What You Can Learn from Vegas Oddsmakers

Don't let the flashy lights blind you; there's a lot to be learned from this place. (Attractions of America)

Don’t let the flashy lights blind you; there’s a lot to be learned from this place. (Attractions of America)

Sports betting may feel at times like a relatively individualistic pursuit. Sure, there are thousands of other people wagering on the team that’s playing against yours, but they don’t really get anything from you if they win. Everything you lose goes to the sportsbook at which you place your bet, and you don’t lose more than you wager in the first place. So there’s always a distinct chance of losing, but that doesn’t mean you’re engaged in any sort of competition. Right?

Wrong. While we have nothing but respect for the oddsmakers behind the sportsbooks, you should consider them to be in direct competition with you. Most bookmakers have learned everything they know from the boys in Vegas, a city which is flush with veritable royals in the field of betting and handicapping.

One of these legends, Jimmy Vaccaro, has described the exciting and fluid nature of setting odds for a game. According to him, bookmakers must “constantly be on [their] toes…to stay one step ahead.” Lines have a tendency to move frequently leading up to game time, so bookmakers never consider their job done until the game has started and they can begin to see whether or not they will be collecting on the lines they have set.

And they do collect. Regularly. If you want to collect with enough regularity to make a true profit off of sports betting, then it would greatly behoove you to learn a bit about how these oddsmakers handicap their games. Even if you intend to take advantage of our handicapping consulting services, understanding how Vegas professionals go about their handicapping methods might help you to appreciate just how much work goes into the process. One thing is for certain: it isn’t as easy as you might think.

1. Become a Human Calculator

Not quite what we meant, but we appreciate the effort. (Kris Snibbe/Harvard Staff Photographer)

Not quite what we meant, but we appreciate the effort. (Kris Snibbe/Harvard Staff Photographer)

If you have read our beginners’ guides on handicapping baseball, basketball and football, then you already know that one of the first things any handicapper needs to know is which statistics to look for in each sport. The pros tend to have this type of information drilled into their brains. They already know the importance of starting pitchers when handicapping baseball games, the importance of team and player matchups in handicapping basketball games, and the importance of knowing which players are favored for which offensive and defensive plays when handicapping football games.

All of this information, as well as much, much more, is taken and used to figure out approximately how many points each team is likely to score in a game. This is vital in determining the odds for money lines, as well as point spreads and totals. Some of the more specific stats are transformed into lines for prop bets, and much of this information also goes into figuring out the odds for futures.

Some think that as long as you have the stats in place, then you can boil the rest of the process down to algorithms. And there are some people who have achieved success in this regard, using computerized simulators to determine their betting picks and making a decent profit. Of course, just because you hear about the success stories does not mean that there are no failures. Similar computer simulations are used by various news outlets to determine their NCAA Tournament brackets and championship predictions for the MLB World Series, the NBA Finals, and the Super Bowl. And for every outlet that might make the right prediction based upon such systems, there are countless others that get it wrong. Even the Bowl Championship Series system was changed in 2014 to the College Football Playoff, because it was determined after fifteen years of the BCS that computer selection methods simply were not reliable in determining a team’s skill level when placed in competition when another team.

Think about that for a second. A system that had been deemed reliable for over a dozen years was replaced because it turned out not to be good enough. In fact, some say that even the system that replaced the BCS is not as effective as a hypothetical system determined by the oddsmakers in Vegas. After all, their livelihood is literally dependent on their ability to judge how teams will compete against one another. Not only that, but they have to be able to set their lines in such a fashion as to entice enough people to bet on each team so that they can ensure profits no matter what the outcome of the game may be. If you asked them to pit the best teams in a sport against one another in such a fashion so as to produce nail-biting games with high television ratings, they could probably deliver with their eyes closed.

Sometimes, more goes into this than simply looking at statistics. Some of the most obvious things that are taken into account include looking at how far a team has to travel to get to their next game. If they’re playing at home, then some handicappers are going to want to know whether or not they were just on the road and might still be a bit jet-lagged or just generally exhausted. For sports like basketball and football, there are even less tangible considerations to be taken into account, such as drive and motivation. You have to be able to forget about the stats occasionally and look at which team is more explosive versus which team is more solid and determined. Vegas oddsmakers are able to take these sort of intangibles and transform them into numerical calculations regarding one team’s performance over the other.

That’s the kind of talent against which you are competing when you place a bet. It doesn’t matter if you’re betting money lines, run lines, point totals, or even prop bets. Every aspect of nearly every sportsbook has been crafted to keep the bookmakers from winding up in the red. If it were any other way, then they wouldn’t just fail to make money, but they would risk winding up in debt. So if you’ve ever questioned whether or not 55% is truly a successful rate for the average bettor who tries their hand at handicapping their own games, keep in mind that the bettor in question is up against people on the other side of the book who have just about a 100% success rate in profiting off of the average joe.

The point of putting the oddsmakers on this type of pedestal is not to scare you away from betting, but rather to ensure that you maintain an attitude of realism. You are going to lose on some of your plays, and there is no getting around that. Your team might fail to cover the spread by just one or two points, because let’s face it: close games are where the sportsbooks rake in most of their dough. But as long as you keep going at it with those statistics, and maybe take the advice of a few handicapping consultants from time to time, then you should have a fair shot at achieving victory in the long term.

2. Update Your Numbers

Poor girl spent three hours working pitcher-versus-batter statistics, meanwhile the money lines moved thirty cents in the wrong direction. Worse still, she has no idea why. (LearningDisabilities.About.com)

Poor girl spent three hours working pitcher-versus-batter scenarios, meanwhile the money lines moved thirty cents in the wrong direction. Worse still, she has no idea why. (LearningDisabilities.About.com)

It would be great if a person could take this idea of becoming a human calculator and apply it to every game before moving on with the reassurance of a win, but that just isn’t how things work. There’s much more to it than that. If you watch any sportsbook long enough, you’ll soon discover that lines move with a surprising amount of frequency. This is because the bookmakers don’t just look at a few stats and then call it quits. They are vigilant in their endeavors, and you should be too if you want to stand any chance of beating them at their own game.

In the intro to this post, we gave you a quote about staying on your toes. This can be interpreted a couple of different ways. First, bear in mind that when you look at the stats for any team or player, you are not just looking at their overall career. Standard recommendations for handicapping any sport dictate that you should be looking at the last five games played by each team. In some cases, you might even want to look at the last ten. You want to get a feel for each individual player’s performance in those games, and try to identify various factors that might be influencing the spikes and lulls in each team’s performance on the field, court, diamond, or what have you.

You are also looking for data that can change up to the minute. Maybe there is a new weather forecast that might shake things up. Some football teams, for instance, might not perform as well in the rain. Maybe one team has a decent kicker who just isn’t too hot when winds are high. There might be a baseball team with a designated hitter who just can’t seem to nab a homer when there’s no cloud cover and he has to spot the ball with the sun in his eyes.

Of course, while weather is a consideration of some handicappers, it is not a primary determining factor in guessing a game’s outcome. Unless you have paid careful attention to the forecasts in the last few games played by each team and found a weather-related trend that applies to some of their major players, you are not likely to find a whole lot of data on how their game might be affected by a bit of drizzle or a little sunlight.

You are, however, likely to find quite a bit of information regarding injuries. Is there a player on one team who sustained injuries that kept him out of the last game? How much time has he had to practice since he healed? Have you checked the injury report to see whether or not it’s the type of injury that might affect his performance in the games to come? After all, just because he’s been cleared to play doesn’t mean that he isn’t in any pain.

And if he’s out for this game, who is replacing him? Reserve players are seldom terrible, but they are kept on reserve for a reason. If they offered the same star-studded performance as the starter they’re replacing, then they’d get a lot more playing time. You may have to go back more than five or ten games to get a true feel for a replacement player’s performance, as they probably don’t have anywhere near the minutes or innings played as the guy they’re subbing for.

Unfortunately, there’s more to betting than simply handicapping a game. If things were that simple, then just about every bettor would hone this skill and Vegas oddmakers would go bankrupt within a week. They set their lines strategically, and you have to be able to identify line movements and gain an understanding as to how they work before placing a bet. A lot of career sports bettors can be pretty finicky in this regard, to the extent that some will wager a different amount on one game than on another because there was a difference in the spreads of just half a point.

Handicapping can help you to see which team might have the upper hand, but you will have to keep up to date with how the lines are moving to see how the Vegas oddsmakers are changing their predictions to keep in line with their expectations of bettors. Keep in mind that to ensure they make money, the bookmakers have to keep money coming in on both sides of the lines. This means that lines may shift slightly due to an influx of people betting on a particular team, but that doesn’t mean that the team in question is expected to win. For instance, if a large number of bettors are wagering the favored team, then the sportsbooks might inflate the point spread slightly to entice more people into betting on the underdog.

3. Learn Your Place

This is going to sound a bit harsh, but one of the last things that you need to learn from the Vegas oddsmakers is that you are a number to them. They aren’t just processing data to find out what’s going to happen in the games, but they are trying to figure out how they can use this data to make you open your wallet.

The last section covered a little bit about the manner in which sportsbooks are devised to lure some bettors into placing bets that seem like a sure thing when in reality they are not. This makes sense from a business standpoint, as bookmakers want bettors wagering on both sides of the line. But when you consider that the oddsmakers who set the bar in this regard are generally located in Vegas, then you start to see other reasons that the pros prefer to set their lines in this fashion.

In Vegas, sportsbooks are generally located in casinos. And as everyone knows, casinos make the bulk of their profits on card tables and other games of chance such as craps and roulette. While we don’t really like to draw comparison between these types of games and sports betting (after all, you can’t really handicap a craps game), a comparison might be drawn between the gamblers who lose money on these games and the bettors who lose money on bets that they thought to be a “sure thing.”

In other words, if you look at the sportsbooks and think that you’re looking at a clear indication of who’s going to win or lose, then you can place an even greater wager on the fact that the oddsmakers don’t have much respect for you. They see you as a walking dollar sign, especially if you’re placing your wager at a Vegas casino.

Of course, that doesn’t mean that you can’t learn anything about the game’s probable outcome by looking at totals and point spreads. If you look at enough of these numbers and then look at the actual results of the games, you’ll find that they wind up being rather close. But the oddsmakers still need to make bank off of bad bets, and they won’t make anything if they set the point spreads so that every game results in a push.

This is part of the reason that they try to handicap the games as meticulously as possible, looking for stats that novice handicappers might not think to look for. For instance, one team in the NBA might have a winning record, but they might get cocky when playing back-to-back games against teams with lower rankings and lose by one or two points as a result. A team in the NFL might run a strong west coast offense, but they might have trouble bringing down corners after throwing an interception, resulting in major turnover gains by the opposing team. One of the top pitchers on an MLB team might have a surprisingly bad ERA against a certain player on the opposing team, even if the player in question is generally considered subpar compared to other players who field their same position.

Each of the above hypotheticals takes into account various scenarios that might affect the outcome of a game. If you don’t learn to think meticulously about aspects of a game that extend far beyond basic team and player stats, then you will never learn to handicap as well as the Vegas oddsmakers. And if you don’t learn how spreads are often exaggerated to influence bets on either side of the line, then you will likely lose bets on winning teams because you forgot to incorporate data into your process that has a great deal of impact on the point spread and the overall total of the game.

As we said at the beginning of this post, sports betting is not an individualistic pursuit. You are in direct competition with the sportsbooks, and you have to understand this in order to persevere and make a profit off of your bets. It may take some trial and error, and there may be a few upsets along the way. But much like the teams on which you are wagering, you can become victorious if you learn from your mistakes and never underestimate the strength and skills of your competition.