Some time ago, in a desert not so far away from you, sat three seasoned sports bettors discussing a play on a baseball game. These three sports bettors, let’s call them, Curly, Larry, and Moe, all agreed on the betting side of the MLB game. Once that decision was made, all three looked at the betting board and saw that the price on that particular side of the game was +100, or even money. So Curly and Larry quickly grabbed their betting sheets and with cash in hand, walked up to stand in line at the counter to place their wagers.
However, Moe stayed back at the table and didn’t move at all.
20 minutes later, Curly and Larry came back to the table with their betting tickets and a couple comp drink tickets in hand to enjoy the game. Curly and Larry then mentioned that Moe better go get his bet in as the line was increasing and first pitch was coming up soon. It was then that Moe mentioned that his bet was already in. With perplexed and confused looks on their faces, Curly and Larry asked how is that so? The three of them just discussed the game and Moe never moved from the table.
At that moment, Moe whipped out the phone and showed his betting buddies the same wager placed at a competing sports book at a price of +120. See while Curly and Larry were standing in line with cash in hand, Moe was line shopping through a few sports betting apps for the best price being offered on the game. Needless to say this caused Curly and Larry to feel a certain type of way.
This play came back a winner for the trio of betting buddies. Yet, while Curly’s and Larry’s $500 MLB bets each turned into $1000, Moe’s $500 MLB wager turned into $1100.
In this case, Moe understood something that Curly and Larry struggled to grasp at that time. The price you pay leads to the profits you make. The only way to get the best price is to shop the lines.
At this point, I’m guessing you can figure out who Moe was.
Flash forward to the Final Four…
Years have past and unfortunately, betting buds Curly, Larry, and Moe have lost touch in a desert and industry that is constantly evolving. So in this Duke-Houston matchup, I can only break down how “Moe” approached the game.
With all number one seeds in the Final Four for the first time since 2008, it seemed like any team’s championship to win. Well, at least on paper it did. However, in the public eye, Duke was becoming the “favorite of all the favorites” entering the national semifinals. So when the lines were released, it didn’t come as much of a surprise that Houston was the largest of the underdogs. The question was how large?
At a price of +215, the implied probability of Houston beating Duke was 31.75%. For a number one seed loaded with veteran players, that already seemed extremely low. Add in the multiplier in the picture above and our friend Moe could get Houston at +236. At this new price, the implied probability was now 29.76%.
So you’re saying that Houston, a number one seed, only has a 29.7% chance to beat Duke?
To Moe, it wasn’t so much about Duke. It also wasn’t all about Houston. It was about the price. The same lesson that Moe showed Curly and Larry years before was in play at the Final Four. Based on data, Moe calculated that Houston had an approximately 40% chance to win the game straight up. That would mean a price of Houston +150. So to get an offer of Houston at +236, Moe took a chance.
And with Lady Luck, plus a staunch defense on his side, Moe walked away a winner.
