O'Reilly logo

Mathletics by Wayne L. Winston

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

39

 

FREAKONOMICS MEETS THE BOOKMAKER

Recall from chapter 38 that if a bookmaker gives 11-10 odds on NFL point spread bets and sets a line so that half the money is bet on each side, then the bookmaker is guaranteed to make a riskless 4.5% profit.

Steven Levitt of Freakonomics fame showed that bookmakers can exploit bettor biases to make an expected profit exceeding 4.5% per dollar bet. Levitt obtained bettor records for 20,000 bettors during the 2001 NFL season. He found that much more than 50% of all money is bet on favorites and less than 50% on underdogs. When the home team was favored, 56.1% of the bets were on the favorite and 43.9% of the bets were on the underdog. When the visiting team was favored, 68.2% of the bets were on the favorite ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required