Friday, February 02, 2007

Super Bowl Propositions - The Achilles' Heel of Square Books

According to USA Today, half of all Americans will wager on the Super Bowl, as a result, 90% of bets on the game are made by novice gamblers. Aware of the opportunity to attract new customers, sportsbooks understandably focus an enormous amount of energy on the biggest game on the sports schedule. The most successful approach to excite these armchair bettors is to offer propositions that promise potentially big returns for a very modest outlay, and those that focus on seemingly random or humorous events.

The problem that books face with this approach is that often just one odds maker is pricing the lines based on variables that he has far less reliable data on than he is used to. These propositions can be the easiest for an educated player to beat and sportsbooks routinely lose money on them. Propositions are a loss-leader for the betting world to tempt new bettors who will end up losing money on one of the more lucrative areas for the bookie. To protect themselves in this unusually vulnerable situation, sportsbooks build in inordinately large margins - typically using a 30 or 40-cent line with low wagering limits - yet will often consider a break-even result a success.

When you wager on a proposition, it's typically your opinion versus one odds maker. If you know more than that one odds maker, you are going to get the best of it. For Super Bowl XLI, Pinnacle Sportsbook is offering over 200 props with many priced to world beating 15-cent margins, a significant savings versus the 30 to 40-cent lines at other online books.

With this many wagering options and the public betting like mad, it's not uncommon to see prop lines move on public money alone. At Pinnacle Sportsbetting, there are several professional prop players that will take a contrarian view on our props and bet almost any one that moves more than 20 cents (betting towards the original price). Therefore, the 'Pinnacle Lean' is useful for measuring market prices on props as well as on sides and totals. For example, PinnacleSports.com is offering the following prop: 'Who will score the first TD?' at Colts -145/Bears +130. This suggests that the no-vig price based on our 15-cent line is -137.5/+137.5. Therefore, you can 'play the lean' if you find another book with the Yes at -136.5, or the No at +138.5.

The biggest mistake that players and odds makers make when evaluating props is in not understanding the difference between the median and the mean (average). Most players would assume that the average (total/frequency) is an accurate measure, but the correct way to analyze many of these types of props is to use the median. Looking at a list of theoretical score lengths in ascending order, the median is the middle number:

1
1
17
20 (median)
39
47
59


If you assumed before Sunday's game that these seven scores would occur, and assessed the prop 'Will the first score be more than 24.5 yards?' you'd price the 'No' knowing the under would hit four out of seven times, making the no-vig price on the 'No' -133 or (-4/3*100). Whereas if you took the average it would give you another answer (26.3), and lead you to the very different and misleading conclusion that the over is more likely.

Although this concept is simple and rather obvious, it will pay dividends to anyone who is prepared to spend time calculating the median. The median is useful on all types of props - from 'length of first rush' to the 'longest/shortest' props (where you use the median result from games for the whole season). In fact, there are two straightforward ways to accurately price these types of props.

First, you'll want to use as much data as possible. Since the Colts have played 19 games and Chicago has played 18 games, this gives you a much better estimate of a fair mid-point. Secondly, you should also consider adjusting your data for the opponent, perhaps ignoring some data for games that aren't similar to their Super Bowl opponent. Sharp bettors might only use data where both teams were playing under similar spread scenarios (though this might produce a small sample for the Bears).

What are players betting at Pinnacle Sports Book?

Chicago +6.5 +103 vs. Indianapolis

It appears like our opening line of Indianapolis -6.5 is solid, as we haven't had to move off the number just yet. In the nearly two weeks since the Conference Championships, the Super Bowl line has only moved four cents from -115 to -111. Public opinion of the AFC being the stronger conference has been evident throughout, while the larger volume bets have come in on the Bears. While the line is standing at 6.5 (-111), it could easily move to the 7 on Sunday when we expect a flurry of bets before kickoff.

Chicago vs. Indianapolis Under 48 points -115
The Super Bowl total opened at 48.5 with two-way betting to start although the heavier volume came in on the under pushing the line down a few cents. This was followed by many small wagers on the over, mixed in with plays on the under. The line was pushed down to 48 after several large plays on the under from our sharper players. Although we've received three times as many plays on the over, the larger volume on the under has the line standing at -115 on the under, which could move another half point by kickoff on Sunday to 47.5.

Chicago +3.5 -102 vs. Indianapolis 1st Half
Indianapolis opened as 4-point favorites in the first half at -111. All of the early betting for the Super Bowl first half line was on Chicago, dropping the line to 3.5 before we saw any buyback on the Colts. The line has since settled at 3.5 where we are seeing more balanced action.

Chicago vs. Indianapolis 1st Half Under 24.5 -132

We opened the first half total at 24.5 with the under a -125 favorite. Early betting clearly favored the over with some mixed buyback on the under. The line has been lowered seven cents due to the game total being lowered even though we've received five times more plays on the first half over.

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