So I’ve been reading quite a lot about sports betting lately and I’ve learned a ton which I thought I’d share here. Before I get in to how to win at betting I think it’s important to examine a few other things first.
Is sports betting illegal?
Maybe. It depends where you live. A couple countries and states have explicitly outlawed it. I’d recommend talking to a lawyer or doing your own research if you want more clarity, but this Is sports betting legal in the United States article may provide some basic background. The one sentence summary is no actual bettors have ever been prosecuted, but plenty of bookies and payment processors have. It is very similar to poker in that regard.
What does a professional sports bettor do?
Make winning bets on sports obv. It’s a little more complicated than that though. Just like if you wanted to become a professional poker player you would be essentially saying “I think I can play in poker games where I make better betting decisions than the majority of my opponents” If you wanted to become a professional sports bettor you would essentially be saying “I think I can find and bet sports book lines that are improperly priced” Your job is to sniff out market inefficiencies and exploit them.
Who wins at sports betting?
So now that we’ve covered the legalities and job description let’s examine some people who make a living do this. First off, who have been some of the best?
Billy Walters
The story of Billy Walters is the story of how a lot of great fortunes have been made. He was in the right place at the right time and met the right people. He was pretty much a degenerate gambler who moved to Vegas at the right time and was hired by members of the infamous Computer Group of the 1980s to place bets for them. The Computer Group was one of the first groups to use computers to handicap sports and bet on inefficient lines. The group broke up around 1985 and Billy went out on his own and hired his own handicappers after that. You can see him on 60 minutes below.
Haralabos “Bob” Voulgaris
Bob was born in 1975. He was well aware of his predecessors like Billy Walters, but he started off making a living being a purely subjective bettor. He started betting NBA games in the late 1990s and made a fortune betting halftime totals back when bookies were dumb enough to set the halftime game totals at exactly 1/2 the game total(teams score more points in the second half down the stretch). In 1999 and 2000 he made huge all in bets for the Lakers to win the championship with his $80,000 bankroll . After that he had $1M to his name and went about hiring an ex-Wall Street quant to help him simulate and handicap NBA games. He has been quoted as having spent in excess of $3 million on his statistical NBA handicapping model.
Excellent interview write-up
2+2 Well
Blog
Twitter
His house and girlfriend at the time
In 2009-2010 he quit betting for awhile – nine months or so to pursue a job with an NBA team. This was his pretty hilarious response to someone who says they’ll never hire a gambler like him.
You couldn’t be more wrong. If I wanted to work for a team right now I could be working for a team. The problem isn’t finding a job, the problem is these jobs don’t pay anything.
GM salaries aren’t normally reported, but I know two assistant GMs who are making less than I pay 2 guys on my team, and I’d bet almost all but one or two GMs make less than my quant does.
A conference at which he was a featured guest. He’s on the far left.
Lots of other small time handicappers
There’s plenty of other less successful bettors out there. If you really wanted to make a career out of this most likely you will end up broke or like one of these guys. Betting sports for a living is incredibly difficult to do.
Bookies
Making a living as a bookie is way, way easier and they make way, way more money than the bettors. A sports bettor has to pick choose his spots very carefully and work very hard to find a 5% advantage. I bookie already has a 2-7% advantage on 99% of the bets they offer due to the vigorish How to be a successful bookie goes something like
1. Copy and paste lines off Pinnacle Sports
2. Pad the vig a bit to increase your bottom line
3. Optional: One minute before the line closes hedge any lopsided action at a larger book to decrease your risk
4. Profit
The problem of course is it’s probably illegal and you run the risk of going to jail.
Sports touts
Please don’t pay for picks. I’d say 99% are scams, but that’s probably an underestimate. Good handicappers don’t sell their picks. If you want to see some of these scammers at work check out CNBC’s show Money Talks The tout takes 50% of his clients’ winnings which makes it impossible for them to be long term winners. His clients need to win over 69% of their bets to break even. Even the best sports bettors in the world only win around 60%. He is making a good living off scamming – I mean sports betting though.
The one reputable sports tout I will mention is Right Angle Sports or RAS. They are proven winners who will charge something like $1,700 for a season’s worth of picks. Sounds great right? The problem with them is check out their Beating Line Movement page. Sports books subscribe to their picks too. Lines move within 5-30 seconds of when the pick is released. The only way you are going to make money using their picks is if you can bet a lot of money faster than anyone else who is also receiving their picks. I would not recommend trying.
There are plenty of handicappers who post their picks for free on twitter or public forums after they make them. If you find a winning one you’re welcome to tail them, but you’ll never get as good of a price on lines as them because the original handicapper’s bet will often move the line so even if he’s a proven winner his followers will have a lower ROI.
How to win at sports betting?
Winning at sports betting essentially boils down to
1. Find an inefficient betting line
2. Bet on the +EV side
3. Collect your winnings
Sounds simple right? Well there’s a lot more to it than that. In order to find an inefficient line you are going to need to know what the “correct” line is. In general, the smaller the book, the more likely it is that they
1. Have an inefficient line
2. Will scam you and not pay you your winnings
You will need to weigh the risks of these when betting with any small book. The ultimate tiny book is a “friendly” wager you might make with a buddy of yours. Maybe you ask your unwitting friend who knows nothing about sports betting if he wants to bet on the underdog at even money tonight? A step up from this might be your local bookie you met at the local casino or bar or whatever who will take your bets and doesn’t have good lines or updates them infrequently. You compare the lines he gives you to Pinnacle’s and bet when you find one that’s off by enough. A step up from that might be depositing on and trying to exploit one of the thousands of tiny illegal sports books online that don’t update their lines as quick as they should. A step up from that is trying to beat lines put out by the big boys like Pinnacle or Vegas Casinos. This is an order of magnitude more difficult, but the rewards are much greater and the risk much lower. There’s almost no chance of you being scammed out of your winnings and your max wager allowed will be much higher than any other books.
So if your plan is to try and beat the lines from one of the major books you’re going to need to start coming up with lines yourself. This is known as Handicapping and the biggest books are VERY good at it. Even when they make mistakes and put out bad opening lines, they are constantly adjusting the lines based on how much is bet on either side. An opening line will typically be different than a closing line. Even if you’re better at handicapping than the sportsbook, you need to figure out WHEN to place your bet. Depending on what data you are using to handicap, some models may be best suited for betting on opening lines and others may be best suited for betting closing lines when the game is about to start.
How to get an edge handicapping
There are many different ways to gain an edge vs the book. I’ll start with the least savory.
Fix Games
Unless you’re Marsellus Wallace or actually play a sport at a high level this option is not open to you and it’s obviously frowned upon – illegal? but it’s important to be aware that it does happen. It’s also the main reason bookmaking is largely illegal in the US. Major pro leagues like the NFL, MLB, NHL are terrified that if sports betting were legal it would ruin the integrity of the game and games would be fixed all the time. However, some people are changing their mind like the NBA’s ex-commissioner David Stern says it’s time for legalized sports gambling
The most infamous case of game fixing is probably the Black Sox Scandal of the 1919 World Series
Tim Donaghy was a high profile case of an NBA referee who bet on games and changed the spread on games by allegedly miscalling the end of games he officiated
As recently as today two lower ranked tennis players were suspended for match fixing
Insider Knowledge
Insider knowledge scares the crap out of sports books. It’s hard to obtain and if you have it there’s a decent chance you’re not allowed to bet on the games or don’t care about betting on games. I’m going to assume you’re not dating Tom Brady so we’ll largely skip over this edge.
Specialize
The main advantage a bettor has over the book is they don’t have to set lines for every game. They can pick and choose which games to focus on. I would recommend specializing in one particular niche where the competition is small. The downside to this is the max wager limits will be smaller, but there is more opportunity to find inefficient lines. The reason is the number of people handicapping, betting on and watching major league sports games like the NFL is orders of magnitudes larger than a less popular sport like golf.
Gather more data
This goes along with specializing. It’s going to be nearly impossible for you to gather more data than the sports books or other handicappors for a major game like the superbowl, but for a small game hardly anyone is going to be paying attention to like Mississippi Valley State vs Alabama State both members of the SWAC conference you may have a chance.
You may also find and use some data that no one else would think of using to handicap. Some hedge funds trade stocks based on your tweets New data is always being released. If you can find a source of data that predicts the outcomes of games that no one else is using you may have found yourself a nice edge.
Interpret the data better
There’s plenty of data out there, but people draw different conclusions based on the same data. Maybe you see something in the data that no one else does that will help you predict the outcome of a game. Maybe you write a better machine learning algorithm than anyone else. Maybe you adjust your model better than anyone else based on a major change in the game such as a lockout or a rule change. Week one of any sport is going to be difficult to predict because its a brand new team with different players and potentially different rules. There’s a big difference between predicting what kind of stats 30 year old veteran Lebron James will have in his 50th game of the season and a college freshman’s first collegiate game ever. A college freshman doesn’t have much to go by in terms of career stats and his play is likely going to improve drastically as time goes on. Maybe you figure out how to handicap young players play better than anyone else.
Use new data more quickly
It takes time for information to spread. If you can be one of the first to find out about something and bet based on that data before anyone else does you can gain an edge. Last season during the opening drive of a preseason game Sam Bradford tore his ACL If you were at the game and saw it happen or you were the team doctor(insider) who x-rayed him you could use that information to bet against the Rams in the upcoming games.
Intangibles or Subjective betting
Sometimes a player’s previous game data is a poor indicator of a player’s expected performance. After Brett Favre’s father died on a Sunday night he completely shredded the raiders on a Monday night game Look at the packers’ 2003 game by game passing stats Favre had by far his best game of the season and clearly had extra motivation to play well that day. Betting Green Bay to cover the spread was probably a good bet.
Take a look at what Steve Smith did when he played his former team the Carolina Panthers last season. He had two touchdowns and 139 yards. By far his best game of the season. Betting Baltimore to cover was probably a good bet.
In my next post I’ll go into the math and statistics involved with sports betting.