Tuesday, 10 September 2019

Dogs and Hotties by the Numbers

The (American) Football seasons are underway with a winner in the opening game of the 100th NFL season on Thursday night as the Green Pay Packers easily covered the spread against the Chicago Bears, and as it was also a Divisional game.

Selections for the basic Road 'Dogs system today were the Tennessee Titans, Atlanta Falcons and Buffalo Bills (in a Divisional game).

The Week One 'Dogs System was also profitable with an 8-6-1 record.

We had our first Division 1A Conference game in the College version of the sport on Saturday, although it was a loss with Stanford being thrashed at USC. 

In Conference games overall the Small 'Dogs system is 3-2 to the good after two weeks, and in all NCAAF games is 9-6-2. 

Overall a small profit on the weekend, but they all add up.

In my last post, I wrote about the over-reaction to a high score in baseball:
A similar over-reaction by the less sophisticated is seen when a team gives up a high (15 or more) number of runs. If the next game is a day game, the Money Line ROI is 14.5%.
Some of you are no doubt wondering if this inefficiency applies to the NFL, and are busily poring over the records. Well, more likely none of you are, and it's never crossed your minds, but I'll here to tell you the numbers anyway. 

When a team covers by 14 points (i.e. two converted touchdowns) or more in Week One, they are 18-29 in their next game ATS, and we have four qualifiers for next week.

As with baseball, in recent season it pays to back big favourites in the NFL, and while there were no double digit favourites in Week One, there are likely to be two next weekend. Over the last ten seasons, such favourites are 164-130-4 ATS. For teams favoured by more than two converted touchdown, the win percentage is 62.9%, and the New England Patriots are 7-1 in these games, with a loss in 2011. They could be the biggest favourites in a game since 2013 after opening at -17.  

The MLB regular season continues to wind down, and those who said the T-Bone was overdone are being treated to an unexpected bonus with a 6-0 September record.

Unfortunately Overs is just 2-4 while Unders is 1-2 this month. 

Two more wins for the Houston Astros this weekend at -430 (a narrow 2-1 win) and at -450 (a slightly wider 21-1 win), and backing at -300 or hotter in divisional games and you'd be up 12.4% this season on the Money Line, 15.9% on the Run Line.   

Tuesday, 3 September 2019

Rare and Publicised

By some measures, Houston Astro's Justin Verlander hasn't had the best of seasons, managing to lose two games in the space of eleven days as a -430 or shorter favourite, but he did come through on Sunday with the third no-hitter of his career, and the second one in Toronto while playing for the road team.

Only five other pitchers in baseball history (since 1876) have managed to throw three or more although Verlander has some way to go to match Nolan Ryan and his seven.

Well publicised and rare events do offer an opportunity to the more sophisticated bettor, as the public overreacts to the news and goes into a collective recency reaction. 

For example, when a team holds an opponent hit-less, in the following game they have a 28.8% ROI on the Money Line when playing the same team again. 

If the no-hitter was the last game of a series, then the play next day is to fade them, currently with an ROI of 34.1% but a losing bet yesterday, albeit after extra innings.

A similar over-reaction by the less sophisticated is seen when a team gives up a high (15 or more) number of runs. If the next game is a day game, the Money Line ROI is 14.5%

I mentioned here the possible new record for the line in baseball on the 22nd, and sure enough a new record was set with a line at -530, Gerrit Cole becoming the third Astros pitcher of the season to start a game at -400 or shorter in August. Not surprising that with a starting rotation this strong, the Astros are as short as 3.15 to win the World Series this year. Currently they are tied with the New York Yankees for the best record in MLB and the American League, with the National League's Los Angeles Dodgers close behind, A repeat of the 2017 World Series looks possible. 

For some perspective on the history of red-hot favourites in baseball, since 2004 there have been just 16 matches where the line was sub -400 and six of those occurred last month, with five being with Astros pitchers. 

“Here's the essence of risk management: Risk no more than you can afford to lose, and also risk enough so that a win is meaningful. If there is no such amount, don't play.” – Ed Seykota

Sunday, 1 September 2019

T-Bone Overdone

September's arrival means that we have just one more month of the regular MLB season remaining.

For those playing the T-Bone, official results for August are Money Line +4.75 points (ROI 8.0%) while the Run Line was up +2.25 points (ROI 5.7%).

Season overall: Money Line +27.45 points, (ROI 11.1%), Run Line +17.10 points (ROI 10.5%).

Historically, the month of September sees the most selections for this system, but is the least profitable (especially on the Run Line), so be careful if you are following along. 'Least profitable' is a charitable way of saying 'costly', especially in the opening game of a series. If the opponent won their previous game, you're better off fading the T-Bone pick.  

Ditching the 9 run total at the All-Star Break ensured the Overs system was profitable in August with a 27-18-1 record, while the Unders had only eight selections, but five winners for another profitable month. 

Saturday, 24 August 2019

Relatively High

While the Basic Unders System doesn't generate as many selections as its Basic Overs sibling, their ROIs this season are fairly close.

Unders is at +12.9% from 138 selections, while Overs is at +11.5% from 278 selections. 

Basic Overs is currently in a slump, seven losses from seven over the last four days, with a first losing month of the season looking highly probable. 

It's the 9.5 total that is causing the problem. 

I apply a similar strategy in baseball to that for the the NBA. When the total is (relatively) high, my expectation is that the public will be deterred from backing Overs, and Overs can thus offer value.
If you've looked into the idea of backing Overs in the MLB, you'll know that where to draw the line regarding what qualifies as a 'relatively high' total can be a tough call. 

Until this season, the 9.5 total was profitable, but markets tend to correct, if slowly. The average total in games when the road team is favorite is 9.1 this season, so 9.5 is no longer 'relatively high'. Compare with the average of 7.9 runs in 2014 and 2015. 

In 2016, the ROI on the 9.5 total Overs was 22%. In 2017 it dropped to 6.3% and in 2018 to 0.9%. The trend was clear, and after losses standing at -13.8% before the all-star break it was clear a change was needed. 

The basic Unders system, on the other hand, is running hot, with ten wins from the last eleven selections, the latest being the 14 inning game between the New York Mets and the Braves which ended 1-2 with 12 of the 14 scoreless.
College Football returns today, although Week One has no Power Five or Group of Five Conference games that look likely to qualify for the Small Road 'Dogs System that has performed so well this millennium with 18 years of winners exceeding losers. 

Thursday, 22 August 2019

Cornered Tigers Pounce

As most of you will have seen by now, the hottest favourite ever in an MLB game lost last night, just 10 days after losing as a -430 favourite.

The official database price on the Houston Astros last night was -470, but I saw it said that it touched -600 (1.167) at the MGM sportsbook in Las Vegas:

The move to -600 appears to have been driven by a fairly substantial bet at -575 (1.174)
I did caution against trying to buy money yesterday, but maybe not everyone reads this blog. 

The Astros never led last night, losing 1-2, so anyone following my Unders recommendation will be happy today. 

My other selection yesterday, the Washington Nationals, also had a comfortable (11-1) win at -150 (1.667), although 1.72 was available on the exchanges.

Having set a new record yesterday at -470, we don't have to wait long for a possible new record, with the same Houston Astros again currently listed as huge favourites at -500 to beat the Detroit Tigers in game four of their series, although there appears to be some reluctance (hardly surprising) to back at that price and it may well drift to around -440. 

Wherever it ends up, this is the fifth -400 or shorter line this month, and the third in four days, beating 2004's three in five days. Exciting times, unless you are an Astros fan perhaps:
Note the different prices quoted (above are from BetLabs), one of the constant challenges with multiple and dynamic markets, although not a big deal on outlier selections such as these that, on average, happen once or twice a season, or five times a month...  

Wednesday, 21 August 2019

Astros Close in on -500 and NFL Week One Preview

With a current line of -470 (1.213), in from -420 (1.238) yesterday, the Houston Astros (Justin Verlander) are in line to be the hottest favourites in database history (i.e. since 2004) when they play the Detroit Tigers today. They've traded at 1.2 on Betfair, so -500 isn't an impossibility when the line is updated! 

The current record for the shortest price was jointly held at -460 by the Boston Red Sox who lost in 2-5 in 2004 to the Tampa Bay Rays (or Devil Rays as they were then known), and the Cleveland Indians in 2017, who beat today's underdog Detroit Tigers 2-0. 

This is only the 21st time a team has been as short as -400 since 2004, and the fourth time for Justin Verlander, which is a record over Clayton Kershaw who has been this favoured just the three times.

Of the 20 completed matches at -400 or shorter, the 'dog has won five, with two others going to extra innings, so as we saw as recently as the 11th of this month, a short price doesn't guarantee anything.

I should point out that from the National League, the big favourite has an unblemished record. 

While the sample size is too small to be confident in anything, the evidence suggests that favourite backers are not buying money.

The 88 matches at the -350 or shorter price do show a profit on the favourite, at least on the Money Line, with an ROI of 2%, but a loss on the Run Line, but again, if looking only at National League teams, the ROIs are 14.4% and 5.1% respectively, while they are in the red for American League teams. 

A safer bet appears to be Unders. From the 88 games, Unders has an ROI of 12.1% spread evenly across both leagues.

The T-Bone system (ROI this season ML 11.7%, RL 10.7%) looks to have a qualifier today with the Washington Nationals at -150 (1.667), while we also have an Overs (ROI 14.2% YTD) selection

Speaking of 'dogs, with the NFL season fast approaching, some of you may have seen the talk on Twitter and no doubt elsewhere on where the value may be for the Week One matches.

The premise is that the off-season is disruptive, and that the public bias is to rate teams based on old form or data meaning that favourites may be over-rated and 'dogs under-rated.

For the past five seasons, Week One 'dogs have a 54.8% record ATS overall, but in Divisional matches, for which there are five this year, the number is 81%. 

In the AFC, the record is 90%, with the one loser (New York Jets @ Buffalo Bills in 2017) failing to cover by a single point.

Divisional opponents are faced twice every regular season, and are the NFL equivalent of a football six-pointer - a win isn't just a win, it denies your divisional rival a win, so the stakes are higher in these games. Add in that the teams tend to know the weaknesses and strengths of a divisional rival better than they do a team they might face every few years, and it's not unreasonable to treat these games as a separate category.

Readers should be familiar with my Small Road 'Dogs strategy which over the past five seasons has a winning record of 54%, but which in Divisional games is 55.8%, and then if you look only at NFC games played on grass, you're at 80.8%, but that's perhaps for another day. 

Monday, 19 August 2019

On The Inside

One of the more interesting Twitter accounts I follow is A Lucky A Day and you can all thank him for being the trigger behind today's post.

While most people talk about the betting market for an event in singular terms, Lucky challenged this idea writing in response to a comment about "beating the market":

He is, in my opinion, totally correct. Each sportsbook has its own market, with prices driven by supply and demand, which vary from book to book, resulting in differing lines and prices. 

Because there may be several markets for the same event, spread across multiple jurisdictions, each with their own regulations and rules, it seems quite reasonable to say that there is not a single market. Soft books and sharp books also offer different markets, in that who is allowed to be active varies.

As Lucky further explained:
There are several different prices depending on the market place. Because there is not free movement of money across these markets and the terms/regulations of each market are different I think the concept of "the market" is flawed.
If there was one single market, then clearly the avenue of arbitrage which many people seek to exploit would not exist. 

The only pure markets are those on the exchanges, where supply meets demand, and anyone can play. The days of significant arbitrage opportunities between them are also long gone, with a change in prices on one exchange being almost instantaneously reflected on others.

Lucky's point on the market letting you play is also critical. Not everyone has access to every market, so beating a market that you don't have access to might be academically pleasing, but from a financial point of view, it's pointless. It's a waste of time, and time is money. 

Coincidentally, I had an exchange with Lucky last night in which the topic of 'insider information' was touched upon.

As readers of this blog will know, I do not get involved in horse racing following the personal revelation almost 40 years ago, that insiders possess rather vital information such as that a horse will not win

As with all sports, this is far less of a concern the more prestigious or valuable the event, but at the lower end of the scale, insider information is a risk. You would certainly expect insiders to make the most of their inherent advantage, but that advantage means the outsider is at a disadvantage. 

The traditional term 'insider information' comes from the world of finance and is defined thus:
Insider information is a non-public fact regarding the plans or conditions of a publicly-traded company that could provide a financial advantage in a securities market.
Substitute "horse" for "publicly-traded company" and "betting" for "securities" and you have the horse racing equivalent. If the stable, and those close to the stable, know that their horse is not being run to win, that is "insider information".

A further explanation of "insider information" states:
Insider information is a non-public fact regarding the plans or condition of a publicly-traded company that could provide a financial advantage when used to buy or sell shares of that or another company's securities. Knowing about a company's significant, confidential corporate developments, such as the release of a new product, could provide an unfair advantage if the information is not public and only a few people know about the developments. Insider information is typically gained by someone who is working within or close to a listed company.
Again, it's not difficult to modify this to fit the horse racing markets, or any other individual sport market for that matter. However you frame it, "insider" means "someone on the inside, or someone with privileged information", and definitely not this:
By definition, insider information is the opposite of public. It's private. 

If someone with no horse racing connections is in their parent's basement and has information on a horse race, it isn't insider information. It makes no difference to the definition of an "insider" how efficient the market is, an insider is someone on the inside. 

Similarly, information that is publicly available is public, even if it might be hard to discover.