Kirk's Hammer: Sports Betting Myths

A very typical segment on the Circles Off show I do with Rob Pizzola, Geoff Fienberg, and Jacob Gramegna goes something like this: Jacob pulls up a tweet with a grandiose statement about sports betting, and the tweet typically comes from someone who has a little badge in their username with Dubclub or Woop or whatever the dumb tout platforms are called today.

The tweet normally is about 95% wrong, but if you squint, has 5% of truth in it. I typically assume, I think fairly, that the Dubclubber is not providing much of a nuanced take, and I don’t want to go into a thirty-minute soliloquy about how he/she is mostly wrong but if you interpret what they say in this way, there is some truth to it. Instead, I’ll give my takes on why the tweet is wrong and be done with it.

Today I’m going to go through a few of the most common misconceptions I see, and provide the nuance of why some of these myths do hold some truth, and why some don’t at all.

All Big Bettors Are in “Syndicates”

I actually would not have considered this a myth until last week, when the greatest live bettor in the world and the greatest injury clicker in the world teamed up to say the dumbest shit possible with the most amount of confidence you could imagine.

I don’t know one person who I would consider in a sports betting syndicate. I have heard of very big groups, and those I would think of as the next level of sports betting that kind of transcends gambling Twitter.

The vast majority of winning sports bettors I know operate like this: they work solo or with one partner, but have a wide web of people that they discuss betting with or work with in some capacity. That relationship can be anywhere from a mover who they bet with daily, to someone they chat to about betting every now and then.

This is not a betting group or a syndicate, it's just a person who bets, who knows other bettors, and sometimes leverages those relationships for liquidity or info.

Parlays Are Bad

I would say this is probably the widest held belief out of the myths I’m going to name, while also being the most wrong.

I went over this last Circles Off, but I think using this example here is worth it: A degenerate approaches you and just desperately wants action on anything. They offer you +110 on either side of a coin flip. If each coin flip pays +110 but has a 50% chance of landing heads, you're getting better-than-fair odds (true odds are +100), meaning each individual bet has positive expected value (EV).

Now, if you parlay those two coin flips together, the true probability of both hitting is 0.5 × 0.5 = 0.25, or 25%. The parlay odds should be +300 (3 to 1) for a fair bet, but at +110 on each leg, your payout would be +110 * +110 = +341. For a bet that is +341 to be positive expected value, all you need is the probability to be higher than 22.7%, and getting two coin flips in a row correct is 25%, so parlaying those bets together did not magically make them lose the EV.

If you parlay two mutually exclusive bets with positive expected value, you get a parlay with more positive expected value. The reason this myth exists is because it works in the inverse—if you parlay lots of negative expected value bets, you now have a bet that has more negative expected value.

Winning bettors use parlays far too little. The only real drawback is that it increases variance; however, it will make your action appear far more square and likely let accounts last longer.

If you want to win in betting, you should almost certainly parlay more.

Vegas Knows or the House Always Wins

I think this myth actually has really helped sharp sports bettors win money. Most people believe winning money gambling on sports is impossible and Vegas has these complex algorithms that no human could possibly compete with.

This is mostly nonsense. The truth is that opening lines in most sports are not very good, and sportsbooks don’t really care. They’re happy to take action at smaller limits when they open and get the line shaped to a fair number.

The real truth is that sharp sports bettors know, and that’s why lines end up being so accurate near game time.

Sportsbooks Want Equal Action on Both Sides

This one has been talked about endlessly on gambling Twitter, and I actually think it probably has been taken too far the other way.

In my view, for the vast majority of games, sportsbooks will move on sharp action and be fine being exposed to risk if they think they’re getting in good with squares. However, in bigger games or unique events, this isn’t always the case.

Probably the most obvious example is when ESPN Bet had six-figure limits at an arb to market on an NFL playoff game, likely to just decrease their exposure from a whale.

I still do think it’s fair to call it a myth, as these examples are more exceptions to the rule than a regular occurrence.

All Sports Bettors Are Betting with Models

I often joke that people treat algorithms like they're magicians or wizards with how much credit they give them.

Of course, modeling in sports betting is extremely important, but I have beaten many markets with either no model or a very bare-bones model.

I remember @chinamaniac on Twitter said on his Circles Off episode that he just used box scores to beat prop bets and people thought that was crazy.

There are lots of ways to beat sports betting markets, and if you want to win at the highest level, you absolutely need models, but I think there is a lot more that goes into it than just run model and click bet.

Fakes Are Very Common in Sports Betting Markets

Faking the market only makes sense in a circumstance where someone can get enough liquidity off-screen that the EV calculation makes sense despite dumping money into a very negative play on-screen.

Let’s say a bettor wants to wager on Phoenix +7, but the market is +6.5. Since they believe +7 is a valuable bet but it’s not available, they’ll bet on Denver -6.5, hoping the market moves the line to +7.

Suppose they risk $1,000 on Denver -6.5 at -110 to move the line. If the line shifts and they then get Phoenix +7 at -110, they can now place their real $10,000 bet on Phoenix. Let’s say their edge at +7 is worth 8%. This gives them a $800 expected profit on the $10,000 wager.

Meanwhile, the fake Denver -6.5 bet has -13.5% EV, costing them approximately $135 in expected loss. Overall, they’ve spent $135 to “buy” a +EV opportunity worth $800, which is a smart tradeoff.

This does happen for sure, but I think at a much less frequent rate than people think, because you need to be able to have so much more liquidity off-screen than what is being offered on-screen for it to really make sense.

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