The Massachusetts sports betting launch is coming at the beginning of 2023. With a couple more months to prepare, sports bettors can begin learning how to avoid common sports betting strategy mistakes.
One of the most common? Taking odds at face value. Odds are not probabilities. They’re potential payouts.
Understanding that difference will eliminate one of the most common sports betting mistakes that bettors make.
Odds vs. Payouts vs. Predictions
Although the numbers that show potential payouts are called odds, those numbers aren’t actually predictions. Sportsbook odds can be converted to probabilities: +/-100 is 50%, +200 is about 33%, and -200 is about 66%.
However, these probabilities are skewed by the money that bettors have put on each side of the line.
As an example, take a basic wager with odds of -110 on each side. A $100 bet on -110 odds results in a $90.91 profit — the original $100 stake plus the winnings. Since every bettor is betting more than they’re winning, the sportsbook can afford to pay winnings and make its own profit.
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But that example only works if there’s roughly equal amounts of money on both sides of the line. If one side has $1,000 and the other only has $100, then a sportsbook’s profit depends on which side wins. To avoid losses, sportsbooks can adjust odds to manage potential payouts on both sides of the line.
Sometimes professional sportsbooks have bad weekends. In 2021, Week 6 of the NFL was “the worst Sunday in 35 years” for sportsbooks. The teams that customers bet on all won, forcing sportsbooks to pay winnings but lose potential profits. Chance and time allow for this to happen sometimes. But in the long run, sportsbooks profit through the adjustments they make on odds.
Election Betting vs. Reality
Election betting is legal in the United Kingdom, and the US presidential election is one of the most popular betting markets. (Election betting is illegal in Massachusetts and will continue to be prohibited when sportsbooks launch.) The 2020 election was a particularly contentious presidential election because of former President Trump’s lies about election fraud skewing the results in favor of Joe Biden.
Vox reported on the effects Trump’s lies and his most fanatic supporters had on UK sportsbooks. Trump bettors, convinced of the certainty of Trump’s electoral victory, kept betting on Trump to win. In response, sportsbooks lowered their odds to reduce their potential payouts in case Trump won. To attract bettors to the Biden side of the line, Biden’s odds went up.
At his peak, Trump’s odds implied a 69% chance of victory, which would translate to odds of -223. As Vox also reported, 93% of Oddschecker bets were being placed on Trump at that time. Slate found an offshore sportsbook that offered Trump odds of -775, an implied 89% chance of victory.
The race was impossible to call until Biden began to gain traction in Georgia and Arizona. The odds finally began to change after Biden’s lead in these two states. Biden’s win in Pennsylvania would go on to secure his win.
Bettors can’t take sportsbook odds at face value, because they don’t know how many bettors or how much money is on each side of the line. Sportsbooks have to turn a profit and adjust their odds to ensure they do.
Sports Betting Strategy 101
Sports bettors can’t use sportsbook odds as credible predictions. Instead, bettors can take advantage of mispriced markets.
If one team is over-hyped and its odds imply a safer win than is realistic, then a bettor can make a lot of money betting correctly on odds that offer higher payouts as a result.
But if everyone could make those correct predictions, then everyone would be professional sports bettors. Because so many major sportsbook brands are live across the US, oddsmakers can see how competing sportsbooks are priced.
So, oddsmakers can adjust their odds to ensure that bettors can’t make money through price differences at different books. (This is called arbitrage betting, and it will get you kicked off an online sportsbook in a heartbeat.)
Sports have an element of chance that is inescapable for everyone. Great teams can have bad days. Bad teams can have a streak of successful passes, interceptions, or critical plays that result in surprise victories.
Sports betting is gambling for a reason. Sportsbook odds are designed to collect more in winnings than what is paid out to bettors. Bettors who rely on a sports betting strategy will often make wrong picks because of the chance and luck that permeates every contest. The least that bettors can do is avoid using odds as an accurate forecast and avoid chasing losses as a result.