The Logic of Sports Betting: Book Review

They speak a different language in America and that applies equally to betting with their money-lines, parlays and points spreads, writes Tony Keenan.  However, it doesn’t mean bettors over there have nothing to say to punters on this side of the Atlantic. Widespread, legalised sports betting is in its infancy in the US but the country has been quick to latch onto it, aided no doubt by having a well-developed gambling culture in Nevada since the 1930s; and a relatively new book ‘The Logic of Sports Betting’ provides an insight into how things are done stateside.

Written by poker player Ed Miller and sports betting modeler Matthew Davidow, the book has three parts. The opening section deals with how the US sportsbooks operate before the second part looks at betting markets in more detail with the final segment discussing strategies for finding good bets. This article will be less a straight review of the content than a look at the application of the ideas therein to UK and Irish racing, translating the suggestions to a different type of betting.

The early part of ‘The Logic of Sports Betting’ deals with the maths (sorry, math!) of the markets and the difference between the value of points and percentage edge. American odds are expressed differently, with plus and minus figures, but the argument is the same. The authors point out that percentage edge value is more important than points value. If you back a horse at 12/1 and it goes off 7/1 (let’s assume that 7/1 is a hard 8.2 on the exchanges and thus a true price rather than a drifting 11.5) you have beaten the market by five points and 4%, a 12/1 shot being 8% of the market, a 7/1 shot being 12%.

That’s a good bet clearly but not as good as the even-money shot that goes off 8/11, again assuming true prices; you have beaten the market by less than a third of a point but with 8% of an edge, the even-money shot being 50% and the 8/11 shot 58%. This is easy to see in the American markets that are typically two-way affairs, sides in a handicap mainly or a points total, but less so for racing punters typically facing ten or more options in a race.

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But it could be a reminder of the value of shorter-priced horses, be it in the win or place markets. The front end of the market is sometimes scorned by racing punters – who wants to be that most banal of bettors, the favourite backer? – but there are plenty of good bets to be had there and they are typically easier to get on than those at bigger prices.

Much is made in the book of zero-hold markets which means a minimal overround and how bettors can achieve these by creating zero-hold synthetic markets, referring to searching out prices that reduce the overround on offer; on one level that is just basic advice to take the best price but it’s a little more complicated than that as they explain how to find bets across similar markets that are not properly correlated to each other.

This is difficult over here with so much uniformity of pricing, particularly on something like Irish racing, and the point is made that ‘if every sportsbook has the exact same price on a market, that’s bad for you as a bettor.’ I did think of another simple application of this, however, and that is finding a horse you hate in a race for whatever reason, be it ground, trip, attitude or whatever, and opposing it strongly as this in effect is taking out a chunk of the market. If not quite saying it cannot win, you are at least viewing it as under-priced and every now and then there are horses that are hard to back at any price. We don’t really have a culture of hating horses here, at least not in the media of which I am part, there being no luck for slagging someone’s prize possession; but, as punters, being negative can produce an edge and thus good bets.

On the subject of good bets, Miller and Davidow have a bit to say on how many of those a bettor should be having. We may all want to have brilliant bets all the time, where the price is wrong and the edge is huge, but for them such selectivity is overrated; we should also be having the good bets and the half-decent bets too with the smaller edges. They are also believers in the idea that the best bets have multiple components built into them; for instance, you may have a time-based case for a horse along with a niche trainer angle and a track bias argument baked in too.

‘Attack surface’ is a prominent concept in ‘The Logic of Sports Betting’ and refers to the wide array of betting opportunities that are available across the vast majority of sportsbooks these days; there are so many markets on offer that they are basically impossible to monitor correctly. The authors are believers in betting where the bookmakers are weakest and in America that means away from the main points spread, money-line and totals markets and instead playing in the derivative markets like player propositions.

Over here, that might mean ignoring the major races and main markets and instead going down the grades and into the side markets like place only or without the favourite/s. The reality is that many of the big players will not be as interested in these markets, mainly because they can’t bet in them to scale, which leaves opportunities for the smaller punter as the betting firms drive for more and more content which in turn creates more opportunity.

As to bad bets, the book argues against making anti-correlated bets where even if you win you will also lose in many scenarios. They give an example of having two bets on teasers (an American bet that allows bettors to manipulate the points spread in their favour in the multiple bet) where only a narrow window allows you to win both bets; for example when the bettor thinks one team will win but the other will keep it close; but the reality is that over time that outcome happens rarely and certainly not enough to justify two bets.

I find I often do this in racing by having too many bets in the same market in the same race: if you have four win bets, only one can actually win and it might be better to try and settle on one or two horses, allowing that multiple runners can be overpriced in a big field.

For Miller and Davidow, market resistance (i.e. when a horse is drifting) is something to be taken seriously and they do not believe in betting into it. For them, if you’ve had a bet at 7/1 and it moves to 7/2, you’re on a good bet with the only issue being that you could have had another play at 6/1 which would also be good. Striking that same bet at 7/1 on a horse that is now 16/1 is conversely a bad bet and we shouldn’t be going in again as it merely compounds the error. I go back-and-forth on this issue and drifters certainly do win in racing, the reason for the drift sometimes being significant, other times meaningless, but they do make a good point that if a bettor always tops up on a drifter they will finish up having their biggest plays on bets that are, by definition, bad.

- TK

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5 replies
  1. Jan
    Jan says:

    Hello Tony,

    thanks for the nice recap as that is always welcome. The book you described is very similar to some of the Buchdal’s books which I found very interesting.

    As a long time advantage player, not in horse racing, I found the niche markets such as Half times, players props brilliant and can confirm, that these are very often forgotten and stays the same even though the main market has been cut ages ago.

    I would totally agree with the market resistance point, once your bet is on, it’s done and you should only watch(or not if your heart is not up to it) and wait for the result. We all place bad bets on drifters, but as you said, that does not necessarily mean the horse will lose.

    Keep up the good work and thank you for your again valuable input.


    JOHN LAING says:

    I’ve thought for years that all this talk of getting value is over-rated.

    Surely picking the winner is the way to obtain value. Better an 8/11 winner than a 5/1 loser.

    • Matt Bisogno
      Matt Bisogno says:

      Any winner is better than any loser in a one off situation, John.

      But if you cannot pick e.g. even money winners better than 50% of the time you will lose.

      If you cannot guarantee you’ll pick the winner almost all the time, then you need to beat the market.

      This is a fundamental principle of profitable betting, I’m afraid. Here’s an old post I wrote about it that *might* sway your view:

      Good luck,

    • Janves
      Janves says:

      I would recommend you to read Squares&Sharps, Suckers&Sharks from Joseph Buchdahl.

      Seriously it will be an eye opener for you.

  3. Samuel Carson
    Samuel Carson says:

    Great review as usual. Just a pity about the connection with the spoiled brat entitled Morrison.

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