finally explained the 11 pt spread

by **Blanch32** 9/2/2014, 9:08 pm

Ok. Think OSU championship game in reverse.

Vegas believes we'll need a key stop in the 4th late but our d will fail us BC they don't think we have the same defensive depth like the past two years. They simply don't believe in our 2nd string as noted by how many true freshmen we played on d last week.

Therefore this is where Mannie and our conditioning comes in along with our recruiting.

Took some random analyst on XM to explain it. Fail yet again by the blue wall

by **WhiteBoyHatcher** 9/2/2014, 9:28 pm

The line is sitting where it is because oddsmakers don't want to get raped by sharp money. Period. Professional gamblers have a large difference in their power ratings between the two teams, and playing in Autzen is probably worth an additional 2.5-3 points in their ratings. If they made it 14.5 and the pros had the difference at 12, they would buy up MSU until the books adjusted to where there no value for them to continue buying. If they made it 7 and the pros had the difference at 12, they would buy up Oregon. Has nothing to do with what Vegas thinks the score will be.

by **Blanch32** 9/2/2014, 9:38 pm

Wbh,

I get the unofficial 3 pt home advantage but until this afternoon never understood the reasoning.

Honestly, I either see it play out like The cal opener or Nebraska last yr.

From my stand point, all the pressure is on Oregon to win since this is at home and they haven't done jack since chip left. Frankly, I see them folding under the pressure just as long as we maintain our composure and not do anything dumb like navy last weekend.

Here's the thing: we've been there before....last year with a good chunk of the team returning. For some reason, probably historical, Vegas expects us to fail and "revert back to the mean". I'm just not buying it.

by **WhiteBoyHatcher** 9/2/2014, 10:10 pm

No I generally agree, for the past 3 or 4 years those power ratings have been off on us fairly significantly, and it probably does have something to do with perception/historical bias. I remember we were 10 pt dogs in the 2011 Champ game against Wiscy. They were also big time faves in the Hail Mary game. We haven't been favored by nearly enough the past 2 times we've played UM at SS (I want to say like 3.5 points). We were big dogs to OSU last year, and of course Stanford, as well. I think a lot of that perception that we can't hang with the big boys, even in the minds of the smartest sports minds on the planet (Oddsmakers and wiseguys) may even go back to the Capitol One bowl vs. Bama a few years ago.

Just commenting in general that those spreads aren't set as a prediction, and they aren't set necessarily to "balance money" either (which is another popular fallacy). They pretty much are set to attempt to avoid exposure to the smartest guys in the room when the number is first released. And those guys know which way they're going to bet because they already have their own lines set, based on their power ratings for each team + homefield advantage.

by oregonblitzkrieg 9/2/2014, 10:16 pm

Blanch32 wrote:Wbh,

I
From my stand point, all the pressure is on Oregon to win since this is at home and they haven't done jack since chip left. Frankly, I see them folding under the pressure just as long as we maintain our composure and not do anything dumb like navy last weekend.

This is likely a game for a spot in the playoffs. Pressure will be on both teams. HTH. Also, we're sick about hearing about Stanford. Plungering MSU would go a long way to silencing the critics.

by **WhiteBoyHatcher** 9/2/2014, 10:22 pm

There is MORE pressure on Oregon. I agree with that. But I personally don't think pressure is going to be any sort of deciding factor in the game. I think both teams will be ready. I know MSU will be ready. It's going to be about execution.

by **Blanch32** 9/3/2014, 8:12 am

oregonblitzkrieg wrote:

This is likely a game for a spot in the playoffs. Pressure will be on both teams. HTH. Also, we're sick about hearing about Stanford. Plungering MSU would go a long way to silencing the critics.

Disagree. While a win would be nice, you simply cannot drop 2 more games the rest of the way. Oregon focus on critics only proves we are so in your heads

by MasonGuy 9/3/2014, 8:19 am

We don't need to be in anybody's heads. We play our game and there are few teams in the nation that can hang with us. Oregon isn't one of them....

by **NigelUno** 9/3/2014, 8:53 am

by Herbie Green 9/3/2014, 10:08 am

WhiteBoyHatcher wrote:

Just commenting in general that those spreads aren't set as a prediction, and they aren't set necessarily to "balance money" either (which is another popular fallacy). They pretty much are set to attempt to avoid exposure to the smartest guys in the room when the number is first released. And those guys know which way they're going to bet because they already have their own lines set, based on their power ratings for each team + homefield advantage.

So if Vegas had $50 million of wiseguy money on MSU but $90 million from the rest of the public on Oregon, then they would want Oregon to win so they could "outsmart the wise guys"?

by **WhiteBoyHatcher** 9/3/2014, 10:16 am

Your point makes no sense. "Vegas" doesn't really care about public money - why should they? The public is stupid. In this case, they would probably hold a sizable handle against the public, which is a position they'd be pretty comfortable with.

by Herbie Green 9/3/2014, 10:39 am

What I am saying is that Vegas doesn't care where the money comes from as long as they are in a position to make it. I have read this wise guy thing numerous times so I don't know if that is in some book or movie.
But Vegas absolutely has to take the average bettor into account. In fact, it is where the majority of the money is coming from.
Lets say they come up with a model that shows Oregon should really be favored by 8 points. But they know the public loves home favorites that score a lot of points and they really love Oregon. They think the line to attract an equal amount on each side is actually Oregon by 14.
So where do they set the line? They might go in the middle and put it at 11. Now they are going to end up taking a position with MSU, right along with the wise guys.

by **WhiteBoyHatcher** 9/3/2014, 11:24 am

No, that's not really true. And yes, I have read books on the subject. There's no hard and fast rule for how every line is set, how every handle is dealt with, etc. But as a general rule, when lines are released, they are released at a number that will not leave Vegas much exposure from the pros, and the public is disregarded. They do not give the Cowboys/Yankees/Lakers/Ohio State extra points because they know the public loves them. The public does not bet games early in the week, and the pros would kill the bookmakers on those soft lines early in the week. At the same time, they are not going to adjust the line later in the week to account for the public because, again, the pros would gobble those lines up and might even take two positions on a game in hopes of middling.

If Vegas winds up holding a public handle on a game, they'll live with it and be way more comfortable with that handle than they would be if they wound up with sizable professional handle. Still, it happens. See Auburn/Arkansas where the public was all over the favorite, but the books had to keep adjusting the lines down because the pros were buying up Soo Piggy. The line opened at 23+ and closed at 17. The bookmakers were holding a sizable professional/sharp handle on the Hogs and desperately needed the public favorite to cover. They did.

by **Other Teams Pursuing That** 9/3/2014, 11:38 am

Will someone tell me if the MSU ML will go back up to +400?

by Herbie Green 9/3/2014, 11:53 am

In my example lets say you set the line accurately at MSU -8 to beat the wise guys. Mission accomplished. You have outsmarted the wise guys. The line is so accurate they don't even bet the game.
But the dumb public does and they love Oregon and now 90% of the money is on Oregon.

So you outsmarted the wise guys but put your casino in a spot where it has a 50% chance of losing its ass.
They absolutely have to take into account the betting behavior of the general public whether it is rational or not. You would go out of business quickly if it was your strategy to ignore them.

by **WhiteBoyHatcher** 9/3/2014, 1:36 pm

I'm not sure you really understand gambling, Herb. No offense.

Your scenario is probably unlikely to occur, where 90% of the money is on one side and it's all public money. I'll explain why below. But even if did, the book would still have to be cautious about adjusting the line too much because Billy Walters and company are always waiting in the wings for value, and bookmakers are constantly forced to guess when and where they're seeking it.

First of all, professional handicappers all have their own power ratings, and they can be quite different. There is not always a "universally sharp" side to a game where ALL the pros are on Team A and Team B is generally public backed.

Second, I think you're greatly overestimating the amount of public handle vs. professional handle on most games, but I don't have figures to back that up.

Third, I think you're greatly underestimating the bankroll of the sportsbooks. They can afford to and DO take risks, and it makes good mathematical sense for them to do so.

Say you have a game - MSU at Oregon. The book takes $2.2 million in Oregon handle to win $2 million and $3.3 million in MSU handle to win $3 million.

If MSU covers, the book pays out $3 million and takes in $2.2 million, losing $800k. If Oregon covers, the book pays out $2 million and takes in $3.3 million for a profit of $1.3 million dollars.

So the book can risk $800k to win $1.3 million on what could be considered a 50/50 proposition. Pretty good odds, right? Approx 8/5. Especially if the book believes there is a "sharp" side to the game and a "public" side, and the public side is the smaller handle. Their pockets are so deep they can easily afford to take these risks, and over the long run with odds like that, it's impossible to lose if your bankroll is big enough.

by Herbie Green 9/3/2014, 2:35 pm

Yeah about the only thing I can agree with is that they do take "risks" but that is because they are usually in a position to profit even more by holding an advantageous position.

For instance, there has been some anomolies. I think it is with home underdogs where they have covered like 60% of the time for several years. So certainly that would be corrected because the wise guys are making a killing right?
Not necessarily. The lines still could be too high against the home team because they intentionally want to attract an imbalance in their favor. They can afford to take that position because as you say they have the law of large numbers on their side. They might very well lose on this game but they have 10 or 100 more where they are in the same position. Vegas would make money if they simply took an equal amount on both sides and make 5% but now they can make even more.
I think this could quite possibly be happening with the Oregon game with MSU as the underdog as I explained.
I would guess most of what you have read comes from the pro gamblers perspective and as such is over-dramatized as a war between them and the line setter. Not to say that isn't a very important part of it. But you almost make it sound like a casino cares more about beating the wise guys than making money in general.
Think about if you were a bookie and setting your own lines. You have 10 customers and one of them is a total pro and wins like 70% of the time. But half of the others are just complete homers. Some of them will bet on MSU even if MSU is favored. Would you set your line with the sole purpose of beating the pro? Even if he was betting much more than the others you couldnt afford to ignore them. (You would have to also assume you are like a casino and couldn't go make a hedge bet of your own to balance it out).

by **MiamiSpartan** 9/3/2014, 2:47 pm

oregonblitzkrieg wrote:

This is likely a game for a spot in the playoffs. Pressure will be on both teams. HTH. Also, we're sick about hearing about Stanford. Plungering MSU would go a long way to silencing the critics.

I disagree, I think more pressure is on Oregon. You guys are Top 5-10 (often Top 2-3) every year, so there's the pressure of possibly coming up short again. You are no strangers to national title talk, but after several years of that without a title, I have to think the pressure is there. I also think that MSU stands a MUCH better chance of running the table if we lose than you guys do if you lose.

by **WhiteBoyHatcher** 9/3/2014, 3:55 pm

Herbie Green wrote:Yeah about the only thing I can agree with is that they do take "risks" but that is because they are usually in a position to profit even more by holding an advantageous position.

For instance, there has been some anomolies. I think it is with home underdogs where they have covered like 60% of the time for several years. So certainly that would be corrected because the wise guys are making a killing right?
Not necessarily. The lines still could be too high against the home team because they intentionally want to attract an imbalance in their favor. They can afford to take that position because as you say they have the law of large numbers on their side. They might very well lose on this game but they have 10 or 100 more where they are in the same position. Vegas would make money if they simply took an equal amount on both sides and make 5% but now they can make even more.
I think this could quite possibly be happening with the Oregon game with MSU as the underdog as I explained.
I would guess most of what you have read comes from the pro gamblers perspective and as such is over-dramatized as a war between them and the line setter. Not to say that isn't a very important part of it. But you almost make it sound like a casino cares more about beating the wise guys than making money in general.
Think about if you were a bookie and setting your own lines. You have 10 customers and one of them is a total pro and wins like 70% of the time. But half of the others are just complete homers. Some of them will bet on MSU even if MSU is favored. Would you set your line with the sole purpose of beating the pro? Even if he was betting much more than the others you couldnt afford to ignore them. (You would have to also assume you are like a casino and couldn't go make a hedge bet of your own to balance it out).

You will believe what you believe. Much of what I have written above comes from guys who ran the book at the Las Vegas Hilton (now LVH) for many years, and other major books. I don't even know what your arguing here. I'm telling you what it is, based off of lots of reading and years of research on the subject, and direct quotes from bookmakers and handicappers alike. And you're telling me that's not true because you think it should be different. Cool.

Here's a picture of a hamburger.

finally explained the 11 pt spread Hamburger%2008

finally explained the 11 pt spread Hamburger%2008

by Herbie Green 9/3/2014, 7:16 pm

Well I did some quick research and found a related example occurred as recently as the last Super Bowl with Casinos holding a position on Seattle despite 70% of the money being on Denver. The line started off at I think Seattle -2.5 and was at Denver -2.5 within an hour and stayed there. Now tell me how and why that happened. Which side were the wise guys on?

Think that through and it might help you understand it better. I can think of a few different reasons why they would hold that position but one thing I would agree with is that they don't want to be holding a position like that on the opposite side of the wise guys. Perhaps that is where you are getting confused.

FYI, it is estimated that 90% of Super Bowl money comes from the public compared to 70% for an NFL regular season game. I would think a big college game like MSU-Oregon would be close to an NFL game. Or at least closer than say a Sienna vs. Bucknell basketball game.

by **WhiteBoyHatcher** 9/3/2014, 8:20 pm

finally explained the 11 pt spread 1966794946

I understand it just fine, Herbie. I've done more than 15 minutes of research on the topic.

Here's a guy wearing scuba gear.

finally explained the 11 pt spread Pjl-scuba_gear

finally explained the 11 pt spread Pjl-scuba_gear

by Herbie Green 9/3/2014, 9:32 pm

I figured as much. As I learned in my 15 minutes of research you would be what is known in the trade as a "square". You have read all these books but still have no idea what the hell is really going on.
Back to the real topic at hand is the MSU-Oregon game. Note that Oregon has a lot of factors working for it that Denver did. Denver had MVP qb Payton Manning, scored tons of points and the thinking was that the Seattle defense "had never really faced anything like this before". This caused a huge bias towards Denver that casinos were willing to risk to exploit. Taking a 70% position in the biggest single gambled sporting event of the year was a huge risk and proves they not only have the deep pockets to cover it in case they lose, but they felt damn confident in their position. Keep in mind Vegas has only lost money on one Super Bowl in history so it is doubtful this was just dumb luck. They could have easily moved the spread as little as half a point and mitigated that risk. But they didn't. Afterall, that would have exposed them to the "wise guys" that would jump all over that. finally explained the 11 pt spread 502811600

finally explained the 11 pt spread 502811600

by **WhiteBoyHatcher** 9/3/2014, 9:44 pm

Jesus Christ.

by **Wally Fairway** 9/3/2014, 10:11 pm

WhiteBoyHatcher wrote:Jesus Christ.

Nice effort

Here is a picture of Buddy Christ
finally explained the 11 pt spread 300px-Buddy_christ

by **WhiteBoyHatcher** 9/3/2014, 10:37 pm

Where is Strangelove.

by **SpartanInNH** 9/3/2014, 10:48 pm

WhiteBoyHatcher wrote:Jesus Christ.

by **Nordic** 9/3/2014, 11:47 pm

WhiteBoyHatcher wrote:
So the book can risk $800k to win $1.3 million on what could be considered a 50/50 proposition. Pretty good odds, right? Approx 8/5. Especially if the book believes there is a "sharp" side to the game and a "public" side, and the public side is the smaller handle. Their pockets are so deep they can easily afford to take these risks, and over the long run with odds like that, it's impossible to lose if your bankroll is big enough.

So your saying the Vegas does try to lure Joe Pub? finally explained the 11 pt spread 2599972566

by **WhiteBoyHatcher** 9/3/2014, 11:57 pm

Nordic wrote:

So your saying the Vegas does try to lure Joe Pub?

Hi. I can talk about this with you, because you're smart and we're friends. And I think you know this.

No, they're not trying to lure anyone. They float their lines to LVSC and other consulting agencies, and maybe even online/B&M books put lines out there early with limits to see how true their lines really are. They get tossed around, one way or another, and by Sunday night or so, all value is pretty much gone.

There's a reason we're all "square", and there's a reason none of us do this for a living. It's ****ing hard and it takes a lot of work. And that's just to hit 55%!

TL;DR Pimpin' ain't easy.

by **Nordic** 9/3/2014, 11:58 pm

WhiteBoyHatcher wrote:IFirst of all, professional handicappers all have their own power ratings, and they can be quite different. There is not always a "universally sharp" side to a game where ALL the pros are on Team A and Team B is generally public backed.

So which Sharp's Power Rankings do they use to set the lines? finally explained the 11 pt spread 1550444538

by **Nordic** 9/4/2014, 12:05 am

WhiteBoyHatcher wrote:

....They float their lines to LVSC and other consulting agencies, and maybe even online/B&M books put lines out there early with limits to see how true their lines really are. They get tossed around, one way or another, and by Sunday night or so, all value is pretty much gone.....

This I agree with... see Miss/Vandy line. If it was 14 on Monday and my kids have a 45.45% chance (repeating of course) of not going to college. 20 seconds after the test line was released it was 20.

by oregonblitzkrieg 9/4/2014, 6:57 am

MasonGuy wrote:We don't need to be in anybody's heads. We play our game and there are few teams in the nation that can hang with us. Oregon isn't one of them.....

You're going to be in for a rude awakening. Unlike Stanford, you don't have any experience with us. It'll be shock and awe. You won't know what hit you till you're 28 points down midway through the 2 quarter. Who knows. If it really gets out of hand we'll just do what we do to all teams that take us on -- bench our starters for the entire second half and cruise to another explosive win. Notch another W on our way to the playoffs and the championship game. Axe the ghosts of the legions of other teams we've sent to the football afterlife in a scorching hail of kick ass.

finally explained the 11 pt spread 26677aa157cc18ead056736ae00aecae

finally explained the 11 pt spread 26677aa157cc18ead056736ae00aecae

by **NigelUno** 9/4/2014, 7:10 am

oregonblitzkrieg wrote:

You're going to be in for a rude awakening. Unlike Stanford, you don't have any experience with us. It'll be shock and awe. You won't know what hit you till you're 28 points down midway through the 2 quarter. Who knows. If it really gets out of hand we'll just do what we do to all teams that take us on -- bench our starters for the entire second half and cruise to another explosive win. Notch another W on our way to the playoffs and the championship game. Axe the ghosts of the legions of other teams we've sent to the football afterlife in a scorching hail of kick ass.

Are you going to make an Eastern Michigan schtick next week? That might be cool. I bet no one has ever made up an Eastern schtick. Make it "Huron" something.

by oregonblitzkrieg 9/4/2014, 7:36 am

NigelUno wrote:

Are you going to make an Eastern Michigan schtick next week? That might be cool. I bet no one has ever made up an Eastern schtick. Make it "Huron" something.

I'm a real duck bro. Cook it.

by **NigelUno** 9/4/2014, 7:39 am

oregonblitzkrieg wrote:

I'm a real duck bro. Cook it.

Oh. My bad. Sorry.

What am I supposed to cook?

by **Blanch32** 9/4/2014, 7:46 am

oregonblitzkrieg wrote:

I'm a real duck bro. Cook it.

Huey, luey, or duey?

by oregonblitzkrieg 9/4/2014, 8:12 am

NigelUno wrote:

Oh. My bad. Sorry.

What am I supposed to cook?

Defeat is on the menu for Saturday.

by **NigelUno** 9/4/2014, 8:34 am

oregonblitzkrieg wrote:

Defeat is on the menu for Saturday.

Duck feet? Is that a delicacy?

by Herbie Green 9/4/2014, 10:57 am

WhiteBoyHatcher wrote:

No, they're not trying to lure anyone. They float their lines to LVSC and other consulting agencies, and maybe even online/B&M books put lines out there early with limits to see how true their lines really are. They get tossed around, one way or another, and by Sunday night or so, all value is pretty much gone.

.

So that would explain the Super Bowl. The wise guys inmediately piled on Denver which caused the line to move (they are the only ones that can cause the line to move even though they are 10% of the total) and all value was gone as it quickly settled at Denver -2.5.
But that wouldn't make the wise guys very wise and it seems there was plenty of value left betting on Seattle any time over the next two weeks as they won by 30 points.

But what do I know, I only value financial risk for a living.

by Herbie Green 9/4/2014, 5:16 pm

http://pricetheory.uchicago.edu/levitt/Papers/LevittWhyAreGamblingMarkets2004.pdf

This is an interesting article that explains how bettor bias is built into the point spread to maximize profit for the bookmaker. It even provides an equation for this profit:
(2.1)*(f + p – 2pf) – 1
Where f is the fraction of dollars on the favorite and p is the probability of the favorite covering the spread.
Lets go back to the MSU-Oregon game. Assume that the true line that gives either side a 50% chance of winning is 8 points but the bettors are biased towards Oregon to the point where the spread would have to go up to 14 points to attract equal amounts on both sides.
Say the casino sets the spread at the “correct” number of 8 points (p=0.5). The profit of the casino is going to be 5% (although there would be a huge imbalance of money on Oregon).
If the casino sets the spread at 14 points (f=0.5), the expected profit is also 5% (you have an equal amount on each side even though MSU is much more likely to beat the spread).
So if either p or f are at 0.5, the casinos profit is always 5%, equal to the base commission.
But now say the casino sets the spread at 11 points. This means that not only will this attract more bettors on Oregon, but it will do so with the likelihood they will lose their bets. Lets say for example this spread equates to p=.4 and f=.6, that is Oregon has a 40% chance of beating the spread but 60% are betting on Oregon. In this case now the expected profit of the casino is 9.2%.
Of course there is no way to know what these factors actually are right now, but it is quite possible a situation like this exists for MSU-Oregon.
…I should probably leave it at that, but what I don’t think gets mentioned in this article is why this situation wouldn’t attract enough wise guys to exploit this situation until both p and f converge to 0.5. I would have to guess limited resources. I suppose it is a given that the gambling market is not that efficient as evidenced by casinos ending up holding a substantial position in many of the games. I would go even further to theorize that the profits from wise guys might be as much or more from exploiting these biased lines than from beating their “true lines”. Think about it. Casinos, in addition to their own expertise, pay consultants that have whole staffs of Ivy League mathematicians to help them arrive at a spread. It is doubtful many people if any could do it better. But since the casino also incorporates the uninformed bias into the line, it gives the wise guy a chance to profit as well.

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