Re: Why favorites are on a roll in NFL \'05
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Because they're more interested in maximizing their expected value than in minimizing their variance, of course. Bankroll is no issue for a casino (or other large sportsbook), so they can afford to take the variance hit if they're convinced that they can improve their EV that way.
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These are big corporations with stock on the NYSE and boards of directors.
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Exactly. The profit/loss from the sportsbook at the Taj on any given Sunday, no matter how big the swing, is a fraction of a drop in the bucket. You say they want to minimize their risk, but, since they're not in danger of going bust because of a run of bad luck, the only risk they have to worry about is the risk of not making as much money as they're able to. If they can take a +EV side on a particular game, there's no real disincentive to do so, since variance is usually not a concern.
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