How to sports gamble
1 Timothy 6:9-10
But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils.
Proverbs 13:11
Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.
***
Are you looking for an outlet to apply your actuarial knowledge, which you acquired from a gauntlet of certification exams, the content of which you never ended up using in your day-to-day job? Have you been juicing to fit a discrete probability distribution to your dataset or longing to try out the snazzy concepts you learned from the overpriced predictive analytic modules? Well, look no further than the grey corner of the internet that is sports gambling. In this post - a simple four step process - I’m going to teach you how to sports gamble!
***
Step 1: Accept that you’re going to lose money
You can’t beat the house, because the odds aren’t set in your favor. Usually sports betting comes down to a binary selection: either the Lakers will win the game or they won’t. Based on the payout, you can calculate the implied odds (essentially, what Vegas thinks the probability of the event will be). For example, if the money-line (jargon meaning a particular type of bet) is set at -135 for the Lakers, then the implied odds say they have a 57% of winning. However - the truth the casino doesn’t want you to calculate - the implied odds don’t add up to 100%; they always add up to more.
Here’s an example gameline for the Nets vs Lakers game on 2/18/2021
Nets +115 (implied odds of 47%)
Lakers -135 (implied odds of 57%)
Simply put, Vegas thinks the Lakers have a 104% chance to either win the game or lose the game. If you’re good with logic, you might ask: “Shouldn’t the probability of something happening or something not happening equal 100%?
Yes, good eye!
The difference between the illogical 104% and fair 100% is called a 4% margin. This may come as a shock, but the casino is in the business of making money, so they tack on an entertainment charge. Whenever the implied odds are higher, you receive a smaller payout. Think low risk, lower reward.
The nerds in Sin City have mastered the odds setting process. With machine learning they can feed millions of variables into a computer, which will then spit out near perfect probabilities for all their available sports bets. On top of all that, they’ll tack on the margin mentioned earlier. It’s unlikely that you, sitting on a couch behind a laptop screen, can beat both the experienced odds-maker and the steep margin. The house always wins.
Step 2: Ignore step 1 and go all in
You’re not here for logic; logic is for nerds! You’ve got a 6th sense for sports betting and an extensive history of being a lucky dude. Sports betting is simple: Clearly the Lakers are going to win; they’ve got Lebron James. You’d have to be a moron to bet against the GOAT. You’re going to make some quick, easy cash. Lets go!
Earlier today you had to listen to the ramblings of a retirement advisor. Insulting as it was, you had to pay hundreds of dollars to be there. Despicable - the rich keep getting richer. He used mystifying words such as mutual funds, risk allocation, and compound interest. It all seemed very sus. How could you trust your entire life savings to numbers on a computer screen; it wasn’t real.
The retirement advisor asked, “So Mr. McKenzie, are you following?”
You slowly shook your head no.
He looked at his watch and said, “Well, we’re about out of time. Maybe we could schedule another session?”
The nerve. You knew it. It was a ponzi scheme! The bastard was stealing your money and leaving your family out to dry! You stood up, looked the weasel in his beady eyes and said, “I’m going to take my savings to South Nevada and bet on the Miami Heat.”
The advisor would have asked “What?” but you’d already stormed out.
Step 3: Find a way to make it fun
For me, the funnest part of sports betting is the research. Sometimes I’ll be researching so long that the game will have already started and I’ll miss the betting window. As alluded earlier, I’m able to use a lot of the concepts I’ve learned in my actuarial exams to sports betting.
For example:
Did you know that home run frequency in baseball is poisson distributed? The same rings true for goal frequency in hockey.
Did you know that total points by an NBA player follows a negative binomial distribution?
Did you know that horse wagering odds aren’t set by odds makers and can be approximated by predictive analytics?
I did!
Step 4: The logistics
Here are the actual steps of how to sports gamble. First, go to Bovada.lv and set up an account. I just googled it now and the one article that supported my point said that it was legal. (However, the second article I saw said it wasn’t legal…) Second, deposit exactly $20 into the account. Any more and you’re an addict. Never add additional money! It’s nearly impossible to take money out - assuming you’re bad at technology and don’t understand Bit-Coin - so you should view the $20 as a sunk entertainment cost. Third, once everything is set up successful, start betting. Since you’re a noob, only make money-line bets (betting which team will win the game), at the minimum possible amount (50 cents), since the other bets are too complicated.
