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I’M DUMB MONEY, as are all so-called recreational gamblers. That’s why, during the recent basketball playoffs, we sports spectators were bombarded with wildly seductive commercials glamorizing sports betting.
Fortunately, I learned my limits early on. My last notable gamble ended badly more than four decades ago, when some IBM options I bought expired worthless.
But I’ve also come to appreciate that not all individual gamblers are dumb money. I’ve lately been serving as the sounding board for my 36-year-old son Ryan, who has become a successful sports bettor over the past two years. Here’s what I’ve learned.
Playing the game. It’s hotly debated whether sports betting is a skill-based activity or merely the latest come-on propagated by the casino industry. But whatever the case, it’s not going away anytime soon. The bourgeoning betting business makes dough for the media, sports teams and sports books, while putting tax dollars into state coffers.
In the short run and without a mathematically sound game plan, sports betting is unadulterated gambling, not unlike the frenetic trading of individual stocks and options. But taking a longer view—say, at least 100 wagers—a bettor with formidable sports knowledge and an intricate grasp of probability theory can eke out an edge that snowballs over time.
A former high school math teacher and basketball coach, Ryan has attended numerous seminars on sports analytics taught by faculty at some of our most elite universities. His betting season encompasses college and pro football, as well as college and pro basketball. As some readers might recall, his modus operandi is much like that of a mutual fund manager, making many simultaneous small bets over a large and diverse number of games.
Analyzing the bet. It’s instructive to look at how Ryan might attack one of the most frequently bet questions posed by casinos: “Which player will score the game’s first rushing touchdown?”
At first glance, this would seem to be more appropriate for your eight-year-old grandkid than for a savvy sports enthusiast. Obviously, you say, you’d pick the runner who has scored the most touchdowns so far this season. Probably, but not necessarily.
The answer is more elusive than that. Let’s start with the injury factor. Is your guy playing with last week’s hamstring pull? Have you done your due diligence and checked his latest health status report? Maybe you should shoot an email to a local sportswriter. And when your touchdown maestro returns, will he be rested and recovered or rusty and unproductive?
If a ball carrier has been out for several games, his total rushing attempts and touchdowns may not reflect how often he’ll be called on today. Don’t overlook whether the team has someone built like a fire hydrant who trots in on short-yardage situations near the goal line. Ditto for the coach partial to using the quarterback sneak from one or two yards out, rather than risking a hand-off.
See what I mean? Not so simple. The situation gets even more complicated when you take the player’s supporting cast into account. You’ll want to know whether your likely choice is on a team that tends to grind it out rather than pass. Then there’s the red zone, football lingo for the last 20 yards before the goal line. How frequently has the team scored a rushing touchdown after entering the red zone? How conservative is the coach? Some are more likely to settle for a high-probability field goal than go for a less certain touchdown.
Fumbling the ball. Any of these developments could affect the likelihood that your pick will be the first runner on either team to reach the end zone. If, despite all these considerations, you can’t resist the temptation to bet, here are some additional caveats.
Keeping score. You probably already know about meat-and-potatoes stuff like home court advantage and weather. But rely on them alone, and the house will gobble you up.
Instead, get up to snuff on the esoterica, like travel time and distance, schedule and fatigue and—I kid you not—Rocky Mountain altitude. Professional sports bettors are willing and, in rare instances, able to match wits with the casinos. I don’t have the requisite skill or endurance and, I suspect, neither do most HumbleDollar readers. The big boys are stalking folks like us—the dumb money hoping for a little fun, a few quick bucks and some ego-inflation.
So, after suffering the guffaws of many friends and extended family, how did our rogue son make out? After the basketball playoffs, Ryan flew in from Los Angeles, so we could run the numbers as a family. His mother Alberta and I hunched over the computer as he slowly moved his hand from left to right across the bottom of the page to reveal the reward he’d earned in return for a year of passion and determination.
I had to brace myself against a nearby table as I stared dumbfounded at Ryan’s six-figure profit.
Steve Abramowitz is a psychologist in Sacramento, California. Earlier in his career, Steve was a university professor, including serving as research director for the psychiatry department at the University of California, Davis. He also ran his own investment advisory firm. Check out Steve’s earlier articles.
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I’m not sure what it says about me that I’m reading this article thinking, “Huh. I could do this” and “that actually sounds like fun.” I think of myself as risk-averse, but maybe not so much.
(I won’t get into sports betting. My husband would kill me.)
Nice article! I gave up on timing the market and sports betting at around the same time!!
I went to a horse race once with several buddies and they guided me through how to bet. One of them convinced to bet on Turbulator; the horse was a former champion, was injured, but had come back strong and was a sure winner. It came in dead last! At that time in my life, and for many years after, I equated expenditures to how many hours I had to work to earn the money. I don’t remember the total hours of work it took, X hours to get into the track, Y hours for the bet and Z hours for a beer. My conclusion was that bet was not worth the time I had to work to earn the money. I thought of many other things I could have spent the money on that would have provided more enjoyment. No more bets for me. Oh, I did buy a lottery ticket once, when the jackpot reached half a billion. Guess how I did!
Yes, the work part is tough. Too many hours, lost weekends and crimped social life. Not to mention no fringe benefits.You’ve really got to love it to do it, but he does.
I’m sure you tell Ryan that you include him in some of your posts. Is he at all concerned with the notoriety of you raising his profile like this? Or maybe he uses an alias? I’m unfamiliar with the sports betting world (and plan to keep it that way), but I wonder about the seedy underbelly of legal & illegal betting and how it could negatively influence someone’s career in this area.
The sports betting world has come out of the shadows and is now big business: https://www.sloansportsconference.com/conference/2024-conference
You’ve got the program. Notoriety is discouraged. All of the methods I mentioned are standard fare for sports betting cognoscenti, none are proprietary.
my sports betting career ended the day the bookie showed up at my office tues morning to collect my $100 bet on Monday night football!! This was about 30 years ago when betting was very much illegal . Thankfully it scared me enough to never ever bet again!!
Despite my obvious psychological investment in Ryan’s career, I have never placed any kind of bet (other than my early options trading). Why take all that risk, carry all that anxiety and work a 60-hour week when you can passively collect your 9-10% in the market practically hands-free?
Aside from everyday expenses and perhaps an emergency fund, does your son invest any of his winnings in more conventional retirement accounts like an IRA or taxable investment account? Or does he simply leave that money in his sports betting account to fund additional bets?
I wonder if he has thought about how he will transition money from his sports betting account to regular accounts as he nears retirement.
You read my mind. It’s been quite an ordeal wooing Ryan from his betting accounts into funds and retirement plans. The reasons are both practical and psychological. It is truthfully quite a chore to transfer money between betting sites and out into bank accounts or money market funds. The houses also charge exorbitant fees for doing so. They want to keep you in there for more betting. The psychological piece probably has to do with me. Ryan was born just as I was retiring from academic life and has known his dad only as an investor. I know my reputation is a bloated one, but he doesn’t know that. He doesn’t want to compete with me and, understandably, wants to go his own way.
Steve, thanks for this intriguing piece. I have no facility for nor interest in gambling, but I’m always interested in learning about very different ways to make a living.
Congrats to your son on succeeding in a most unusual and specialized field and “against the odds”.
Andrew, thanks for your open-mindedness. The “shame”associated with sports betting reminds me of how I feel when a patient insists on getting his meds from his internist rather than a psychiatrist. I don’t know what Ryan’s going to say when he goes to meet his fiancé’s parents! But he’s got a passion. He’s happy, so I’m happy, if you know what I mean.
It’s possible but very hard to overcome the house edge, or vig. Vegas used to have some video poker games set to pay a bit over 100% for those who learned to play using perfect strategy. Same for certain blackjack games for those bright enough to master card counting; I tried this unsuccessfully. Your son has mastered sports betting. Thing is, gambling ceases to be entertainment and becomes very much a high stress job at this level. Like any job, some will love their work and some won’t.
Dan, you’ve got it right. It’s a very high stress job—and it really is a “job.” But it’s a job with no benefits like health care and bruising weekends (when, for example, almost all football games are played). It takes a love of sports, a facility with numbers, fear of an 8-to-5 grind under an insensitive boss and—let’s face it—a need for high arousal.
Steve, I’ll admit I have a bias against betting, but it’s intriguing to think of it as a business venture, rather than a chase after random luck. My questions will reflect my ignorance of the activity. Will the casino industry change the rules if too many bettors have a winning season, thus making it harder for your son to come out ahead? Is it possible for an individual bettor to be blacklisted for having a winning system?
Edmund, for someone who clearly underestimates his acumen, those are really good questions. The answers are yes and yes.
Taxes on DraftKings and FanDuel profits are close to 50% in some states and there is a movement to decrease the odds of winning in them so they can compensate.
I think there have always been a few guys that could master sports betting, such as Lefty Rosenthal and Steve’s son, but not enough to destroy the odds. Blackjack is another story with continuous shuffling and 6/5 VS 3/2 blackjack payouts that have totally destroyed a counters advantage.
Yup, the era of card counting has surrendered to the use of multiple decks. And those house henchmen hovering around the tables aren’t stupid.
I’m off to buy my weekly Powerball ticket.
Dick, you would have been better off with the Boston Celtics!