Odds and Ends: Week 7

A good sports betting column should be backed by a profitable gambler with a proven track record. It should offer picks generated by a sophisticated and conceptually sound model. Most importantly, it should treat the subject with the seriousness it warrants.

This is not that column.

Instead, this will be an off-beat look at the sports betting industry-- why Vegas keeps winning, why gambling advice is almost certainly not worth the money, and the structural reasons why even if a bettor were profitable, anything they wrote would be unlikely to make their readers net profitable, too.

While we're at it, we'll discuss ways to minimize Vegas' edge and make recreational betting more fun, explain how to gain an advantage in your office pick pools, preview games through an offbeat lens (with picks guaranteed to be no worse than chance), and tackle various other Odds and Ends along the way.

Tracking the Unders

In 2022 and 2023, mass-betting the unders was incredibly profitable over the first 6 weeks and essentially just broke even after that. I hypothesized this year that maybe all we needed to do to make a killing was to start our "mass-bet the unders" strategy earlier in the season.

That looked great... for two weeks. Last week, Unders turned in their third straight losing performance, this one especially catastrophic-- a 3-10-1 showing that would have wiped out 52% of any money you staked. Overall, anyone who bet $10 on the under in every game would have lost $72.73 last week and would be down $52.73 since Week 1. (Every week, I've suggested bettors should consider quitting while they were ahead. That ship has now sailed, but perhaps consider quitting before you're even further behind.)

As bad as the week was for the $10-per-game betting strategy, it's even more devastating for the equal-share-of-the-bankroll betting strategy. With that method of bet sizing, a gambler would be down $83.32. More than the slightly larger losses, though, a single terrible week like this dramatically reduces the chances of ever coming back; even if Unders have a perfect 15-0 record this week, the total bankroll will still be $13.61 lower than it was at the start of the process.

(My bold prediction is that Unders will not go 15-0 this week.)

Vegas is Fallible. (You're Still Not Going to Beat It.)

I was going to write this week about prop bets-- which are worth discussing, and we'll get to them soon-- but I saw a tweet his morning that gets to the heart of a lot of what I aim to cover with this column.

Our article on rest advantage in the NFL is now published @FrontiersIn (with @DataWithBliss)https://t.co/A7Z5D78hjJ pic.twitter.com/lKQyROjT6D

— Michael Lopez (@StatsbyLopez) October 17, 2024

Michael Lopez, for those who don't know, is the Director of Data and Analytics for the NFL. His job is to analyze the sport and report his findings to the league itself. When the NFL considered changing the kickoff heading into 2024, Lopez's department modeled the impacts of the various proposals. When the NFL looks into overtime formats, Lopez's department prepares reports on various aspects such as length and fairness.

As part of the collective bargaining agreement signed in 2011, the NFL included rule changes designed to lessen the advantage of a "rest differential", which is when one team has more days off heading into a game than the other (either because they're coming off of a bye or because they played on Thursday night the week before). Most consequentially, the new CBA mandated that teams give their players four days off during the bye, greatly reducing the number of "extra" practices that team got compared to their upcoming opponent.

Lopez's department was tasked with measuring how successful those changes were. But they also decided to look at something very interesting for our purposes-- how the pre-game point spread has reacted to the changes. (Used as a proxy for how well the public has understood and adapted to the new reality.)

The entire paper is free to read for anyone interested. There's plenty of math, but also plenty of plainly-written explanations that are accessible to even a lay audience. This section, in particular, is crucial:

Model results suggest that the Bye advantage provided a significant edge before the CBA change, but that most, if not all, of the rest benefit has since been eliminated. Using Model 2, prior to 2011, there is a 99.6% probability that the Bye advantage had a positive effect on point differential, and our best estimate of the benefit is +2.21 points per game (95% credible interval, 0.61–3.80). The effect size of this Bye advantage is similar to that of the home advantage; that is, prior to 2011, it was as beneficial to play off a bye week as it was to play at home.

Post 2011, the Bye advantage does not provide a statistically detectable benefit. Model 2 implies a 67.9% probability that the Bye advantage has a positive effect on point differential, with a median estimate of +0.31 points per game (95% credible interval, −1.01 to 1.64).

While the benefit of the Bye edge has dropped post 2011, betting markets have moved in the opposite direction. Using Model 4, betting markets increased the value of the Bye advantage from +0.39 points per game (95% credible interval, 0.00–0.78) pre CBA to +0.97 points per game (95% credible interval, 0.65–1.28) post CBA.

It's important to unpack what we're seeing here. The league's own analytics department looked at a decade's worth of data and found that Las Vegas was underrating the effect of rest differential in a way that was systematic, sizeable, and exploitable.

Operating with a 1-week rest advantage was worth 2.21 points, but Vegas only valued it at 0.39 points. From 2002 to 2010, one could have made a significant profit by blindly betting on teams coming off of a bye that were facing teams that weren't coming off a bye. Home teams covered the spread 55.8% of the time in that scenario, while road teams covered 56.9%; either value is more than enough to overcome the vig.

For those who think Vegas is infallible, this is a deathblow. That's a rather serious blind spot. The problem is that... for most of this period, very few people were making note of this advantage and identifying it as a profitable betting strategy. The most influential paper on this inefficiency was published in 2014, three years after it had (unknown to the authors) already been closed.

Perhaps some savvy bettors had identified this edge in real time. If so, they were too busy profiting from it to talk about it. By the time the public had caught on, the edge was gone.

It's also interesting that Vegas spreads increased the implied value of a rest advantage over the last decade at the same time that the value of that advantage disappeared. Perhaps this is another example of a market inefficiency, a new blind spot Vegas has developed. They thought the rest advantage wasn't real back when it was, and now they think the rest advantage is real even though it's not.

But for anyone looking to beat the house, there's another possibility that should be especially chilling. Quoting once again from the paper:

Though the Bye advantage estimates for the point spread do not directly reflect those for point differential, the estimates and uncertainty intervals are sufficiently close that any inefficiency is unlikely to be exploitable. For example, a simple strategy of backing teams with a Bye disadvantage against the point spread would have won 52% of bets since 2011. While >50%, this margin would not be profitable after accounting for betting market vig.

Perhaps Vegas has once again failed to accurately model the impact of a rest advantage since the 2011 CBA. More perniciously, perhaps Vegas knows perfectly well how much of an advantage additional rest provides and is setting lines perfectly calibrated to maximize the losses of anyone using rest advantage as a betting strategy (at a time when doing so is more popular than ever) without being exploitable by anyone who is running a contrarian strategy and betting teams with a rest deficit.

As an afterthought, the paper notes that in areas where advantages are well-researched and well-known, Vegas' accuracy in estimating them is impressive.

While estimating the home advantage was not a primary goal of our research, in accounting for home advantage in our models, we note a few interesting results. First, while betting markets were behind trends in the Bye advantage impact, for the home advantage, betting markets appear to be near perfect proxies for point differential results.

You don't see many betting strategies advocating for blindly backing home teams or road teams, so the estimate of home field advantage is very accurate.

There are a lot of fascinating findings in the study with wide-ranging implications, and I'd encourage anyone who is interested to read the whole thing. But for today I wanted to take the opportunity to remind everyone that just because Vegas isn't perfect doesn't mean we stand a chance of beating it.

Lines I'm Seeing