Wednesday, July 08, 2009

The System

I have been a pretty big sports better most of my life. Most of the time, I analyze the match-ups, and come to a solid decision on what side to bet based on my sports knowledge. I have also employed betting "systems" in the past. One of the betting systems that I used in the past was for baseball, and it worked really well. I have not used this system in about 15 years, but I see no reason why it would not continue to work. Since IMO the system continues to work, yet I have not chosen to use it in a long time I have no problem revealing it here in detail, for someone who wants to take advantage of it. The system is basically an arbitrage system that takes advantage of the fact that Baseball is thinly bet compared to other sports, and has a very low house edge. The edge from arbitrage can easily out way the house edge, and lead to long term profits for the user of the system. Once you have convinced yourself statistically that the system works, you can ramp up the amounts you are betting and make some significant money on it. When I was last using the system I was betting between 2k to 5k a day as an unemployed UNLV student.

Baseball Betting

There are three main ways to bet on baseball. There is the money line which is a bet on who will win the game. There is the over/under line on what the total combined score will be. There is also a line called the "Run Line" which is a line with the favorite -1/2 run (The favorite to win by 2 runs or more). The system exploits the information from the over/under to find arbitrage opportunities between the Run Line and the Money Line. Arbitrage is simply a way of exploiting inefficient markets. The baseball betting market is inefficient because it is thinly traded. An example of arbitrage would be buying goods in the United States, transporting them to Europe and reselling at higher European prices. If the market is inefficient allowing for price disparity between two markets, and the cost of transport is less than the price disparity, guaranteed profits can be made. Guaranteed profits can be made betting baseball using arbitrage.

The System

So lets take a hypothetical game like the Yankees vs. the Red Sox. Lets say that Beckett is pitching for Boston and Boston is the favorite. The money line might be -145 (bet $145 to win $100) for Boston, and +140 (bet $100 to win $140) for the New York. If the house can get equal money laid on both sides they make a small profit by taking in $145 for every $140 that they pay out. The run line for this same game would be something like -145 for N.Y., and +140 for Boston. While Boston is favored to win the game outright, they are not favored to win the game by two or more runs. In this case, they are the underdog on the run line. Lets also say that the over under for this game is 10 runs. In nearly all cases the favorite on the money line is the dog on the run line unless they are huge favorites. The system is based on the fact that Boston will not win this game by exactly one run more than one in five times. I take $100 and bet it on Boston to win the game by two or more runs (run line), and $100 and bet it on N.Y. to win the game (money line). So I am betting $200 and will get back $240 if Boston does not win by exactly one run. As long as this happens less that one in five times I will collect $200 in profit before I lose both sides, and lose $200. I am looking for an average win of at least $40 in this case, so you shop sports books for lines like this. You also shop multiple sports books to find the best possible lines for each side. Because baseball is thinly bet, the lines are often different at different sports books. You identify the games you are interested in, and find the best lines to make your bets against. A lot of the time you will be able to do better than a $40 average win on a $200 in total bets if you shop around, but that is the minimum acceptable amount.

Before I started the using the system, I studied it against past games for several months to verify that it worked. What I found is that it works for American League games and was close to break even for National League games. Rockies home games were an exception to the rule for the National league. I also looked at the correlation between the over/under line, and the success of the system. I found that the higher the over/under on the games selected, the more successful and profitable the system is. All of this makes perfect sense. High scoring American League games are less likely to be decided by one run, while low scoring National league games, where they like to manufacture runs, are more likely to be one run affairs. So you can use the over/under line as a first screen to select American League games, and then make sure you can earn at least $40 on average based on a $200 successful bet. The higher the over/under, and the higher you can make on average per success helps to increase your profitability. In practice I like to use the system on about 5 games each day. That way you either made a nice chunk of change if everything works out, or you will break even if one of the five games is a one run game won by the favorite. The disaster scenario is losing two of the games, but I think that was so rare it only happened to me once or twice as long as I used it.

You will end up making huge bets with the system, and winning smaller amounts, but that is fine. You will be a high volume player, so you may be able to get rakeback or deposit bonuses at online sportsbooks while using the system. Back before the UIGEA when I was sports book bonus whoring it was not baseball season, so I was using football. This system would have cleared bonus requirements faster than you could blink, so there is some additional money to made there as well. Another great thing about this system, is it is purely analytic. You don't need to know anything about baseball to profit from it. Let me know if you have any questions or plan on trying it out.

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8 Comments:

At 11:29 AM, Blogger Buffalo66 said...

Unfortunately, it's hard for US bettors to shop lines these days. Without Pinny it's pretty brutal.

I used to scalp O/U on baseball, usually around an even number since games cannot end in a tie.

(e.g. U 9.5 -105, O 10 +125. You profit on any total except 10, where you push the over.)

You also need an arb calculator to make the right bet amounts.

 
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At 11:32 AM, Blogger Microvillain said...

I must be missing something because the numbers don't add up for me. Keep in mind that I am not a big baseball bettor. As I see it, you have 3 scenarios:

1- Boston wins by 2 or more
2- Boston wins by 1
3- NY wins

If you bet $100 at -145, you win approx. $69 on a successful bet (? $100 x 100/145).

Under scenario 1, the boston money line bet wins you +$69 but you lose the NY run line bet for -$100 for a net loss of $31.

Under scenario 2, you win the boston money line bet for +$69 and win the NY run line bet for another +$69 for a net win of $138.

Under scenario 3, you lose the boston money line bet for -$100 but win the NY run line bet for +$69 for a net loss of -$31.

Obviously I am misunderstanding something (payouts, bets placed, etc.) but what?

 
At 9:19 AM, Blogger Blinders said...

Microvillain,

I totally explained it wrong. In the example you take NY as the moneyline dog +140, and you take Boston as the runline dog +140. You are betting say $200 and will collect $240 ($100 + $140) if either bet wins. Boston wins by exactly 1 run and you lose both bets. I will correct in the post.

 
At 4:18 PM, Blogger Microvillain said...

This comment has been removed by the author.

 
At 4:24 PM, Blogger Microvillain said...

Grammatical edits!

That makes sense. If you take the plus side then all but scenario 2 nets you money by definition. If you take the minus side, then you want scenario 2 to come true otherwise you lose a little bit.

Right now, I am working on taking the minus side of both lines if the fav is at home with a low over under (9 or less).

By the way, the fav won by one 3 out of 14 times on Friday. All three times, the fav was the home team.

Why? because the fav is suppose to win by one 17% of the time but double that average when the home team is the fav (somehow the bottom of the ninth not being played makes a huge difference).

 
At 4:56 PM, Blogger thompson182 said...

Just stumbled across this. I have been doing something similar on my own. I use matchbook.com. How profitable were u? If your system was profitable 15 years ago with Vegas lines I can only imagine the profit using an offshore online exchange. I actually ran the numbers for the entire MLB with current matchbook.com lines and u could actually just play everygame everyday instead of trying to just pick and choose. The average return for games was 22%ish.

 
At 12:17 PM, Blogger Mike said...

Even though you made mistakes explaining your system, I understand what you are saying. If you bet on the Red Sox run line at +140 and the Yankees ML at +140 and the game doesn't end in one run, you win $40. If this happens 80% of the time you still lose $40 because one out of five times you lose $200 when the team does win by one run. In addition to that 27% of the games in baseball last year were decided by one run. Your system makes no sense unless you want to lose a lot of money. Try another hobby.

 

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