Odds are perception. Results are reality. The distinction seems obvious, but the two can easily become muddled during the betting process. The proverbial bounce of the football means that no bet is completely assured at the college or pro level, as reality is not just the difference between the two teams, but also the hidden role of chance in sport.
Betting on football is a matter of exposing the gap between perception and reality. The wider that gap, the safer the bet is.
This is what other sports bettors call Value Betting, a term well known in horse race handicapping. Value Betting is the process of finding those bets were the public selection has a flaw and very few people are noticing something that could change the expected outcome of a game. Key to the Value Bet is the payout which should be 2x or more the intial investment.
The Spectrum of Perception
Public perception is not a single opinion held as a conglomerate of football fans. Rather it is the median of what can be a wide range of beliefs. Las Vegas, or for our purposes the house, is keenly aware of this spectrum of perception and makes a living out of finding it and using it to create betting odds.
An ideal line falls at the median of gamblers. If the house is favoring one result, it becomes a gambler. The house would almost always prefer the role of the broker, knowing it will come out ahead before the game even takes place.
A Case Study with NFL Player Cam Newton
As a rookie, Cam Newton was a polarizing player who naturally had strong opinions on both ends of the public spectrum. Many thought that 2011’s number one pick was too immature as a person and as a player to have immediate success at the NFL level.
On the other side, Newton’s athleticism and passing ability had the potential to make him one of the NFL’s most dominant players, even as a rookie. In hindsight, we know that reality fell closer to the latter, but this was far from obvious going into 2011.
At the beginning of the season, Vegas set the win-loss line at 4.5 for the Carolina Panthers (it’s worth noting that win-loss lines vary in that an equal number of bettors don’t need to be on both sides of the bet for one team, but rather over the entire league).
The success of Cam Newton would be the biggest factor in the outcome of wager. Carolina finished 6-10, rewarding futures bettors who trusted Newton and took the over. Newton passed for over 4,000 yards and rewrote sections of the record books by rushing for fourteen touchdowns. His aptitude in the passing game exceeded even some of his most optimistic supporters, and the margin of improvement from Clausen and Moore in 2010 to Newton in 2011 resulted in a four game improvement for Carolina [1].
The spectrum of perception regarding Newton resulted in a 4.5 line on Carolina’s wins. Four and a half wins was thus the perception; six wins proved to be the reality. Those who took the over were accurately able to recognize that Newton was being underrated and would exceed the expectations. They exposed the gap between perception and reality and cashed in.
The gamble they took was not much different than the one that the Carolina Panthers’ front office was taking; both had high stakes placed on Cam Newton being a good quarterback. Neither the Panthers nor savvy gamblers came to this conclusion subjectively. To make an intelligent draft choice or wager, one has to properly evaluate. The Panthers needed a certain degree of confidence in Cam Newton to select him. Likewise, gamblers needed confidence in Newton, or merely in the Panthers’ evaluation of Newton, to make the right bet.
A gambler who can accurately evaluate a player, team, or matchup on a regular basis can make a killing in the sports betting world. Whether this is the bettor’s personal abilities to diagnose football or simply knowing which sources to trust in making a wager, sports betting can quickly become highly profitable on a consistent basis.
The formula becomes simple: find reality, expose perception, win.
Online References
[1] nfl.com, Cam Newton Stats, 2014