Are You A Winning Or Losing Sports Bettor?

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Comparing your odds against the closing line is a good indicator to find out if you’re a winning or losing sports bettor.

Read on to learn why.

The Closing Line

Bookmakers determine the opening odds for an event by analysing various factors like past performances, injuries or suspensions, or other pieces of information that can affect a competitor’s chance of winning.

As soon as they go live, people bet where they see value in the market, causing the bookmakers to constantly adjust their lines to keep the line balanced.

The odds available just before the match starts are the closing line.

In theory, the closing line should be the most efficient market.

Expected Value

Long-term success from sports betting takes luck out of the equation.

In its place is positive expected value (+EV).

This refers to finding bets that have a greater chance of winning than the implied probability given by the odds.

Here’s a coin toss example to explain.

Assuming a fair coin has a 50% chance of landing on heads or tails, let’s say we had the following odds:

Heads +110

Tails -115

The expected profit can be calculated from the following formula:

Expected Profit = Bet Size * [((Heads Odds - 1) * Probability of Heads) - (1 * Probability of Tails)]

It’s best to convert the odds to Decimal Format to make the calculation easier: 

Heads 2.1

Tails 1.87

So, if you put a $10 bet on heads, the expected profit would be:

Expected Profit = $10 * [((2.1 - 1) * 0.5) - (1 * 0.5)] = $10 * (0.55 - 0.5) = $0.50

As you can see, the expected profit is a positive number.

This means that making this bet will be profitable in the long run – even though the chances of losing the toss is 50%.

Efficient Market Theory

Now, while the above example makes the idea of +EV bets seem simple, it’s not quite as clear-cut in sports betting.

It’s even more complicated due to the fact that the odds are always changing, from the initial price right up the to the closing line.

So, the question is:

Which odds are the most accurate?

The answer, according to the efficient market hypothesis (EMH) is the closing line.

According to Pinnacle:

EMH dictates that in an efficient market, where a large number of individuals try to maximise their profit by predicting future market values of securities and where current information is freely available to all, competition leads to a situation where, at any given point in time, the actual prices reflect the intrinsic value of the security.

Ok, so how does this apply to sports betting?

Here’s the deal:

Sports betting odds take all publicly available information into account.

As such, bias cannot exist in the long-term.

For example, if sports bettors realized there were inefficiencies in the odds, they would bet them until the inefficiency ceases to exist.

Opening odds don’t reflect every piece of available information so it’s inevitable for inefficiencies to be present.

In fact, just by making adjustments to the odds goes to show that the closing line is unbiased.

This is why beating the closing line serves as a valuable marker to showing if you are a winning or losing sports bettor.

This way, it’s easier to measure if your success came about by your strategy or just blind luck.

In a previous post, we asked other sports betting experts about the importance of the closing line to long-term profitability – you can find it just below: 

Expert Roundup: Importance Of Beating Closing Line Value

Find out what industry experts have to say

Expert Roundup: Importance Of Beating Closing Line Value

Find out what industry experts have to say

How Efficient Is The Sports Betting Market?

The best way to look at this by using a bookmaker’s data – we used Pinnacle earlier so we’ll stick with them as our sharp.

From nearly 400,000 matches, they found an extremely high correlation between closing lines and the real world outcome – 99.7% in fact.

Most soft books are European, while the Sharps are mostly Asian.

More money is wagered in Asian markets so it has higher liquidity.

As such, this attracts professional sports bettors that place much larger bets and exploit any inefficiencies.

Now, while it may be easier to find value bet opportunities in European markets, there are stricter limits on how much you can bet that can restrict your winnings. 

Efficient markets like the Asian books can only be beaten by a couple +EV%.

The lower edge is counter-balanced by large sized and large volume bets. 

High Vs Low Liquidity Markets

We’ll finish on this.

Generally speaking, bookmakers only allow small bets on minor leagues.

This means these leagues have lower liquidity compared to the likes of the NBA in basketball, the NFL in football and the EPL in soccer.

For example, if you have an edge in betting on the EPL and the National Conference, less money is needed to shift the lines in the NC, meaning your bet can turn from being +EV to being -EV.

Of course, this can also go the other way and make your +EV bet even better.

The important thing to note here is that lower liquidity markets are more volatile than high liquidity markets, meaning that they carry extra risk.

For example, if you place a bet on the EPL and NC within an hour before kickoff at the closing line, chances are they will both be +EV plays.

However, if you place a bet on the EPL and NC 5 hours before kick off, the NC bet is more likely to swing against you compared to your EPL bet.

Therefore, sports bettors must decide if that particular bet, even with your edge, is worth it.

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