paid for baseball picks

compaqDikk · 06-09-07, 07:25 PM

i don't disagree

jjgold · 06-09-07, 07:34 PM

Jover you should not be gambling

Ganchrow · 06-09-07, 07:34 PM

Originally posted by jover

Hi, i recently paid someone for some baseball picks..

His picks to me didn't make much sense

i got chicago cubs -1.5 +185
and atlanta braves at for the moneyline at -140

atlanta is playing chicago so the only way to win is for chicago to win by 2

I'm sharing these picks with my friend who knows nothing about betting and went ahead and placed the bets anyways. I couldn't convince my friend that this is a bad pick. Could someone respond here and agree with me so my friend can see as well..

Assuming you were to structure your bet sizes such that you would win a constant dollar amount if the game result were anything other than Chicago by exactly 1 run, then you'd find yourself betting 1 unit on Chicago -1½ and 1.6625 units on Atlanta (2.6625 units total) in order to win 0.1875 units.

This corresponds to US-style odds of -1,420 (decimal ~ 1.07042). For this to be a breakeven bet Chicago would need to win by exactly 1 with probability no greater than 6.579% (that's 100/1,520).

Now this 6.579% frequency is considerably lower than what we might expect based on general historical considerations, so unless there exists specific and compelling rationale as to why Chicago is less likely than usual to win by exactly 1 run (and you should certainly ask ths of the person from whom you purchased these picks -- or better yet -- invite him to this forum board), you probably have not made the best of all possible bets.

onlooker · 06-09-07, 07:34 PM

I disagree with paying for picks.

BigBollocks · 06-09-07, 07:43 PM

Your friend is dead on the money here mate. I hate to be the first to inform you, but you've just bitten for one of the most typical scam tactics in the book and are making a horrible play mathematically that will eventually burn you.

Touts love to give tactics such as these because it gives them a greater chance to real you in before that one run loss occurs and you lose both bets. Assuming you bet the same base amount on both bets (i.e. 140 to win 100 on ATL, 100 to win 185 on CHI), the roughly 57% Atlanta wins based on the odds nets you nothing as you stated. Those times simply won't affect you.

A road underdog at that price who is victorious wins the game by one run between 25-30% of the time. Rounding down to 25% we'll say that for every three times you net $40, the 4th time you will lose $325. So in essence you're risking $325 for a 75% chance of winning $40. You couldn't make much worse of a bet if you tried. I can't think of any game alive save the lottery that has over a 50% takeout.

You can see why you're tout is clever due to the fact that he has a 75% chance of continuing to reel you in, but you are making about the worst play imaginable. I hope you don't let people sucker you in like this on a routine basis, but if so it might be wise to have someone else handle your money. Hopefully this helped somewhat and here's hoping tonight goes OK for you regardless....

BigBollocks · 06-09-07, 07:46 PM

Ganch it seemed like he was using equal base units based on his post, so I went that route in my explanation. Either way he is making an absolutely horrible and beginner's mistake bet. Not only that, but he's paying a tout to give him this. It's really the worst of both possible worlds....

Ganchrow · 06-09-07, 08:23 PM

Originally posted by BigBollocks

A road underdog at that price who is victorious wins the game by one run between 25-30% of the time. Rounding down to 25% we'll say that for every three times you net $40, the 4th time you will lose $325. So in essence you're risking $325 for a 75% chance of winning $40. You couldn't make much worse of a bet if you tried. I can't think of any game alive save the lottery that has over a 50% takeout.

You can see why you're tout is clever due to the fact that he has a 75% chance of continuing to reel you in, but you are making about the worst play imaginable. I hope you don't let people sucker you in like this on a routine basis, but if so it might be wise to have someone else handle your money. Hopefully this helped somewhat and here's hoping tonight goes OK for you regardless....

25% is considerably too high. The bet's bad, but it's not that bad. At least it's not any worse than any other bet at 4ish% vig.

Based on the historical record and the implied Pinnacle probabilities, the actual likelihood is more on the order of 10.5% implying a theoretical on the order of a -110 market. This makes sense because ostensiblly the original lines came from a -110 book.

(If the probability actually were 25%, then playing the opposite bets, in other words betting ON a Chicago by exactly 1 run victory would have huge positive value a player.)

homedog · 06-09-07, 08:30 PM

Kody at it again.

crackerjack · 06-10-07, 11:47 AM

Originally posted by jover

Hi, i recently paid someone for some baseball picks..

There's your first mistake...

bigboydan · 06-10-07, 12:18 PM

Why not just flip a coin like they do

LargeMouthBass · 06-10-07, 03:45 PM

jover, you are gonna end up losing a lot of money from tailing this prick. First of all, any good capper will not make you bet the Cubs -1.5 and ATL when they are playing each other. Do some research before you lose your hard earn money. Meaning, if you are gonna pay for your picks, get it from someone that has a proven record for several years. Or cruise around sportsbetting forums and follow a winning capper. Good luck

BigBollocks · 06-10-07, 04:18 PM

Originally posted by Ganchrow

25% is considerably too high. The bet's bad, but it's not that bad. At least it's not any worse than any other bet at 4ish% vig.

Based on the historical record and the implied Pinnacle probabilities, the actual likelihood is more on the order of 10.5% implying a theoretical on the order of a -110 market. This makes sense because ostensiblly the original lines came from a -110 book.

(If the probability actually were 25%, then playing the opposite bets, in other words betting ON a Chicago by exactly 1 run victory would have huge positive value a player.)

Ganch he said in his post he's base uniting both sides, and only stands to profit if the Cubs win and only stands to lose if the Cubs win by exactly one (i.e. laying 140 to win 100 on ATL, and risking 100 to win 185 on CHI -1.5). Any win by the Braves is a wash the way he's playing it. So we're only looking at percentage of wins by the Cubs that are by one run. That is a little over 25%. He's giving up over 50% vig per bet.

Even if he were doing it in such a way as to ensure a small profit on both sides so long as the Cubs don't win by exactly one he's making an absolutely horrific bet. JJ might have hit the nail on the head by suggesting this individual perhaps try other ventures....

spliff · 06-10-07, 04:29 PM

Originally posted by bigboydan

Why not just flip a coin like they do

exactly.
run, don't walk away from these crooks.

Ganchrow · 06-10-07, 05:13 PM

Originally posted by BigBollocks

we're only looking at percentage of wins by the Cubs that are by one run. That is a little over 25%. He's giving up over 50% vig per bet.

Even if he were doing it in such a way as to ensure a small profit on both sides so long as the Cubs don't win by exactly one he's making an absolutely horrific bet.

Perhaps I didn't explain my point sufficiently well. I do that a lot.

Given the game money line, run line, and total the probability of a Cubs win by exactly 1 run was on the order of 10.5%. This was confirmed not only by the historical record, but also by the implied odds of the prevailing Pinnacle market.

A 25% likelihood would be way too high.

As I previously mentioned, if the odds of a Chicago win by 1 run were indeed 25%, then the reverse of the specified reverse middle, (namely the Chicago money line and the Atlanta +1½ run line), paying off only in the case of a Chicago victory by exactly 1 run, would have hugely positive EV. If this were indeed the case this would have represented a potentially disastrous situation for that sportsbooks.

Anyway you slice, the vig paid by the OP on the initial bet was only about 4%. A vig of 50% is quite simply not supported by the underlying facts or logic.

Originally posted by BigBollocks

Ganch he said in his post he's base uniting both sides, and only stands to profit if the Cubs win and only stands to lose if the Cubs win by exactly one (i.e. laying 140 to win 100 on ATL, and risking 100 to win 185 on CHI -1.5). Any win by the Braves is a wash the way he's playing it.

Betting constant base units (meaning risking 1 unit on bets at longer than even odds, and betting to win 1 unit on bets at shorter than even odds -- certainly a questionable staking strategy under any circumstances), implies risking 1 unit on the Chicago run line and 1.4 units on the Atlanta money line. As I previously mentioned the unit risk required to guarantee a constant loss as long as Chicago did not win by exactly 1 run and a win otherwise was 1 unit on Chicago -1½ and 1.6625 units on Atlanta.

Therefore "base unit staking" implies that the OP was over betting Chicago by 1 - 1.4/1.6625 ≈ 15.79%. This means that for every unit risked on Chicago and every corresponding 1.4 units risked on Atlanta, the OP's position would be 1-15.70% = 84.21% of the Chicago/Atlanta reverse middle and a 15.70% of a naked unit on Chicago.

So anyway, what we had here was a linear combination of two bets. The first was a unit bet on the Chicago -1½ run line at +185, and the second was a 14.2 unit bet on any outcome other than Chicago by exactly 1 run at -1,420.

So was this a bad bet? Maybe yes, maybe no. On its face it certainly seems like it was, although perhaps the service that sole him the advice had some justification (although I'd hardly hold my breath waiting for it).

But was it a horrible bet?

No. There's no reason to believe that either. Really this set of bets was probably no worse than any other bet (or bets) one might select at random. Whether he placed this set of bets or if had instead he bet the same amount on only the Atlanta money or run line or only the Chicago money or run line (chosen at random), on average he probably couldn't expect to do any better or worse.

raiders72002 · 06-10-07, 06:09 PM

Kody at it again.

raiders72002 · 06-10-07, 06:16 PM

, but also by the implied odds of the prevailing Pinnacle market.

I've found this the easiest way to convert ML to RL if you want to stay away from the work of a database.

I agree with both Ganch and BB since we aren't 100% sure of the motive of this thread. There are times when making a bet like that is advantageous.

That type of play is similar to any other type of middle. You are most likely going to have to make plays at two separate books to get lines making it a +EV bet.

BigBollocks · 06-10-07, 06:33 PM

Originally posted by Ganchrow

Perhaps I didn't explain my point sufficiently well. I do that a lot.

Given the game money line, run line, and total the probability of a Cubs win by exactly 1 run was on the order of 10.5%. This was confirmed not only by the historical record, but also by the implied odds of the prevailing Pinnacle market.

A 25% likelihood would be way too high.

As I previously mentioned, if the odds of a Chicago win by 1 run were indeed 25%, then the reverse of the specified reverse middle, (namely the Chicago money line and the Atlanta +1½ run line), paying off only in the case of a Chicago victory by exactly 1 run, would have hugely positive EV. If this were indeed the case this would have represented a potentially disastrous situation for that sportsbooks.

Anyway you slice, the vig paid by the OP on the initial bet was only about 4%. A vig of 50% is quite simply not supported by the underlying facts or logic.

Betting constant base units (meaning risking 1 unit on bets at longer than even odds, and betting to win 1 unit on bets at shorter than even odds -- certainly a questionable staking strategy under any circumstances), implies risking 1 unit on the Chicago run line and 1.4 units on the Atlanta money line. As I previously mentioned the unit risk required to guarantee a constant loss as long as Chicago did not win by exactly 1 run and a win otherwise was 1 unit on Chicago -1½ and 1.6625 units on Atlanta.

Therefore "base unit staking" implies that the OP was over betting Chicago by 1 - 1.4/1.6625 ≈ 15.79%. This means that for every unit risked on Chicago and every corresponding 1.4 units risked on Atlanta, the OP's position would be 1-15.70% = 84.21% of the Chicago/Atlanta reverse middle and a 15.70% of a naked unit on Chicago.

So anyway, what we had here was a linear combination of two bets. The first was a unit bet on the Chicago -1½ run line at +185, and the second was a 14.2 unit bet on any outcome other than Chicago by exactly 1 run at -1,420.

So was this a bad bet? Maybe yes, maybe no. On its face it certainly seems like it was, although perhaps the service that sole him the advice had some justification (although I'd hardly hold my breath waiting for it).

But was it a horrible bet?

No. There's no reason to believe that either. Really this set of bets was probably no worse than any other bet (or bets) one might select at random. Whether he placed this set of bets or if had instead he bet the same amount on only the Atlanta money or run line or only the Chicago money or run line (chosen at random), on average he probably couldn't expect to do any better or worse.

Ganch I always look forward to reading your posts as you are one of the most informed posters I've ever come across. We're still on two different pages with our numbers however. I'm not basing my numbers on Chicago's probability of winning by exactly one run across all possible outcomes. Instead, I'm looking at the likelihood of a Chicago victory by one run vs. a Chicago victory by two or more runs. Atlanta winning the game by any amount is irrelevant to the question at hand.

Lets say Atlanta wins the game 57 times out of a hundred. Those 57 games are completely irrelevant to the discussion. Only the 43 games won by Chicago factor into a plus or minus effect on his bankroll. A win by Atlanta is a breakeven result for him based on what he's attempting to do. Everytime Chicago is victorious by two or more he wins $45 for every $325 put into play. However, everytime Chicago wins by exactly one he loses all $325. Given a roughly 75% chance of the victories by Chicago being by two or more, the 25% chance that Chicago wins by exactly one will bury him. He's making a bet with an over 50% vig on himself when a Chicago victory occurs....

Cheers....

Ganchrow · 06-10-07, 06:37 PM

Originally posted by Ganchrow

A 25% likelihood would be way too high.

As I previously mentioned, if the odds of a Chicago win by 1 run were indeed 25%, then the reverse of the specified reverse middle, (namely the Chicago money line and the Atlanta +1½ run line), paying off only in the case of a Chicago victory by exactly 1 run, would have hugely positive EV. If this were indeed the case this would have represented a potentially disastrous situation for that sportsbooks.

I'll give an example based on current Pinnacle markets:

CWS +124 -1½ +187
PHI -132 +1½ -205
(total = 9½)

These lines are certainly to those in initially discussed. You had posited a > 25% probability of visitor by exactly 1 run. Let's say that due to the lower total you reduce your estimate slightly. Actually, you know what? Let's say you reduce your estimate substantially, from 25%+ to let's say 15%.

So whay would happen if you were to take play the middle under these circumstances, in other words, what would happen if you were to bet on the outcome Chicago by exactly 1 run?

The way to place this wager would be to place 1 unit on the Chicago money line (risking 1 to win 1.24), and about 1.50557 units on the Philadelphia +1½ runline (risking 1.50557 to win 0.73442623). In this manner, given any outcome other than Chicago by exactly 1 run, you'd lose 0.265574 units, and if Chicago did win exactly 1 run, you'd win 1.97443 units.

This would be the equivalent of betting on Chicago by exactly 1 run at US odds of about 743.5. (Actually, it's not *quite* like that unless you're betting at a credit shop or at a place like Matchbook that only locks in your at-risk funds).

If you really expect that Chicago by exactly 1 run would occur with probability 15% then your expectation would be a whopping 7.435*15% - (1-15%) ≈ 26.52%. And if you expected it to occur with 25% probability your expectation would be well over 100%. (Although again I do point out that playing at a traditional post-up book your capital requirement would be considerably higher -- about 9.43 times higher. That's why if you really do want to do this you'd either do it at a betting exchange or would need to set up credit arrangements).

So anyway, if you really do believe the probability in these such cases is indeed that high then my advice to you would be to stop reading right now, and start making bets and shopping for limousines.

BigBollocks · 06-10-07, 06:52 PM

Ganch I don't know if you had the opportunity to read what I posted prior to what you just posted, but I'll keep this reply brief in order to highlight what I've been saying all along....

I'M NOT TALKING ABOUT CHICAGO WINNING BY 1 WITH RESPECT TO ALL POSSIBLE OUTCOMES, BUT INSTEAD THE ODDS OF THEM WINNING BY 1 vs. THE POSSIBILITY OF THEM WINNING BY TWO OR MORE. THROW ANYTHING REGARDING ATLANTA OUT...

Ganchrow · 06-10-07, 07:14 PM

Originally posted by BigBollocks

Ganch I always look forward to reading your posts as you are one of the most informed posters I've ever come across. We're still on two different pages with our numbers however. I'm not basing my numbers on Chicago's probability of winning by exactly one run across all possible outcomes. Instead, I'm looking at the likelihood of a Chicago victory by one run vs. a Chicago victory by two or more runs. Atlanta winning the game by any amount is irrelevant to the question at hand.

Lets say Atlanta wins the game 57 times out of a hundred. Those 57 games are completely irrelevant to the discussion. Only the 43 games won by Chicago factor into a plus or minus effect on his bankroll. A win by Atlanta is a breakeven result for him based on what he's attempting to do. Everytime Chicago is victorious by two or more he wins $45 for every $325 put into play. However, everytime Chicago wins by exactly one he loses all $325. Given a roughly 75% chance of the victories by Chicago being by two or more, the 25% chance that Chicago wins by exactly one will bury him. He's making a bet with an over 50% vig on himself when a Chicago victory occurs....

Vig represents an expectation. For every $100 bet how much does the player expect to lose? The answer is a bit less than $4. If he risks $100 on this bet and repeats it 1,000,000 times, betting $400,000,00 in the process, he expects to lose about $4 * 1,000,000 = $4,000,000, which is 4% of what he's wagered. Whether you like it or not, whether you choose to accept it or not, that's just how the math works out.

Nevertheless, if you really really wanted to throw logic to the wind and were only to count per non-zero bet resolution (which in this case would be exceedingly foolish as it would imply that betting a fraction of penny more on either outcome would arbitrarily create a huge jump in vig), then you'd still only be at 11ish percent.

I actually addressed similarly flawed logic as it related to the "anything-but-7" strategy in craps on the Rx message board. Check it out here.

Reduction ad absurdem: If the bettor wanted to reduce vig then by your definition all he'd need to do would be bet an arbitrarily smaller or larger quantity (let's say a billionth-of-a-trillionth of a penny) on either of the two underlying bets. If a billionth-of-a-trillionth of a penny change in bet size serves to drastically change percentage vig then clearly that conception of vig is very seriously flawed.

(I'll also point again that even if we accept this demonstrably flawed logic, the vig is still nowhere near 50%.)

BigBollocks · 06-10-07, 07:26 PM

Agree to disagree my man. I actually have a lot more statistical knowledge than you might care to believe (was close to a ph.D. in business strategy/statistics once upon a time before bolting into industry), but there's no disputing you know your stuff as well. You choose to err on the side of condescinding without knowing, but to each their own. I can't seem to get you to get over a couple of humps in my explanation, so I'm just going to let sleeping dogs lie.

I won't be coming back in this thread, but am looking forward to discussing future topics later...

Ganchrow · 06-10-07, 08:51 PM

Originally posted by BigBollocks

Agree to disagree my man. I actually have a lot more statistical knowledge than you might care to believe (was close to a ph.D. in business strategy/statistics once upon a time before bolting into industry), but there's no disputing you know your stuff as well. You choose to err on the side of condescinding without knowing, but to each their own. I can't seem to get you to get over a couple of humps in my explanation, so I'm just going to let sleeping dogs lie.

I won't be coming back in this thread, but am looking forward to discussing future topics later...

I fully apologize for having come off as condescending. Insofar as I have I've clearly acted unfairly and inappropriately and I do wholeheartedly apologize.

Nevertheless, just because I may have acted the asshole (and sorry again) should in no way serve to negate my argument.

I'm continuing here because in this one particular case there really is an obvious flaw in your logic, and even if you don't care to respond (and that's perfectly OK), I just want to make sure that the issue is abundantly clear for anyone else who might come across this thread in the future. It's an important point and is one that is often overlooked.

I do understand where you're coming from -- the OP's initial bet was almost certainly quite poorly conceived, and you quite reasonably want to drive that point home. I'm with you on that 100%. Nevertheless, the argument you're is advancing overstating the negative aspects by all reasonable mathematical conceptiosn.

While I truly do respect your statistical acumen, the issue at hand is just a very simple application of expected value theory. Vig is a book's expectation (or the negative of a player's expectation). If the player bets $100 on this wager, he expects to lose about $4. The fact that part of the time the wager is resolved he breaks even, doesn't impact the mathematical concept of vig.

Your argument is that because roughly 57% of the time time his initial wager is returned to him, the vig he's paying, conditioned on money being won or lost is higher. Strictly speaking you are indeed correct, but the point that future readers of this thread need to understand is that this is an inappropriate manner in which to consider expectation.

Consider the following probability vector call it p (I'm just blindly using your numbers):

Atlanta wins by any margin: 57%
Chicago wins by exactly 1 run: 10.75%
Chicago wins by 1 run: 32.25%

And consider the following payout wager vector, y, corresponding to a 0.4167 unit bet on the Chicago run line and a 0.5833 unit bet on the Atlanta money line:

+0 units
Chicago wins by exactly 1 run: -1 units
Chicago wins by more than 1 run: +0.1875 units

So what expectation does this represent? Clearly the expectation as calculated canonically definition would be pTy = 57%*0 + 10.75%*-1 + 32.25%*0.1875 ≈ -4.70%.

Now your argument is that because no money changes hands in the case of the first outcome, that outcome should be ignored when calculating expectation. So based upon that definition what do we have? Well, expectation conditioned on no net push would be: pTy / (1-p1) = -4.70% / (1-57%) = 10.94%.

So firstly what we see is that even using the liberal definition of vig you've proffered (and in a moment I'll demonstrate why it's usage is inappropriate), the vig is "only" 10.94%, considerably less than the figure of 50% that you've posited.

Nevertheless, we still do need to consider the issue of which methodology makes more sense -- the one implying 4.70 vig or the one implying 10.94 vig. I'll argue that the first method is more sensible. I'm going to argue that in two ways: firstly I'll consider it from the perspective of an alternative investment by the book; and secondly from the perspective of the same reductio ad absurdum I used above:

Alternative investment argument
If the book were risk neutral and they had an opportunity to either book this set of bets or to lend out money at 5% (over the life of the bet) which one would they do? Obviously, if their expectation on the bet really were 10.94%, then of course they'd prefer to book the bet. But would this make sense?

No. If the structured bet pushes (as it does 57% of the time), it's not as if the book could retroactively lend out money at that 5% rate -- they would still have an opportunity cost of 5%. The fact that no money changed hands would be of no importance to the book. All they would care about is their gross expectation without regarding to the microstructure of that expectation.

Hence, the 10.94% figure does not meaningfully reflect the book's expectation.

Reductio ad absurdum
What if instead of wagering 0.4167 units on the Chicago run line and 0.5833 units on the Atlanta money line, the OP had instead wagered 0.41670000001 units on the Chicago run line and 0.58329999999 units on the Atlanta money line. How would that change his expectation? Well in this case the payout vector y would look like:

-0.0000571429 units
Chicago wins by exactly 1 run: -1 units
Chicago wins by more than 1 run: +0.187595 units

resulting in an expectation by the canonical method of pTy = 57%*-0.0000571429 + 10.75%*-1 + 32.25%*0.187595 ≈ -4.70% which is two 3 decimal places is identical to the expectation calculated above.

But what about using your method? The important point to note is that because there are no zero payout outcomes your method is identical to the canonical method. Why is this important? Well it's important because it suggests that if one were to use your method for calculating expectation a 0.0000000024% change in bet size would correspond to a 57% reduction in vig. Clearly this is logically inconsistent (if the reduction were meaningful, the a bettor could palpably reduce his vig simply by wagering a fraction of a penny more or less) and hence we need to reject the conception of vig you've advanced.

Anyway, I hope this makes sense.

Arilou · 06-11-07, 07:16 AM

Without getting into details, while in terms of loss per dollar wagered this bet may not be that bad, there is zero doubt that this bet is beyond terrible. Whatever game makes those odds attractive together, it aint baseball. I enjoy Ganchrow going off with his numbers and doing all this technical analysis and I'm pretty sure he's spot on here, but the bottom line is: This makes less than no sense, so make sure this man never gets another dime from you.

MLB is all but impossible to buy picks in, because it's about having a small edge and grinding out a living rather than finding great spots. Baseball is a random game, and Santana can and does lose to the Nationals... and at the same time, there wasn't that much value on Washington even at the peak. If you pay for a pick, you need to bet giant amounts to get that value back even if the picks are perfect, and they're probably terrible.

Bill Dozer · 06-11-07, 07:53 AM

Welcome Jover. I was wondering if the tout happened to advise you on which sportsbook to use? Care to share who the capper is?

Ganchrow · 06-11-07, 08:41 AM

Originally posted by Arilou

Without getting into details, while in terms of loss per dollar wagered this bet may not be that bad, there is zero doubt that this bet is beyond terrible. Whatever game makes those odds attractive together, it aint baseball. I enjoy Ganchrow going off with his numbers and doing all this technical analysis and I'm pretty sure he's spot on here, but the bottom line is: This makes less than no sense, so make sure this man never gets another dime from you.

All we have available to look at is expectation per dollar wagered and in that regard the composite bet is no worse than a bet of similar vig randomly determined, which is ostensibly how many touts determine their picks.

Perhaps what's going on here is that the tout's likely intention is so blatant that it evokes an immediate visceral distaste for the advice, but the truth is that if you make this bet 1,000 times, on average you wouldn't expect to be any worse off that if you had simply selected a bet at random. Sure, you could start calculating in utility gained from different flavors of &plusminus;EV "action", but that would bring in a whole other set of complications.

Look, the bet appears silly because it almost certainly is (although to be fair one could contrive a set of circumstances where a bet such as this would be rational), but there's no way to argue from the perspective of bettor expectation that it's somehow more silly than a bet chosen via coin flip. And insofar as a certain class of tout uses just that method to come up with their picks, ipso facto the bettor's not doing any worse with this tout than he is with any other.

WWTSblows · 06-11-07, 08:59 AM

I tracked someone earlier this year, he went 7-0 for me. I went on vacation, come back, and he had gone like 1-8 over his next 9. Glad I went away

jjgold · 06-11-07, 10:51 AM

Stay away from touts period or any guy that sells picks as they are all losers.

BigBollocks · 06-11-07, 11:32 AM

Originally posted by Ganchrow

I fully apologize for having come off as condescending. Insofar as I have I've clearly acted unfairly and inappropriately and I do wholeheartedly apologize.

Nevertheless, just because I may have acted the asshole (and sorry again) should in no way serve to negate my argument.

I'm continuing here because in this one particular case there really is an obvious flaw in your logic, and even if you don't care to respond (and that's perfectly OK), I just want to make sure that the issue is abundantly clear for anyone else who might come across this thread in the future. It's an important point and is one that is often overlooked.

I do understand where you're coming from -- the OP's initial bet was almost certainly quite poorly conceived, and you quite reasonably want to drive that point home. I'm with you on that 100%. Nevertheless, the argument you're is advancing overstating the negative aspects by all reasonable mathematical conceptiosn.

While I truly do respect your statistical acumen, the issue at hand is just a very simple application of expected value theory. Vig is a book's expectation (or the negative of a player's expectation). If the player bets $100 on this wager, he expects to lose about $4. The fact that part of the time the wager is resolved he breaks even, doesn't impact the mathematical concept of vig.

Your argument is that because roughly 57% of the time time his initial wager is returned to him, the vig he's paying, conditioned on money being won or lost is higher. Strictly speaking you are indeed correct, but the point that future readers of this thread need to understand is that this is an inappropriate manner in which to consider expectation.

Consider the following probability vector call it p (I'm just blindly using your numbers):

Atlanta wins by any margin: 57%
Chicago wins by exactly 1 run: 10.75%
Chicago wins by 1 run: 32.25%

And consider the following payout wager vector, y, corresponding to a 0.4167 unit bet on the Chicago run line and a 0.5833 unit bet on the Atlanta money line:

+0 units
Chicago wins by exactly 1 run: -1 units
Chicago wins by more than 1 run: +0.1875 units

So what expectation does this represent? Clearly the expectation as calculated canonically definition would be pTy = 57%*0 + 10.75%*-1 + 32.25%*0.1875 ≈ -4.70%.

Now your argument is that because no money changes hands in the case of the first outcome, that outcome should be ignored when calculating expectation. So based upon that definition what do we have? Well, expectation conditioned on no net push would be: pTy / (1-p1) = -4.70% / (1-57%) = 10.94%.

So firstly what we see is that even using the liberal definition of vig you've proffered (and in a moment I'll demonstrate why it's usage is inappropriate), the vig is "only" 10.94%, considerably less than the figure of 50% that you've posited.

Nevertheless, we still do need to consider the issue of which methodology makes more sense -- the one implying 4.70 vig or the one implying 10.94 vig. I'll argue that the first method is more sensible. I'm going to argue that in two ways: firstly I'll consider it from the perspective of an alternative investment by the book; and secondly from the perspective of the same reductio ad absurdum I used above:

Alternative investment argument
If the book were risk neutral and they had an opportunity to either book this set of bets or to lend out money at 5% (over the life of the bet) which one would they do? Obviously, if their expectation on the bet really were 10.94%, then of course they'd prefer to book the bet. But would this make sense?

No. If the structured bet pushes (as it does 57% of the time), it's not as if the book could retroactively lend out money at that 5% rate -- they would still have an opportunity cost of 5%. The fact that no money changed hands would be of no importance to the book. All they would care about is their gross expectation without regarding to the microstructure of that expectation.

Hence, the 10.94% figure does not meaningfully reflect the book's expectation.

Reductio ad absurdum
What if instead of wagering 0.4167 units on the Chicago run line and 0.5833 units on the Atlanta money line, the OP had instead wagered 0.41670000001 units on the Chicago run line and 0.58329999999 units on the Atlanta money line. How would that change his expectation? Well in this case the payout vector y would look like:

-0.0000571429 units
Chicago wins by exactly 1 run: -1 units
Chicago wins by more than 1 run: +0.187595 units

resulting in an expectation by the canonical method of pTy = 57%*-0.0000571429 + 10.75%*-1 + 32.25%*0.187595 ≈ -4.70% which is two 3 decimal places is identical to the expectation calculated above.

But what about using your method? The important point to note is that because there are no zero payout outcomes your method is identical to the canonical method. Why is this important? Well it's important because it suggests that if one were to use your method for calculating expectation a 0.0000000024% change in bet size would correspond to a 57% reduction in vig. Clearly this is logically inconsistent (if the reduction were meaningful, the a bettor could palpably reduce his vig simply by wagering a fraction of a penny more or less) and hence we need to reject the conception of vig you've advanced.

Anyway, I hope this makes sense.

Wow Ganch, that's beyond impressive. You could say whatever you wanted and still be golden in my book for weekly pearls such as the one above. I'd be curious to know your background in statistics, as it's obvious you've received superb training in your methodology. What's more impressive than that to me is your ability to write in explaining your numbers. I'm not blowing smoke up your ass to say what you've written above would trump just about any "A" list journal article written by most Ivy League phDs, as the majority of scholars who are excellent in their statistical packages tend to be poor writers as a whole.

Obviously we both agree that he is being suckered to pay for the right to put in a long-term losing bet. After looking over your numbers I see how you're thinking in factoring in Atlanta's 57% no impact wins. I am following you completely in your steps to derive the final edge, but just don't get how you have Chicago winning by one being only -1 unit and Chicago winning by two or more being +.1875 units. If he's base uniting ATL at 1.4 to win 1, and Chicago -1.5 at 1 to win 1.85, is he not losing 2.4 units everytime Chicago wins by exactly one (and his profit numbers to be a little scewed)? This would in turn raise the final expected loss percentage up a fair amount.

Thanks

Ganchrow · 06-11-07, 01:07 PM

Originally posted by BigBollocks

Wow Ganch, that's beyond impressive. You could say whatever you wanted and still be golden in my book for weekly pearls such as the one above. I'd be curious to know your background in statistics, as it's obvious you've received superb training in your methodology. What's more impressive than that to me is your ability to write in explaining your numbers. I'm not blowing smoke up your ass to say what you've written above would trump just about any "A" list journal article written by most Ivy League phDs, as the majority of scholars who are excellent in their statistical packages tend to be poor writers as a whole.

I think you may be giving me a little bit too much credit on this particular instance, but I'll just leave it at "Thanks".

Originally posted by BigBollocks

don't get how you have Chicago winning by one being only -1 unit and Chicago winning by two or more being +.1875 units. If he's base uniting ATL at 1.4 to win 1, and Chicago -1.5 at 1 to win 1.85, is he not losing 2.4 units everytime Chicago wins by exactly one (and his profit numbers to be a little scewed)? This would in turn raise the final expected loss percentage up a fair amount.

He loses 2.4 units whenever Chicago wins by exactly 1 run, and wins 1.85-1.45 = 0.45 units every time Chicago wins by > 1 run. But "units" are dimensionless, arbitrary forms of measurement and so we could also say he's risking 2.4×100 = 240 units to win 0.45&times100 = 45 units, or that he's risking 2.4/2= 1.2 units to win 0.45/2 = 0.225 units. Or we can (and do) say he's risking 2.4/2.4 = 1 unit to win 0.45/2.4 = 0.1875 units.

The point is he that however many units he risks he stands to make 0.1875 of that.

We could have chosen any other set of values for the y vector (just so long as y2 = y3 / -0.1875), but then the dot product of p and y would have been in unit terms rather than percent. To convert to percentage terms we'd need to normalize by y2.

So EV = pTy / y2

BigBollocks · 06-11-07, 01:30 PM

Thanks Ganch for the explanation and formula. Leave it to me to have to ask about one of the easier steps that should have had to have been left unexplained....

Ganchrow · 06-11-07, 01:32 PM

Originally posted by BigBollocks

Thanks Ganch for the explanation and formula. Leave it to me to have to ask about one of the easier steps that should have had to have been left unexplained....

I hear ya, Bro.

It's always the simple stuff that gets you.

I can't even tie my own shoes.