How to Bet the Moneyline

Picking a straight-up winner (as opposed to picking against the spread) is called betting the moneyline.  Betting the moneyline is very simple; the pay odds are listed for both teams, you pick one, and that’s it.  For example, last week the Panthers were +230 playing against the Giants.  If you picked the Panthers to win and bet $100, and they won, you would win $230.  If not, you would lose your $100.  And that’s it.  The only trick, of course, is deciding which side to bet.  This can be figured out from the pay odds.  The expected value of a decision is found by multiplying each potential outcome’s value by the probability of that outcome occurring, then adding them up.  In this case, it’s worth $230 if the Panthers win, and let’s say that happens p percent of the time (since we don’t know the actual number yet).  If the Panthers lose, it’s worth -$100 since we lose our bet.  This happens 1-p percent of the time, since probabilities must add to 1.  Our expected value is then 230*p -100*(1-p).  We will then break even if the expected value is 0; in the long run, we expect to win as much money as we lose.  This would be written 230*p – 100*(1-p) = 0.  If we solve this equation for p, we get p = 100/330 = .30303.  So if the Panthers beat the Giants 30.3% of the time, we break even.  If they win more often and we pick the Panthers, we expect to make money; if they win less often and we pick the Panthers, we expect to lose money.  My model directly predicts win probabilities, which can be used for exactly this purpose.

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