Tuerto de los ciegos

Vegas Over/Unders and MLB

Posted in MLB by Kyle S on February 26, 2010

Vegas Watch, a very interesting sports blog, posted over/unders for MLB regular season team wins in 2010 today. I investigate how much I would have won (or lost) last year had I taken a decent set of baseball projections and bet accordingly. Based on that result, I calculate a set of bets for this season, if you’re in the gambling mood and it’s legal (it usually isn’t).

With some googling, I found Vegas Watch’s over/unders from 2009 as well as Sean Smith’s CHONE 2009 team projections. A little Excel trickery later and I lined them up. Next, I subtracted the CHONE projection from the over/under to determine where the projection system thought the best value was. Here are the results:

The list is sorted in descending order of divergence from the Vegas line; in other words, CHONE disagreed most with Vegas over the Padres, closely followed by the Diamondbacks.

Next, I assumed that I bet each line according to whether CHONE’s prediction was greater or less than the Vegas line. Thus, as CHONE was more sanguine than Vegas on the Padres last year, I would have bet the over. Finally, I varied the amount of the bet directly proportional to the degree of divergence from the Vegas over/under at $20 per win; thus, I would have hypothetically bet $170 on the Padres Over, but just $10 on the Phillies under. Here are the bets the system would have made:

Overall, Vegas does a very good job of setting lines: 50% of the bets (15 out of 30) hit. However, the hits and misses were not evenly distributed based on divergence from the over unders: the five largest divergences were all hits. If we assume that Vegas charges a 10% vig on winning bets on average (i.e. wagering $170 wins $170 minus 10 percent, or $153), this simple little system would have cleaned up last year.

As you can see above, this model would have produced $333 in profits on $1700 wagered, roughly 20% return on capital in a little more than 7 months.  The credit for this hypothetical result all goes to Sean Smith for his projection system.

Applying the same model to 2010 produces the following set of bets. Don’t blame me if you lose your house!

There you have it – take the over on the Indians. Results guaranteed or your money back!

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