Written By @Hookslide23
I’m won’t lie to you boys, this is becoming the opposite of fun. Week 11 saw underdogs rolling over and playing dead again; winning just 2 of 14 games. Unfortunately, neither of those winners made their way onto Poppa Hooks card, so I got swept this week. It’s just me, wearing my Sombrero as I type. 0 for 3. Fortunately, I left the Dolphins off my card or this would be a much fancier sombrero, a golden one to be exact.
In the famous words of Louis XVI, “AAAAUUUUUUUGH!”
I’m still not ready to jump ship, because it’s proven to be a winning strategy over several seasons, even though I know some of you are ready to ditch the ‘dogs and start betting favorites. I don’t blame you, but keep in mind it’s an extremely small sample size.
If you’re going to start betting favorites, you still need my “is this a plus-expected value bet” formula, and you need to know how to calculate The Juice. No, I’m not talking about electric currents, steroids, Tropicana, or O.J. Simpson (which is a killer joke for another time); I’m talking about what your sportsbook charges you to place a bet.
Let’s return to the example of the Super Bowl coin toss prop bet. Your odds of winning that bet are 50%, because there are only two sides of the coin. But sportsbooks offer -110 on both sides — and if you recall last week’s column, at -110 that equates to implied odds of 52.38%:
Payout / (Payout + 100) = 110 / (110 + 100) = 110/210 = 52.38%
Something is amiss here. Higher win probability equates to lower payouts, because if you have a higher chance of winning, I (as a sportsbook) need to adjust accordingly to make sure I don’t go broke. That makes sense. But treating a coin flip like you have a 52.38% chance of winning, when in reality you only have a 50/50 chance, is tilting the odds in the sportsbook’s favor.
You’re not going to win that coin flip 52.38% of the time, but because sportsbook pay like those are the true odds, you’re making roughly 91 cents on every dollar you bet, which means you will lose long-term.
That’s The Juice or Vigorish. It’s that little bit of overage on the implied odds that puts you in a position to lose money.
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Here’s a faster way to understand the lesson: that -110 payout on the coin flip implies that both heads and tails are 52.38% to win. Add those odds up and you get 104.76%, which is impossible. You don’t have to be a math genius to know that 100% is the limit, which means we have an overage here of 4.76%, and baby, that’s all juice.
How do you beat The Vig? By making sure your true odds yield an edge greater than the implied odds by sportsbooks like BetOnline.AG. Let’s take an actual example from this weeks games to make it easier to explain and absorb.
Here is a helpful Odds Converter Tool to assist you in calculating implied odds right along with me for this example.
The Lions will play their traditional Thanksgiving Day game against the Vikings this year, and the current moneyline (implied odds) looks like this:
Lions: +130 (43.48% implied)
Vikings: -150 (60% implied)
Total implied odds: 103.48%
The vig is 3.48% total. Let’s say you crunch the numbers, handicap the game, consult with a few other bettors you trust, and conclude that the Vikings’ true odds are 65%. You are 65% certain they’ll win by your calculations. Subtract the implied odds from your true odds (65% – 60%), and you’ve got a 5% edge. Take the bet.
But if you think the Vikings true odds of winning are 59%, then you have no edge since the implied odds are 60%. You won’t be able to overcome the juice, so you should pass on that bet.
Have a great Thanksgiving, guys — here’s a toast to returning next week just a little bit fatter (mostly in the wallet).
