Blackjack and Card Counting Forums - BlackjackInfo.com

  #1  
Old March 9th, 2011, 03:07 AM
WABJ11's Avatar
WABJ11 WABJ11 is offline
Senior Member
 
Join Date: Apr 2006
Posts: 262
Default Sportsbook Edges and Operations

Can you run a profitable sportsbook without a lot of action? Lets say you only have one client for example betting $300-$500 a game taking 10% vig. (550 to win 500, 330 to win 300 etc...) If you do have an edge how big of a bankroll would you need to sustain this type of variance?

The reason I ask these questions is because I never understood where exactly the sportsbook edge lies. Is it the vast amount of action so they have enough to pay both sides? Or are spreads exactly 50/50 that taking a vig ensures profit over the long run no matter how much action you have?
  #2  
Old March 9th, 2011, 05:04 AM
MangoJ MangoJ is offline
Executive Member
 
Join Date: Feb 2011
Posts: 607
Default

Quote:
Originally Posted by WABJ11 View Post
Can you run a profitable sportsbook without a lot of action? Lets say you only have one client for example betting $300-$500 a game taking 10% vig. (550 to win 500, 330 to win 300 etc...) If you do have an edge how big of a bankroll would you need to sustain this type of variance?

The reason I ask these questions is because I never understood where exactly the sportsbook edge lies. Is it the vast amount of action so they have enough to pay both sides? Or are spreads exactly 50/50 that taking a vig ensures profit over the long run no matter how much action you have?
If you know this business and have a customer where you take 10% vig, you don't need a bankroll at all. Just take the customers bet, and place the same bet somewhere else where you get better conditions (say 5% vig).
If your customer wins his bet, you make profit.
More advanced techniques are that you also make profit if the customer loses.

There are several types of sportbooks. One of them I have described above: You take bets and immediatly sell them elsewhere where you get better value. The difference in value is your profit.
Other sportbooks try to balance both sides of their bets, and make the profit purely from the vig.
And yet other sportbooks are sharp in evaluating games. Most bets they take from their customers is a value bet for the book, hence they don't care much if they can balance their book.

In a sportsbook market environment, only the last group of sportbooks are likely to generate profit consistently, because taking vig amount has to decrease due to competition with other books.

Last edited by MangoJ; March 9th, 2011 at 05:07 AM.
  #3  
Old March 9th, 2011, 06:59 AM
FLASH1296's Avatar
FLASH1296 FLASH1296 is offline
Executive Member
 
Join Date: Oct 2007
Location: East Coast, U S A
Posts: 3,749
Send a message via ICQ to FLASH1296 Send a message via AIM to FLASH1296
Default


MangoJ is fully correct. Nice post !

There has always been the (logical-sounding) myth that
bookies desire a balanced book. Bookies take "positions"

Example: In NFL football - most favorites, especially teams
playing at home are overbet. Ditto when one team is from
a major metro area and the other isn't. Sports books are not
balanced, so that if the 'dogs are predominantly victorious,
the books earn substantially more than their projected "vigorish",
and if the opposite holds true, they will lose or break even on the
total action.

P.S. if you had bet EVERY NFL 'dog playing at home since
the inception of the NFL, you'd be about even today
.
  #4  
Old March 9th, 2011, 04:10 PM
moo321 moo321 is offline
Executive Member
 
Join Date: May 2007
Location: Midwest
Posts: 3,812
Default

With one client, you may want to offer square lines to him. Say he's a san francisco fan, maybe you can lay him -3.5 on their game instead of -3.

Lots of books offer intentionally square lines to the public, such as the line in the Super Bowl this year, but they can get killed if the underdogs don't come through. That's why Vegas lost money on the superbowl this year.
  #5  
Old March 9th, 2011, 05:43 PM
WABJ11's Avatar
WABJ11 WABJ11 is offline
Senior Member
 
Join Date: Apr 2006
Posts: 262
Default

I will be honest I am not familiar with this business at all.

So am I wrong in my original assumption that spreads released by the books are 50/50 thereby taking a vig ensures a profit in the long run?

Its not always easy to find the same line for -105, even at reduced juice books.

Last edited by WABJ11; March 9th, 2011 at 08:34 PM.
  #6  
Old March 9th, 2011, 11:34 PM
MangoJ MangoJ is offline
Executive Member
 
Join Date: Feb 2011
Posts: 607
Default

Offering a -110/-110 spread line doesn't mean you make a profit in the long run. Your spread must match the expected game results. If you are way off, you will lose - and knowing the business I guarantee you that - HEAVILY.

Last edited by MangoJ; March 9th, 2011 at 11:37 PM.
  #7  
Old March 10th, 2011, 10:22 AM
WABJ11's Avatar
WABJ11 WABJ11 is offline
Senior Member
 
Join Date: Apr 2006
Posts: 262
Default

No I think you misunderstood my question. I know that just offering -110 will not guarantee you a profit.

What I meant was are the spreads released by sports books statistically 50/50? If this is the case then offering -110, I would assume, would guarantee you a profit.
  #8  
Old March 10th, 2011, 10:44 AM
MangoJ MangoJ is offline
Executive Member
 
Join Date: Feb 2011
Posts: 607
Default

Books will set a spread of X. And then they offer two -110 bets that the actual point difference of the result will be larger than X, and smaller than X.

What do you mean with 50/50 ?
  #9  
Old March 10th, 2011, 05:55 PM
moo321 moo321 is offline
Executive Member
 
Join Date: May 2007
Location: Midwest
Posts: 3,812
Default

Quote:
Originally Posted by WABJ11 View Post
No I think you misunderstood my question. I know that just offering -110 will not guarantee you a profit.

What I meant was are the spreads released by sports books statistically 50/50? If this is the case then offering -110, I would assume, would guarantee you a profit.
Do you mean that they are trying to split the betting public?
  #10  
Old March 10th, 2011, 08:16 PM
FLASH1296's Avatar
FLASH1296 FLASH1296 is offline
Executive Member
 
Join Date: Oct 2007
Location: East Coast, U S A
Posts: 3,749
Send a message via ICQ to FLASH1296 Send a message via AIM to FLASH1296
Default

As has been stated here already, the Sports Books DO take positions, so they often have their lines geared to encourage the weaker side, like the favorites in NFL match-ups. So their lines may sometimes reflect an attempt to create a near 50-50 split on the action, but they are willing to be quite a bit off of that mark exposing themselves to a loss, but assuring improved long-term profits. Their loss is softened or even eliminated by the vig' that they charge.
 

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -6. The time now is 01:05 PM.


Forum Software vBulletin®
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright 2005-2011 Bayview Strategies LLC