By William Foote and the SuperiorDaily.comStaff

Baseball is a game of figures. America’spastime is enshrined in numbers, records and statistics. In the currentera, there are thirty teams and 2,430 contests scheduled during theregular season. With this massive sample size of games, baseball presentsmore opportunities for the gambler than any other major sport. But tofully exploit these opportunities, one needs to have a proper understandingof the relationship between money lines (the odds format for baseball)and winning percentages implied for every money line price point (e.g.-110, +110, -120, +120, etc.).

This concept might best be understoodby sharing an email one of our handicapping associates recently received.It was a long time friend of his and it came on opening day of the MLBSeason. To put this email in its proper context, let us quickly setthe stage. Toronto kicked off the season hosting Detroit. The Blue Jaysopening day starter was Roy Halladay, considered by most baseball “experts”as one of the best handful of pitchers in the Major Leagues. The Tigerscountered with Jason Johnson, who subsequently had led Baltimore (hisprevious team) to a 2-12 lifetime record vs. the Jays behind a towering6.92 career ERA in those fourteen respective starts. By all accounts,this looked to be a helpless cause for Detroit. After all, the toothlessTigers lost more games than any other team last season. On paper, thechances of Detroit winning seemed less likely than Jessica Simpson becominga Rhodes Scholar. Oddsmakers priced the Toronto at -250, meaning youhad to lay a whopping $250 on the Blue Jays in order to win $100. IfToronto lost, you would be out $250. Now back to the friend’s email.

"Can I ask why you are not bettingon the Blue Jays? The Tigers’ bats are as thin as your hair and theHalladay vs. Johnson match up is an utter mismatch. The Blue Jays arebrimming with confidence right now and this is a big first game. Seemstotally illogical to miss out on this gimme’ bet."

Final Score: Detroit 7 Toronto 0

We bring this email up for a number ofreasons. None of which have to do with the fact our staff member beggedus to publicly humiliate his friend after said friend took a jab athis thinning hair line. It is rather interesting, however, that hisbrainiac buddy—who will be attending graduate school at Harvard Universityin the fall—did not pick up on how “illogical” a bet on Toronto wouldhave been. And that is the exact purpose of this column. If a HarvardGraduate Student does not understand the percentages behind money linebets, we venture to guess there are several others lacking this understandingas well. We actually know this to be the case, as our occupation putsus in close contact with novice gamblers. And to say the vast majorityare lured into playing large money line favorites because of the apparent“no lose” nature of these bets is an understatement in the very least.The reason? It is because they do not have a proper grasp of the relationshipbetween money lines and what sort of long term winning percentages arenecessary at each money line price point to show a profit.

Our anonymous friend, like so many beforehim, thought there is no way a stud like Halladay will ever lose toa team like the paper Tigers. Well, as you can see, this couldn’t befurther from the truth as Detroit not only won, but won handily. Infact, there were a number of other large favorites who crashed and burnedin just the first few days of the regular season. Mike Mussina twice(-250, -210), Barry Zito (-240), Randy Johnson twice (-220, -190), MattMorris (-220), Roy Oswalt (-200), Andy Pettitte (-190), Miguel Batistatwice (-190, -195) and Pedro Martinez (-180) all failed to grab thecash as heavy chalk in the opening days of the season.

In hopes that you can avoid making thesame mistake as our Harvard-bound friend, let us quickly illustratethe relationship between a particular price point (e.g. -250) and thewinning percentage needed to show a long term profit at that price point.This concept sounds like a mouthful, but it is actually a fairly easyone to understand. We will look to explain this concept in full by usingthe example of a large favorite. But this model really applies regardlessof price. And once you fully understand it, you should use it to gaugeeach of your baseball wagers no matter what the price. The first questionwe ask ourselves before releasing any pick is whether or not it lookslike a long term winning proposition at the posted price.

As far as the example above goes, theBlue Jays at -250 would have to win this particular match up 72% ofthe time over the long term in order to be profitable. This percentageis derived from the following equation:

$100W – $250L = 0, where W=Blue Jays longterm winning percentage in this match up, and L=Blue Jays long termlosing percentage in this match up. $100 represents what the amountyou will win if the Blue Jays win; while -$250 represents the amountyou will lose if the Blue Jays lose (both numbers assume you are a $100player). Assume the Blue Jays win this match up 72% of the time overthe long term. This would imply that the Blue Jays lose 28% of the time(1-.72) or if you prefer the Tigers win 28% of the time over the longterm. When W=72% and L=28%, the above equation equals zero (it’s slightlyoff due to rounding errors).

To recap, Toronto must win this matchup at least 72% over the long term or else you are going to lose money.This is a formidable challenge for the Blue Jays. And one crucial pointhere is that when you risk 2.5 times your money (i.e. -250); you arereally risking it on the team and not the pitcher. Halladay can throwa gem and still lose a 1-0 game, as is so often the case. To put itanother way, the Blue Jays would have to win 117 times over a 162-gameseason in order to win at a 72% clip. Even if the Blue Jays had 5 Halladayclones in their starting rotation, it is highly unlikely they couldwin at this rate. There are simply too many “other” factors that Halladay(or his hypothetical clones) cannot control (hitting, defense, umpiring,etc.).

Of course, our staff member did not suggestto his anonymous Harvard-bound friend to bet on Detroit either. Herein the office, we felt like everyone else about the game. The clawlessTigers did not stand a snowballs chance in hell of winning. That said;the risk-reward ratio (the price) did not seem to justify a wager onthe Blue Birds.

On the other side of this equation, Detroitsat at +220 (depending on the sportsbook). This simply means for every$100 wagered, you receive $220 in net return if the Tigers won. Again,there is long term winning percentage implied at this price point. Aswe noted above, the Tigers would “only” have to win at a 32% clip tobe profitable over the long haul. Imagine for a moment that Detroitwon this match up 29%-31% of the time over the long term. This wouldfall below the 32% break even threshold. But it also implies that Torontowon this match up between 69%-71% of the time. Notice that this alsofalls below the 72% break even threshold for the Blue Jays. In suchan instance, the player would be wise to lay off because it would beimpossible for him or her to win money on either side over the longterm! By the way, there is a “can’t win range” for the player at mostevery price point (including your standard -110 wagers).

Handicapping is really just a processof comparing posted odds set by linesmakers to the “true odds” of thatparticular team winning. By “posted odds,” we mean the odds that thelinesmakers are implicitly assigning to a particular team given theparticular price. In our above example, the posted odds for Torontowinning at -250 are 72%. The posted odds for Detroit winning at +220are 32%. “True odds” on the other hand, are the actual odds of a particularteam winning. Handicapping is really an exercise in identifying situationsin which the true odds are greater or less than the posted odds. Thisconcept applies across all sports for any given line. Of course,this is far easier said than done because while we can always calculatethe posted odds for a given line, it is impossible to say with 100%accuracy what the true odds actually are. Trying to find a variancebetween posted odds and true odds with enough regularity to earn a profitover the long term is the very definition of handicapping.

Calculating posted odds is easy. We haveshown you how to do this above with Toronto and Detroit. Here are afew more money lines and their implied posted odds:

Money Line Implied Posted Odds

-110 - 52.38%

-150 - 60.00%

-200 - 66.67%

+110 - 47.62%

+150 - 40.00%

+200 - 33.33%

For each price point in the left handcolumn there is a corresponding implied posted odds percentage. Thisis simply what percentage a team would need to win at for it to be profitableover the long term. If the Yankees are -150 over the Red Sox, New Yorkwould need to win better than 60% of the time to turn a profit. Noticethat the posted odds increase as the price of the favorite increases(i.e. from -110 to -200). Notice too that the posted odds decrease asthe size of the underdog increases (i.e. from +110 to +200). In otherwords, you must win a larger percentage of games as the money line pricerises and a lower percentage of games as the money line price decreases.This is why playing underdogs in baseball is so appealing! And noticethat even with a small underdog like +110, you can win actually winless than 50% of your wagers and still come out ahead! And finally,we should point out that the implied posted odds for -110 (52.38%) and+110 (47.62%) add up to 100%. This is also the case for the pairs -150(60%) and +150 (40%); as well as -200 (66.67%) and +200 (33.33%).

The key question to ask each time a moneyline wager is placed on Team X at Money Line Y is: Are the true oddsfor Team X winning (based on your handicapping) greater than the postedodds at Money Line Y. If the Cubs for example are priced at -150, simplyask yourself: “Will Chicago win this game more than 60% of the timeover the long term”? If the answer is “yes” then it makes sense to beton Chicago. Conversely, if the answer is “no” then you should lay offor consider the Cubs opponents in this game as an option.

The key phrase here is “long term.” Anythingcan and will happen over the short term. But if the Cubs reallyare better than their opponent 60% of the time in this particular matchup, then over the long term you can make money by wagering on them.Again, this concept applies for any team at any given price across allsports. Using basic math, you can quickly calculate the implied postedodds for any money line price point. Understanding and utilizing thisconcept should take you one giant step closer to a profitable baseballseason.

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