Is there an easy formula for determining vig with money lines?

[BooksWorstEnemy]

According to my math, if a book posts a money line of +400/-525, the expected hold for the book is 6.6% of every dollar wagered.

This takes a pretty long time to figure out doing it the way I am doing it. There has to be a faster way to figure the vig with money lines.

Anyone got a simple formula?

Thanks,
Books Worst Enemy

 

[BooksWorstEnemy]

Anyone? Anyone? Beuhler? Anyone?

 

[TheNuts]

You can work it out like this.

The favourite -525 supposedly has a 525/625 chance of winning = 84 %

The dog +400 supposedly has a 100/500 chance of winning = 20 %

However, this doesn't add up to 100% because of the Bookmakers " over round "

It adds up to 104 %

The theoretical hold if all action is balanced perfectly by the book is:

1 - 1 / 1.04

Which equals 0.03846 ie 3.85 %.

Pinnacle has a free caluculator where it works this out for you. It's on the main screen on multi way calculator.

 

[TheNuts]

I must point out that theoretical hold is different than vig.


Ie lines on football, ie A +6.5 -110 and B -6.5 -110.

Although the lines are -110 on both sides, and you may like to refer to this as 10 % juice or vig.

The theoretical hold for this is not 10 % but only 4.55 %

I think that is why your original calculations were wrong.

 

[BooksWorstEnemy]

The nuts,

I totally understand your 4.55 hold on -110 sides with point spreads. But I think you are losing me on your calculation system.

This is the way I figured 6.6% hold for the books:

The midway point of 400 & 525 is 463. I think it is safe to assume that if you play the game 563 times, the dog wins 100 games and the favorite wins 463. This is only an assumption and can never be proven.

Assume the book has balanced action on both the favorite and the dog. They have $10,000 on the dog and $10,000 on the favorite.

Each time the favorite wins, the book pays $1,904 to the people who bet the favorite and keep the money that was bet on the underdog. So they make a profit of $8,096 with each favorite win.

Each time the dog wins, the book keeps the $10,000 that was bet on the favorite but they pay out $40,000 to the people who bet the dog. So, when the dog wins, the books lose $30,000.

If my percentages are correct, we should have a total of 5.63 events. The favorites will win 4.63 of those contests and on those 4.63 contests the book would clear ($8,096 X 4.63) or $37,484. Then, there is the game that is won by the underdog that costs the book $30,000. So after 5.63 games, the book has held $7,484 on $112,600 ($20,000 X 5.63) worth of action, which is 6.6%.

If you move the expected win percentage up for the dog, such that we will see upsets at a rate of 1:4, then the hold for the books drops to 2.4%. If you move the expected win percentage down for the dog, such that we will see upsets at a rate of 1:5.25, the the hold for the books increases to 10%.

Very confusing stuff for me.

But I don't understand the logic behind your calculation. I'm sure it is there but I am not smart enough to see it.

Later,
Books Worst Enemy

 

[phdinsports]

You can work it out like this.

The favourite -525 supposedly has a 525/625 chance of winning = 84 %

The dog +400 supposedly has a 100/500 chance of winning = 20 %

However, this doesn't add up to 100% because of the Bookmakers " over round "

It adds up to 104 %

The theoretical hold if all action is balanced perfectly by the book is:

1 - 1 / 1.04

Which equals 0.03846 ie 3.85 %.

Pinnacle has a free caluculator where it works this out for you. It's on the main screen on multi way calculator.

Nuts I always knew the formula but cannot understand it. -110 standard bet on a game, both sides taken, book collects 220, pays back 210 to winner, keeps 10 bucks! 10 bucks out of 220 is .04545 or 4.55% is books hold. How would you work this out using the -525 +400 moneyline!

 

[Doug]

The flaw is balanced dollar action won't normally occur between fav and dog with a line like that. Much more fav money will be bet, otherwise the lines will converge closer to pick'em.

 

[drunkguy]

http://www.pinnaclesports.com/MWCalculator/MWCalc.asp

 

[BooksWorstEnemy]

phdinsports,

According to the pinnacle calculator, the theoretical hold they are figuring has equal action on both sides.

We call it theoretical because it applies only when the customers as a group have bet to win equal amounts on each contestant. This situation is known as "balanced action".

Perhaps what they are saying is that the "to win" amounts are the same on both sides of the action. But the "risk" amounts are different. I have calculated the hold in the above scenario using equal "risk" amounts.

I would have also assumed that the gamblers would put a lot more action on the underdog with money lines than on favorites. Is this assumption way off?

Later
Books Worst Enemy

 

[Slash]

What Pinnacle means is that if we say the line is +190 -205, and they get equal action (eg. 100 to win 190 vs. 205 to win 100), the theoretical hold is what the calculator gives you.

Of course this is not true in real life as they will rarely be able to attract action on both sides without moving the line. So in real life the hold is lower.

 

[JayC]

Theoretical House Hold Percentage = 1 - A/B

A = (1 + dog price)*(1 + favorite price)
B = (1 + dog price)*(favorite price)+ 1 + favorite price

The example for -625/+525
A = (1+5.25)*(1+6.25) = 5.7575
B = (1+5.25)*(6.25)+ 1 + 6.25

Someone else can do the math

 

[JayC]

Remove that 5.7575, it's from an old example

 

[TheNuts]

Honestly my original calculations are completely correct. In your example +400 / -525 the theoretical hold is 3.85 % as my calculations confirm as well as the pinnacle calculator.


And Slash what you said was incorrect.

Quote: Pinnacle means is that if we say the line is +190 -205, and they get equal action (eg. 100 to win 190 vs. 205 to win 100),

This is not equal action. Because if the favourite wins the bookie ends up even, but if the dog wins, the bookie ends up winning 15.

Equal action is when the bookie ends up with the same result either side.

An example for the +400 -525 odds is:

100 dollars is bet on the dog +400 to win 400

420 is bet on the favourite -525 to win 80

Now if the favourite wins, the bookie pays out 400 but wins 420, ie profit 20.
If the dog wins the bookie pays out 80 but wins 100, ie profit 20.

Ie balanced action.

So the bookie makes 20 on a total bet of 520. ie exactly 3.85 % as calculated before.

 

[phdinsports]

Thanks Nuts!!!!!

 

[BooksWorstEnemy]

In reality, do the books generally get more dollars wagered on favorites or on dogs when they post money lines?

My gut feeling is they get a lot more on dogs, but I could be way off.

At the end of the day, the hold with money lines is very speculative at best. It really depends on the true rate of upsets on the underlying event, as well as the ratio of dollars wagered on favorites to dogs. In the above example, using +400/-525, assuming equal risk amounts on favorites & dogs, the favorite should win somewhere between 80% and 84%, assuming the posted line is accurate. With equal "risk" action on both sides, a move from 80% to 82% has a dramatic impact on the books profits.

Thanks,
Books Worst Enemy

 

[TheNuts]

Sportsbook.com shows how much action they are getting on a particular side.

http://www.sportsbook.com/sportsbook/lines_mlb.html

I'm not sure how accurate the stats are though, or exactly what 75 % means, ie does this mean 3 times as much RISKED on the favourite, or 3 times as much Base wager.

But it does seem like the favourites are getting more action.

 

[BooksWorstEnemy]

Nuts,

I would guess more money on the dog simply because I believe most gamblers would rather risk a little to win a lot than play it the other way around.

I just wouldn't assume many gamblers would get a thrill out of betting $100 to win $19.

Thanks for the help on this.

Later,
Books Worst Enemy