THE BOOK--Playing The Percentages In Baseball

Tango, you are obviously not a sports bettor.  For one thing, why should we believe that Rose bet and bet exactly the same amount on each and every game?

More importantly, a degenerate sports bettor, which Rose apparently is, wants to win one game and one game only - and that is the game that is going on AT THE PRESENT TIME.  There is NO way in heck that Rose is thinking long term.  That is just not the way a degenerate gambler thinks.

We have no way of knowing of course what Rose was thinking or doing during each game, and we shouldn’t really care.  There are 800 reasons why an MLB manager should not under any circumtances be betting on games, for or against, that he is involved in or even those that he is not involved in.

But, in any case, Poz’ argument is reasonable.  You are WAY off base here.  And do you really think that Rose is even close to being smart enough to think the way you are?  He’s not.

If you’re a robot, perhaps it won’t impact how you manage a game.  Likewise if you’re a dual PhD in econ and math and are risk-neutral and rational.

But people aren’t like that, and Pete Rose sure as heck wasn’t.  So I’m definitely willing to believe that he left a pitcher in there too long in a close game when the pitcher was effective.  And I’m willing to believe that may have impacted the pitcher negatively down the road.

“Non-betting Pete” may not have wanted to make that sacrifice, getting a boost in winning percentage today at the cost of it 4 or 5 days from then, but “betting Pete” might have been in more of the frame of mind to make that sacrifice.

MGL, Tango is referring to the hypothetical situation that JoePo created--he best the same on every game and that the game is still corrupt as a result.

There’s no way to know how much he bets on each game or if he bet on each game, but we’re talking about a hypothetical situation.

This isn’t about whether or not a gambler is smart enough to think this way.  It’s whether or not this hypothetical situation ruins the game.  It does not.  Tango is right.

The one assumption that I think Tango is making is that the betting odds on every game are even money which of course they aren’t.  I don’t have my baseball betting odds database on this computer, but it is possible to win money betting on one team every game of the year even if they win say 70 games.  That is, “bad” teams will be playing at +160, +170, etc. in quite a few games.  Likewise, it is possible to lose money betting a team every day when they win 85-90 games.  Off the top of my head, I would guess there are years where the Yankees lost money for bettors when they won 85+ games because they are a popular team and played as a favorite most of the time.  Back to the Rose situation, there would be times when he would have different motivations to win.  A +200 game when the Reds’ #5 starter is going against Nolan Ryan on the road is more valuable than a game when you are big favorites. In the first situation, a $2000 bet would win $4000 while in the 2nd might only net you $1000.  And, if you lose in either situation, you lose $2,000 each time.

Right, I’m talking about the hypothetical that Joe is bringing up, that Rose bets the same, come rain or shine.

There’s no way that Rose will leave a pitcher in too long, to try to win this game, because this will impact him in his next start… which Rose has already committed to betting on.

Therefore, if he bets on each and every game the exact same amount, there is no integrity issue.

Now, whether you want to argue if it’s possible that a degenerate gambler can do that is another question.  I wasn’t asking about that.  I was only following Joe’s lead.  And Joe’s lead makes an invalid conclusion, based on his assumptions.

A +200 game when the Reds’ #5 starter is going against Nolan Ryan on the road is more valuable than a game when you are big favorites. In the first situation, a $2000 bet would win $4000 while in the 2nd might only net you $1000.

Fantastic point.  Yes, clearly if a win is NOT a win, then he could manipulate it this way.

I stand corrected, based on this point alone.

However, we can just as easily add a rider on our scenario that says that every bet is an even-money bet.  If the bookie (or the GM) thinks that the Reds are an 81-81 team, then he’ll take that bet.

Otherwise, we can make the bet payoff be identical each game, based on the expectation of the team.  If for example the bookie and Rose agree that the Reds are an 86-76 team, then the payoff for a win would be 76/86 and for the loss, it would be the inverse.

I don’t think this is a remotely plausible scenario, for Rose or anyone else.  The compulsive bettor needs to show he’s smarter than everyone else—that’s the whole point! Betting $2000/day, every day, on the same team, same odds, doesn’t achieve that.  It’s very hard to imagine such a person resisting the temptation, after a string of losses, to bet a little bit more when his ace is on the mound (or “forgeting” to bet on a day he doesn’t like his chances, to avoid the psychic pain of losing). 

BTW, MLB got Rose’s bettering records, and IIRC he did NOT do this—he bet on some games, but not others. Which is why it was clearly corrupting, even if he never bet against the Reds.

And to answer Poz’s question, I’d vote no on the Hall even if we knew it never affected his managing, because he opened himself up to blackmail by those who knew he was betting.  His bookies could have threatened to end his career if he didn’t throw games.

Tough crowd!

Ok, how about every player and every manager is paid in this manner:

1. you negotiate your salary as per usual
2. you put half the salary in escrow
3. you accept the preseason W/L forecast from Vegas for every team
4. your payout of what you have in escrow is based on the L/W ratio forecasted, so that for every win your team has, you get (1 + the forecasted L/W ratio) times your escrow/162

If your team wins as many games as expected, you get all of your escrow.  And the money is handled by the MLBPA (and they can’t lose any money, since it’s a zero-sum game).

Under THOSE conditions, do we have any issues?

Indeed, I will even argue that this is the way players SHOULD be paid.

I like the concept, but ... we’re asking MLB-minimum guys to make the same deal that established stars are making? If my team starts badly and my GM trades its only stars for prospects, that’s going to cost the remaining players money? Under your proposal, each season is an individual entity. But it’s common for teams to make decisions intended to pay benefits two or three years down the road.

There’s also the issue of Rose (or any gambler) potentially building up a large enough debt that the bookie could use it as leverage to force him to throw games (or shave points, in basketball). Certainly with the steep penalty MLB has for bettors (permanent ban), anything that gives the bookie something he can hold over the player/coach/referee’s head creates the opportunity for even more unethical behavior.

So has anyone looked at the Reds performances during the time in question?  Are there days when Rose did inexplicable things as manager, such as sending out light-hitting players when the game is on the line, or leaving someone in to keep pitching longer than they should (and to measure that, you might have to find the same situation in a bunch of games, and see where he made different decisions)?  Is it even possible to determine this, since the noise in the data would be so great it would probably wash out the truth?

David, you completely missed my point.  I’ve lived in Vegas for 27 years and I know many compulsive gamblers.  Regardless of whether he bet the same amount every day and even if the odds were the same every day, a compulsive gambler only cares about TODAY’S game, not tomorrow’s.  Period.

If you want to make the hypothetical that Pete cares about all games equally, that he is a rational, intelligent, analytical person, then is there even a point to the discussion?

The whole discussion of what Pete may or may not have been thinking or done is silly anyway.  Seriously, why are we even discussing how a compulsive, not-too-intelligent gambler/manager may have managed his team on a day-to-day basis given that he may or may have bet on one or more or every one of his games for some amount and for some odds of which we have no idea?  Who the heck knows and who the heck cares?  I can tell you one thing. There is no rhyme, reason, or rationality for a compulsive gambler.  Tango’s assumption is ridiculous.  Poz’ “assumption” is plausible, but it is mere speculation.

I think there are also very good procedural reasons--some related to the points MGL is bringing up--for banning completely any sort of gambling, and having the current punishment for it, even thought there could be hypothetical agents and gambling scenarios which no one would object to on their own.

Crowd is getting tougher!

MGL: it’s a thought experiment, trying to separate the gambling aspect from the potential to throw a game away, almost as if Rose the gambler can be disassociated from Rose the manager.  So, we’re trying to setup conditions to make that happen.

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There’s also the issue of Rose (or any gambler) potentially building up a large enough debt that the bookie could use it as leverage to force him to throw games

As I said, the “bookie” is MLBPA.  It’s like a large-scale friendly poker game, where all the money remains in-house.  The house or the bookie makes zero.  It would be similar to how the playoff money is spread out actually.

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If my team starts badly and my GM trades its only stars for prospects, that’s going to cost the remaining players money?

Good point. I have no rejoinder.

"A +200 game when the Reds’ #5 starter is going against Nolan Ryan on the road is more valuable than a game when you are big favorites. In the first situation, a $2000 bet would win $4000 while in the 2nd might only net you $1000.”

Yes, but the Reds also have a smaller chance to win this game from the outset, and expending additional effort to win today will have less effect on the outcome than if that effort was saved for tomorrow.

Think about it this way: if Nolan Ryan is facing a Little League team, is the Little League team going to gain much from going all-out to defeat Ryan today at the expense of tomorrow’s game against another Little League team?

MGL is certainly right about the thought processes of compulsive gamblers.  That’s one reason this thought experiment isn’t really relevant in any discussion of Rose’s integrity.

The difference in win probabilities does not remove the possibility of the bet impacting a manager’s decision.  If the Reds are a big underdog yet are tied after 7, Rose has an extra incentive to bring his closer in early.  Or if the game goes to extra innings, to pitch his best relievers more innings. 

And the variation in win probabilities is of course much narrower in MLB than your example.  So it would absolutely make sense for Rose to rest his regulars on days with small payouts (for him), and put his best lineup on field for the best payouts.  Over a season, if the bookmakers did their job correctly, Rose would make money.

Is there any problem with players and managers betting on their team to win in Game 7 of the World Series?

If your criteria for “problem” is that the manager or players may play or manage in such a way that is advantageous to their pocketbooks but disadvantageous to “the game of baseball” then no, there is probably nothing wrong with it.  However, I think that we can pretty much all agree that betting on baseball games by players or managers is problematic whether it involves any non-normal strategies or behaviors or not.

Again, this kind of discussion about “why” betting on games by a manager may or may not be “bad” is really stupid. It is obviously a bad thing, period.  Players and managers have incentives to win each and every game whether they bet on those games or not.  Some people might play or manage/coach differently if they had a bet on a game and some might not.  Who the heck knows (or cares)?  Still, betting on games if you are a manager, player, coach or umpire is bad.  Period.

I finally read the blog entry.  For those of you who did not read it, Poz says, “Imagine that Rose bets on his team every day, the same amount, and that he doesn’t manage any differently than if he did not bet on any games.  Would you allow him into the HOF if that is exactly what he did?”

I think the answer to that is exactly the same as the answer to the question, “Should rose be in the HOF if he bet on baseball?” I don’t think it changes things one iota.  Either you think the penalty for betting on baseball should be no HOF or you don’t.

Again, dumb hypo and dumb question.  “If I rob a house and it turns out that all the people who had stuff in the house were dead with no heirs and even the state was going to burn the contents, and I give all the stuff away that I stole, should I be charged with robbery or theft?”

Equally dumb question.  Must have been a slow day n Pozland…

You’re kind of missing the nuance here MGL.  Your analogy is ridiculous.  The question Poz (and Tango) are driving at is whether or not betting on baseball is inherently bad if it doesn’t result in the creation of incentives that can hurt the team.  Saying:

“Still, betting on games if you are a manager, player, coach or umpire is bad.  Period.”

falls short in terms of answering it, because it doesn’t explain why betting is inherently bad.  The assumption that most people have had is that the problem with gambling is that it creates incentives that hurt the team even if you bet on your own team, like leaving a starter in too long in a game you’ve got money on or saving the pen in a game that you aren’t betting on.

The hypothetical being discussed is ridiculous.  That is why I used an analogy which is equally ridiculous.  Betting is bad period, regardless of whether there are or are not incentives to change the way one manages or plays. If nothing else, it gives the appearance to the public that the game is not on the square and that the integrity of the game is compromised.  Is there really an argument that betting on a game by a manager or player is OK if it does not appear that they do anything differently during the game?  Why don’t they just add that to the sign in the clubhouse - “Betting on baseball is strictly prohibited, unless of course you don’t do anything to influence the outcome of the game that you would not do otherwise.”

Do we now want to create a hypothetical where the public never knows that anyone is betting or the public doesn’t care?  How about a hypothetical where the manager just thinks he is betting but he is not?  This is ridiculous.  Yeah, I get the nuance - I just happen to think it is a ridiculous discussion.

Tbe real problem with the premise of the question is that Pete Rose was not put on the restrictive list for betting on baseball.  He was put on the restrictive list for breaking the rule against betting on baseball. 

You can argue, and the hypothetical in essence does argue, that there can be ways to bet on baseball that might not adversely affect the integrity of the game.  In Rose’s case, however, this is entirely irrelevant.  You cannot argue with any of the following:  that the rule was validly adopted and included in Rose’s contract, that he had had notice of it, that he was entirely aware of it and that he knew that his conduct was in direct violation of it.  If you took the hypothetical facts as true (and as others have pointed out, they are, in Rose’s case entirely untrue; many of the evils the rule is intended to prevent were absolutely present in his case), that would not change the result. He bet on baseball.  There was an express rule against doing it, and the penalty for doing it was placement on the restricted list.  And if you’re on the restricted list, you are not eligible for induction into the Hall of Fame.

Let’s take a different example.  Say you have a spotter on the corner of Main and Third, an intersection that is lit up like daylight at 3am but is entirely deserted, and the spotter confirms that nothing is in the intersection.  You plow through a red light.  You are caught on a red light cam and sent a ticket.  You claim that all of the reasons behind having rules about red lights were not present.  There was no one in the intersection.  You had taken precautions to know this in advance.  Nonetheless, I assure you that you will be paying the fine.  You can make an argument to the legislature to change the rule, but the rule is there and can be enforced even if there is no one around to be harmed if you do.  The legislature may have decided that the learned behavior of always stopping for a red light is an important policy, or it may have never thought about it.  Nonetheless, the words of the ordinance don’t have an exception for 3am and no one around and you’re going to pay the fine.

I do a lot of work with financial fraud and one of the things I learn in my day-to-day job is that the crooks are always one step ahead of the literature.  The deals that the experts describe based on who has been caught are not the deals offered by con men today, because those deals have been blown and they’ve moved on to the next iteration.  It’s very similar, of course, to steroids. 

This justifies very broad prohibitions ("any scheme or artifice to defraud"), instead of rules against specific behavior.  The same is true of betting rules.  You may think you’ve worked out all the permutations of what a manager might or might not do, but someone may have worked out a system to wager on the game in a way that will make it worthwhile to know the manager is betting, too.  Having a hard and fast rule in place, with no exceptions, is an appropriate way to keep the gamblers interest out of the game.

There are rules on Wall Street where brokers are not allowed to trade in their own accounts, that it must be held in trust, they have no power over any trades.  This is so they don’t use their insider knowledge to be able to buy / sell stocks they are deeply involved in.

All they can do is tell the money manager of his account what his general strategies and desired asset balance is, and then, he has NO SAY in his account (other than to close it).

The same could apply here. 

Rose could direct his money manager to bet on all Reds games to win, or lose, or whatever.  This would be documented, so that anyone could audit it.  The money manager then decides exactly what to do, if anything.

Your Wall Street example falls down because every trade on Wall Street is intensely documented.  There is no underground market where stocks are bought and sold.  There obviously is one in the gambling world, and even if you hypothetical Rose were the most honest man in the world (as opposed to the real Rose), it is still a perfectly reasonable policy to say that you don’t allow him to bet on games with your hypothetical legitimate betting mechanism when a very real illegitimate betting mechanism exists.

The suggestion seems to be that it is impossible (even for discussion purposes!) to disassociate the player from the gambler.

For example, if MLB allows betting (on your own team) only on Game 7 of the World Series (where there is no incentive to do anything other than do your best in this game, since there is no more games left), that still we can’t discuss this on its own, because we’ve already thought ahead that once you bet, you are in the potential grasp of professional gamblers.

Tango/26:
1. Gambling is a disease such that if a player is a gambler he is a gambler first and a player second.
2. You are trying to find the arbitrary point where gambling on your team is ethically ok. If Vegas/bookies were an honest industry, then this would be a valid and interesting exercise; however, it most certainly is not honest. Even if you can guarantee that the gambling player will be performing in his team’s best interest (WS game 7), you can never guarantee, in fact you can always presume, that the oddsmakers are being crooked.
The only way allowing players to gamble would work is it if were done totally anonymously. Vegas knows who is in the bag and who is not and will adjust lines accordingly.
Also, remember that Vegas sets the lines not based on who they think will win, but on who they think people will bet on. Before a game starts, they don’t care who wins. (Example: NFL teams such as the Cowboys and Steelers, which have large fan bases and successful reputations, will receive a built-in point spread penalty that has nothing to do with how Vegas expects their games to turn out on the field, but instead because they know more people will bet on them and so putting themselves at risk by raising the line will be more than offset by the many people who will still take that high line.)

"The only way allowing players to gamble would work is it if were done totally anonymously.”

This was why I said you can have an escrow account, that MLBPA manages.  You are paid based on how much you win.

Indeed, this is EXACTLY how the playoff payouts are made by MLB/MLBPA!  The World Series winners make more than the first-round loser.  All of that money could have, instead, been split evenly among the 8 playoff teams, or really, among all 30 teams.  They are not.  They are held, in essence, in escrow, by docking all 750 players a tiny portion of their contracts, to pay off their playoff winners.  That is, had it been decided that the playoff money goes to all 30 teams, guess what happens: all that money gets moved over to the players in the form of salary.  Instead, they are “betting” with that money.

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Gambling is NOT a disease.  I gamble when I want, which is rarely.  I also drink, rarely.  I’m not an alcoholic either.  Gambling, in-and-of-itself is not bad.

In Canada, the provincial governments control gambling (in addition to the underground market).  You can bet on games, just by buying a lottery ticket at the local convenience store.  No one would know.

I’ll make the same point I did in the comments of Posnanski’s post:

First, I’ll use Tango’s assumption that Rose is a rational bettor, and that having $4000 riding on each game doesn’t affect his managerial style.

But, we all know baseball is a good ol’ boys network in many regards.  Now let’s say Pete’s has a buddy managing or playing for the opposing team, and that team is out of contention or has already clinched.  If Pete’s friend knows about the $4000 riding on the game, he’s more likely to take it easy, as if his team loses the game, it’s no big deal to him, but his friend would stand to gain a bit of money.  That‘s why I can’t condone even this convoluted scenario.

Players being paid by performance is interesting, but it has the problem (already pointed out) that it hurts players to have bad teammates. That doesn’t really seem fair.

A way to get around this would be to base pay on individual achievements (for example, HR). Though unless you do this carefully it will no longer be a zero-sum result. You could adjust for league average, though.

For example, you’d earn:
Salary * Actual HR / Projected HR * Projected League HR / Actual League HR

Players being paid by [team] performance is interesting, but it has the problem (already pointed out) that it hurts players to have bad teammates. That doesn’t really seem fair.

Actually, the problem of the bad teammates is addressed: if your team is forecasted to be a 108-54 team, you would get 1.5 the standard bonus per win.  An average team would be 2x the bonus per win.  The 54-108 team would get 3.0 the standard bonus.  In all cases, it works out to 162 shares of bonuses, regardless of how good or bad your teammates are.

No, the problem is with trades, or players being brought up or down.  Then, you can get scr-wed (or rewarded).  Say, for example any team that is involved in in-season fire sales.  That’s because the forecasted talent level doesn’t match your in-season talent level.

The problem with the “gambling is not a disease” argument is that it proves too much.  Gambling is a disease for some people and not for others.  I learned this with alcoholics and I think it’s the same for compulsive gamblers:  everyone says they can stop anytime they want, those for whom it is true and those for whom it is false (except those who have confronted their disease).  Given that, how is the employer to know who is telling the truth?  So a prophylactic rule still makes sense.

The “7th game of the Series” idea also doesn’t stand up to analysis.  Floyd Landis used the same rationale in the Tour de France:  cheating was worth the payoff times the chance of getting caught.  Hell, he might have thought it was worth it to wear the yellow jersey under the Arc de Triomphe even if he had it taken away.  Without adding the complications that come with gambling, players already do that with performance-enhancing drugs and other strategies (emery boards, cork, etc.). 

The World Series share question already has a gambling element to it:  the players are paid solely on the basis of the four, mandatory games, so there is no financial incentive to play the maximum (frankly, this gives an incentive to MLB to make the Series go longer because they are not sharing the gate receipts for the last three games with the players, but the owners apparently assume themselves honest).