A Tip for a Sports Enthusiast’s Next Vegas Trip

How did we do Wednesday?

Records for Tuesday, 12/13/17:

Love It = 0-0-0

Like It = 1-0-0

Total = 1-0-0

  

Records overall:

Love It = 3-2-0 (60%)

Like It = 4-6-1 (40%)

Total = 7-8-1 (46.7%)

What’s on tap for Thursday and Friday?

ZILCH - As I mentioned in an earlier post, the Power 7 games the next 2 weeks or so are few and far between.  I do see 12 games on the slate for this Saturday.

With no games to pick today or tomorrow, I’d like to provide a tool you and your amigos can use when you’re ponied up in the sports book the next time you visit Las Vegas.  This tip will help you mitigate some of your risk and will be especially fruitful for the folks who may not be very familiar with the sportsbook but know how to crunch a few numbers.

Situation: I want to put a few bucks down on some games, have a burger and a few cocktails, and have a chance to win some money without risking a lot.  How can I do this?

 Let me derive a hedging formula for you and explain how you can make it work for you at the sportsbook.

 First, let me explain the premise this formula is built on.  The idea is that you will wager on a moneyline or a spread of your liking, hope your team starts the game hot, and then put in another wager on the opposing side at some point during the game. 

 Wait, why would you ever bet on both sides of a line?!  I’ll explain.

 By doing this, you guarantee you cannot lose both bets and also give yourself a chance to win both bets.  Now, if your initial wager is never on pace to win, you likely won’t have a chance to put in this second risk-reducing wager, but you still have the chance to win your initial bet…which is all you had before you read this post anyway.

Let’s take a look at a concrete example.

Let’s say Duke is playing North Carolina in basketball, and Duke is a 7 point favorite.  You know how big of a rivalry this is, so you wager $10 on the underdog: North Carolina +7.  Let’s say North Carolina has a 5 point lead going into halftime.  Vegas knows Duke was the favorite going into the game.  They also know there is a good chance Duke makes a comeback in the 2^nd half.  Vegas will likely set the 2^nd half spread at Duke -7 meaning that in order for you to win your 2^nd half Duke bet you will need Duke to win the game by more than 2 points.  If your initial wager was North Carolina +7, and your halftime wager is Duke -7, then you can win both bets if Duke wins by 3, 4, 5, or 6 points (This is called creating a window for yourself.  Within the window, you cannot lose both bets.).  You can also win 1 of your 2 bets while pushing or tying your other bet if Duke wins by 2 or 7 points exactly.  This gives you exactly 6 outcomes where you either (A) win both or B) win 1 and push/tie the other while also not allowing you to lose both bets.  Now, you might say the chance of hitting 1 of the 6 outcomes isn’t very high.  In a way, you are correct, but let me give you several reasons why the “window” opportunity is good to take advantage of:

1.      You can’t lose both bets, but you can win both.  At worst, you win 1 and lose 1.  If you bet $10 on each side, you lose *"the juice" of $0.91 while you had a chance to win $18.18 by hitting the window.  In my opinion, the risk vs. reward is well worth it.

2.      Vegas is very accurate with their spread predictions.  For this reason, if you wager on 1 side to start a game and that side looks good in the early stages of the game, there’s a good chance the result will regress toward the original spread.  That regression gives you a good chance to hit your window.

3.      Many sportsbooks will give out food and drink tickets for all wagers to get you betting on more games.  They don’t care who you bet on.  So if you make 2 bets on 1 game with no chance of losing both bets, you may get 1 of these tickets for each bet.  If you lose 1 bet and win the other, your food and drink still offset your $0.91 cost.

Ok, so you’ve told me how the process works.  Now, show me the formula and tell me how to use it!

In our Duke vs. UNC example, if both the initial and the halftime or in-game spread are priced at -110, then it’s easy.  You simply bet the same amount on both lines.  Let’s play dumb and pretend we didn’t know how much we needed to wager on the halftime spread. 

In order to figure out how to equalize your profit/loss no matter what the outcome of the game, you need to offset the profits and bet amounts from the initial bet and halftime or in-game bet:

Let’s set the variables first.

P1 = Profit from Bet 1

P2 = Profit from Bet 2

B1 = Bet 1

B2 = Bet 2

L1 = Line 1 (The line for spreads is usually -110 to -120.)

L2 = Line 2

Now that we have the variables defined, let’s derive the formula.

1.      P1 - B2 = P2 - B1 (offsetting profits w/ bets)

2.      P1 = B1/L1 (The profit from bet 1 equals the bet divided by the line.)

3.      P2 = B2/L2 (The profit from bet 2 equals the bet divided by the line.)

If we substitute P1 from line 2 and P2 from line 3 into line 1, we get:

B1/L1 - B2 = B2/L2 - B1

(Quick aside…all these Bs and Ls are making me thirsty for a Bud Light.)

Now, we need to solve the equation for B2 so we know how much to bet when the 2^nd line comes out.

B2/L2 + B2 = B1/L1 + B1

B2*(1/L2 + 1) = B1*(1/L1 + 1)

B2 = B1*(1/L2 + 1)/(1/L1 + 1)

You now have everything you need to make the right wager on the 2^nd line.  When halftime hits, check the line you will be betting.  If it’s a spread, it’s usually going to be -110.  If it’s not -110, it doesn’t matter.  Whatever the line is, if you substitute it into the equation you will be able to easily calculate what your 2^nd bet should be.

B2 = 10*(1/1.1 +1)/(1/1.1 +1)

B2 = 10*(.909 + 1)/(.909 + 1)

B2 = 19.09/1.909

B2 = 10 or $10 (We already knew we needed to wager $10 because the pregame and halftime lines were identical at -110, but plugging the numbers into the equation verifies we've derived it correctly.)

Now, let’s say L2 (the 2^nd line) is not -110.  It’s actually -115.  In order to equalize your loss if only 1 bet would win, you simply plug in 1.15 for L2 and solve the equation again.  I will save you the confusion/boredom.  The value of your 2^nd bet is $10.21.

If you win Bet 1 and lose Bet 2, you win $9.09 ($10/1.1) and lose $10.21.

You lose $1.12.

If you lose Bet 1 and win Bet 2, you lose $10 and win $8.88 ($10.21/1.1.

You lose $1.12.

If you win both bets, you win $17.97.

Let’s use our Duke/UNC example again.  Let’s say you bet UNC +7 to start the game, and they are up 10 points at halftime.  Duke would probably be -7 or so (meaning the line is predicting they would lose the game by 3) for the 2^nd half.  You could bet Duke’s 2^nd half moneyline at +120 (or whatever it is) and guarantee yourself a profit and also have a window where you can hit both bets.  If Duke loses by 1 or 2 or wins by 1, 2, 3, 4, 5, or 6, you win both bets.  This is your window.  If they lose by 3 or win by 7, you push 1 bet and win the other.  If they lose by 4+ or win by 8+, you win 1 bet and lose the other but still guarantee a profit.  In the formula, instead of 1/1.1 (if the line is -110), for a line of +120 your calculation would change to 1*1.2.  After crunching the numbers, we find your 2^nd wager would be $8.68.

If you win Bet 1 and lose Bet 2, you win $9.09 ($10/1.1) and lose $8.68.

You win $0.41.

If you lose Bet 1 and win Bet 2, you lose $10 and win $10.42 ($8.68*1.2).

You win $0.42 (Rounding throws the profit off 1 penny from $0.41 to $0.42.)

The formula I’ve given you [B2 = B1*(1/L2 + 1)/(1/L1 + 1)] gives you all you need to equalize your profit/loss when you have a window opportunity.  You can always adjust your bet amounts based on how much you like or dislike a line.  In my opinion, it’s always a good idea to equalize your profit/loss.

 I apologize if I’ve simply confused everyone.  This sort of thing is easier to discuss out loud than to write down.  Until I launch my podcast, you will need to settle for the written version.  Feel free to post a comment if you would like me to clarify anything.

As always, if you enjoy my blog please share, like, and retweet thebisness.blogspot.com on Facebook and Twitter.

Cheers!

*Note: “the juice” refers to the fee the sportsbook charges for offering betting lines.  Standard juice is 10%.  Spreads are normally listed at -110 meaning your winnings are calculated as your bet divided by 1.1.