Sports Gambling Strategy

From the post I linked earlier (question from The Blue Horseshoe):

2. am19psu .. why do you think there isnt any decent lit. on sports gaming while I alone have 30+ poker theory books

The obvious answer is it's a lot easier to beat a random donkey at poker than it is to beat a professionally run sports book. That said, some attention has been paid to it, both by gamblers and academics. However, I'm not sure a successful strategy has ever been developed. Certainly, nothing has ever been published with as much mainstream success as card counting in blackjack or "power poker" in Hold 'Em and other no limit games.

I've been of the opinion that VegasWatch and MoneyLine, and to a lesser extent myself, are at the forefront of publicly developing a sports wagering strategy that is quantitative and repeatable. Maybe I'm blowing a little bit too much sunshine up our tails, but I honestly believe we are laying the groundwork for some good analytical research. I know I am not going to find the answer because I am 27 and have a real job, but there are smart people with more time on their hands that are going to stumble across ML's site and start thinking.

Contrarian strategy isn't a new idea, but the ability to employ the concept is greater than ever. With the internet, there is a lot of information out there prior to games. Whether it is consensus information, quantitative predictions, like Pomeroy or Football Outsiders, line movement statistics or even message boards, everything the contrarian gambler could want is at our fingertips.

In the old days, you really had to know the sport you were wagering on to spot a trap line. Squeeky is an example of this type of gambler. When he was playing every sport, he knew intuitively when the books were trying to attract action to a certain side. And this is still true. I can spot a good deal of the trap lines the books set in college football. But now I have a way to back up my ideas quantitatively. Before the internet, unless you knew a bookie, you couldn't get that kind of knowledge. And even then, you couldn't publish literature telling people to befriend a bookie.

Who knows, maybe we'll all end up going broke before we become truly successful, but I'm guessing that somebody, maybe (probably?) not us, figures it out. It's not going to be easy to learn how to do. Like other gambling strategies, it will take commitment and intelligence to make it work properly, and not everyone will be able to get it, but those that do will make sports wagering an investment strategy or a job, not unlike poker. In my opinion, it's only a matter of time.

Of course, even if we or somebody else figures it out, there will be the question of whether people will be allowed to use it. I tend to think they will, at least at small limits. This is unlike card counting in blackjack, where the events being bet on are less dependent on one another. A good card counter can clean out the house in blackjack. With sports gambling, by taking the anti-public side, contrarians are providing a kind of insurance to the risk and variance the books take on by setting a trap line. If people are betting 10 dimes a game and becoming a consistent winner, it wouldn't shock me to see books turn away their business, but at smaller limits, I wouldn't be surprised if books welcomed the contrarian's action.

This post has been more of a stream of thoughts based off The Blue Horseshoe's question, but it is obviously something I've thought about before. I guess the future will tell whether I am full of crap or forseeing where this is heading.

How Does Frank Choose Sides?

Every contrarian has their own style of finding the sides to play. I'm going to show you mine, using tonight as an example.

The first place I look is Wagerline. I go there and write down every game where the underdog is getting less than 40% of the action, usually. For nights with big cards, like tonight, I'll usually stop after 37%. I'll also add favorites receiving less than 50%. Next to each of these games, I'll add a 'W' next to the game. I'll also check the line movement throughout the day. For games with reverse line movement, I'll put an 'L' next to the game and for forward, an 'X' is placed.

Next, I visit Carib, Sportsbook, Sports Investments Insights, and SIA to look at their consensus numbers. I follow a similar pattern to Wagerline and place a 'C', a 'B', a check, and an 'A' next to the games that qualify.

Finally, I'll head over to KenPom and see how the line compares to the Pomeroy prediction. Games where the prediction shows the lean beating the spread get a 'K', while an 'H' marks games where the prediction is not in my favor.

Of course, there needs to be a way to differentiate between a side that is receiving 35% of the action and sides that are getting 15%. I do this by circling or squaring the letters or leaving them alone according to the key below. There are different levels for different sites because some have more squares than others. For example, SIA is the squarest book around, so their thresholds are lower than the rest.



Lastly, I integrate all of this information in my head and come up with the unit size that I want to play a particular side. Below, tonight's 2x plays are in yellow and the 3x plays are in orange.



I do all of this in a notebook every night. It may not be the most efficient use of my time, but I feel it allows me to see the most information and make better decisions.

Totals

I've been wanting to add totals to my gambling repertoire for some time now. Two things have been keeping me from doing it: 1. early on, I was unwilling to dabble in a new (to me) gambling theory, and 2. by the time I wanted to, I was already deep in the hole. I'm obviously even deeper in the hole now, but I still feel like I am leaving profits on the table by not including them in my wagering strategy.

During the early parts of college basketball season, I will evaluate totals just as I would sides and keep record of them. I won't be posting them, but I will put the results up once I feel I've come to a reasonable conclusion as to whether they are worthwhile to me. This is important, because I plan on playing baseball this summer, and totals were extremely profitable to other contrarians last year during baseball season.

Stay tuned.

Going Daily

From here on out, I'll be updating the blog on a daily basis. The tentative schedule should be as follows:

Mon - A review of the previous week's plays
Tue - Initial leans for the week
Wed - Trisomy 21
Thu - Updated leans and possibly some plays on a MAC game or two
Fri - Profit?

Sat - When not in State College, updating throughout the day with plays, probably starting at 11am. If I am in State College, plays will likely be posted before 9am.
Sun - When not in State College, I will update at 12pm and 3:30pm. If I am in Happy Valley, plays will be posted by 10-11am.

Where do I place bets?

UPDATE: I'm not terribly pissed about this, because the reduced juice option at 5 Dimes isn't bad, but I just found out you need to rollover your bankroll once (bet the amount you deposited) before you can do an interbook transfer. At the end of the day, it will probably cost me a few units in the first three weeks of the season, but it is still better than paying -110 juice.

Offshore sportsbooks are the best way for gamblers to place bets in this day and age. The U.S. government cracked down in 2006 on some of the offshore books and it has become a little bit more difficult to get posted. But not terribly difficult. I put down over a dime in about an hour this afternoon. First, you need to know which books are good books.

Most sportsbooks are scams. They will not pay winning players, they will not allow winning players to place bets, they will renege on bonuses. These books are the scum of the gambling industry. However, it is really easy to find out if a sportsbook is reputable or not. Just go the Sports Book Review. This is a non-profit site that essentially acts as a policeman on the gambling industry. If a sportsbook does not have an A rating from SBR, frankly you should worry if you will ever see your money again.

There are other options to consider when choosing a book. For example, are you looking for bonuses with small rollovers? Or are you a reduced juice player (you should be)? I am currently posted at two books, they are both rated A books by SBR and have plenty of reduced juice options.

The first is 5 Dimes. This is a standard sports book that offers -105 pricing on games 24 hours before they are scheduled to start. On top of that, if you are going to play obscure sides or futures, this book has decent (though not the best) prices. This will be my first season playing with 5 Dimes, but they come highly recommended from friends that I have that gamble. I've been gambling for a while now, so their layout is straightforward to me. However, if you have questions about, I can answer them quickly.

The second book you should be posted at is Matchbook. This book is absolutely a must have for any serious gambler. You will find your best prices at Matchbook, particularly as a contrarian gambler. This is because Matchbook isn't a real book, but instead a market based gambling option, where you are betting against other real people, rather than against the book. You will be on the less popular side of games, so as money goes down in the hours leading up to kickoff, the price you receive gets better and better. MB makes money by charging a 2% commission on all winning bets. So, when you are doing you calculations, realize that if you place a bet at -103 juice, you are actually paying -105.

The set up at Matchbook is a little confusing. For beginners, you should just click on the spread and juice you want and enter the amount you want to bet. Even this can be confusing. I recommend playing with their interface for a half hour or so before you actually make a bet. As you understand the webpage better, you will be able to make an offer for someone else to take. Again, I will answer questions in the comments for those in need of assistance.

Lastly, getting money into these books is relatively simple. Both 5 Dimes and Matchbook accept moneygram cash transfers (which can be done at any Wal-Mart). This is the easiest way to deposit money in this day and age. Currently, Matchbook's ability to accept moneygrams is down, but 5 Dimes is still working and that's where I deposited today. Then, you can do an interbook transfer to get posted at both books.

Once you go to 5 Dimes, talk to their Live Support. They will give you instructions to whom and to which Eastern European country to send the money. Today, I went to my local Wal-Mart and endured the strange looks of the counter worker when I was explaining that my Bulgarian friend I met in a hostel in France needed money. Whatever. I'm not really concerned if the Customer Service Representative at Wal-Mart is judging me.

One last thing, after your money is deposited into 5 Dimes, make sure you ask the Live Support numerous times to sign you up for the Reduced Juice Option. It's not something they are really excited about advertising, but they will give it to you.

That's it. Make good use of the book's Live Support. They are very helpful and will answer any question you ask. Sometime this week, I'll put together a glossary of gambling terms. Then, next week, we actually get to start talking about games.

Why the juice is important

EDIT: I just read this on the FOS Premium Board. It is an example of a great post to fade. I already knew I was going to be on UVA because of mongoloids like this. Honestly, this is why I pay to be a FOS Premium Member. Where else are you going to get this kind of hard hitting analysis?

I saw these lines two days ago and assume they still hold: Any input?

USC -19.5 at UVA

->Even with a backup QB, I think USC steamrolls UVA by atleast 3 TDs.


Utah +3.5 at Michigan

->A couple of reviews I read gave Utah pretty glowing reviews on both sides of the ball. Plus I think Michigan is gonna struggle big time this season.

Note: Originally, this post was going to be about which online sportsbooks to deposit money into. I am going to push that back until next week because I think it is more important to describe the rationale for choosing those sportsbooks first. If you are desperate to get money into an account, go to Matchbook and talk to their live support about where to send a Moneygram, which you can do at any Wal-Mart.

The second most important thing to consider when gambling, after being contrarian, is to make sure that you are getting the best price possible. Betting anywhere costs money. It's not like betting $20 on the Super Bowl with your buddy or entering a $5 bracket into an NCAA Tournament pool. The money it costs is called the juice, vig, or rake. The juice is why you often hear that books try to set a line to attract equal action (which was already posited as false). Think of juice as a tax for allowing you to place a bet.

In Las Vegas, you are going to pay a 10% tax on your wagers. In other words, in order to win $100 on a bet, you have to bet $110. In the gambling vernacular, this is known as -110 juice. I've never placed a bet with a bookie, but I've heard of them charging as much as -115 juice, which is a terrible price. Occasionally, you will find positive juice. For example, a bet at +103 wins $103 for every $100 bet.

On the internet, most books will also charge you -110 juice. So, if you are looking at tonight's Eagles-Panthers game at a standard book, you will see Philadelphia -3.5 -110 and Carolina +3.5 -110. Fortunately, there are a few better options out there than -110 juice. But we'll come back to that next week.

To see why getting good juice is so important, a math problem is necessary. Aaron places his bets in Las Vegas and always gets -110 juice on his bets. Bret on the other hand uses an online book and averages -105 on his picks. Each of these players hit at 55% and flat bet $100/game. Let's see what happens after 100 bets:

Aaron has won 55 bets for a gross profit of $4999.50 (which is 55*$90.90, the amount you win for a $100 bet at -110). Aaron, however, has lost 45 bets for a gross loss of $4500. Therefore, Aaron has netted $499.50 for the season.

Bret, on the other hand, has won 55 bets for a gross profit of $5238.20 (55*$95.24). His gross loss is the same as Aaron's for a total net profit of $738.20.

Just by finding a better price for his bets, Bret has made $238 more than Aaron over the course of this hypothetical season. As the number of bets or unit size increases, this disparity will only get larger.

Intuitively, you should be able to see that you can win less bets and make a better profit at less juice. For example, at -110 juice, you need to hit 52.34% of your bets to break even (100*p - 110*(1-p) = 0, solve for p). At -105 juice, you only need to win 51.2% of your bets. So, if you are a 52% gambler, you damn well better be getting the -105 juice or you are going to lose money.

Another concept relating to juice is determining value. This applies more to futures and props and I don't play a lot of them, but it should probably be explained. If you are getting a price of +300 (or 3-to-1) on the Giants to win the NFC East, you need to figure out how often the Giants should win the NFC East for the bet to be profitable. The formula required here is (100-p)/p = odds, where odds are the juice/100. In this case:

(100-p)/p = 3
100-p = 3p
100 = 4p
p = 25

So, the Giants need to win the NFC East 25% of the time for your bet to be profitable. If you think the probability of them winning the division is higher than that, then you should bet on the G-Men.

I realize there was a lot of math in this post. I just wanted to prove a point before recommending certain books to you. The main thing to take away is "low juice is good, high juice is bad." Next week, we'll go over the best sportsbooks, which obviously offer low juice. Hint: Matchbook is one of them.

What are units?

A unit is basically a way of normalizing bet sizes. When I post a bet here, it will have a unit size next to it, rather than a dollar amount. I find it to provide much more information than how much money someone has won. For example, would you rather trail the person that bets $10 units and is up $200 on the year or the player that bets $500 units and is up $1000?

Some common names for unit sizes are dime ($1000), nickel ($500), quarter ($25 or $250) and penny ($100). You'll often read these things on other message boards when posters, usually exaggerating, try to brag about how much money they bet on a particular game.

What do unit sizes mean to me?

My bets are generally between 1x and 5x (or one unit and five units). This is kind of arbitrary and something that just became "the way I do things." Obviously, more units bet mean that I am more confident in a selection. The breakdown is as follows:

1x - A bet that is just messing around, often early in the season. Someone may ask "why do you mess around with bets?" I liken it to gaining information in poker. While I love college football, an early season matchup between UConn and Akron doesn't really excite me. By placing 1x on that game, I pay more attention to it than I ordinarily would. Last year, during college football, I hit 18/32 (56.25%) of my 1x bets. In college basketball, I hit 44/81 (54.32%) of my 1x bets.

2x - A normal bet. Most of my bets come in at this level.
2007-8 Records: NCAAF - 30/47 (63.83%); NCAAB - 54/110 (49.09%)

3x - I am feeling a bit more confident. Usually a couple of these make it onto my card a week.
2007-8 Records: NCAAF - 17/29 (58.62%); NCAAB - 25/40 (62.5%)

4x - I really like this bet. It stood out to me as soon as the lines came out* and almost all of the Covers' posters are on the other side.
2007-8 Records: NCAAF - 11/15 (73.3%); NCAAB - 10/21 (47.62%)

5x - It doesn't get much better than this. Everything that could go right with this bet has. Not only do I think it is great, but Covers' posters hate it, bigbookie at theRx needs it to win, and the important people on RMMB are hammering it.
2007-8 Records: NCAAF - 7/11 (63.64%); NCAAB - 2/4 (50%)

Larger bets - For some reason, in college basketball last year, I felt the need to bump my largest normal bets to 6x instead of 5x. I plan on changing that this fall. There are other times where I have placed larger than average bets, but I plan on cutting those out of my gambling repertoire this year. That said, a 10x play on Kansas in the championship game made my basketball season last year.
2007-8 Records: NCAAF - 3/8 (37.5%); NCAAB - 6/10 (60%)

There are couple of things to note here. Three unit plays and large plays saved my NCAAB season last year. It was a grind, but it was my first full season of playing college hoops. I expect to get better this year. Also, the 2007 college football season was ridiculous with upsets galore. I do not expect that to happen this year and I think my percentages, while still profitable, will not be nearly as high. I did not list my NFL stats because it was a small sample size, but it was not pretty. The NFL is the hardest sport for a contrarian to wager on because Vegas will not set trap lines due to the high volume of action they take. I ended my NFL wagering after Week 9 last year and will not hesitate to do so again if I fail.

On Thursday, I'll look at books at which you should be posted. They are not the ones you've heard of most likely. Next week, I'll try to put up a glossary of gambling terms. Other than that, I'm not sure what else to post before the seasons get started. I am willing to take suggestions, so post them in the comments below.

*As you become a better contrarian, you will be able to find suspect lines simply by looking at them. For example, Stanford +3 vs. Oregon State opening weekend. I know I am going to end up playing that game, I just don't know for how much yet.

How can I be a contrarian?

Now that the philosophy of sports gambling* has been laid out, you are going to need to know how to employ the strategy. Essentially, this post is going to outline what I do every Saturday and Sunday morning to determine who I am going to bet on.

Step 1: Check out the consensus sites.
Along the right side of the blog, you will find some links labeled consensus sites. Both Wagerline and Sports Insights have some advantages and disadvantages. Wagerline is completely transparent on how it collects its data. For free, people look at the matchups and choose which side they think is going to cover. The problem with this, of course, is that it is free. People aren't going to take it seriously if there isn't real money involved. Anyone who has ever sat a play money table in an online card room can vouch for that. Sports Insights on the other hand claims that their data is compiled from the online sports books. Supposedly, Pinnacle, WSEX, 5 Dimes, etc. send SI the total number of bets placed on each side and money line. This seems a bit fishy to me and I would never use the SI numbers exclusively to decide which way I wanted to wager, but it is a good starting point.

Unfortunately, there is no hard and fast rule as to what these numbers mean. Obviously, you want to be on a side that is getting a lower percentage of the action, but there are times when you will see me pass up a team that is only receiving 20% of the bets for a team that is getting 35%. These are things you are going to learn as you go along. I am a quantitative person, so it took me some time to get my head around that gambling is as much an art as it is a science.

At this point, I've usually narrowed the card down to about a half to a third of the games. That is entirely too many games to be wagering on in a given day, so I turn to a different source of information.

Step 2: Find out what the squares are thinking
Also, along the side you will find links called square boards. This is where most of the research is done. Internet gambling message boards are some of the stupidest places on the web. However, because I want to be on the opposite side of stupid people, I have to lower my IQ by about 35 points every weekend morning and read these boards.

The first board I check is Covers. This place is lowest common denominator when it comes to sports gambling. The posts there are full of emoticons, poor spelling and grammar, and completely asinine logic. Generally, the more emoticons and spelling/grammatical errors, the more likely it is I am going to fade that particular poster. Not all of the posters there are complete retards. In fact, some of them are very good handicappers**. But 95% of the stuff you read there is garbage, but it is garbage that you can get a lot of information from.

The next board I look at is theRx. If Covers is your average retard, then theRx is Chris Burke. Yeah, some of the people there have talent, but at the end of the day, theRx is still retarded. The only exception to this rule is bigbookie. He appears to be a legitimate bookie and will post which teams he needs to cover in order to come out ahead for the day. Something I failed to mention in Tuesday's post was that contrarians are essentially betting with the sportsbooks. We are rooting for Vegas to win, because when they win, theoretically, we will be winning too. That is why bigbookie's information is more valuable than anything else you'll read on these boards.

The last board I check out is MJs. This board has some decent people on it. You should be able to figure which posters are good and which suck after a few weeks of watching their posts. Titus34 is a particularly good handicapper on this board.

Now that I have seen which teams are loved by the masses, I have narrowed my card down to somewhere between 6-12 games, depending on the week. The last thing I want to do is make sure that I am seeing things correctly.

Step 3: Checking in with other people who know what they are doing
Remember in college when you would ask your roommate if he got the same answer you did for a homework problem? That is what I am doing here. I generally head over to TMLJ and the RMMB gambling board to make sure that people like MoneyLine, Kinsey, VegasWatch, Drex, Boozy, and Squeeky are on similar teams as I am. Our cards won't be exactly the same, but they will be very similar. If they aren't, I probably did something wrong.

Other things to do during the week are read VegasWatch's posts, which analyze gambling lines from a quantitative, probabilistic approach and check to see if MoneyLine has updated Contrarian Angles, which is kind of similar to this, only written better and by somebody with more experience.

Step 4: Assigning unit amounts and wagering.
The last step is to actually place the bets. This is probably best left for a separate post, but the gist of it is that as I become more confident in a selection, the more money I will bet on it. Quite intuitive.


*This is a paper from an economics journal showing the scientific reasoning behind contrarianism and how it compares and contrasts to financial markets. Good read for scientists and businessmen.

**Handicapping is not what I do. There are very few true handicappers, people who actually look at stats and matchups and are able to find value in a particular side. The rule about knowing nothing about sports does not apply to them.

What is contrarianism?

In the last post, I arrogantly stated that I know more about gambling than you. In this post, I will also pompously assert that I know more about college football, pro football, or college basketball than you. Am I claiming this to stroke my own ego? A little bit. But it's mainly to prove a larger point: as much as I think I know about sports, I know nothing. Absolutely nothing. This is the hardest thing for recreational gamblers to overcome.

While being able to name the Super Bowl Champion from 1987 or how many yards LaDanian Tomlinson ran for in 2005 or how Jared Odrick mastered the 3-gap technique in the offseason may be able to impress people at the bar, it won't win you any points gambling. The bottom line is, no matter how much you know, the sportsbooks know more than you or me do.

Now that we have that cleared up, why is it important? Realize that for any reason why you think one side or another is a good bet, Vegas has already considered it. For example, I've seen people rationalize fades of West Coast NFL teams because they know that, statistically, those teams are likely to have a let down when traveling east. If you know that, don't you think Vegas does too?

The next logical question to ask is: "but I always heard that Vegas sets lines to get equal action, why does any of this matter?" And the answer is simple. Vegas DOES NOT always set lines to attract equal action on both sides. There are many times where sportsbooks will set a line to gain action on a side. For example, last year, before anyone besides Illini faithful knew who Arrelious Benn was, Vegas set the line for the Illinois-Penn State game in Champaign at PSU -3. That line drew 80% of the bets (note: not money, but it was still uneven) on Penn State. Naturally, behind the competent quarterbacking of Anthony Morelli, Penn State went on to lose the game 27-20. Had I not had my rule about not betting on Penn State, I would have loaded up the Illini as at least a 5x bet.

Now, to put all of this together, here is my gambling philosophy: contrarianism. Yes, I know Google Spell Check doesn't think it is a word. Essentially, what it boils down to is whenever you hear Joey Sixpack say "Dude, Notre Dame is a f---ing lock, brah!" go the other way. Unfortunately, it's not quite as easy as it sounds. On Thursday, we'll look at ways to identify the sides that squares are pounding.

Why a blog?

There are a couple of reasons why I am writing this blog, in order:

1. It will help me as a gambler. By forcing myself to write out my methodology and reasoning, it should keep me from making stupid bets. I am already pretty good at this, but the difference between hitting 57% and 58% of your bets can be hundreds or thousands of dollars.

2. This is mainly for my friends and their friends. Not to sound cocky, but I know more about gambling than you do. A lot more. I've spent the last three years researching gambling methods and learning the hard way with my own money. Some people go to dinner parties, play games, read books, or invest in the stock market with their spare time. I gamble. This is one of those things that will be what you make of it. It could be another blog in the wasteland of the internet. Or, it could be educational for people. At the very least, I hope you come away with a different way of thinking about sports in general.

3. To help myself as a writer. This place could just be me posting my picks or, if you guys get involved by asking questions, insulting me, insulting each other or just posting comments, it could be a lot of fun. The better I get at writing, the more funny the posts will become, and it will just feed on each other.

There are lots of way to take the blog between now and the start of football season August 28th. It can just sit here and idle and I'll start posting my leans on August 26th, I can write a few posts about sports gambling and contrarianism, or I could write football previews. Ok, not the last one. Go spend $7 and get Phil Steele's magazine. He is better than I am at that stuff. In other words, post in the comments what you want to know and what you want to hear, and I'll try to put something up about it.

Gambling 2008-2009

I am going to attempt to track my gambling record for 2008-2009 NCAAF, NFL, and NCAAB. The record will be updated along the side. If you plan on following me, don't give me shit when my picks don't pay out for a week. Gambling is a marathon, not a race. It's entirely possible that my picks will suck, but keep in mind, I'll be losing more money than you when they fail.

If you have questions or requests, put it in the comments below.