Sports Betting Part 1
This week 2 emerges as one of the most interesting in deciphering the Vegas code.
I’d like to put into the right perspective the Vegas role in all the sportsbetting business first.
So, how the whole business works and what we mean when we say Vegas this and Vegas that? Well, in oder to understand how the system works – we have to know the flow and the role of each player we have to deal with and decipher.
1. The lines and the odds for whatever we bet originate in Las Vegas usually. There used to be one authority called Las Vegas Sporting Commission that all the best experts and the oddsmakers used to sit there and each in its area of expertise used to issue opening lines for each bettable sporting event around the globe. The books used to hire the services of LVSC and after receiving the opening lines and odds – they used to doctor those according to how they read the market and the bettors perceptions while the main goal of both – LVSC and the books (online most, but also Vegas casinos and the hotels as well as other gambling institutions round the globe – was to create the lines as close as possible to the middle (so there will be similar amount of money on both side of the spread, totals and the money line). Now, since creating the middle line for the spreads and the totals was possible by setting the number as close as possible to expected outcome – with the money line they had to calculate the potential backing on each team and set the odds the way that the money wise – there will be an equilibrium on both sides. That was an idea. And that idea was to serve the books to live on juice or the wig or the commission – any way you call it. That meant that no matter what side won – the books would always earn the juice in the middle. Well, that didn’t always happen as sometimes and even most of the times there were unbalanced sides and then the books had to change the lines and the odds to attract people to take the less betted side so the books could be balanced. That was the case and is still the case although LVSC is no more the major force in the business as today the people who call them themselves the “traders” are the experts who actually decide on lines and the odds and offer their services to anyone interested. Most of the books and hotels and casinos employ their own traders who are in close contact with the other traders of the other books and hotels and casinos and are actually synced between each other using the trading and betting platforms created to monitor a major source for the lines and odds adjusted according to the amount of money flowing in globally and thus issuing almost the similar lines and odds in all books, hotels and casinos. So, Las Vegas as the city in the state of Nevada has nothing to do with our meaning of Vegas as it is conditional nick for the side that manipulated the lines and the odds through various tools and methods. If it was up to books and casinos – they would like to have all the games absolutely balanced money wise guaranteeing them profits steadily through the juice. But that is not the case. And actually never was. Because people have their own perceptions about the lines and the odds.
I have to insert a sentence here that makes clear what we are dealing with when handicapping games: we all have to understand that the sportsbettors are merely a fraction of people who watch and enjoy the sporting events. Therefore – the first and utmost importance is given to the entertainment value of those events. Sportsbetting is only another tool to attract people to the events and watch them although they have no interest in one or another side winning. Merchandising and advertising are closely knitted with networking enterprises creating a giant circus for all to see and enjoy. So, the usual perception of an average gambler that the game ended up in a certain way opposed to his or her logic and the predictions – may be a disaster to him or her but has utmost entertainment value for the business and the viewers who mostly have nothing to do with the lines and the odds. So, even if there are some events manipulated into certain outcomes – it is not automatically a “Vegas Fault”. Actually number of interests have to inter cross in order to create a manipulation that will also go through. The leagues in professional sports are trying to avoid inequality between the teams – the draft system is the testimony for that when the weakest teams are given an opportunity to pick the strongest players for the next season. No league is interested in having the Bulls consecutive three pits. Or Real Madrid’s consecutive European Titles, or Michael Tyson beating everyone in his way in just one round, or Maradona dominating the football the way he did, or Brady, Mannings and all the other great quarterbacks winning the titles year after year etc etc. That is not a good business. But if there will be no interference by the leagues through manipulations of all kinds – what we will see is that the NE Patriots and the Green Bay Packers will be winning the title every other year. Or LBJ and the POP winning the titles alternating years. I can give you many examples but first digest all this and in Part 2 we will also touch the subject of how the bias is created and who has hands in it. Actually all of us are guilty of the bias in sports.