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Oh what a comeback game that was yesterday! Great cheers for the Boomer; great bottom of the ninth (!), two out comeback; and then the exciting finish in the 12th. It's a thrill to tune in whenever

I love Jeter's leather this time of year.

I have heard Yankees fans, conscious of the team's pitching deficiencies, say that the Cardinals will go all the way this year.

 

In your example, I'd imagine the line would move down to get action taking the points.

 

Here's a good little quick rundown of shading: http://www.sportsinsights.com/betting-tools/sportsbook-profit-margins/ and why you see sharps betting against big public bets so often. They take the biggest hit when the public and sharps are in together. A link posted above mentioned the same.

Bingo.

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That 2nd sentence makes no sense at all. Whether the spread is -20 or -3 you are still laying $11 to win $10. So it doesn't matter how many underdogs cover.

 

It's talking about underdogs in the absolute sense, not in the betting sense - it's confusing out of context, I agree (the idea is just that you're setting the spread so that the EV's zero, even if the money's not 50/50 on a perfect spread - in your Cowboy's example, if the money's 80/20 on the five point spread, the Casino's got a loser [a 50% chance of losing 80% of the bets] so the spread needs to move upwards. You may never hit even bets on either side, but you may be able to offset the risk because people irrationally bet high and you get an 80% of the money on a 20% cover).

 

The shading point is interesting. Surprised that the market doesn't, in general, adjust the spread downwards, especially in the big casinos. Are there numbers on frequency?

 

I highly recommend the Rob Ford news right now.

 

ETA: though, I guess, the persistence of betting inefficiencies helps to explain World Series odds.

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The latest from ESPN on the Yankees and the luxury tax. It really all depends on not having to pay Rodriguez next year but there are also major implications in the salaries of the people they sign. They've got a laundry list but it's not likely they'll sign them all.

 

Read all about it.

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Bingo.

 

I think your "taking positions" language was ambiguous. Like the rest of the casino, the sports books have the upper hand in terms of reserves and time. So the "position" they take is always going to be reducing risk while increasing margins -- in the long run -- regardless of team, sport, etc. That's why shading happens, lines move, etc. They're agnostic as to who actually wins or by how much. (We already know this but seems like it was taken as such)

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Bingo.

 

I think your "taking positions" language was ambiguous. Like the rest of the casino, the sports books have the upper hand in terms of reserves and time. So the "position" they take is always going to be reducing risk while increasing margins -- in the long run -- regardless of team, sport, etc. That's why shading happens, lines move, etc. They're agnostic as to who actually wins or by how much. (We already know this but seems like it was taken as such)

 

yes. exactly.

 

They are trying to optimize for volumes and will take some risk to do so, but risk that they know given enough coin flips will eventually even out before they have issues. Over time the ER = 0 even if they are willing to occasionally put capital at risk. If the books themselves were trying to profit from their capital over time they would get arb'd out of existence.

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Bingo.

I think your "taking positions" language was ambiguous. Like the rest of the casino, the sports books have the upper hand in terms of reserves and time. So the "position" they take is always going to be reducing risk while increasing margins -- in the long run -- regardless of team, sport, etc. That's why shading happens, lines move, etc. They're agnostic as to who actually wins or by how much. (We already know this but seems like it was taken as such)

 

 

That's simply not true. In my Cowboys example above, they clearly want the underdog to win. The casino has collected $11 for every $10 bet. A 50-50 wager with a 10% vig. If 80% of the money is placed on the Cowboys how are they possibly agnostic as to who wins? They are taking a position on the Cowboys because they believe the line should really be 5 pts. They will take extra money on a team all day long if they think the public is wrong.

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Bingo.

I think your "taking positions" language was ambiguous. Like the rest of the casino, the sports books have the upper hand in terms of reserves and time. So the "position" they take is always going to be reducing risk while increasing margins -- in the long run -- regardless of team, sport, etc. That's why shading happens, lines move, etc. They're agnostic as to who actually wins or by how much. (We already know this but seems like it was taken as such)

 

 

That's simply not true. In my Cowboys example above, they clearly wan't the underdog to win. The casino has collected $11 for every $10 bet. A 50-50 wager with a 10% vig. If 80% of the money is placed on the Cowboys how are they possibly agnostic as to who wins? They are taking a position on the Cowboys because they believe the line should really be 5 pts. They will take extra money on a team all day long if they think the public is wrong.

 

 

 

 

Bingo.

 

I think your "taking positions" language was ambiguous. Like the rest of the casino, the sports books have the upper hand in terms of reserves and time. So the "position" they take is always going to be reducing risk while increasing margins -- in the long run -- regardless of team, sport, etc. That's why shading happens, lines move, etc. They're agnostic as to who actually wins or by how much. (We already know this but seems like it was taken as such)

 

yes. exactly.

 

They are trying to optimize for volumes and will take some risk to do so, but risk that they know given enough coin flips will eventually even out before they have issues. Over time the ER = 0 even if they are willing to occasionally put capital at risk. If the books themselves were trying to profit from their capital over time they would get arb'd out of existence.

 

 

They limit the arbitrage opportunities by limiting the size of the bets from the "smart money."

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In my Cowboys example above, they clearly want the underdog to win.

They want the underdog to win 50% of the time.

 

 

Las Vegas will win more money on sports bets if the underdog covers more than 50% of the games and they will have a greater chance of losing when the favorites cover more than 50% of the games. Why is that?

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What is your definition of "taking a position?"

any book where the expected return is not = 0 over time. Not necessarily a balanced book from an accounting perspective, but a balanced book from an economic perspective.

Sports Books are Market Makers.

 

If you told me there were illiquid areas where they tried to make profit off of the book - like tennis or track or something I could believe that. But something like NFL? or another widely bet on sport? Its too liquid, too many competing books.

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In my Cowboys example above, they clearly want the underdog to win.

They want the underdog to win 50% of the time.

 

 

Las Vegas will win more money on sports bets if the underdog covers more than 50% of the games and they will have a greater chance of losing when the favorites cover more than 50% of the games. Why is that?

 

Its the same thing as why buying low price to book stocks works.

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What is your definition of "taking a position?"

any book where the expected return is not = 0 over time. Not necessarily a balanced book from an accounting perspective, but a balanced book from an economic perspective.

Sports Books are Market Makers.

 

If you told me there were illiquid areas where they tried to make profit off of the book - like tennis or track or something I could believe that. But something like NFL? or another widely bet on sport? Its too liquid, too many competing books.

 

 

Sorry, you are wrong. That is why some books make a bunch more money than other books. They are not simply a market taking a vig. On NFL games. On NBA games. On the Super Bowl.

 

You actually have it the opposite. They rarely take positions on things like tennis or track.

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