Matchup Handicapping can provide cappers and bettors with a “house advantage” in picking NFL pointspread winners. Since it requires 52.38 percent pointspread winners to break even at 10 percent juice with all wagers of equal amount, the house advantage is defined as a long term winning venture that can provide 54 to 58 percent against the spread (ATS) winners over the course of an NFL season. Such an advantage realistically places cappers and bettors in a winning environment and I maintain that an ATS winning percentage of 54 to 58 percent over an NFL season is a highly realistic and an optimistic expectation and REALISTIC.
Now, many people may think this is too low of a winning percentage to be worth risking hard earned money, but I beg to differ. The key to winning and maximizing profits with a "modest" winning percentage is to have a sufficient number of plays. For example, a bettor actually turns a higher profit with 56 percent winners over 100 plays than with 70 percent winners over 20 plays assuming all wagers are equal amounts. Besides, most cappers and bettors love the greater amount of action. Thus, Matchup Handicapping was designed to achieve a modest winning percentage with a relatively high yield of plays. Besides, I have no idea of how to pick consistent 70% winners. I'll leave that to the scamming touts.
Since a moderate winning percentage should experience a variety of winning and losing streaks, there is no guarantee on any specific time frame for posting a winning record. The cold reality is that there will be losing streaks that could last weeks or even months. Why? Because 55 percent winners equate to 45 percent losers that will certainly lead to down periods. Remember, sports handicapping is not an exact science and there is no such games as locks or guaranteed plays. Again, I will leave the locks and guarantees to the sales pitches of the tout services. Have your credit card number ready!
Think of a weighted coin that will flip the heads side up about 56 percent of the time. Would a bettor feel good betting the heads side up? You better believe it. With a 56 percent advantage, the proper wagering strategy would be to risk small amounts on many coin flips. Sure there will be losing streaks where tails are out-flipping the heads, but the 56 percent advantage should certainly provide a long term winning prospect. The absolute wrong strategy would be to risk large amounts at a time since a 56 percent advantage hardly qualifies as a can’t lose proposition. If the wagers are too high, a losing streak could wipe out the bankroll, nullifying the 56 percent advantage.
Any wise and disciplined money management approach requires a bankroll to begin the season. The bankroll amount is a lump sum of cash set aside in a separate account and is what the player can afford to lose without undermining or destabilizing the bettor’s livelihood. Think of it as strictly disposable income for investment or venture capital enterprises. The paramount question to ask of oneself is “can I afford to lose all this money?” If and only if the answer is yes, then you can start making wagers.
I recommend that all wagers during a season be 5 percent or 1/20th of the starting bankroll amount for a winning wager for two reasons. One, a winning strategy risks small wagers over a frequent number of plays; and two, there just isn’t a large enough winning percentage disparity to warrant some plays being worth more than others. For example, if your starting bankroll is $10,000, your betting unit will be risk $550 to win $500 per each and every wager.
Matchup Handicapping generally offers about 5 NFL plays per week during the regular season weeks 4 through 17. Another 4 or so plays occur during the playoffs on average. This generates about 75 plays per NFL season. A 55% winning percentage would yield about 41 wins and 34 losses ATS, or a gain of 3.6 units to the bankroll, assuming a 10% juice. Using our starting bankroll of $10,000 and assuming the 55% success rate, the season winnings would be 3.6 x $500 = $1,800 for about 5 months of work. Under this scenario, you would exit the season with $11,800. How is your 401K and savings investments performing lately?
Gambler’s Fallacy
Many bettors hold to the mistaken belief that the chances of winning increase during losing periods. For example, if a handicapping method typically produces 54 to 58 percent winners and the last five bets were losers, bettors suffering from gambler’s fallacy will believe that their next wager will have an increased chance of winning. Often times this disastrous thought process leads to larger wagers because the gamblers feel they are “due” to win. Unfortunately, anyone who believes they are due to win are many times only increasing the probability of losing. Progressive betting schemes are the result of gambler’s fallacy and have caused the ruin of many a gambler.
The problem with this logic is the handicapping method is an inanimate entity with no memory. Each pointspread selection is unbiased and unprejudiced and independent of the last. Regardless of the outcome of prior wagers, each and every future bet will have the same 54 to 58 percent chance of winning, provided the handicapping method is truly capable of producing 54 to 58 percent winners over time. Winning and losing streaks should not be confused with gambler's fallacy.
Take note that the single biggest mistake made in sports betting is viewing it as a short term prospect. On the contrary, a successful winning strategy involves a long term and disciplined investment approach. While there are no guarantees in a winning percentage, Matchup Handicapping has a realistic understanding that a 54 to 58 percent winning percentage over an NFL season is both attainable and acceptable.
NFL Preseason
I view NFL preseason football handicapping as a total crapshoot and nothing but an exercise in forcing the action to generate an interest in a meaningless NFL pre-season game. Think about that. You are placing a wager on a meaningless event. How does one even begin to handicap such an affair? Were not the hapless Lions undefeated last year in the pre-season?
The Matchup Handicapping picks begin on week four of the NFL season as the first three games are used to generate accurate team performance ratings. Needless to say, preseason stats are not used.
Showing posts with label Wager Guidelines. Show all posts
Showing posts with label Wager Guidelines. Show all posts
Thursday, August 8, 2013
Friday, January 8, 2010
Beware the Big Game Hunters
NFL playoff games are played on a grand stage as each game has its own individual time slot and each game is discussed and analyzed to the nth degree during the week leading up to the game. Every playoff team is under the microscope as every "expert" from TV, radio, websites and publications are all front and center to render their opinions on how the teams will ultimately perform in their do or die scenarios. Although a lack of information is certainly not the problem, this increase in the spotlight for these particular games can present a real problem to cappers and bettors.
The need to place a wager because it is a playoff game is very prevalent in the sports betting world. The feeling of "the bigger the game, the bigger the itch to lay down some action" plagues us all. Here is where discipline needs to take the day. Bettors cannot allow themselves to fall victim to tout services and handicappers who will ALWAYS have a play on a big game. Let's face it they only get paid for offering selections.
Forcing the action at playoff time is never a good idea and will usually result in lowering the net worth of the wagering party. If you do not have a strong opinion on the game (and most you will not), then absolutely pass on the game and wait for a future opportunity. Your bankroll will thank you.
The need to place a wager because it is a playoff game is very prevalent in the sports betting world. The feeling of "the bigger the game, the bigger the itch to lay down some action" plagues us all. Here is where discipline needs to take the day. Bettors cannot allow themselves to fall victim to tout services and handicappers who will ALWAYS have a play on a big game. Let's face it they only get paid for offering selections.
Forcing the action at playoff time is never a good idea and will usually result in lowering the net worth of the wagering party. If you do not have a strong opinion on the game (and most you will not), then absolutely pass on the game and wait for a future opportunity. Your bankroll will thank you.
Tuesday, October 27, 2009
Purchasing the Hook
I stand corrected. After further review, it is indeed a wise choice to purchase a half-point or hook when the line is 2.5 or 3.5. When? Always when the price is right! (no more than 20% juice)
This is not a knee-jerk reaction to losing the Texans game this past Sunday at -3.5 (they won by 3). It is a conclusion based upon a pointspread study for the NFL seasons 2002 to present.
The study shows that 8.5% of all the NFL games over the time period have been decided by 3 points on the scoreboard. This is by far the most common straight-up point differential for NFL games. The fact that NFL teams kick numerous field goals throughout many a game and most overtime games are decided by a field goal certainly add to the frequency of three point scoring margins.
Furthermore, the 8.5% applies to all the games. The three point scoring margin rate increases to 10% when the line has a favorite laying 2.5 or 3.5. This makes sense because the opponents are projected to be about 3 points apart. Since 2002 to present day, there have been 243 games with the favorite laying 2.5 or 3.5, and 24 of these games finished with a three point scoring margin. Therefore, about 10% of these games would benefit from buying the hook. If you are playing the favorite, you buy down from -3.5 to -3. If you are playing the dog, you buy up from 2.5 to 3.
To prove the point, let’s analyze buying the hook over ten plays. Presume that a bettor over a period of time is playing ten favorites who are all laying 3.5 points at the standard 10% juice (110/100). Without buying any hooks, the bettor wins five and loses five. The net take is therefore -0.5 units (5-5) – (0.10 x 5).
Since there are ten games in our study and 10% of these games typically hit on three as a final scoring margin, we will assume one game had a favorite winning the game outright by three points, therefore the bettor lost one of these contests by a half-point.
Now suppose the bettor purchased the hook at 20% juice (120/100) for all these games. The bettor’s ATS record would now be five wins, four losses and one push. By buying the hook in all ten games, the one game that hit on three now becomes a push rather than a loss. The net take is now +0.2 units computed by (5-4) – (0.20 x 4).
That is a swing of 0.7 units to the plus side and if it happens three times over the course of a season, the swing is 2.1 units. It does make a positive difference.
Suppose the bettor would lose all ten bets without buying the hook and salvage a push in one of the ten games with purchased hooks. Losing all ten at 10% juice equates to -11 units (-10 – (.10 x 10). Losing nine at 20% juice and pushing one shows -10.8 units (-9 – (0.20 x 9). It is still a positive swing to buy the hook doing the worst case scenario.
Again, these findings are based on the 2.5 and 3.5 lines being at 10% juice and the hook being bought at 20% juice.
Is there a breakeven point? Yes, a breakeven point occurs when only 5% of the games land on three and the bettor only picks four out of ten winners. The bottom line is that 10% of the games are hitting on three and most bettors should be able to pick more than 40% winners.
It is the position of Matchup Handicapping that if a pointspread selection is a favorite laying 3.5 or a dog getting 2.5, purchase the half-point at 20% juice ALWAYS until further notice.
I made a mistake with an incorrect assumption and I stand corrected. I paid with a losing pick on the Texans.
This is not a knee-jerk reaction to losing the Texans game this past Sunday at -3.5 (they won by 3). It is a conclusion based upon a pointspread study for the NFL seasons 2002 to present.
The study shows that 8.5% of all the NFL games over the time period have been decided by 3 points on the scoreboard. This is by far the most common straight-up point differential for NFL games. The fact that NFL teams kick numerous field goals throughout many a game and most overtime games are decided by a field goal certainly add to the frequency of three point scoring margins.
Furthermore, the 8.5% applies to all the games. The three point scoring margin rate increases to 10% when the line has a favorite laying 2.5 or 3.5. This makes sense because the opponents are projected to be about 3 points apart. Since 2002 to present day, there have been 243 games with the favorite laying 2.5 or 3.5, and 24 of these games finished with a three point scoring margin. Therefore, about 10% of these games would benefit from buying the hook. If you are playing the favorite, you buy down from -3.5 to -3. If you are playing the dog, you buy up from 2.5 to 3.
To prove the point, let’s analyze buying the hook over ten plays. Presume that a bettor over a period of time is playing ten favorites who are all laying 3.5 points at the standard 10% juice (110/100). Without buying any hooks, the bettor wins five and loses five. The net take is therefore -0.5 units (5-5) – (0.10 x 5).
Since there are ten games in our study and 10% of these games typically hit on three as a final scoring margin, we will assume one game had a favorite winning the game outright by three points, therefore the bettor lost one of these contests by a half-point.
Now suppose the bettor purchased the hook at 20% juice (120/100) for all these games. The bettor’s ATS record would now be five wins, four losses and one push. By buying the hook in all ten games, the one game that hit on three now becomes a push rather than a loss. The net take is now +0.2 units computed by (5-4) – (0.20 x 4).
That is a swing of 0.7 units to the plus side and if it happens three times over the course of a season, the swing is 2.1 units. It does make a positive difference.
Suppose the bettor would lose all ten bets without buying the hook and salvage a push in one of the ten games with purchased hooks. Losing all ten at 10% juice equates to -11 units (-10 – (.10 x 10). Losing nine at 20% juice and pushing one shows -10.8 units (-9 – (0.20 x 9). It is still a positive swing to buy the hook doing the worst case scenario.
Again, these findings are based on the 2.5 and 3.5 lines being at 10% juice and the hook being bought at 20% juice.
Is there a breakeven point? Yes, a breakeven point occurs when only 5% of the games land on three and the bettor only picks four out of ten winners. The bottom line is that 10% of the games are hitting on three and most bettors should be able to pick more than 40% winners.
It is the position of Matchup Handicapping that if a pointspread selection is a favorite laying 3.5 or a dog getting 2.5, purchase the half-point at 20% juice ALWAYS until further notice.
I made a mistake with an incorrect assumption and I stand corrected. I paid with a losing pick on the Texans.
Thursday, August 13, 2009
The Cost of Pay to Play
Sports gamblers all realize there is a “pay to play” cost associated with placing bets, whether in Vegas, offshore or a local book. Known as the vigorish or juice, the cost is that a straight bet pays out less in winnings than what is paid in for losses. A 10% juice is the standard vig for straight bets and means a bettor must risk in $11 to win $10 ratios. For an 11-10 wager, a losing bet costs the gambler $11 while a winning bet nets a $10 gain.
The required winning percentage for straight bets with 10% juice and all wagers being of equal value is 52.4%. Otherwise known as the breakeven point, straight game bettors must pick 11 winners out of every 21 games to straddle the line between profit and loss. Picking 50% winners is therefore a losing proposition for the gambler, but a winning proposition for the sportsbook. Hence, the sportsbook enjoys a house advantage with every placed bet. Put another way, the sportsbook has a built-in margin of error to help sustain a losing streak with no significant long term adverse impacts. Oh, the everyday gambler should be so lucky.
Thus, the gambler must win at an above average rate to overcome the vig and reap winnings. But, is 52.4% the true breakeven point? Not if you are paying for pointspread picks. Gamblers who enlist professional handicapping advice do so at a price. Thus, the pay to play costs increase even more. Now, the gambler must realize that 52.4% winners is not good enough to stay out of the red.
For example, consider a pro capper who touts a recent pointspread record of 11 winners and 9 losers for 55% winners. From the capper’s perspective, assuming all the selections were of equal value, this 55% winning percentage is certainly being advertised as a winning period. The capper can even claim that the selections have netted a plus 1.1 betting unit with all equal wagers and 10% juice. The plus 1.1 unit is computed by (11 minus 9) minus (10% times the 9 losing bets) equals 2 minus 0.9 equals plus 1.1 unit.
Why only 55% winners you ask? Because it is a realistic long term winning percentage for a professional capper. Forget about the outrageous claims of 60% or more when projecting over the long term. Remember, the single biggest mistake made by sports gamblers is focusing short term and not seeing the big picture of the long term. The tout services capitalize big time on the shortcomings of the short term outlook of many a gambler.
Unfortunately from the gambler’s perspective, the +1.1 unit does not factor in the money paid for the selections. The bettor who paid out money for these 20 selections certainly does not end up with plus 1.1 unit, but rather plus 1.1 units minus the amount of money paid to the pro capper. How can we quantify this action?
Let’s say these 20 paid selections were over a month of the NFL season (five picks per week) and a typical NFL monthly plan charges about $275. On the surface, this doesn’t appear excessive as it computes to $13.75 per pick. At the conclusion of the month, the bettor is at +1.1 betting unit minus the $275 for the handicapping service. Thus, unless the bettor is wagering $250 ($275/1.1) or more per game, the bettor has a losing month.
Using the above scenario, a $100 player would have lost $165, a $200 player would have lost $55 and the $250 player would have broke even for the month. In contrast, the pro capper is touting a winning month at 55% winners.
Looking at these numbers, unless a gambler can afford to wager at least $300 per game in the NFL, paying for selections may not be an affordable option. And don’t fall victim to the cappers who are quick to throw in baseball, basketball and college selections as well in order to increase the number of plays to reduce the per game paid selection fee. This is fine if the winning percentage is still in the 55% range after all these extra selections. If not, you may be digging a deeper hole.
Exercise caution with a “shotgun” handicapper whose claim to fame is “any sport anytime.” You don't want to pay for a jack of all trades who makes pick after pick, day after day in any and all sporting events. You want to pay for a specialist, that is a capper who truly specializes in a particular sport and has a bonafide winning track record over the long term.
It is my opinion that the smaller players would be better served doing their own research from publications and websites to formulate their own informed pointspread selections. There are numerous weekly publications that provide excellent handicapping information for the NFL games and they cost a lot less than paying a handicapping service.
The required winning percentage for straight bets with 10% juice and all wagers being of equal value is 52.4%. Otherwise known as the breakeven point, straight game bettors must pick 11 winners out of every 21 games to straddle the line between profit and loss. Picking 50% winners is therefore a losing proposition for the gambler, but a winning proposition for the sportsbook. Hence, the sportsbook enjoys a house advantage with every placed bet. Put another way, the sportsbook has a built-in margin of error to help sustain a losing streak with no significant long term adverse impacts. Oh, the everyday gambler should be so lucky.
Thus, the gambler must win at an above average rate to overcome the vig and reap winnings. But, is 52.4% the true breakeven point? Not if you are paying for pointspread picks. Gamblers who enlist professional handicapping advice do so at a price. Thus, the pay to play costs increase even more. Now, the gambler must realize that 52.4% winners is not good enough to stay out of the red.
For example, consider a pro capper who touts a recent pointspread record of 11 winners and 9 losers for 55% winners. From the capper’s perspective, assuming all the selections were of equal value, this 55% winning percentage is certainly being advertised as a winning period. The capper can even claim that the selections have netted a plus 1.1 betting unit with all equal wagers and 10% juice. The plus 1.1 unit is computed by (11 minus 9) minus (10% times the 9 losing bets) equals 2 minus 0.9 equals plus 1.1 unit.
Why only 55% winners you ask? Because it is a realistic long term winning percentage for a professional capper. Forget about the outrageous claims of 60% or more when projecting over the long term. Remember, the single biggest mistake made by sports gamblers is focusing short term and not seeing the big picture of the long term. The tout services capitalize big time on the shortcomings of the short term outlook of many a gambler.
Unfortunately from the gambler’s perspective, the +1.1 unit does not factor in the money paid for the selections. The bettor who paid out money for these 20 selections certainly does not end up with plus 1.1 unit, but rather plus 1.1 units minus the amount of money paid to the pro capper. How can we quantify this action?
Let’s say these 20 paid selections were over a month of the NFL season (five picks per week) and a typical NFL monthly plan charges about $275. On the surface, this doesn’t appear excessive as it computes to $13.75 per pick. At the conclusion of the month, the bettor is at +1.1 betting unit minus the $275 for the handicapping service. Thus, unless the bettor is wagering $250 ($275/1.1) or more per game, the bettor has a losing month.
Using the above scenario, a $100 player would have lost $165, a $200 player would have lost $55 and the $250 player would have broke even for the month. In contrast, the pro capper is touting a winning month at 55% winners.
Looking at these numbers, unless a gambler can afford to wager at least $300 per game in the NFL, paying for selections may not be an affordable option. And don’t fall victim to the cappers who are quick to throw in baseball, basketball and college selections as well in order to increase the number of plays to reduce the per game paid selection fee. This is fine if the winning percentage is still in the 55% range after all these extra selections. If not, you may be digging a deeper hole.
Exercise caution with a “shotgun” handicapper whose claim to fame is “any sport anytime.” You don't want to pay for a jack of all trades who makes pick after pick, day after day in any and all sporting events. You want to pay for a specialist, that is a capper who truly specializes in a particular sport and has a bonafide winning track record over the long term.
It is my opinion that the smaller players would be better served doing their own research from publications and websites to formulate their own informed pointspread selections. There are numerous weekly publications that provide excellent handicapping information for the NFL games and they cost a lot less than paying a handicapping service.
Thursday, June 25, 2009
Parlays
A parlay is a combination bet where all the bets fall under a single wager. Each bet must cover to win the wager. For example, a three team parlay involves three bets and if all three cover, the bettor collects six times the wager amount. Sounds good except for the fact it only takes one bet to lose and the total wager amount is lost. Important to note is that depending on the book, a push in a parlay results either in a no bet situation, or the bet is pushed down to fewer games. Under the push down rule, a push in a three team parlay converts the bet into a two team parlay and a push in a two team parlay would become a straight bet.
The inevitable question arises to whether a parlay bet is a sound investment strategy. In order to answer this question, the important number to consider is the projected success rate for picking pointspread winners. If a bettor is picking less than 52.38% winners, straight bets are better than parlays as the straight bets will lose at a slower rate than the parlays. The consolation for making straight bets would be the bankroll won’t be wiped out as fast. The bottom line is that both straight bets and parlays will be losing propositions for failure to pick consistent winners. If you cannot pick consistent winners, why are you betting anyway?
For the situation where the bettor can pick consistent winners, let’s use some statistical mathematics to crunch the probability numbers. Let’s use a two team parlay where we will back Team A and Team B. The first step is to determine all the possible outcomes for each of the two bets.
There is one combination of two wins. (Team A and Team B cover).
There are two combinations of one win and one loss. (Team A covers and Team B losses). (Team B covers and Team A losses).
There is one combination of two losses. (Team A and Team B both lose).
Thus, there are a total of four win-loss combinations, assuming there are no pushes. If a bettor picks 54% winners over a season, the individual game bet success rate is 0.54 and the individual game bet failure rate is 0.46. Applying the success and failure rates to the four possible combinations shows the following:
The probability of two winners is: 0.54 x 0.54 x 1 combination = 0.291 (29.1%)
The probability of one winner and one loser is: 0.54 x 0.46 x 2 combinations = 0.497 (49.7%)
The probability of two losers is: 0.46 x 0.46 x 1 combination = 0.212 (21.2%)
Since a winning two team parlay pays 13/5 odds, this means a successful parlay will pay out 2.6 times the wager amount. The 13/5 odds also show that 5 out of 18 (27.8%) two team parlays are required to win to break even. For a $110 parlay wager, a winning parlay will pay out $286 and if any game loses, the $110 wager will be lost. If 54% ATS winners over time are anticipated, the expected rate of return on the two team parlay bet is computed as follows:
0.291 x $286 = $83.23 (bettor has a 29.1% chance of winning $286 on successful parlay)
0.497 x -$110 = -$54.67 (bettor has a 49.7% chance of splitting the games and losing $110)
0.212 x -$110 = -$23.32 (bettor has a 21.2% chance of losing both games and losing $110)
Summing the three returns (83.23-54.67-23.32) yields an expected profit of $5.24 per parlay bet. If a bettor played 150 two team parlays at $110 each (gross risk = $16,500), the expected profit would be $786.00.
Would the bettor make more money playing straight bets? If the bettor chose straight bets for the same games, there would be 300 single wagers at $55 each (gross risk = $16,500) and 54% winners would show 162 winning bets and 138 losing bets. With a 10% juice, the profit would compute to (24 – 13.8) x $55 = $561.00. This calculation shows that at 54% winners, a two team parlay has a higher expected rate of return than straight bets.
Actually, 52.7% ATS winners are the breakeven point for two team parlay bets as compared to 52.38% ATS winners for straight bets at 10% juice. In other words, if a bettor can win more than 52.7% of the plays, the two team parlay has a higher expected rate of return than straight bets. And, three team parlays are even better.
Beware, before everyone forsakes straight bets to play all parlays, extreme words of caution need to be expressed. First of all, there is no guarantee that 54% winners will directly translate into winning 29.1% of the two team parlay bets as shown above. It is mathematically possible to only win 16 parlays out of 100 while still picking 54% winners. This worst case scenario translates into $4,664 in losses with a $110 per parlay wager. Ouch! It clearly shows that 29 parlay winners are in no way guaranteed while picking 54% winners in the individual games. Parlays are a high risk venture.
The second reason for not falling in love with parlays is that it can compel bettors to force the action. If only one game stands out on the day’s card, the bettor is likely to force another selection to generate the parlay. This is never a good idea and can quickly accelerate a losing agenda.
Parlays should be an occasional wager and only when the bettor is operating in the profit mode and has two solid plays for that day. If each straight play is worth 5% of the starting bankroll, I advise a two team parlay bet should be 2.5% at most of the starting bankroll amount, and only on occasion.
The inevitable question arises to whether a parlay bet is a sound investment strategy. In order to answer this question, the important number to consider is the projected success rate for picking pointspread winners. If a bettor is picking less than 52.38% winners, straight bets are better than parlays as the straight bets will lose at a slower rate than the parlays. The consolation for making straight bets would be the bankroll won’t be wiped out as fast. The bottom line is that both straight bets and parlays will be losing propositions for failure to pick consistent winners. If you cannot pick consistent winners, why are you betting anyway?
For the situation where the bettor can pick consistent winners, let’s use some statistical mathematics to crunch the probability numbers. Let’s use a two team parlay where we will back Team A and Team B. The first step is to determine all the possible outcomes for each of the two bets.
There is one combination of two wins. (Team A and Team B cover).
There are two combinations of one win and one loss. (Team A covers and Team B losses). (Team B covers and Team A losses).
There is one combination of two losses. (Team A and Team B both lose).
Thus, there are a total of four win-loss combinations, assuming there are no pushes. If a bettor picks 54% winners over a season, the individual game bet success rate is 0.54 and the individual game bet failure rate is 0.46. Applying the success and failure rates to the four possible combinations shows the following:
The probability of two winners is: 0.54 x 0.54 x 1 combination = 0.291 (29.1%)
The probability of one winner and one loser is: 0.54 x 0.46 x 2 combinations = 0.497 (49.7%)
The probability of two losers is: 0.46 x 0.46 x 1 combination = 0.212 (21.2%)
Since a winning two team parlay pays 13/5 odds, this means a successful parlay will pay out 2.6 times the wager amount. The 13/5 odds also show that 5 out of 18 (27.8%) two team parlays are required to win to break even. For a $110 parlay wager, a winning parlay will pay out $286 and if any game loses, the $110 wager will be lost. If 54% ATS winners over time are anticipated, the expected rate of return on the two team parlay bet is computed as follows:
0.291 x $286 = $83.23 (bettor has a 29.1% chance of winning $286 on successful parlay)
0.497 x -$110 = -$54.67 (bettor has a 49.7% chance of splitting the games and losing $110)
0.212 x -$110 = -$23.32 (bettor has a 21.2% chance of losing both games and losing $110)
Summing the three returns (83.23-54.67-23.32) yields an expected profit of $5.24 per parlay bet. If a bettor played 150 two team parlays at $110 each (gross risk = $16,500), the expected profit would be $786.00.
Would the bettor make more money playing straight bets? If the bettor chose straight bets for the same games, there would be 300 single wagers at $55 each (gross risk = $16,500) and 54% winners would show 162 winning bets and 138 losing bets. With a 10% juice, the profit would compute to (24 – 13.8) x $55 = $561.00. This calculation shows that at 54% winners, a two team parlay has a higher expected rate of return than straight bets.
Actually, 52.7% ATS winners are the breakeven point for two team parlay bets as compared to 52.38% ATS winners for straight bets at 10% juice. In other words, if a bettor can win more than 52.7% of the plays, the two team parlay has a higher expected rate of return than straight bets. And, three team parlays are even better.
Beware, before everyone forsakes straight bets to play all parlays, extreme words of caution need to be expressed. First of all, there is no guarantee that 54% winners will directly translate into winning 29.1% of the two team parlay bets as shown above. It is mathematically possible to only win 16 parlays out of 100 while still picking 54% winners. This worst case scenario translates into $4,664 in losses with a $110 per parlay wager. Ouch! It clearly shows that 29 parlay winners are in no way guaranteed while picking 54% winners in the individual games. Parlays are a high risk venture.
The second reason for not falling in love with parlays is that it can compel bettors to force the action. If only one game stands out on the day’s card, the bettor is likely to force another selection to generate the parlay. This is never a good idea and can quickly accelerate a losing agenda.
Parlays should be an occasional wager and only when the bettor is operating in the profit mode and has two solid plays for that day. If each straight play is worth 5% of the starting bankroll, I advise a two team parlay bet should be 2.5% at most of the starting bankroll amount, and only on occasion.
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