completely on the same page or very far off into how the process actually works.

First off, the sportsbook aren't the ones who set the initial line.....although if they alter the line by implementing other variables they are technically taking a position but only for the purpose of creating equal action. The sportsbook purchases the opening lines from the linemaker which in Vegas used to be from Las Vegas Sports Consultants and probably still is. Nearly every sportsbook in Vegas at one time purchased from LVSC at least back when I was close with my guy out there while some simply put out this number while others included their own internal linemaker to complement this service.....but I was told that 90% of Las Vegas books use LVSC services in some form or another. From that point on the line movement is based strictly on action to create equal value......never do books "gamble" on a side at least the books in Vegas and this comes directly from a sportsbook manager. When an injury or in baseball a pitching change occurs that game comes off the board immediately and not put back on until LVSC releases a new line to their clients, the sportsbook.

As far as sharps pouncing this is mitigated by books only opening the initial number to a select few players which is how the game worked in Vegas when these sharps would have limited access to numbers before the line went public......but the line these sharps are using ARE the ones released by LVSC or their own adjusted line based on their own variables. They absolutely do not set the line based on their own handicapping.....those who do use in-house linesmakers DO take into account variables however it is to balance the books and not to gamble on predicting the results. This was told to me from a sportsbook director and not disputed by a former sportsbook worker who I ended up hiring several years ago so naturally we had many conversations on the topic during down time.

If you guys have other information I'd surely be interested in hearing it but from people I know those books run on a tight budget and tight numbers......the casino operators do not give the sportsbook managers the ability to gamble on the results. Contrary to popular belief you can't simply walk into a sportsbook and bet $100k on a game. The caps are surprisingly low and you need special clearance or approvals to wager beyond those limits.....in some cases even beyond the sportsbook manager.
 

EddieYost

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This sports book talk is fascinating. Maybe you guys could talk about it in a different thread though?
 

HomeRunBaker

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Just to use a recent example, this year's super bowl - the books kept the line at -3 despite an overwhelming amount of money coming in on the Pats.

http://www.cbssports.com/nfl/news/super-bowl-li-las-vegas-gets-absolutely-destroyed-by-the-patriots-victory/
* Mods - I know this needs to be moved from the Hayward thread however I feel obligated to correct misinformation.

This is also an example of "Fake News" as the Nevada Gaming Control Board tracks and reports the states sports book results for this game as public information. This agenda-driven cbssports piece took one tiny slice of the actual results and painted it as fact for all parties. Irresponsible reporting by Will Brinson.....I'll remember that name.
http://www.espn.com/chalk/story/_/id/18633871/super-bowl-li-sets-nevada-sportsbooks-record


Nevada books won $10.93 million off of a record $138.48 million wagered on Super Bowl LI, the state's gaming control board announced Monday.

The $138.48 million wagered beats last year's record mark of $132.54 million. The books held 7.9 percent of the amount wagered and recorded their seventh-most lucrative Super Bowl ever, when the New England Patriots erased a 25-point deficit and beat the Atlanta Falcons 34-28 in the first overtime game in Super Bowl history.

The action was so evenly distributed on the point spread, total and props that most sportsbooks entered the game in a no-lose situation.

The Patriots covered as 3-point favorites, and the game went over the consensus closing total of 57. The favorite and over is normally a bad combination for the books, but that was not the case this year.

The MGM sportsbook reported winning multiple seven figures on the game off of extremely balanced action. Jay Rood, vice president of race and sports, said he ended up with 51 percent of the straight-bet money on the Patriots and approximately 1,000 more bets on New England.

William Hill's sportsbook was the only Las Vegas shop that reported coming out on the short end. A flurry of in-game bets on the Patriots at odds of 10-1 or greater perpetrated a six-figure loss for William Hill. In the fourth quarter
 

djbayko

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First off, the sportsbook aren't the ones who set the initial line.....
Yes, I was incorrectly interchanging "linesmakers" and "sportsbooks" because I didn't think the distinction was very important to our discussion. From the perspective of the bettor, the "sportsbook" is setting the line, even if it's really the guy behind the guy.

Here is a link to a video from the MIT Sloan Sports Analytics Conference where the panel - including Matthew Hold, head of LVSC at the time - talks about the myth of books necessarily wanting equal action on both sides of a line. This fact is brought up many times throughout the discussion, but the money shot is at 23:23. Interestingly, the claim seems to be that books would, in fact, prefer the predictable income of 50/50 action, but that is an impossible standard to meet, so they are forced into a business model where they must take "winning" positions.

The panel also confirms a lot of what you were talking about as well (low early betting limits, sharps helping refine early lines, etc.).

http://www.sloansportsconference.com/content/sports-gambling-quantitative-vs-qualitative/

I don't have links handy, but I've read studies which have found evidence in support these industry claims.
 
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HomeRunBaker

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Yes, I was incorrectly interchanging "linesmakers" and "sportsbooks" because I didn't think the distinction was very important to our discussion. From the perspective of the bettor, the "sportsbook" is setting the line, even if it's really the guy behind the guy.

Here is a link to a video from the MIT Sloan Sports Analytics Conference where the panel - including Matthew Hold, head of LVSC at the time - talks about the myth of books necessarily wanting equal action on both sides of a line. This fact is brought up many times throughout the discussion, but the money shot is at 23:23. Interestingly, the claim seems to be that books would, in fact, prefer the predictable income of 50/50 action, but that is an impossible standard to meet, so they are forced into a business model where they must take "winning" positions.

The panel also confirms a lot of what you were talking about as well (low early betting limits, sharps helping refine early lines, etc.).

http://www.sloansportsconference.com/content/sports-gambling-quantitative-vs-qualitative/

I don't have links handy, but I've read studies which have found evidence in support these industry claims.
Great link and thank you. Holt is referring to only a small handful of Cantor Gaming properties where they are willing to accept these types of risks......however since I had my contact out there they have grown to take a larger market share in Vegas. Still, the large majority of books I'd imagine are still on the old tried and true ways of mitigating risk by taking sides.

When I'm out there next week for the WSOP I'm going to try and locate one of the two guys if I can as Cantor is seemingly changing the marketplace in Vegas where you CAN go into a Cantor property (I believe there are 6 now) and have much larger limits with with to wager. I'm naturally very interested in these changes. Thanks again for posting that link.

Mods please break this out before I get banned!
 

schillzilla

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I also think in Chad Millman's book The Odds the bookmaker he follows at one of the big casinos on the strip echoed something similar to needing a position. That once these books were large entities, they needed a profit - and they weren't going to do that on juice alone. They need to have the best people / algorithms that could allow them to have an unbalanced position on a game to turn the larger profit/growth that was being demanded from higher ups (just like any other large for profit business really)
 

djbayko

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Great link and thank you. Holt is referring to only a small handful of Cantor Gaming properties where they are willing to accept these types of risks......however since I had my contact out there they have grown to take a larger market share in Vegas. Still, the large majority of books I'd imagine are still on the old tried and true ways of mitigating risk by taking sides.

When I'm out there next week for the WSOP I'm going to try and locate one of the two guys if I can as Cantor is seemingly changing the marketplace in Vegas where you CAN go into a Cantor property (I believe there are 6 now) and have much larger limits with with to wager. I'm naturally very interested in these changes. Thanks again for posting that link.

Mods please break this out before I get banned!
You might be right but they are clearly talking about books in general in that video and not just Cantor. So if that's the exception then they are misleading.
 

Devizier

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The market for "where Gordon Hayward will sign" has to be minuscule. At that scale, the odds are meaningless.
 

HomeRunBaker

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You might be right but they are clearly talking about books in general in that video and not just Cantor. So if that's the exception then they are misleading.
I located a personal email address for a guy out there from my buddy who knows him well. My friend sent him an email with my questions so hopefully we get more clarification.
 

HomeRunBaker

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You might be right but they are clearly talking about books in general in that video and not just Cantor. So if that's the exception then they are misleading.
Ok here goes.....he can be a bit long winded but great information from an insider who has been on both the book side as well as the handicapping side. And Go.......



First, this is a rather complicated subject. My views have shifted a bit on this but overall remains pretty consistent.

First, there is no question that the books have some of the best algorithms in setting lines. They have the best working for them, at least on the creating the line end.

However, sophisticated sports bettors have caught up and in some instances have surpassed the books in coming up with an accurate line.

My thought is that this has occurred for a number of different reasons. The first is the ingenuity of some of the professional sports bettors and their expertise in programming. They incorporate variables into their techniques that typically you do not see books even attempt to quantify into theirs.

That is why you see reverse line moves in many instances add value to whatever handicapping technique you are using. These reverse line moves reflect in part what the best of the best handicappers are doing.They tend to move massive amounts of money into the system which is reflected sometimes in a low % public side’s line moving opposite of the % action.

But saying that the books tend to be different in how they evaluate what type of action they wish to get. Some move their lines substantially with the action while others barely move and take the heat.

As an aside, this is a good thing for a sports bettor as long as you have access to both types of books. You get to pick which line you want to bet, a sharp line or a public line. This is no small thing! It can add many units a year taking advantage of this.

So to answer your question it all depends on the book. And that depends on who is running the book and their concept of risk along with their volume of wagers.

A small book does not have the luxury of relying solely on a algorithm while books like Cantor Gaming to a degree can.

My opinion is you are both correct on this one. Even in this day and age, there is still a substantial difference between how books handle their business.

My comments are given as a general proposition. Each sport has different considerations for the books. The extreme being the NFL where the public still has a massive footprint in the betting. But even that has shifted a bit over the last 5 years.
 

luckiestman

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Ok here goes.....he can be a bit long winded but great information from an insider who has been on both the book side as well as the handicapping side. And Go.......



First, this is a rather complicated subject. My views have shifted a bit on this but overall remains pretty consistent.

First, there is no question that the books have some of the best algorithms in setting lines. They have the best working for them, at least on the creating the line end.

However, sophisticated sports bettors have caught up and in some instances have surpassed the books in coming up with an accurate line.

My thought is that this has occurred for a number of different reasons. The first is the ingenuity of some of the professional sports bettors and their expertise in programming. They incorporate variables into their techniques that typically you do not see books even attempt to quantify into theirs.

That is why you see reverse line moves in many instances add value to whatever handicapping technique you are using. These reverse line moves reflect in part what the best of the best handicappers are doing.They tend to move massive amounts of money into the system which is reflected sometimes in a low % public side’s line moving opposite of the % action.

But saying that the books tend to be different in how they evaluate what type of action they wish to get. Some move their lines substantially with the action while others barely move and take the heat.

As an aside, this is a good thing for a sports bettor as long as you have access to both types of books. You get to pick which line you want to bet, a sharp line or a public line. This is no small thing! It can add many units a year taking advantage of this.

So to answer your question it all depends on the book. And that depends on who is running the book and their concept of risk along with their volume of wagers.

A small book does not have the luxury of relying solely on a algorithm while books like Cantor Gaming to a degree can.

My opinion is you are both correct on this one. Even in this day and age, there is still a substantial difference between how books handle their business.

My comments are given as a general proposition. Each sport has different considerations for the books. The extreme being the NFL where the public still has a massive footprint in the betting. But even that has shifted a bit over the last 5 years.

I've been following this Vegas line debate for as long as I have used the internet (1996ish), 21 years and the answer is "it depends". WOW. Thanks for the info.