Checking the Score

Steve Abramowitz

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.

  • Don’t get fooled by randomness. Short-term results are often juiced by luck. Say Uncle Sammy boasts he has a system that beats the sports books because he won both of his bets on the NBA finals. But remember, by chance, getting two heads in two coin flips occurs 25% of the time—hardly insurmountable odds.
  • Avoid overestimating your resilience. So far, we’ve only touched on data readily available online. But serious sports bettors insert this information into predictive models to tease out statistical inefficiencies and oversights in the casino odds. The work is intense, exhausting and at times daunting. All else being equal, an outstanding sports bettor wins only 55% of the time. Can you withstand all the losing? If the idea of allocating some retirement money to a sector fund makes you queasy, dipping a toe into these waters probably isn’t advisable.
  • Resist surrendering to gut feels and hunches. If you can’t keep your emotions under control, the casinos will welcome you with open arms. The house knows far more than just which team should be favored and by how much, and that gets reflected in the odds offered. For instance, the sports bookies routinely bake in a halo effect around Alabama’s college football juggernaut. Similarly, earlier this year, Taylor Swift’s good vibes distorted Super Bowl betting on the Kansas City Chiefs.

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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