November 29, 2012

Skewed Left

Whom You Should Bet On if You're Going to Bet on Baseball (Which You Should Never, Ever Do)

by Zachary Levine

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A list of people who should never bet on baseball in descending order of importance that they never bet on baseball:

1. Allan H. (Bud) Selig
2. Professional baseball players
3. People who work in college athletic departments (This is actually true, they can't bet on any level of a sport in which the NCAA has a championship, so they can bet boxing but not the World Series or even fantasy football)
4. People who don't have any money
5. Baseball writers who make terrible predictions every year
6. You

You should never bet on baseball. But if you are going to bet on baseball, a futures bet on baseball is about the worst bet in the world. The only problem is that right now, it’s the only baseball betting available, so if you need to get your fix, the numbers tell us a little bit about where to go and what neighborhoods of the futures betting board to avoid like poison.

For those lucky enough to be uninitiated, the futures bet falls outside the category of just one game, like “give me 20 on the Red Sox tonight.” It’s who will win the World Baseball Classic (the Dominican Republic is favored at 2-1, followed by Japan and the United States at 5-2). Or the biggest baseball bet going right now: who will win the 2013 World Series. The Tigers and Nationals are co-favorites right now at 17-2, and while odds fluctuate unlike in a pari-mutuel system like a horse race, once you bet in a futures pool, you’re locked in. So when the Blue Jays annexed the Marlins and went from 35-1 in the initial wagering to an 11-1 co-third choice as of Tuesday at Bovada.lv, your payoff if they win depends totally on when you jumped on that train.

As for the 2013 World Series winner, you have no idea, which is only part of what makes this a terrible play. It’s also one of the worst house edges you could possibly find. The house typically takes 4.5 percent of a standard team vs. team bet, meaning if you bet $100 on a game that’s deemed evenly matched, you won’t win $100. You have to bet $110 to win $100. A horse race, at least on the big-league tracks of New York, has a 16 percent takeout.

 

The MLB futures wager has a house edge of between 23 and 24 percent in the leading online case. Basically, there will be only one outcome, and the house doesn’t want to take a bath on any of them. A team like the Blue Jays, now at 11-1, would have a 1/12 chance to win the World Series (at least in the house’s view of the public’s view) under a completely fair system. Add up all of these numbers under a fair system and you get not a 100 percent chance but a 131 percent chance, and 1-(100/131) = .765, meaning only 76.5 percent of the money is returned.

In one way, the 2013 World Series futures market is immensely intriguing, with no team shorter than 8-1. You win, you’re going to get paid. Just three years ago, by contrast, the defending champion Yankees opened shorter than 3-1. This year the defending champs are 12-1, in a large pack of co-fifth choices.

However, the problem is that this would be a lot of fun if you were betting on who would win Major League Baseball’s President’s Trophy, which Brent S. Gambill in his Baseball Proguestus piece suggested adding for the team with the best record. But then your team has to win three near-toss-up playoff series.

So what would I do? Bet on who’s going to get in, and in this way, taking any AL East team under the current odds seems like the worst of the worst of this bet.

Instead of listing the odds as they are usually displayed, from top to Astros, here they are broken down by division, converted to a perceived chance of winning, which is (1/1+odds) divided by the ~1.31 house edge adjustment.

American League East			American League Central			American League West
Team	Odds	Chance	Team	Odds	Chance	Team	Odds	Chance
NYY	11-1	6.4%	DET	8.5-1	8.1%	LAA	12-1	5.9%
TOR	11-1	6.4%	CWS	30-1	2.5%	TEX	12-1	5.9%
TB	25-1	2.9%	CLE	75-1	1.0%	OAK	18-1	4.0%
BOS	30-1	2.5%	KC	100-1	0.8%	SEA	66-1	1.1%
BAL	33-1	2.3%	MIN	100-1	0.8%	HOU	200-1	0.4%
Division		20.4%	Division		13.0%	Division		17.3%

 

National League East			National League Central			National League West
Team	Odds	Chance	Team	Odds	Chance	Team	Odds	Chance
WAS	8.5-1	8.1%	CIN	12-1	5.9%	LAD	12-1	5.9%
ATL	16-1	4.5%	STL	20-1	3.6%	SFO	12-1	5.9%
PHL	16-1	4.5%	MIL	28-1	2.6%	ARZ	40-1	1.9%
NYM	66-1	1.1%	PIT	45-1	1.7%	SD	75-1	1.0%
MIA	100-1	0.8%	CHC	75-1	1.0%	COL	100-1	0.8%
Division		19.0%	Division		14.8%	Division		15.4%

The odds show these to be the division’s perceived chances of winning according to the oddsmakers. Meaning if you like a certain division’s chances better than the following figures, that division might be where you lean, keeping in mind that the divisions’ odds of winning may be closer than you think to even 16.7 percent across the board.

AL East: 20.4%
NL East: 19.0%
AL West: 17.3%
NL West: 15.4%
NL Central: 14.8%
AL Central: 13.0%

I love the AL Central and detest the AL East, which may see trouble even finding a second team. Bet an AL East team and you have little margin for error in your schedule, lots of competition even to get there, and really not much of an advantage if they do.

This is why the Tigers were my pick last year, and while they didn’t win, I was still fairly proud of it. (Try telling that in a casino.) If your chances of winning the World Series are your chances of getting to the playoffs times chances of winning given a playoff appearance, I tend to treat the second number as very close to a constant, though wild cards have to be treated differently now.

Other things to keep in mind:

Not to pick even more on the Astros, but the AL West should get a big boost in its chances of getting two teams or maybe even three from the arrival of Houston, which is not operating with 2013 in mind. Similarly, if you bet on an NL Central team, you face a more difficult road to the wild card now.

Try to predict moves that may jolt the odds. I anticipate the Royals could shorten in price just based on reports of their hotstovery. I think the Dodgers, who have on speculation alone (or maybe Brandon League) gone from 18-1 to 12-1, may end up being the favorite, which means if you’re going to bet on them, now seems like the time that you should.

But really, you shouldn’t.

Zachary Levine is an author of Baseball Prospectus. Follow @zacharylevine
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