Understand What the Oddsmakers Want You to Do (And Do the Opposite)
We established in previous posts that bookmakers must apply statistical analysis and relevant sports information when they set their lines. However, they need to also take into account public perception and emotion before finalizing their lines.
Oddsmakers may know that Team Apple is six points better than Team Orange. However, they may also know that Team Apple is an beloved by the public and, thus, that a large number of the betting public will bet on Team Apple to overcome the normally set spread.
Thus, if they set the line where they think it should normally be at Team Apple -7, too many bettors will take that bet out of love Team Apple. Therefore, oddsmakers must adjust that spread to account for public perception. They may set the line at Team Apple -10 to anticipate the fact that people will need additional encouragement to bet on Team Orange.
Shading the Line
Oddsmakers are constantly mindful of the physical and situational aspects of sports matchups, but they are also aware of public perception and market realities. As a result, oddsmakers shade the line, or move the spread around, to account for fan favorites and achieve nearly equal bets for each team in the matchup.
There are many factors that play into public perception. For example, the public has a large recency bias. Most bettors are going to look back on the last game each team played and the result of that last game will disproportionately impact their bet. If Team Apple crushed the last team they played, even more bettors are likely to bet on Team Apple.
The public is additionally influenced by teams with historical roots or emotional stories. Think back to the 2016 World Series: the Chicago Cubs versus the Cleveland Indians in a best-of-seven matchup. The Cubs had not won a World Series since 1908 and there was an overwhelming desire in large swaths of the public to do away with the Curse of the Billy Goat. Bookmakers needed to shade the line to account for public emotion here.
Additionally, Chicago is a much larger geographic area with a far wider media market. Many more people in the United States have or feel a personal connection to Chicago than to Cleveland. This type of geographic discrepancy is also something bookmakers take into account.
This type of geographic issue comes up in many areas and leagues. For example, New York teams receive a disproportionate amount of bets for their teams. New York is both a “big money state” (as in, there are a lot of individuals with significant disposable income to apply to betting) and a highly populated area, where many people feel personally connected to New York’s sports teams.
If a sportsbook has a game on its books with a New York team versus a smaller market team, such as a team from Florida, they will need to shade their line in order to influence more individuals to bet on the Florida team and achieve equal betting action.
The Key to Successful Sports Betting
There is a psychology element to sports betting that does not always reveal itself in a database of facts and figures about how these teams may actually perform. The average sports better is not educated about this psychological element. Sports betting is never what it appears. In order to be a successful sports better you have to be contrarian. You have to work to see what the larger public is not seeing. You have to think like a sportsbook to be successful.
Fundamentally, contrarian betting is doing the opposite of most bettors. Sometimes is is doing the opposite even if you don’t understand why you’re doing the opposite.
As a general rule, if everybody is on one side of the boat, you want to be on the other side. There are excellent pieces of long term evidence that show that if you are betting with the minority, you win more times than you lose.
Contrarian betting is a relationship between how you are betting and how most the public is betting. A contrarian bet is not related to other aspects of betting such as the spread, the moneyline, or the vig.
There are plenty of underdogs out there that, despite being underdogs, are still really popular with the public. For example, Team USA versus Team Russia in men’s hockey. Team USA is not nearly as good as Team Russia in real life (please, don’t shoot the messenger!), but the US public will overwhelmingly bet on Team USA. A contrarian bet in this case would be a bet on Team Russia, regardless of how the moneyline or vig is set.
Winning at Sports Betting in the Long Run
If order to win at sports betting in the long term, you need to win 56 percent of your wagers. If you win 55 percent the vig is going to chew you up.
If you win 56 percent of your wagers you can generate wealth via sports betting over your longer run.
When, as a bettor, you identify and interpret reverse line movements properly, you can generally win between 57 and 63 percent of the time (based on decades of available data). That is why it’s so important to learn reverse line movement and understand the psychology for sports betting. If you simply bet on the other side of the public, you would do well, but you probably wouldn’t win over 56 percent of the time. You would likely win around 52 or 53 percent of the time. However, you will still be losing in the course of your betting career because the vig will bleed your bankroll out over time.
You need to understand how to fade the public. Fading the public is essentially going against the grain of the larger population. And one of the ways to do this is to follow reverse line movement and understand its purpose.
If most of the US public is betting on Team USA against Team Russia in men’s hockey, you’re fading the public if you bet on Team Russia. It might feel like you are a traitor, but it’s the smarter bet.
If you just bet against the public in every wager indiscriminately you are only going to get around 52 percent winnings. You will win more than you lose, but you won’t be able to withstand the long haul because of the vig. If you’re looking for the extra piece that gives you intelligence, look to understand how oddsmakers influence the public.