Why Big Money Line Underodgs?

First week of college football had about 50 double digit spreads, including some in the 50s. South Alabama and Albany were 20-point underdogs that won outright, Texas State was 17-points. Army, Wisconsin, Houston, Richmond were some others.

Wizard has talked about playing these. So why is there so much value on them? To have a good bet, you cannot bet them blindly. You still have to beat the market price. But you don't have to beat it by very much for it to be +EV.

On a typical 50/50, -110 proposition, the house charges 4.55%. If you bet both sides you can put $220 in action with a guaranteed $10 loss. 10 / 220 = 0.04545...

But what happens if it's not 50/50? What if it's 80/20? First take the odds, then add the 4.55% vig: 0.8 x 1.0455 = 0.836 and 0.20 x 1.0455 = 0.209. Those odds convert to money lines of -510 and +378. First thing to notice is most sports books won't have -510 / +378. If they have a -500 favorite, they'll have a +400 dog -- which is less than 4.55% vig and exactly break even on the underdog. Some will instead have -475 and +375, and as you can see, the dog is still so much closer to break even than the favorite.

It can get even more extreme (where market price on the underdog is very close to break even) as the money lines get even bigger. Arkansas-LA Tech was a 21-point spread (where the favorite won by one point) and it wasn't too hard to find -1300 on the favorite or +900 on the underdog. At those prices, the vig is less than 3% and the no-vig line is around +925. If you can find one book that has -1500 / +1000 (and there was at least one), it is now a very good bet.

Why would you assume that the underdog money line in that case was a good bet? For +1000 to be profitable, your team would have to win outright at least one time in eleven--and I actually doubt that 21-point dogs win that often in college ball. For what it's worth (probably not much for comparison purposes), in the NFL, 21-point dogs have only won about 5% of the time.

This is a system developed by some brainiac MIT guy that purports to show that betting the extreme favorite, (20-25 points), on the money line, in the NCAAF is profitable in the long run and he gives an example of 6 years worth of betting. I'm not saying that I like this system, or would do it, or would recommend it. I'm just saying that it was very interesting. I guess it might work because the favorite is so unpopular because of the tiny % payout that the odds are shaded in its favor. Maybe. I'm not really sure. But again, to me, it was an interesting read.


http://www.sloansportsconference.com/mit_news/the-following-appeared-in-espn-columnist-chad-millmans-blog-on-august-10th/

Quote: lilredrooster

This is a system developed by some brainiac MIT guy that purports to show that betting the extreme favorite, (20-25 points), on the money line, in the NCAAF is profitable in the long run and he gives an example of 6 years worth of betting. I'm not saying that I like this system, or would do it, or would recommend it. I'm just saying that it was very interesting. I guess it might work because the favorite is so unpopular because of the tiny % payout that the odds are shaded in its favor. Maybe. I'm not really sure. But again, to me, it was an interesting read.


http://www.sloansportsconference.com/mit_news/the-following-appeared-in-espn-columnist-chad-millmans-blog-on-august-10th/

Interesting...thanks. It seems like a mere one or two more dogs winning each year would upset the apple cart, but hindsight is always easy.

Quote: NokTang

Interesting...thanks. It seems like a mere one or two more dogs winning each year would upset the apple cart, but hindsight is always easy.

If I was going to do this, and I'm not, I would bet the extreme favorite only when they are home.

I still maintain there is a small value in betting underdogs of about +7 to +21 on the money line if combined with shopping around for the best lines. However, it is extremely volatile. In my position, it isn't worth the bother of running around for the sweet lines.

What about shopping around online? Perhaps the lines are bad online ?

Quote: Joeshlabotnik

Why would you assume that the underdog money line in that case was a good bet? For +1000 to be profitable, your team would have to win outright at least one time in eleven--and I actually doubt that 21-point dogs win that often in college ball. For what it's worth (probably not much for comparison purposes), in the NFL, 21-point dogs have only won about 5% of the time.

What method would you suggest using to calculating a fair market price?

Quote: Wizard

I still maintain there is a small value in betting underdogs of about +7 to +21 on the money line if combined with shopping around for the best lines. However, it is extremely volatile. In my position, it isn't worth the bother of running around for the sweet lines.

Because of the smaller commission and because the no-vig price will be much closer to the +800 than the -1100, finding the best odds will usually be at least break even. Ridiculous to spend time and gas finding break even bets ... but if you're already at the sports book and want action it may be one of the few things that are as good as the bill-breaker machine

Quote: TomG

What method would you suggest using to calculating a fair market price?

Do research on how often big dogs win outright, either in college ball overall, your particular conference, or whatever other context you feel applies. Use that to calculate an "all other things equal" fair money line. There may be value if the posted number differs substantially from your calculated price.

Quote: Joeshlabotnik

Quote: TomG

What method would you suggest using to calculating a fair market price?

Do research on how often big dogs win outright, either in college ball overall, your particular conference, or whatever other context you feel applies. Use that to calculate an "all other things equal" fair money line. There may be value if the posted number differs substantially from your calculated price.

That wouldn't be market price so much as our own interpretations of our databases.

My contention is that if there is -1700 and +1400 available (which happens routinely on games that are around those lines) that is a 1% vig instead of the typical 4.5%. The markets on small conferences are far less efficient than NFL or Alabama games, which means there is a very good chance one of those bets is good. It will most likely the be the underdog.

Now imagine if there is -1600 and +1500 which we'll see a few times this year. . .

Quote: AxelWolf

What about shopping around online? Perhaps the lines are bad online ?

Underdogs bettors get much better lines here in Vegas, where the squares are mostly on the favorites. The action offshore is much more sharp.