Ever watch Mad Money with Jim Cramer? It’s a show on CNBC that provides common people insight into how to invest in the stock market. In the financial industry, providing investing advice or managing other people’s money is a billion-dollar business. That type of advice also lives in the sports betting realm with the advisors known as “professional handicappers” and “touts”, but unfortunately, the service is not as reliable or trustworthy..
As you can gather, the terms “professional handicapper” and “tout” paint two very different pictures. The former suggests an educated, well-researched individual is studying sports and providing insight. The latter suggests a used car salesmen who is trying to swindle you. While financial advisors are – for the most part – trustworthy, unfortunately, the same can’t be said for professional handicappers.
All too often, these professional handicappers have been exposed as frauds. Back in the day before the internet, there were handicappers that would give out picks via a hotline and they’d give half of their customers one side of a game and the other half of their customers the other side of game. With the advent of the internet, a lot has changed but handicappers have used different tricks to attract customers.
Remember that for them, the business may not be betting the games. You’re buying their betting picks so they’re going to make money regardless of whether you win or lose. That means their business is partially sales. Ideally, a winning track record would be all of the sales that they would need but unfortunately, that’s not how this industry works.
With the internet making it easier to track handicapper picks, it’s become a bit more challenging those “experts” to fudge the numbers. However, the most common way this is done nowadays is to frame their stats – or track record – to paint the rosiest picture possible. Let’s say it’s January and there are multiple sports going. If a handicapper is on a 10-game winning streak in all sports, that’ll be part of the sales pitch. However, let’s say he’s lost four straight in hockey but has won five in a row in college basketball. You’re less likely to hear about the cold streak in hockey but you’ll be sure to see the college basketball hot streak in the sales pitch.
Or let’s say his “regular picks” are struggling but he puts out a Pick Of The Month – or whatever other unique label he wants to give it (5-Star picks, Game Of The Week, Run Line Specials) – he’ll be sure to tell you that he’s hit nine of his last 10 Pick Of The Month games while hiding the overall record. And sites will usually have hordes of cappers available to you, so they’ll always have someone who is hot at any given moment.
The bottom line here is that stats can be framed to paint the picture that they’re always hot in some realm. That entices people to buy. Make sure you see the whole picture before investing.
One thing that’s often forgotten with handicappers and touts is the costs involved. Let’s face it: it’s not cheap. When you’re betting on sports, a profitable year in football might be hitting 55% of your picks and a very good year for a sharp might be 58% or 59%. So let’s say in a perfect world, you buy a year-long NFL package and follow every pick to the tee. A full season package could cost you in the neighborhood of $800-$1000, so if you’re a $100 player, that could swing you from a profitable season to a losing season. Even if you’re a $500 player, that’s a significant amount of profit you’re losing. And remember, we’re assuming that these guys win. If they have a losing season and you bought their picks, then you’re really down in the dumps.
So let’s say you’ve done your research, you’ve checked references and monitored track records. You’ve finally found a smart handicapper that is legitimately successful. Here’s the problem: they’ll always get a better number than you. Any pro who is actually that good at betting on sports is going to get a better number than you when you lay your bets, which means that you’re going to be at a disadvantage.
Let’s say you pay for a pick and the shrewd handicapper told you to bet the New York Yankees at -135. Well, if he bets the game and he’s genuinely a sharp bettor, that line will move. By the time you get to it, it could be -140, -150 or higher. That loss in value might not seem like much but when you’re talking about doing this over a long period of time, it is in fact significant. If you don’t get the same odds, you’re going to lose more and win less over time. That’s a problem.