Super Bowl Betting – How the Bookies Lost

Great article from Bloomberg shows how the linemakers are reluctant to change the spread from where it’s set, even when they know its wrong.

Why, if the sportsbooks could see all the money flooding onto the Giants, did they simply not move the point spread? In financial markets, if all the money is short then the market will move down and if all the money is long then the market will move up.

The answer is that in sports betting, once the line has settled then the books will only move away from that point spread if there is major injury news. If Tom Brady had an injury so serious that he missed the game then the line might have moved from favoring the Patriots by 12 to favoring them by only 5, or perhaps less.

But if the line had been moved because of the weight of money, then the books may have found themselves taking early action on the Giants +12 and late action on the Patriots -9.
If the game then ended with the Patriots winning by 10 points they would have had to pay out to both sets of bettors, which would have been seriously expensive. In bookmaking terms this is known as getting ``middled'' and it is what linesmakers try to avoid doing, at almost any cost.

Real Life 'Ace' Rothstein - WSJ

Stats are not enough, you need a voice! These are gamblers ready to risk what they can't afford for what they can't have, you're selling the world's rarest commodity: certainty, in an uncertain world. - Two For The Money

The Wall Street Journal has a fascinating article about a full time sports handicapper:

Each Thursday morning at precisely 10 a.m. Nevada time, every major casino sports betting operation in the world from here to Costa Rica was being simultaneously pounded by thousands of bettors wagering millions of dollars on the same few college football games. Odder still, most of these lock step bets were turning out to be winners, costing the casinos a fortune.
...
There were rumors. Some thought terrorists were involved, or hackers, or maybe a shadowy international gambling syndicate known as the Asian Group. But as the month wore on, the truth began to bubble up through the Las Vegas whisper pool.

Turns out there was no grand conspiracy. The global business of sports betting was being jolted every week by one person: an obscure 41-year-old statistician from San Francisco named Dr. Bob.

If you've never placed a sports bet in America, you are fast becoming a member of the minority. Since its beginnings at Colonial horse tracks in the 17th century, the amount of money Americans wager on sports has grown to rival the gross domestic product of New Zealand.

He won't disclose his revenues but its hard work:

As well as these methods have worked, they have done nothing to cut his workload. In the months when basketball and football overlap, Mr. Stoll works 18 hours a day nearly every day, sleeping in bursts of no more than four hours.

The full article is excellent, if you can't get paste the gated version send me an email for the full one. Do not miss it.