If you listen to much talk radio about sports, or if you follow any Twitter account of experts about betting on sports, you’ll soon realize that all the pundits are fascinated by who the public is betting on and who the sharps are betting on.
You’ll hear them talk about how much the public loves favorites, or you’ll see someone presenting a chart showing who the public is betting on this week.
Or, they’ll talk about who the sharps are betting on.
They often present this information without much analysis or advice about how to use it to inform your sports betting choices.
According to Ed Miller’s recent book, The Logic of Sports Betting, such thinking is only of limited use, anyway.
That’s the opposite of what you’ll hear elsewhere.
In this post, I examine what Miller has to say about that and what you should take away from his analysis.
How the Pundits Say You Should Use this Kind of Information
Most sports betting bloggers I know love to tout the common advice that you should “fade the public.” In other words, if the public is betting one way, you should take the other side. The idea is that the public is almost always wrong.
Other bloggers will suggest that you figure out what the sharps are doing so that you can do the same thing. Or they might suggest that you try to get on the side of the sportsbooks.
Miller claims that this advice isn’t especially useful when it comes to finding good bets.
If you understood that discussion, you can probably see why trying to fade the public or bet with the sharps might be an exercise in futility.
How Most Lines Get Set
Almost all lines in sports betting start off at small, market maker sportsbooks. Retailers copy those lines. Rarely do sportsbooks get the same amount of money on each side, though – even though that would guarantee them a profit.
You might think that a retailer sportsbook would be eager to move their line to try to balance their action.
But they’re often reluctant to do so.
They don’t want to create opportunities for their customers to arbitrage.
Miller suggests that there are exceptions, especially on big games with a lot of public interest. Examples might include playoff games in the NFL.
The public action on such games might get so big that a sportsbook can’t afford to let their betting action get too lopsided. It might result in a loss so great that they go out of business.
Why Public Action Doesn’t Affect the Lines as Much as People Think
Most sportsbooks are retailers. Market makers are the exception, not the rule.
The market makers set the lines, and most retailers just copy them.
And most of the public bets at retailers. Those are the sportsbooks that are least likely to move their lines based on public action.
This is, in a nutshell, why trying to fade the public is doomed to fail. Public action just doesn’t have that big an effect on the lines most of the time.
And the line is what matters when it comes to placing the bet.
Remember, you’re trying to buy a bet when it’s priced too cheaply. If the public action doesn’t affect the price of the bet (the line), it doesn’t help.
An Example of When the Public and Sharp Action Did Matter
Miller allows for exceptions in his book, and the big example he uses is the Mayweather-McGregor fight in August 2017. The public loved McGregor and bet on him heavily. And, since it was a well-promoted event, there was lots of action – more than usual.
Most bettors just bet on McGregor because he was likable.
But the lines affected the action in a big way, too.
Mayweather was obviously the favorite to win. The question was how big a favorite. A bet on Mayweather might have been priced at -500 or more.
This means you’d need to risk $500 to win $100. Most people don’t like winning less than they risk. Look at how many people bet the pass line at the craps table even though the don’t pass has better odds. It’s because the odds bets on the don’t pass bet require you to risk more than you’ll win.
On the other hand, you could bet on McGregor at +350, which meant you only had to risk $100 to win $350.
All the sharp bettors had their money on Mayweather, and most of the public had their money on McGregor. If you knew this, you didn’t have to know anything about boxing to know how to bet. You just bet with the sharps on Mayweather.
The point that Miller makes is that events like this are the exception, not the rule.
What Happens When the Line Stops Moving at All the Sportsbooks
With most sporting events, the line moves a lot early, but eventually, it settles down at one price. This happens sooner than most people might think, too. When this happens, there is no sharp side. It’s impossible to fade the public, too.
That’s because the market has priced the line to where it’s accurate – it’s a fair market price. I wrote about this in an earlier blog post, but I’ll reiterate here.
The other thing to remember is that the hold (or vig) changes things a lot. Most of the time, action from the public would need to move the line enough to change your break-even percentage by 3% before making any noticeable difference to your profitability.
Here’s the Bottom Line
Most of the time, the discussion of public money and sharp money doesn’t matter because it’s already baked into the line. You can’t find good bets once the line has settled in.
You can find exceptions, though:
Look for high-profile sporting events to bet on. Then think about whether the public is betting one side irrationally. If that’s the case, you can bet the other way and get a positive ROI.
This is the kind of opportunity that David Sklansky and Mason Malmuth suggest looking for in their book How to Make $100,000 a Year Gambling for a Living.
What that book leaves out or couldn’t predict is how accurate the lines have gotten.
Don’t worry, though – there are still good ways to find profitable bets.
I cover some of them in my upcoming posts.