THE BOOK--Playing The Percentages In Baseball

4:1 should read 3:1.  I also think the ROIs Nate’s quoting are unrealistically high, though there may well be some potential for profit with this strategy.

betfair.com odds on France are 190:1 to 210:1, as compared to the 120:1 Nate cites.  Betfair is like a stock market ... there’s no bookie, you can post your own odds on either side and hope to find a taker.

On the other hand, Uruguay is 44:1 to 48:1 on betfair, even higher odds than the bookies.  If you really think they should be 11.3:1, as Nate has them, you can make a lot of money taking them at 44:1.

These numbers are just so, so far off from the betting market that there’s almost certainly a huge flaw in the model. As just one example, he currently has Spain at 45% to advance, whereas the books (Pinnacle, in this case) have them at 65% to advance. This is a huge, huge discrepancy, an optimal Kelly wager assuming this is true is 37% of your bankroll. When you’re this far off of the market consensus, something is wrong, especially in a widely bet market like the World Cup.

Also, why is it “remarkable” that the books are still offering France at 120-1?  That type of thing happens all the time ... bookies have huge incentive to lower odds on teams that outperform expectations (they’ll get picked off if they don’t), but they only have a small incentive to raise odds on teams that underperform (worst case scenario is they miss out on a couple bets by not having competitive rates).

In championship futures across all sports, you’ll see the laziness from the books win out all the time and teams playing badly will routinely be listed with odds that haven’t been changed from earlier on.

As Devin suggests, it’s different when there’s a two-sided market, then there really is incentive to get the price more accurate.

Betfair gives Chile a 62% chance to qualify for the next round. Silver gives an 88% chance. Betfair gives 66% chance to switzerland. Silver gives 42%. The reason? Silver has WAY more faith in the underdogs in this tournament than the bettors do. Spain and Switzerland are big favorites going into the final round 1 games Friday. Silver has Spain at 43% to win the game and Switzerland at 37% for the other game.  Silver’s system does not at all reflect the way the bettors think about the games in this tournament.