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 hypothesis... is faring poorly after yet another poor showing from our "mass bet the unders" strategy. It's almost like we shouldn't expect to find One Weird Trick To Let You Beat Vegas And Print Money Without Any Effort Whatsoever. (Based on the online advertisements I see, someone really should tell all the other touts this.)

Unders went 5-8-1 in Week 11 and are 71-76-3 since we started tracking. If you'd put $10 on the under in every game (and saw the same lines I saw, and got all action at -110), you'd be running a 7.6% loss right now, which amounts to $114.55 overall. It turns out the best advice I gave was back in Weeks 3-6 when I advised you to consider quitting while you were still ahead.

By contrast, the "snowball strategy" (starting with a $160 bankroll, betting equal amounts on every game, and rolling over profits and losses) is down $120.54. The bad news is the remaining bankroll has fallen below $40, and there's no coming back from that; unders could go undefeated over the next two weeks and the "snowball strategy" still wouldn't be back to where it started. (Though the "equal bets on all games" strategy would go from 8% down to 8% up on the year.)

The good news is we've now reached the "maximum downside risk is capped" stage of the season; the most the snowball strategy can lose from here is less than $40, while if unders keep losing at the rate they've been losing, the fixed-bet strategy could easily blow right past that.

Big Fortunes Are Built On Bad Bets

Back in Week 5, I laid out the math behind bet sizing, which is the process of deciding how much to bet based on the size of your bankroll and the size of your edge, known as "Kelly bet-sizing". That math advocates for much smaller bets than people would naively think: if you had a guaranteed 10% edge over the house, you should bet just 1/12th of your bankroll, and the long-run expectation is a 0.42% increase in your bankroll per bet. If you started with $5000 and wanted to become a millionaire, you should expect to need 1,265 bets. (And that's before considering taxes.)

Remember that this isn't a conservative prescription; this is the value that maximizes your long-run expected growth. Betting any other value would make the path to your first million dollars take even longer in expectation. (If you deviate sufficiently far from optimal bet sizing, you'll actually lose money over time, even when you're betting with a guaranteed 10% edge.)

If this seems bleak, well... so far, this is an extremely rosy picture of reality. Because this is the math for when we know the size of our edge, which will never happen. We might think we have a 10% edge, but there's a good chance we're wrong. And the damage to our bankroll of being wrong is not symmetric-- the gains if we're underestimating our edge are not as significant as the losses if we're overestimating our edge (which is more likely, anyway). Because of this, no serious gamblers "bet Kelly". Instead, they bet "fractional Kelly"-- meaning whatever the math says, they bet a fraction of that. 1/4th is a popular target, though depending on the nature of the bet, you might see even smaller fractions like 1/8th or 1/10th. (Generally, even 1/2 Kelly is considered overconfident and reckless.)

Again, I can't reinforce this enough: the reason for betting fractional Kelly isn't because you're risk-averse; it's because this is the number that maximizes your bankroll growth in the long run. At 1/4th Kelly, you're looking at 5,000 bets at an estimated 10% edge before you add that coveted second comma to your bankroll. But at anything other than 1/4th Kelly, you're looking at even longer. (Potentially infinitely long if you go broke in the pursuit.)

How do you make a living gambling? A massive amount of very risky, very patient work. How do you make a fortune gambling? You ignore optimal bet sizing, wager way too much, and hope you get absurdly lucky and get rich before you go bankrupt. You can go from $5000 to $1,000,000 in just eight bets if you go double-or-nothing on each and win them all. (Of course, even one loss leaves you broke. And the odds of at least one loss are 99.6%.)

The people who made the most money gambling are usually the ones who made the worst bets. (Most people who made millions gambling in America won it in the lottery despite the lottery being one of the worst bets available-- as little as 50% of money wagered is returned to the players, which would be like if sportsbooks let you bet against the spread, kept your wager if you lost, and returned your wager with no extra winnings if you won.)

There's a belief that if you want to get rich, you should study rich people and do what they did. This is spectacularly dumb because of something called survivorship bias: by only looking at trials that were successful you miss all the trials that were unsuccessful. If a thousand people tried a strategy and one wound up rich while the other 999 wound up destitute, that was a dumb strategy and you probably shouldn't be giving it a try.

We have seen this in action. In 2020, Sam Bankman-Fried, a 31-year-old wunderkind with an estimated 11-figure net worth, posted a Twitter thread where he walked through the math behind Kelly bet-sizing and then just... disagreed with it. He essentially said that he was a special unicorn who was going to repeatedly bet five times Kelly because his value function was non-linear and so he was willing to accept more risk to maximize his return. But again, Kelly isn't conservative; that's the value that maximizes expected return!

(This blog post runs through a bunch of simulations to see just how lucky you'd have to be to wind up with more money betting 5x Kelly. The value was so extreme the author's laptop broke before he could find it.)

Bankman-Fried got rich by making a bunch of absurdly overleveraged bets based on a misunderstanding of the underlying math and continually getting lucky enough to not be punished for his error. And once he was rich, he continued making absurdly overleveraged bets until his luck ran out; his net worth fell by $9.1 billion on November 8th, 2022-- the largest single-day drop for anyone in history-- after a reckless bet resulted in a bank run on his company. His net worth continued to fall to zero, Bankman-Fried was convicted of seven counts of conspiracy and fraud and last March was sentenced to 25 years in prison.

(There's a theory called nominative determinism that suggests a person's name will influence the path their life takes. Someone named Stephen Baker, for instance, might be more likely to work as a baker or a pastry chef than someone named Steven Painter. This is probably just junk science, but still, witnessing the fate of Mr. "Bank Man Fried" gives one at least a moment's pause.)

This is a useful lesson. The numbers behind exponential growth through wagering are dismal, but the math is the math. And anytime you see anyone who has been extraordinarily successful but isn't preaching bankroll discipline, assume you're witnessing survivorship bias firsthand. Anyone trying to sell you an easy road is selling you a scam.

As someone who talks about sports on the internet, I see all these scams being pushed and I recognize how seductive they can seem. But the only sustainable path to profit (in this space or any other) is slow and laborious; for anyone who thinks they're a special unicorn and the laws of math don't apply to them, "up big" is merely a precursor to "down bad".

This is why I'm such a fan of the second option: bet for fun, wager only what you can afford to lose, and count your losses as the cost of entertainment.

Lines I'm Seeing