July 26, 2005
Game Fixing
Chris Wavrin at CommentaryPage.com notes a scandal in Taiwan. It seems players and bookies are conspiring to throw games.
I understand why an individual would want to fix a game. A big bet on an underdog would lead to a big payoff. I don't understand why bookies would want to fix games. Bookies make their money by setting odds that cause people to bet evenly on the favorite and the underdog, and make a profit by taking a small percentage of the bet, say by paying out 99 cents for every dollar won. As long as the odds are set correctly, they shouldn't care who wins or loses.
Posted by David Pinto at
12:04 PM
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Actually, a lot of bookie profit comes from setting odds that are weighted by how they think the public will wager; in these cases, the odds laid out do not perfectly reflect the mean/median expected outcome.
For example, if they Sox are 55% favorites over the Orioles in a ballgame, you might think that the bookie would want to pay out .55x2= 1.1 dollar for every 1 dollar bet on the Orioles if they win, and .45x2= .9 dollar for every 1 dollar bet on the Red Sox. However, knowing that there are a lot of Red Sox fans out there, who are biased toward betting on the Sox, the bookie could get just as many bets if they gave back .8 dollar for dollar bet on the Sox winning. So while the true Expected Winning Percentage of the Sox is 55%, bookies will often try to set the line as though it were 60%, because gamblers' personal preferences will allow them to take such a worse proposition.
It's the ability to discern those differences between the bookie's "fleece the gambler" line and the most likely real outcome that makes the dough for good professional gamblers: they're smart, and they bet with cold blood. A guy I knew from high school made good money (over many, many years, so no fluke there) betting baseball, basketball, and horses. I'd be surprised if he wasn't still raking it in.
If a bookie new the outcome in advance, he could set the odds to induce more betting on the loser, thus making more money than if the bettng was evenly split.
So is betting on baseball as simple as just betting against the most popular teams and players, since they'll be the ones bookies have it stacked toward?
Yup. Just bet against the Yanks and Sox every time, and you're golden...well, uh, maybe not. I expect it's more subtle than that (just as you do). If I'd figured it out myself, I wouldn't still be off to work every day, and I certainly wouldn't be blogging it about...I imagine bookies alter their lines as bets come in.
Yeah, the real key there is figuring out for yourself when the posted odds don't jibe with what you think reality is. Figuring out which way the bias in the odds goes. But of course, that's easier said than done. I do remember back in 2003 I was in Reno in August and thought that their odds on the Marlins winning the Series were too low; 20:1 or so. And I considered placing a bet, not because I thought the Marlins were the best team, but because I thought the oddsmakers had underrated them. Well, I didn't place the bet. But if I had, I would have won a lot of money!
Don't you wish you went with your guts sometimes? Oh well. I think the way the pros make money is by making a lot of bets...seeing the 20:1 odds on the Fish, a bettor like yourself might have thought that those odds were too long (correctly, as it turns out!), and placed a fair amount on that, while placing a similar or lesser amount on some other shorter odds to cover yourself. This guy I knew from school showed me his betting card from one of his days up working the horses up at Saratoga, and he placed about three or four bets for every race/special combination. He netted a good gain (something like $500 for the day) because he protected himself with short odds even as he risked money on the longer but yet too long odds (like the Marlins at 20:1). It was pretty fascinating. I imagine I'd drink a bottle of Peptol every day if I tried it myself.