From: jpak@oakhill.sps.mot.com (James Pak)
Subject: Re: Sports betting
Reply-To: jpak@manute.sps.mot.com
Organization: Motorola Inc.  Austin, Tx.
Distribution: na
Date: Wed, 8 Apr 1992 21:53:42 GMT

In article <ri8b8INN11a@cs.utexas.edu> wilding@cs.utexas.edu (Matthew Wilding) writes:
>I've been trying off and on for a couple years now to get an answer to
>this question: How many "smart" betters does it take to make the
>sports line so close to the expected game result that there's no way
>to beat it given the house vig?  If the answer is very few, as I
>think, then this talk about how to make good sports bets is useless.

and

In article <rnuunINNd6m@cs.utexas.edu> Matthew asks again:
>I guess no rec.gambler is going to respond to the original point I
>made at the beginning of this thread: How few "informed" betters in
>the sports book market need there be to make it impossible to beat the
>sports book's vig?  I think very few, and that sports book bets are
>bad bets for EVERYONE who is using publically-held information despite
>the fact that the nearly half who win each week will argue with this
>contention.  Don't we have an economist who can answer this for us?

I'd be happy to give your question a shot, but I didn't say anything until now
because I don't really know exactly what you're asking, or even if your
question is based on a reasonable assumption.  Look, I'll give it a shot, but
if you think I didn't answer the question you asked, could you please re-phrase
it in clearer terms?  Don't want to leave you frustrated.  :-)

OK, here goes.  I think you're asking, "If the initial line on a game gets set
at some number, say Duke -6.5, then how many "smart" bettors does it take
before the line consistently goes toward the result of the game, say Duke -20."
Is this what you're asking?  (If not, then please re-phrase it.)

Well, in the above example (1992 NCAA basketball final), the answer is "Won't
happen."  There aren't enough bettors in the world for the line to move that
much.  If the action were *THAT* unbalanced in Duke's favor, the book would
probably suspect something fishy and simply take it off the board.  Period.
How many basketball games move 13 and a half points?  There aren't any.  (So,
your answer above of "very few" is incorrect.)

But, to answer your question in a more general sense, the answer is "I can't
answer it."  Why?  Because your question is based on a fallacious assumption.
Namely, that how close the final spread compares to the line is somehow a
measure of how "good" the bettors were or how "efficient" the oddsmaker was.  I
don't think most bettors (or oddsmakers) think this way.  We think in terms of
"they covered--great!" or "they didn't cover--damn!"  We think in binary terms.
When the 49ers beat the Broncos by 45 points a couple of years ago, nobody in
Vegas that I knew of went around saying, "The sports book market was highly
inefficient for this game because all the bettors couldn't make the line close
to the final score."  Makes no sense.  We only cared whether we made money or
lost it.  And again, in that example, no amount of money bet on SF could have
made the line "efficient" enough to touch the final score.

I think (correct me if I'm wrong) that you have this idea that once the initial
line goes up, there are bunch of "smart bettors" who pounce on it and thus move
the line to a point where there's no way for regular bettors like us to get a
"good" bet down.  And that it takes very few of these "sharpies" to do this.
This is untrue.  Because there's no such thing as a "smart" or "good" bet until
AFTER THE FACT.  And because you're also assuming that there aren't an equally
large number of clueless people with money (again, clueless is only something
known after the fact :-) ) who bet the other side.  And because "consensus"
doesn't necessarily mean "right."  (Example of this:  NFL playoffs, Jan 1991,
Bears vs Giants in Meadowlands, initial line on the total was something like
34.  On Thursday night, CNN Sports reported that the Mirage had booked some-
thing like $50K on the under, $20 on the over.  Line eventually dropped to
31.5.  Did that mean the "market" was then too "efficient" to put down a good
bet?  How many people bet the under and how many the over?  Gotta be some
"smart" bettors in the $50K, right?  So was the line now too "efficient"?
Hell no!!  Giants won 31-3, late garbage touchdown put the game over.  Moral:
Consensus != right :-) )

The point of all this is, I dispute your claim that the concept of "efficiency"
in sports betting AS YOU DESCRIBED IT even exists.  So your question can't be
answered because it assumes that there's some "threshold" level of "efficiency"
that can be reached that somehow subsequently takes all the skill out of pick-
ing winners and reduces it to pure luck for the rest of us.  I vehemently dis-
agree.  Nobody is "right" or "wrong" until the game is over.  If the line moves
one way or the other, what does that tell you?  It tells you more money got bet
on one side than the other, nothing more.  Does it tell you anything about what
the final score of the game is likely to be?  No way.

One more thing.  I think it's true that the variance in final score spreads is
almost always larger than in the line itself.  That is, even though one team
might beat another team by 20+ points in the NFL (and it happens quite often,
even though you will very rarely see a team being favored by 20+ points), it
doesn't necessarily mean that the team SHOULD HAVE BEEN favored by 20+ points.
So the whole premise of the line being more "efficient" if it approximates the
final score is flawed in that sense, since blowout games are a reality in any
sport, and the blowout itself doesn't necessarily reflect the true differences
in abilities of the teams in question.  If the definition of "efficiency" is
how close it approaches the final score, then it's a terrible definition.
That's not what any bookmaker strives for.

So did I answer your question?  Do you even think I understood your question?
If not, please let me know or re-phrase your question and I'll get back to you.

Jim
-- 
(Do not listen to the address on the header.  My correct email address is: )
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