So there are sites like 538 (site created by Nate Silver) that make projections on basketball games but over the course of the season you will ultimately lose money if you use their info.
Sports books from what I understand always overall make a profit at the end of the year. So while people often view Vegas and sports betting as kind of this underground seedy thing, it seems like the Data Scientists and Analysts working for legal sports books are pretty darn smart.
This was just kind of an interesting thought I had, because if you are into stats and sports, your goal might be to work for 538, or Yahoo Fantasy Sports. Or you watch a movie like 21 and think of ways to outsmart Vegas. But nobody ever references the guys actually working for Vegas / bookmakers as the guys who are super smart. How are sports book makers consistently raking in money?
ELI5?
In: Mathematics
The math is pretty easy, you don’t have to be very smart to work it out. All bookmakers do is ensure all bets have roughly the same amount of money on them…the losers cover the winners and the bookies take a cut.
KC is currently a 1 point favorite over SF for the Super Bowl. That doesn’t mean the bookies have done a deep statistical analysis, they just move the odds until the money is split evenly between the teams. If more people start betting on KC, they’ll change the spread to 1.5 point, 2 point, whatever it takes to get the money evenly split. It was the original crowdsourcing. And since the book takes 10% off the top (you bet $11 to win $10), they make money no matter who wins.
You’re missing the main way Vegas (et al) actually makes money. They don’t want a winning side. They want exactly even action on both sides. Then they simply win 5% of the action (dumbed down, but essentially both sides “pay” 10% to play).
Sure, there are giant Vegas windfalls when an underdog slays, but generally, they’re counting on the vig.
Edit: Point being, it isn’t about them being “right”. It’s about them setting and moving lines to encourage even action on each side.
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