Longtime Las Vegas oddsmaker Peter Korner is debunking some of the most popular myths and common misconceptions in the sports betting industry, helping educate bettors by shedding light on the oddsmaking process and what really goes into the overnight lines.
Futures odds are a constant ebb and flow of numbers that try to entice you to bet throughout the year and into the playoffs. But what do they exactly mean?
At the beginning of a season, to the novice (and most major sports media outlets) futures odds are a close representation of how teams will fare and a ranking of who has the best chance of winning a championship, league title or individual honor.
Now, admittedly, most thoughts comprising the initial presentation of futures wagering do have the logic of “who are the best teams with the best chances to win?” But the odds themselves are technically nothing more than a way to spread out money so that when any team ultimately wins, the sportsbooks will pull a profit for their season-long bookmaking.
So, to burst your bubble, the futures market really doesn’t represent a team’s mathematical chances of going all the way.
A bookmakers’ best chances for winning at the end of the year is, of course, having the best numbers at the beginning of the season and then maintained at least once a week to keep up with hot teams and public money being played.
The numbers themselves are not a reflection of a team’s actual odds of winning, and the team with the lowest odds at any point is not necessarily the top team to beat. Now, that assessment narrows continually as the season progresses because as teams start to separate themselves from the pack, their odds will lower in anticipation of the incoming money.
For example: sportsbooks everywhere, season to season, never posted odds of the Chicago Cubs at 10,000/1 or even 1,000/1 odds, even when the Cubbies were at their worst. The reason is their faithful fans came to Nevada and bet Chicago to win the World Series every year despite what number was brandished on their boards.
Sportsbooks knew they were going to get a ton of Cubs money, so why post a wild number? What sportsbooks did was post other teams higher than the Cubs to get the money flowing another way. Books don’t want to be overloaded on teams with high odds. They’ve seen what happens when the long shots come in – it’s a nightmare to their bottom line.
If a sportsbook is fair with its futures odds, taking between 23 and 27 percent throughout the year, bettors will always find a good team somewhere with a marginal chance to win. The public’s perception of which team is the favorite to win it all will always carry such low odds as to disenchant the bettor to play them. Sportsbooks know they will always get that money, but the lower they go with the team with the best chances to win, the lower the payout at the end of the year and hence, higher profits.
The odds are a balancing game like every other aspect of sports wagering. Bookies are not in the business of guessing or making predictions. Their job is to create the numbers that divide so they can conquer.
Now, as we enter the playoffs with hoops and hockey, the bettor who took the best numbers at the beginning of the season has the best chance to score a definitive win for his patience. Bettors can now hedge both game-by-game and series-to-series.
Once the playoff schedule is set, odds are slightly reshuffled again. Futures on series prices will be determined by the money lines of each game in advance. There’s no guessing here. And as each game is played and a win is recorded, oddsmakers have a special formula that updates these prices after each game. Now, they can be manipulated any way they judge by the amount of hypothetical risk extension they have on their original futures money.
For example, the wise bookmaker, after Game 1 of the Portland-Golden State series can come up with the updated series price after the Warriors won. They’d be wise to pump up whatever number they came up with, as public money and perception has the Warriors winning this at whatever point. What they’re saying is, “We know what the real odds are but if you’re going to bet, we’re going to make you pay for Golden State”. The books are going to make you freeze a ton of money this early into the playoffs as to make you say, “Well, maybe not”.
Now, on the other hand, you have a series like Utah-Los Angeles. After the Jazz upset the Clippers at home in Game 1, the opening series prices dropped naturally. However, the formula comes out to more of a breakeven adjusted price. But with the Rudy Gobert injury, and the fact that L.A. money will continually come in, bookmakers played it smart by keeping the series prices higher on the Clippers. Chances are the Clippers will come back and win this series, so there’s no reason to be too low on the price. The odds being dealt are no more than perception.
Futures are a great way for the sportsbooks to freeze money away and make a profit at the end of the year. But if they’re not maintained books will find themselves in a prisoner’s dilemma - no matter who wins. That’s why the futures odds are constructed to attract money away from the true contenders and keep cash piling up on championship pretenders. In the end, it’s all about the math.
Peter Korner is a long-time Las Vegas oddsmaker and analyst, working at the Las Vegas Sports Consultants and operating his own odds service, The Sports Club. Find out more about Pete and his storied career in the sports betting industry here.