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.

Advertisements
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s