MLB Strategy (4/16/12)
Monday, April 16 at 8:00 PM ET
Just less than two weeks into the MLB season, this blog will tackle wagering strategies for a daily sport like baseball where the payout odds for all plays, particularly on the money-line, vary significantly from pick to pick. While there is some new information on last season's totals and early performance this year, much of this will be review for those who followed along last year (and will also likely become a tutorial video in the near future).
The most important element to consider regarding wagering on baseball is that it is must be viewed with a long-term approach (this is why we do not sell baseball information in quantities less than 30 days - but we do allow for rolling 30 days now instead of specific months). Every day (at least every day for us thus far in more than one full regular season), we recommend wagers on opinions that we think are less than 50% likely. That means that we may not even think that it is more likely than not that utilizing our information on a day will be profitable (especially if it is a with just a few opinions and most are on money-line underdogs or straight-up favorites who we like on the -1.5 run-line). However, there is value in all recommended plays. If played over a significant sample size, all value plays should be profitable.
Betting baseball requires a long-term approach that is focused on value and return. Quantity can often be as important (even on a daily basis) as quality. In baseball, fortunately, it is much easier to apply the math and predict games than it may be in other daily sports like basketball. However, value means something a little different. Instead of wagering against a spread, the majority of action relates to which team is going to win (straight-up). All wins and losses are not created equal. There are odds associated with the chances the books give for either team to win (plus the vig or "juice" that gives books the edge overall - if their lines are right). Payouts for correct plays are based on these odds. While we normally talk about winning greater than 52.38% of the time ATS or O/U as profitable, on the money-lines, someone could hit 60% and lose money or win 40% of the time and win (more on that below). Because of that, we are often recommending picks that are less than 50% likely, meaning that the chance of the pick (an underdog) being correct is not great, but it is worth the payout associated with the odds. A long-term approach (at least a week, though my preference would be looking at an entire month if not a season) is necessary.
These money-line odds are expressed as +/- numbers in the hundreds (or thousands, though not often in an MLB game). Favorites are expressed as minus numbers, like -150. Underdogs are positive numbers like +150. For favorites, one must risk that amount to win $100. For underdogs, if $100 is risked, that much is won (in addition to the risk). Calculating whether the confidence that we have in a pick winning straight-up (SU% proj) exceeds the percentage related to the payout from the odds (SU% needed) is pretty easy. For favorites, the confidence needed is the odds divided by the odds plus 100. So, technically absolute value(odds)/(absolute value(odds)+100). For instance, a -150 favorite must win 60%, which is 150/(100+150) to warrant action. For underdogs, the confidence needed is 100 divided by the odds plus 100. For instance +150 yields 40% SU% needed because 100/(100+150) is 0.40.
We may think the straight-up outcome of a game is exactly 50/50, but we side with the underdog as a play if the odds payout for it is anything greater than +100. At +150, that would be like someone telling you that you can bet a dollar on a coin flip. If you bet on heads and you win, you win $1.50. If you bet tails and it wins, you win $0.67 (assuming no vig and tails odds are -150). If you lose, you lose your dollar. You would bet on heads every time (you'd better). That's the same concept in play to varying degrees in baseball.
While the notes above address the topic, we often get questions about the difference between our money-line and straight-up tables. Money-line picks represent our straight-up information ordered by value relative to payout odds. We base value on the relationship between the Predictalator's projected straight-up winning percentage and the straight-up winning percentage needed to justify a pick (as calculated above). When wagering on a favorite, it costs more to win less and vice versa with underdogs.
For instance, if the Texas Rangers are -156 favorites over the Seattle Mariners who are at +145, Texas must win more than 60.9% (or 156/256) to justify a play on the Rangers. If Seattle wins more than 40.8% (or 100/245), the Mariners have value. Texas will appear as our favorite to win in the straight-up table, but the Mariners are the pick in the Money-Line table. If neither wins at the necessary rates, it is a "no pick" because neither team has value.
Straight-up and money-line percentages are the same. One table caters to wagerers that need to know where the value play is relative to payout (the Money-Line). The straight-up table caters to fans who want to know their team's chances of winning and the projected score. They both use the same results, but they appeal to two different angles.
The gap between the projected SU% and the necessary SU% dictates our confidence in that pick and is used in the Play Value Calculator to determine the optimal wager amount for that pick. If the wager amount for a normal $50 player (the default setting) is $1-$49, this is a "weak" pick. If it is between $50-$99, it is considered a "normal" pick. Between $100-$149 is 2X normal pick and anything stronger than that is considered 3X normal pick.
In the 2011 MLB regular and postseason, we projected 196 normal picks (which come from 73 Money-Line picks, 86 Over/Under picks and 37 Run-Line picks). Thus far, through the first twelve days of the 2012 season, we have generated one normal Money-Line pick, ten normal Over/Under picks and two normal Run-Line picks (14 normal plays in 12 days as part of a total of 292 playable picks).
Considering the long-term investment nature of wagering on baseball, there are several strategies to consider. In order of least risky to riskiest, I will outline four strategies below: 1) Play All, 2) Half-Bet, 3) Half-Win and 4) Play All as Normal. For all four strategies, we review 2011 performance utilizing the current simulation engine that is in place (which was essentially "finalized" in late May last year) and 2012 performance thus far.
All quoted dollar win/loss values are calculated utilizing our published play value recommendations on a play relative to a "normal" $50 player. This is consistent with all other reporting, but not consistent with the "optimal" approach. The ideal way to implement ML, O/U and RL projected picks with confidence is to set a fixed percent of bankroll to use as a "normal" play (1%-3% is recommended, though up to 5% is allowable) and update that number as bankroll changes (hopefully increases). The reported numbers do not take into account "other plays today" or growing bankrolls (meaning actual results should be more extreme - almost exclusively in these cases, more profitable... in fact, with relatively consistent profitability last season, especially May-August, actual results should be much better than reported here due to growing bankrolls). For ML and O/U, we recommend using the Play Analyzer for recommendations at the most up-to-date lines as well (which is impossible to track, but we hope/believe/assume that, as long as starting pitchers are as published in the "More" info box, addressing line movements should be beneficial - suggesting higher wagers when our pick gains value and lower wagers when not).
At this point, with the complicated and confusing nature of playing against both a line (+/- 1.5) and wildly varying payout odds in Run-Line plays, Play Analyzer and TrendFinder applications for Run-Line information seem to do at least as much harm as good (so they are currently not considered in either application). For ML and O/U, the Play Analyzer provides a very quick way to identify the "Half-Bet" (below) wagers to make as well as what is currently "playable" for the first and last strategy options considered. And lastly, please note/remember that all wager recommendations are risk amounts, not win amounts.
Play All Strategy:
The "Play All" strategy for wagering on baseball is technically the least risky and is best suited for how our information is constructed. It's certainly not for everyone, though as it requires playing every playable pick at the play value recommendations, which requires meticulous work to navigate through the course of an entire year, an appetite for some action on just about every game (some can handle this much better than others) and, either a large bankroll or the ability to make potentially very small wagers. As a conservative estimate with sports that employ -110 odds (like football and basketball) for just about every game, we consider 53.0% the cutoff for "playable" picks. That being said, the play value recommendation for a normal $50 player at 53.0% confidence with -110 odds (requiring 52.38% confidence to play) is $7. Anything that shows up as less than $7 in the Play Analyzer or Customizable Predictalator for all sports or in the articles for baseball and hockey would not actually be considered a pick at our football and basketball thresholds.
For 2011 and thus far in 2012, playing all playable picks at their recommendations for a normal $50 player would have generated the following results:
- 2011 Money-Line Plays: +$1,386, 653-564 (54.2%), 9.3 plays/day
- 2012 Money-Line Plays: +$183, 63-53 (54.3%), 9.7 plays/day
- 2011 Over/Under Plays: +$411, 455-398 (53.3%), 6.4 plays/day
- 2012 Over/Under Plays: -$67, 47-42 (52.8%), 7.4 plays/day
- 2011 Run-Line Plays: $686, 449-380 (54.2%), 6.3 plays/day
- 2012 Run-Line Plays: $102, 47-40 (54.0%), 7.3 plays/day
The Half-Bet strategy was discussed at length last season in our blogs and is my personal recommendation for wagering/investing of this nature. Instead of playing 20+ plays a day, this focuses on the most valuable 5-9 plays most days (some days much less and some days a little more), which is much more manageable - especially in a fluid market - and essentially as profitable. The plays that would qualify as "half-bets" are any which recommend a wager of $25 or greater for a normal $50 player. This is a stronger and more consistent alternative to simply playing just the "normal" plays (which is not actually a strategy we discuss here, but is certainly allowable for those looking to plod along at about one play per day). The Play Analyzer's "Original" lines (no longer the default because "Consensus" is more relevant) displays play value recommendations and can be a good place to verify what we track as "half-bets" (anything $25 or greater on the list), though actually using the Play Analyzer (at least for ML and O/U) for current lines should provide the most usable list of "half-bets" for that period in time.
For 2011 and thus far in 2012, playing all "half-bets" at their recommendations for a normal $50 player would have generated the following results:
- 2011 Money-Line Plays: +$1,309, 248-206 (54.6%), 3.4 plays/day
- 2012 Money-Line Plays: +$138, 18-15 (54.5%), 2.8 plays/day
- 2011 Over/Under Plays: +$399, 178-160 (52.7%), 2.5 plays/day
- 2012 Over/Under Plays: -$16, 21-18 (53.8%), 3.3 plays/day
- 2011 Run-Line Plays: $605, 155-124 (55.6%), 2.1 plays/day
- 2012 Run-Line Plays: $129, 13-7 (65.0%), 1.7 plays/day
It's both (a little) riskier and more difficult to maintain than the "Half-Bet" strategy, but I could see how the "Half-Win" strategy could be appealing. Rather than playing all games where the "risk" amount is half or greater of a "normal" play, this strategy, plays all games where the "win" amount is half or greater than a normal play. This maximizes the value of winning and could be interesting for those who are looking for big payouts without substantial risk. It's not that the half-win strategy is significantly riskier than either of the above, but it does require much more patience and would be more volatile. In this case, a large percentage of plays would be on "upset" picks for ML and -1.5 RL plays (hence the low percentage of accuracy, yet profitability on half-win RL below), where the payouts are greater. For O/U, where payouts are usually between +105 and -125 on either side of the total, there is not a big difference between the half-win and the half-bet strategy.
For 2011 and thus far in 2012, playing all "half-wins" at their recommendations for a normal $50 player would have generated the following results:
- 2011 Money-Line Plays: +$1,361, 241-199 (54.8%), 3.3 plays/day
- 2012 Money-Line Plays: +$142, 17-15 (53.1%), 2.7 plays/day
- 2011 Over/Under Plays: -$39, 158-158 (50.0%), 2.4 plays/day
- 2012 Over/Under Plays: -$81, 18-18 (50.0%), 3 plays/day
- 2011 Run-Line Plays: $346, 118-187 (38.7%), 2.3 plays/day
- 2012 Run-Line Plays: $104, 10-7 (68.8%), 1.4 plays/day
Play All as Normal Strategy:
By far, this is the riskiest strategy (though it becomes less risky if fewer games are played), but it is/was also, by far, the most profitable reviewed of the last year of baseball (aka the only year of baseball) and the easiest to maintain. It requires confidence, will, a substantial bankroll and some luck to pull off. Because the results can be catastrophic to the bankroll in the short-term (by definition, if it's "catastrophic" the "long-term" becomes very difficult as well), the Play All as Normal strategy is not recommended. Since we've been asked about it multiple times and the results are this strong, though, it's impossible to ignore. Also, this can serve as an illustration of other strategies, especially when used in conjunction with others above (such as "play all as half than normal," "play all at X," "play half-bets all as normal," "play half-wins as normal", etc.)
Last year, simply playing $50 on all playable MLB RL, ML and O/U picks would have been more profitable than the numbers reported (true and considerably so for each category, a total of +$7,234 for all playable plays).
That being said, that is 1) not consistent with our expectation and 2) a potentially catastrophic strategy (especially if $50 is actually 2% of beginning bankroll). There was a point in time after a particularly poor/unlucky day that bankroll would have dipped below $500 if $50 was played on every pick and the bankroll began at $2,500. That's one bad day away from having no bankroll (and makes it pretty difficult to wager $50 on all playable picks the next day - there will never be more than 45 picks in a day and are rarely more than 25).
Bankroll management is more important than maximizing potential profit - especially in baseball with so many betting opportunities and we are often recommending betting on something that is less than 50% likely to happen. When the payout is the same, there is (should be) a difference between playing something that is 60% likely to happen and something that is 50% likely to happen. Not accounting for that difference in wager size (or even whether a wager is made at all) is not appropriating fair value. Our recommended strategy (i.e. following the play value recommendations) may not have the highest ceiling (winning 100% of all MLB possible picks at $50 a pick would likely generate over $100K, while our approach, by nature, likely would not allow for that - unless EVERY play is normal or better and we win all of those as well), but, more importantly, it protects against crushing days and should consistently keep bankrolls growing for the long-run.
For 2011 and thus far in 2012, playing all playable picks as exactly "normal" for a normal $50 player would have generated the following results:
- 2011 Money-Line Plays: +$4,079
- 2012 Money-Line Plays: +$587
- 2011 Over/Under Plays: $1,149
- 2012 Over/Under Plays: $28
- 2011 Run-Line Plays: $2,006
- 2012 Run-Line Plays: $234
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