Understanding Probability With MLB Betting

SBR Staff

Sunday, May 31, 2015 12:45 AM GMT

We turn to probability to help bettors understand the chances they have of winning their moneyline wagers and how the MLB odds makers create the prices offered on the games.

Before ever placing a moneyline wager on an MLB game, a bettor should have a solid understanding of what the bet actually means. What am I talking about? Unlike the NFL and NBA where betting on teams is most commonly done using point spreads, betting on MLB teams typically consists of betting on the moneyline. For example, you may see the following prices offered on an MLB game:

Pittsburgh -125 / Philadelphia +115

For any reader who has bet on an MLB game before, you are familiar with how this works. To win $100 on Pittsburgh, a bettor must lay $125. A Philadelphia bettor can win $125 for every $100 bet. 

How do MLB odds makers create these prices? They develop probabilities for who they believe the outcome will be decided. If they believe Pittsburgh has a 50% chance of winning, their theoretical moneyline should be even money or +100. If their win probability is 60%, their moneyline will be -150 (150 divided by the sum of 150 and 100).   

Since the bookmakers are in the business of making money, they do apply a vig to these prices. In other words, they offer a price to the bettors at a disadvantage according to the true probability. If you search the internet for a no-vig calculator, you can learn how to add or remove vig from a moneyline. 

In regard to MLB betting, most recreational bettors will simply place a bet on the team they believe is going to win. Ignoring the price is a mistake that will ultimately lead to long-term losses when placing MLB picks. With that said, price is everything! In the example above, Pittsburgh is being offered at a price of -125. The implied probability of laying $125 to win $100 is 55.6% (125 divided by the sum of 125 and 100). If we know our implied probability is roughly 56%, we should only take this bet if we think Pittsburgh has a win probability greater than 56%. Anything less would be considered a losing bet. 

Here’s a better example to highlight the dangers of ignoring the price of an MLB game:

St. Louis -250 / Milwaukee +220

In this example, St. Louis is a heavy favorite as their implied win probability for a -250 moneyline is 71.4%. St. Louis may have their pitching ace on the mound that day, and the casual bettors might be inclined to bet that team without factoring in the price they must lay. An astute MLB handicapper may determine the St. Louis win probability to be 60%. With a win probability of 60%, the astute handicapper still thinks that they are likely to win the game. The problem is that if you bet this game 1,000 times at -250 and the true St. Louis Cardinals win probability is 60%, you’re going to lose money in the long term. 

Some handicappers like to look at certain trends or angles that have to do with specific batter vs. pitcher matchup statistics or with the specific favorable or unfavorable situation that a team might be in. For a hypothetical example, it might favorable to bet on a home underdog after losing its last 2 games. While this may have merit, situational handicapping will typically ignore or underplay the importance of price. Other handicappers will definitely review the prices they are being offered and make a “gut decision” based off how they feel about a game. In this case, not understanding and/or developing the expected win probabilities for each team will lead you to losses.

With all of this said, the importance of weighing price and the win probabilities should show you the importance of developing an MLB handicapping method that can compute expected win probabilities. Personally, I have spent years developing a mathematical simulation model that will compute an MLB team’s expected win probability and create an output like the one below:

 

 

Based off these outputs, I would make the Away team the favorite at -103. From there, I’m searching the betting market at sportsbooks like GTBets or Bovada for the best price I can find. 

While other styles of MLB handicapping and gut feelings can prove to be valuable, I believe every successful MLB bettor should develop a method of creating their own moneyline prices to be their baseline to start evaluating profitable bets. 

Good luck with your handicapping!