Hedging Bets, Arbitrage, and Middling
Sports betting is something that can be quite torturous. It is something that really gets in your mind and seems like this wonderful thing, and how often it turns on you with all the little tricks it pulls. One of the many ways it can happen is with hedging your bets. When you hedge your bet, the idea is that you are just playing it safe, by either guaranteeing yourself a win, or at least not a loss that bothers you. If you had $550 on the Jets at -6.5 against the Dolphins, and it gets to half time and they’re up 21-3, their opponent is likely to be a favorite in the second half of the game, and very possibly a large favorite. What if the Dolphins are -5.5 for the second half? Well that means the second half plays as if it’s 0-0 again, and the Dolphins have to win the second half by 6 or more points. If they don’t do that, then they did not cover.
All professional sports are going to feature some pretty amazing comebacks every season. Suppose the Dolphins made this game pretty close? Or even won? That means your Jets bet would have lost, or come close to it. If you take the Dolphins at halftime, for the same $550, as long as the juice is still -110, the worst you can now do is lose $50. That’s only if you don’t the best you can now do which is win $1,000. Examples would be if the Dolphins lose 24-17, that means they won the 2nd half 14-3, covering the 5.5, but still failing to cover the 6.5 for the game. If they lost 21-17, now they do cover both the 2nd half and the entire game.
Anyone betting sports can have any kind of motivation for doing it. Some people are willing to lose at first, but will gladly guarantee themselves avoiding it when given the chance. They figure, hey, I’m supposed to lose anyway. But if I can get heart pumping entertainment for 3 and a half hours and only have to spend $50, why not, especially when I have a legit shot at winning $1,000? There is no way I can lose $550, and that feels great. As long as you are someone that values not losing money more than winning it, hedging is something you’ll probably find yourself considering quite a bit.
You need to acknowledge the fact that when you’re hedging, you are still making a bet you don’t have to make. Hedging is just a type of bet. It sounds pretty obvious, but it’s something I still believe should be said out loud. Because if your team is crushing and it looks like they’re just going to continue to steamroll, maybe just let it ride. Of course nothing is a guarantee, but trust your gut.
Hedging is tough. It can present some interesting dilemmas, a couple of examples are a guy told me he bet $1,000 on the Arizona Cardinals to win the Super Bowl before the season started. He was getting 40/1 odds. This was the year the Cards went to the Super Bowl and had the lead against the Steelers in the closing moments of the 4th quarter. His bookie offered him $15,000 right then and there. The Steelers were getting the ball back still down 3 points. What do you do? 15 grand is a lot of money to win without your bet having to even be completed. But aren’t you going to feel kind of sick if they win and you missed out on another 25 grand? From the team you so wisely put a thousand on at the start of the year? But then again, you’ll feel pretty smart too if you take the 15 grand and then see them blow the game. It simply comes down to doing what you think you should do, whatever feels right.
Whether it’s a gut feeling or it just seems of the appropriate value to you, it does make for a stressful decision for you and the bookie. He ended up turning down the hedge and stuck with the team he liked all year. We don’t know if it was because 15 grand seemed like too little or if he just didn’t want to do it. In any case, the Steelers scored a touchdown, won 27-23, and he was -$1,000.
Another story was when the St. Louis Cardinals made the most improbable September run in Major League Baseball history. They were 500/1 to make it to the World Series, and 999/1 to win it. There were a couple of weeks left in the season. They were all but mathematically eliminated. But the Atlanta Braves imploded to end the season, the Cardinals caught them, made the playoffs, and proceeded to win it all. A guy bet $250 on both of those tickets. Before the World Series even starts, he knows the worst he can do is win $124,750 if he doesn’t hedge. Tempting to put $50,000 on their opponent the Texas Rangers though right? If he rides out the Cards (and I didn’t choose the Cardinals for each sport in both examples on purpose), and they win, he pockets another $249,750 on top of his near 125. If he puts $50,000 on the Rangers and they lose, that additional profit drops to $199,750. I don’t remember what the odds on the Rangers were to win the Series right before it started, but if you win that bet, you get that plus the $125,000 because the Cardinals won the pennant.
So, this was a big money decision for that guy, and I don’t know what he ended up doing. Bottom line is this, if you’re thinking about hedging a bet, that’s a good thing. It means you’re off to a good start.
There’s nothing sweeter than a freeroll. This is when the worst you can do is push. Or, you just win. Let’s say you made a $110 bet on the Pirates’ over of 79 wins, at -110. Entering the final game of the season, they have a record of 79-82. This means all you stand to now is either make $100, or you just push. This gives you the luxury of betting their opponent if you think they have the edge. You can take the $100, and bet against the Pirates. If you lose the straight bet, you still broke even as the Pirates will have now gone over the 79. Should you win the straight bet, you additionally collect whatever the payout for $100 would be.
So as you can see, you are in the driver’s seat. You are freerolling the $100 profit you can pick up with a Pirates win. No matter what you do you can’t lose. Only push, or possibly win.
Cutting Your Losses
Sometimes you find yourself in a situation where you’re willing to forfeit the original bet you made in hopes of cutting your losses. But beware, this can backfire and leave you with 2 losses. Let’s say you took the Jaguars at +10, and then find yourself down 31-0 at halftime. The Jaguars are likely to be favored in the second half even if it’s a very small number. You say to yourself okay, this was a total flop, I’ll bet against them in the 2nd half. The Jaguars are -2.5 at halftime, and they go on to lose 34-10. That means you just got scooped, because they lost the game by 24 when you only had 10, but they won the 2nd half 10-3, covering the 2.5. The idea of cutting your losses can be very deceptive, because you are not necessarily doing that. The reality is you’re just placing another bet, and anything can happen.
Arbitrage betting has to do with when situations arise where you bet on both sides to win and it is guaranteed to make you a profit. These are also known as surebets, or miraclebets. Yes it certainly sounds like it’s too good to be true, and usually it is. But these things can happen, just don’t count on them every day, or every minute for better. With bookies constantly adjusting their lines and analyzing what risks they are taking, an arbitrage opportunity can come and go very quickly. So you need a lot of time on your hands to be able to know when they pop up, and act quickly when they do.
Each individual sportsbook, or bookie, are not going to allow a mistake like this to be made. The only possibility is when you can bet one side one place, and the other side with another. You need the payouts to be drastically different. The only way that may happen is if one side really needs to balance their books, so they make one side a lot more appealing than it is anywhere else. An example is if the Bulls were playing the Knicks. The Bulls could be -150 to win with Bookie A, and the Knicks could be +165 with Bookie B. If you bet $150 on the Bulls, and $95 on the Knicks with each of these lines, you just made money. A Bulls win means $100 win minus the $95 you had on the Knicks, so you are +$5. A Knicks win means $156.75 minus the $150 you put on the Bulls, so you are +$6.75.
Bookies can and will cancel their bets. If you’ve made money this way, and presumably quite slowly, it can suddenly come crashing down one day if a bookie cancels on you, and now you’re just riding the other team. You have to consider how much time it will cost you as well. Time is money, and needs to be highly factored in as you look to make this investment.
When you “middle”, you are betting both sides with the opportunity to win both bets. For instance, the Packers are -7 against the Ravens. You like the Packers so you grab the -7 right away. Everyone else liked them too and piled them all week. Hours before gameday, now they are -10. A line moving 3 points is pretty gigantic, but it happens, and lines can very easily move at least 1 point. In this situation, you can now take the Ravens +10, and will win both bets if the Packers win between 8-9 points, hence the term middling. If the Packers win this game by exactly 7, or exactly 10, you still win 1 and tie on the other. But if they win by 6 or less, or 11 or more, you just lost to the vig. If you bet $110 on each and win, you net $200, or lose $10. That means you have to succeed at this approximately 1/20 times to make any money.
Finding the Value
You shouldn’t just middle for the sake of doing it. The whole idea of middling is betting on whichever side is giving you the most value. When the line moves enough, then you bet the other side as that is now the one giving you the most value. Determining when the value shifts can often come down to a ½ point. The key numbers to work with when betting football are 3, 7, and 10. A team may have worthwhile value at -7, but -7.5 presents a whole different story.
Vary Where You Bet
You can place your middling bets at the same sportsbook if the line moves enough, but you run the risk of having your action refused, or even being banned at some point. Not because you did anything wrong or illegal, the sportsbook just knows that middling is a tactic that can make money, and they’re not trying to allow this to happen. Play it safe and spread your action around to prevent this.