King Yao - Weighing the Odds in Sports Betting

copyright 2007, 2008, 2011 by King Yao

All rights reserved. Inquiries should be addressed to Pi Yee Press, 4855 W. Nevso Dr, Las Vegas, NV 89103-3787.

ISBN 978-0-935926-38-5

The Purpose of This Book

Sports betting can be attacked intelligently. Smart sports bettorsdo not gamble the same way as tourists play roulette or retireesplay the slot machines. Instead, smart sports bettors are makingbets that they have thought through carefully with supportinglogic and/or research. The purpose of this book is to give you toolsto succeed at sports betting, to show you how to evaluate, compareand view sports betting from an analytical perspective, notfrom a gambling perspective.

This book should be used as a guideline to sports betting ratherthan a blueprint. The sports betting market changes and adaptsquickly. The underlying principles shown in this book should helpyou adapt and continue to make good bets even when the marketchanges.

This book is for you if you want to think analytically aboutsports betting. It is for you if you do not want to be spoon-fedsupposed winners, but want to get some ideas to improve yourgame. You battle bookmakers and line makers constantly; bettingsports is a game of maneuvers and adjustments. You can use as many weapons as possible in this continuous fight. This book shouldhelp in that regard.

Organization

Chapters 1 through 7 are on general theory and ideas in sportsbetting. These chapters should be read first as the rest of the bookbuilds on their ideas. The remaining chapters can be read in anyorder. Chapters 8 through 17 examine more in-depth issues in particularsports. These chapters give you a sense of how to attackdifferent aspects of sports betting using analytical tools, marketperspectives and logical reasoning. Chapters 18 through 24 haveinformation and general advice while covering multiple sports. Atthe end of the book is a glossary.

Other Books

There are few quality books on sports betting. The first sports-bettingbook that I recommend is Sharp Sports Betting by StanfordWong. A few other sports-betting titles contain good information,including books by Don Peszynski, Kevin ONeill, Trace Fields,Scott Kellen and Mike Murray. You also can get information fromsports books that are not geared towards betting, and use that informationto suit your purposes when it comes to handicapping andbetting. Compared to other forms of gambling, there are relativelyfew good books on sports betting.

There are many knowledgeable sports bettors who have theability to write quality books on their craft. Why have so few ofthem written books on the subject? Unfortunately, the financialreward they expect to get from writing a book is probably notworth the effort. Instead, writing a book may hurt a sports bettorsfuture winnings if disseminating his secrets decreases his futurebetting opportunities. You implementing the authors ideas meansmore competition to make the same bets as the author. Most bettorswho have the knowledge to write quality sports-betting booksdecide it is negative EV (EV is explained in chapter 2) to give outinformation when the expected royalties from a book are relativelysmall compared to the size of their wagers. In addition, it takestime and energy to write a book. Instead of writing a book, skillfulsports bettors may sell information in the form of picks, which willprobably net them more income than royalties from a book. Selling picks does not require any explanations, so they do not have toreveal their methods.

Why I Wrote This Book

When I wrote my first book, Weighing the Odds in HoldemPoker, I did not have to think about the possibility that I would costmyself money by giving out information. If you use some of theideas I wrote about in my holdem book, it is unlikely to affect medirectly since there are so many poker players, so many holdemtables and so many poker rooms.

Sports betting is different from poker in that it is a worldwidemarket similar to a financial market. If someone in New Zealandmakes a large wager, it is possible that his wager can affect medirectly by moving the line on the game around the world, thusdenying me the opportunity to make the same wager at the sameline. The sports-betting marketplace has similarities to the financialworld. I was able to transfer my training and experience in tradingoptions and other derivative products to sports betting. The informationin this book is some of the things I have learned during thattime.

I have analyzed and bet on sports for a long time, but it wasafter finishing writing Weighing the Odds in Holdem Poker thatI turned my main focus on sports betting. There are many differentways to approach sports betting, and the more I delved into it, themore interesting and challenging I found it. You can approach itfrom a handicappers point of view and try to make a better linethan the line makers and the market. Or you can approach it froma relative-value players point of view and make distributional, correlatedand derivative bets. Or you can approach it from the pointof view of a scalper or middler. There are numerous ways to attackthe sports betting market and find positive EV.

I did enjoy the process of writing Weighing the Odds inHoldem Poker and decided to write about some of the things Ilearned about sports betting. In February, 2006, I submitted myfirst article to the Two Plus Two Internet Magazine, which canbe found at TwoPlusTwo.com. That article, on the analysis of aSuper Bowl prop, is the foundation for chapter 12 of this book. Ienjoyed writing the article as it forced me to focus on a specifictopic and explore it in-depth and from different angles. After a few months of writing articles, I started thinking about writing a book,the book that you now are reading.

I knew I had to make sound logical arguments if my writingwere to be published. But I was also prepared for the possibilitythat someone might catch an error, which actually did happen withthat first article. I did not mind being corrected since learning frommy mistakes allowed me to improve both my writing and my ownbetting. The same logic applies to this book: If you find an error,please tell me about it. I am both a sports bettor and a writer, andwilling to improve in both endeavors.

I wrote this book is to satisfy my own ego. There are few goodbooks on sports betting, so my contribution to the literature will bemore significant than a similar effort in another field. My enjoymentof the writing process and my ego outweigh the possiblenegative EV in writing the book, thus making it positive EU (expectedutility) for me.

Why Sports Betting?

I enjoy following, betting, and thinking about sports more thanI enjoy following stocks, thinking about interest rates and trading inthe financial markets. I would rather analyze how Alex Rodriguezwill perform in his next playoffs given his poor past performancethan how PAC IOs will perform given an increase in mortgagerefinancings. I would rather evaluate how often a baseball team isexpected to win by more than 1 run given certain variables thanevaluate the skewness of an out-of-the-money put in the PharmaceuticalIndex. I would rather compare the relative strengths ofthe Colts and Patriots when playing on a cold November night inNew England than compare the relative differences in volatility,skew and kurtosis between the SPX and NDX indices.

Making money in sports betting is just as challenging as makingmoney in the financial markets. My enjoyment of sports madeit easy for me to choose sports betting over trading in the financialmarkets. Being my own boss, waking up when I feel like it, watchingtons of baseball, basketball and football games and travelingfrequently to Las Vegas all helped tip the scale towards sportsbetting. You probably have similar interests in sports if you arereading this book.