Saturday, 3 April 2010

Play Ball


The baseball season is once again upon us. Opening day is on Sunday, and unsurprisingly the New York Yankees are favourites to repeat as World Series Champions at about 4.8.

Betting on baseball is like betting on no other team sport. Statistics rule. If you think cricket's a statistician's dream, you need to check this game out.

In baseball, the pitchers are the key to the game, first the starter, and then the bull-pen. The money line in baseball is based on the starting pitchers for the games, not on the teams. It is not unusual in a three game series between two teams to see one team odds-on in a couple of matches, but odds against in the third simply because of the pitching matchups.

Baseball is also a game where even the most awful of teams gets to win at least one game in three. Over the last five years, the best team has ended the regular season wining 63.6% of matches (New York Yankees in 2009) while the worst record has been the Kansas City Royals with 34.6% in 2005.

The results show that not surprisingly, betting on baseball underdogs is the way to go. Underdogs over the past seven seasons have gone 6917-9644 for a loss of 153 points. Favorites during that span are 9619-6891 for a loss of 641 points. Thus even though favorites win at a 58% hit rate, betting on them costs you more than four times your money. Of course, no one in their right mind blindly bets on either the favourite or the underdog, but the numbers show that there is better value to be found on the underdog.

Baseball is also a game of streaks. If a team is on a losing streak, leave them alone. By being selective, backing slight underdogs can be profitable with a good money management system – i.e. no Martingale!

There are of course occasions when the favourite offers value. No ‘system’ can ever work all the time, but a combination of ideas can lead to success. One such idea for backing the favourite is based on the premise that over a long season, there are bound to be some games that teams will be ‘up’ for more than others. If a home team loses by three runs or more, and then face the same opponent the next day, the theory is that the team will be keen to find revenge. They must be the favourite however, the reason being that we need to ensure that the team we are betting on at least comparable in ability to the team they just lost to.

Baseball on the exchanges can be somewhat illiquid, especially when the action is spread rather thin with several simultaneous games, but there are games such as this Sunday when the attention is focused. There have been some big money to win in the past too. About three seasons ago someone was backing any team on a four game or more win streak for £10,000 or so, happy to take up to 10% below market price to get on. By all accounts he was quite successful with this strategy, further evidence of the power of the streak!

If you haven't already read it, I strongly recommend Moneyball by Michael Lewis to get a unique insight into the game of baseball, and for the idea of value contained therein. His latest book, The Big Short, arrived yesterday, and that is off to an interesting start as well.

6 comments:

Anonymous said...

"If a home team loses by three runs or more, and then face the same opponent the next day, the theory is that the team will be keen to find revenge"

What if they lose by 2? Do they not care?

"They must be the favourite however, the reason being that we need to ensure that the team we are betting on at least comparable in ability to the team they just lost to."

You've already stated it has to be a home team. An inferior team is often going to be slight favourite at home.
Regardless of that, to make the statement that a team being fav ensures they are at least comparable in ability suggests the market is always right on such things. Which kind of suggests you should look elsewhere for value.


And do you not think the market may be aware of revenge theories such as the one you mentioned so it is factored into price. US punters are massive on revenge theories etc. So is the market.

Rather than plunging headfirst into system betting, I presume you'd bother to check the pitchers in these situations? Or do they suddenly become irrelevant?

And no mention of price with this system. You seem to suggest just to back these teams that fit the system at any price as long as they are favourite. Do you blindly back them at 1.10? 1.20? 1.30? Maybe make cut off point at 1.60? Or 1.80?

Just one problem with system betting is that most systems are not price sensitive and assume all "system situations" to be identical with scant regard for any other factors, even factors as simple as differential in standard between teams.

Rob The Builder. said...

Cassini

It seems at the moment that whatever you say will have 'anonymous' hopping mad. Maybe I'm dyslexic, but I find your posts generally thoughtful and informative, whereas others are reading the same words but find them combative and offensive. Maybe it's the fact that I read the whole post rather than picking out individual sentences to take issue with?

wibdib said...

What i dont understand is why someone with so much to say is so reticent when it comes to putting a name to their comments?

Anonymous said...

(a different) Anonymous talks a lot of sense in most of his posts. There is much truth in the points he makes.

Sleazynick said...

great post,

surely a martingale style bet on underdogs would work though?

if favorites only win 66% of their games then back the dog in each of the 3 game series doubling till you hit a winner would work?

Anonymous said...

I'll save Cassini the hassle:

"I haven't yet updated my ELO ratings but I suspect they would have suggested I back the any unquoted correct score on betfair"

I thank you