Value in Sports Investing

Every sports wager should be evaluated from a value perspective. What does that mean? For example if team x was slaughtered by team y last year in a big upset that cost team x an opportunity to go to a bowl game there is a strong inclination to play the revenge angle and bet team x. But the odds maker knows this very well and builds this into the line. So there may be value to bet the game at -7 and hope the revenge factor provides the impetus for team x to play an inspired game and cover the line, but if the line is -10 the value may be gone and the odds maker has fully built the revenge factor into the game. If the odds maker posts the line at -13 ½ he may have over compensated on the revenge factor anticipating that conventional wisdom of bettors is that revenge will carry team x to victory and they will bet team x. At -13 ½ the lines maker is likely trying to goad bettors into betting team x based on the bettors overvaluation of revenge as a determinant of the line. All handicappers should respect the emotional aspect of revenge but not bet it without regard to the value he is getting in the line.

The line is always the final arbiter of the value one is receiving in a bet. There maybe great trends, significant injuries and revenge but the sophisticated bettor has to carefully evaluate whether all these numbers have been taken into consideration in the price(the line) he has to pay to bet on the team he perceives as all these advantages in the game. As a rule of thumb the more factors(power ratings, injuries, emotions, home field, match ups etc) considered the greater the opportunity to evalulate a good price and have an excellent opportunity to win the bet. However, it is important to remember that not all individual good priced or value bets win and not all individual bad bets or poor value bets lose but over the long term it will determine whether you make a profit or not.

Line movements can quickly erode and eliminate value in a play, especially in the NFL. If a highly touted handicapper releases a hyped Game of the Year Play for example at -2 and it quickly rises to -3 ½ or -4 the value is likely gone. If a team looked great on a Monday Night TV Game the week before, they are on the cover of Sports Illustrated and ESPN has features on their genius coach, there is likely little value in betting that team this week.

However, in turning sports wagering into sports investing, there are some important caveats to consider: Firstly, if a lot of people agree there is value in a game one should be wary. Take USC at Oregon this year, many handicappers and even odds makers stated there was value on Oregon. I heard Ken White the head of Las Vegas Sports Consultants(the company Roxy Roxborough founded that supplies lines to Las Vegas Casinos), a man we should all respect, say that the true line he thought was around USC-14 but they opened it higher 3 to 4 points higher and it went up in different spots another 3 to 4 points higher. Many handicapper services and professional cappers all advocated Oregon as a value play. USC’s awesome offense and string of covers pointed towards Oregon as a value play. But when too many people agree that it is a value play it probably isn’t.

Secondly, in handicapping a game I always try and determine what the range of expected outcomes in a game could be, and in particularly does the probable results of the game skew towards one team winning by more points against the line than the other team. For example in this case Oregon has a strong home field and a fairly potent offense and USC did have some struggles on the road last year for example at Oregon State, and I thought USC’s defense was significantly down. When the line reach 21 ½ I did look to see how much value there was with Oregon but in trying project range of possible game scores, I thought that Oregon’s pass defense was very vulnerable to USC’s passing attack and Reggie Bush is well Reggie Bush so I projected the game falling anywhere from a 17 to 33 point USC victory. So although there was certainly a reasonable chance that Oregon could cover the risk was much more skewed to significant USC victory because of the damage the USC offense could against the Oregon defense. Consequently, given a risk reward analysis, any value that might exist with Oregon at +21 was overwhelmed by the risk that USC would scorch their defense and beat Oregon by 33. Restated in my analysis of the game I equated the probabilities that Oregon would beat the spread by 4 points were equal to the possibility that USC would beat the spread by 12. That took me off Oregon but did not put me on USC before kickoff. I did watch the game and with my observations of the game in conjunction with my pre-game analysis I did take USC on a second half bet.

Value is not a static thing and the deeper you dig to analyze and appraise it the more successful you will be. And always and I mean always try and get the best line you can by shopping around different sportsbooks.