Monday, January 20, 2020

Sports Gambling

Some of the sports podcasts I listen to talk about betting on games, and in particular, like to talk about combo bets that look juicy to them.  Bill Simmons is very big on this. These are the classic sucker's bets.  These disguised ripoffs are a great example of how Las Vegas makes its money. They look good, they aren't good. The argument why you should never make these bets comes from the first week of your probability and statistics course.  Or just your own doing a little arithmetic on your own.

A 70% bet looks great.  You think your football team is likely to win this matchup seven times out of ten?  Awesome.  Who wouldn't put money down on that.  Then there's this other game over here, and one of the teams is a big favorite.  LSU over Clemson seven times out of ten, right?  Maybe eight times out of ten. Put money on it!

70% times 70% = 49% is the classic example.  Less than half.  Keep thinking like that and you are out of money soon. But they keep you coming back with that misdirection. Even a really good bet at 80% gets almost down to 50% with the third repetition. Gee, THAT looks like a good bet, and THAT looks like a good bet, and the payoff is tremendous! Where's my checkbook?

If you want to bet something, just bet it.  Don't combo it with anything else. Thane of Glamis, Thane of Cawdor, King hereafter. They are sucking you in.

1 comment:

Jonathan said...

People are bad at estimating conditional probabilities. In politics that might be Trump-prosecution predictions on the Left and civil-war predictions on the Right. When you have to string together chains of unlikely events to convince yourself that a particular outcome is likely, it should be a clue that it's not likely. Conspiracy thinking is based on similar kinds of errors in estimating odds.