Should You Bet on the Underdog or the Favorite Most of the Time?
In sports, some players or teams are better than others. That’s pretty simple to understand. If some players or teams are better than others, and it’s obvious to you who the better team or play is in a particular matchup, should you bet on the favorite to win?
It’s not clear yet.
Why? We don’t yet know how much of a penalty or fee the oddsmakers are applying to the favorite team. You see, they also know who the better team or play is in this matchup.
Consider the Penalty
Oddsmakers can apply a penalty or a fee to the favorite in a matchup in one of two ways: first, by applying a spread; and second, by increasing the vig (or odds).
Oddsmakers recognize when one team is better than another, or when situations are more favorable for one team (playing on their home field, no starting players on the injury list, playing in snow against of warm weather team, etc.). To discourage excessive betting on the favored they place a spread on the game, which essentially means assigning a point penalty to the favorite team.
When you are betting with a spread, you create an alternate game score at the end of a real life matchup. It might be easy for the public to know one team is likely to win. What you’re betting on as a bettor is, “will they be winning the game by more than expected”?
And that’s where things get tougher and tougher. Oddsmakers try to set a spread that is going to put a sufficient penalty on the favorite team that forces bettors to ask themselves not just if a team is better than another team, but if the favorite to win is that much better than the other team.
Oddsmakers applies a vigorish to every bet that you make. The vig is written with either a + or – sign and then a number. The most common vig you will see looks like this: -110. A vig of -110 means that in order to win $100, you have to bet $110. The vig is a ratio.
You read the vig first by identifying if the symbol is a minus or a plus.
– = in order to win $100 you have to bet #
+ = betting $100 wins you #
Understanding the risk or incentive implied by the vig is key to placing an intelligent bet.
Odds set with a negative (-) sign and a number much higher than 110 imply that you are betting on a favored team and you will need to risk a lot of money in order to win a little. For example, odds set as -1800 mean, “in order to win $100, you must bet $1800.” The team or individual you are betting to win the matchup will, in the oddsmakers’ opinion, almost certainly win. Therefore, oddsmakers are saying bettors need to risk a haystack to win a toothpick.
Conversely, odds represented with a positive (+) sign and a number much higher than 110 indicate an underdog. For example, odds set at +1000 mean, “betting $100 wins you $1,000.” In this instance oddsmakers are saying they believe this team is an underdog and one that is unlikely to overcome the odds. Thus, if you win, you get 10 times your risked money! If that underdog wins one out of every ten times, you break even.
Always Choosing the Underdog
Everyone has their own betting style. Some bettors love to bet on the massive underdog.
These bettors repeatedly bet “the toothpick” (a small amount of money) waiting for the once-in-a-lifetime “haystack” payout. This strategy is the same as playing the lottery.
Individuals repeatedly buy $2 Powerball tickets waiting for $30 million winning day. These individuals believe the prospective payout makes the small risk worthwhile. However, you should think about the lottery this way: you’re not being compensated enough for the risk.
If you bought every single number that was available in the lottery, and you covered the entire board (and you “won” the lottery), you would lose money. It costs more to cover the board than the offered payout.
That’s why it’s great to be the lottery! Every once in awhile you to pay out the haystack. However, the lottery collects so much money otherwise it doesn’t feel the dent. The same risk to reward imbalance is true with slot machines. Ultimately, it’s true of most gambling events.
When you win a bet on the underdog, you are undercompensated for the risk you took.
Always Going With the Favorite
Some bettors prefer to bet on a “sure thing.” These individuals are the ones that bet on the sun coming up and LeBron James winning his next game. The thinking is that if they lose, they’re going to lose a lot of money, but they aren’t going to lose that often.
Where these bettors get really hurt is when LeBron James loses 3, 4, or 5 games in a row. The favorites do have losing streaks. And when you risk a haystack to win a toothpick, and then lose a lot of haystacks in a row, that’s a big problem!
So, What’s a Bettor to Do?
If it isn’t already clear: we advise bettors to strike a well conceived middleground. We do not advise always betting on the underdog or the favorite, for the reasons we outlined above. Instead, do your research! Understand how to read the spread and how to read the odds of each matchup and create a diverse portfolio of bets.