The myth of balanced action

[tech]

You run a sportsbook and you have to set the line for New England at Pittsburgh this weekend. Let’s say that you think the “true” line is NE -1. In other words, the result would fall on either side of that line 50% of the time. But, you also know that the line that would balance the betting action is NE –4. What line do you post?

[craig r]

If the sportsbook I ran had a lot of money (the reason I say "alot" is because of how much action comes down on an AFC title game) I would hang -1. If it truly is 50/50, then I would have a huge edge here for two reasons: 1) Get tons of money on NE at 2) -110. My book would get way more than 50% of the action on a 50/50 proposition. Basically it might get 75/25 action. Crap, I would take that on a coin flip anyday. And then couple that with the fact that people have to lay -110.

I base my answer on the way your question was phrased. As if we could have either -1 or -4. I would probably not want to risk as much and would maybe move line to 1.5 (no pushes) or even 2.

craig

[QuickLearner]

If I'm the football linemaker and I think that NE will win the game by 1 point... but I want to allow for the public's heavy NE action, then I might hang NE-3 as my first number.

Youe example is made more difficult because 3 is such a critical number. It would take a world of one-sided action to move me off the 3. I'd manipulate the payoff rather than move the number (NE-3 -115, then NE-3 -120, etc.) in order to keep the action balanced.

[craig r]

The problem with hanging the 3, is that you are now encouraging action on PIT. Which is not what you want to do if you want to maximize how much money you are going to win. I would want as much action on NE as possible.

craig

[2the9s]

[ QUOTE ]
What line do you post?

[/ QUOTE ]

The same line that every other book has. Even if the action is not balanced, the benefits of moving the line to balance it don't seem to make up for what you'd lose by getting middled by smart gamblers.

[Easy E]

How many "smart" gamblers, as a percentage of all gamblers, do you think there are?

Go by money invested, if you'd prefer

[ttleistdci]

[ QUOTE ]
How many "smart" gamblers, as a percentage of all gamblers, do you think there are?

Go by money invested, if you'd prefer

[/ QUOTE ]

Do "smart" gamblers = long term winners?

If so, I'd say percentages are in the single digits.

[2the9s]

Regardless of how many "smart" gamblers there are, they will bet substantially more than a square when they have a big advantage. Catching a middle around the 3 is huge, and a LOT of smart money would take advantage of that.

[QuickLearner]

If I'm trying to balance the action I want to find the perfect balancing point between sharps who would take Pitt and the value and squares who would take NE and pay the penalty. Per unit wagered, though; one sharp betting $5K would equal 100 squares at $50. I would never want all NE action, no matter what the line. That ball has points! Those refs are human! That field is slick!

Books don't really "play," they get paid a commission to facilitate the "trades." Just like Wall Street, eh?

[craig r]

That is the whole purpose of Tech's post (i would assume); he is pointing out that balanced action is not the purpose of a book. they want to win. Pinnacle is known for finding edges and exploiting it (i have been told that they were part of the "computer group" in vegas..don't know if this is true though).

There is a book, called "The Odds." The book is highly entertaining, but it is also very informative. Some of the people that the book discusses are linesmakers and sportsbook operators. There is some of an "interview" type format as well.

Don't get me wrong, in my example above, I am probably leaving myself too wide open. But, why balance the action when you can get +ev by taking a "risk?"

craig