Tuesday, August 30, 2016

Bet Sizing

 
 
When it comes to betting on football games there are many systems out there. The most popular systems seem to follow the same basic idea. It goes along the idea of raising your bets when you’re winning and lowering them when you’re losing. That way you take full advantage of winning steaks and don’t get hurt on losing steaks. The reasoning behind this seems logical enough. That certainly sounds like good advice, but is it? It’s very bad advice actually. Before we get into the nuts and bolts of it, I have a simple question. How in the world does someone know they’re in the middle of a winning streak? And if they know that they’re in the middle of a steak, why wouldn’t they bet everything they have on the next game? After all, they would know they’re going to win the next game, because being in the middle of a winning streak means just that. The advice is silly on its face. As it turns out, that piece of advice has hurt far more gamblers than it’s helped. Raising and lowering your bet sizes actually makes it harder for you to win. Here’s an example. Take any series of 10 bets with 5 wins and 5 losses. If you bet the same amount on every game, you’re going to break even, no surprise there. Now let’s look at a sequence of bets, raising and lowering after a win or loss. It doesn’t matter what the order is for these 5 wins and 5 losses. I’ll do two below. The one on the left is 5 wins followed by 5 losses. On the right, 5 losses followed by 5 winning bets. The bet size will be 10% of the total bankroll after the last bet. The bankroll stars out at $1000.

 

Bet size
Bankroll
Bet size
Bankroll
1000
1000
win
100
1100
loss
100
900
win
110
1210
loss
90
810
win
121
1331
loss
81
729
win
133
1464
loss
73
656
win
146
1610
loss
66
590
loss
161
1449
win
59
649
loss
145
1304
win
65
714
loss
130
1174
win
71
785
loss
117
1057
win
79
864
loss
106
951
win
86
950

The first thing we notice is that both sequences end up losing money. Remember, when you bet the same amount on each game you start with $1000 and after 5 wins and 5 losses you still have $1000. When you change bet sizes, you end up with about $950. You’ve lost about $50 in both examples, picking the same games at the same win rate, 50%. The wins and losses can be in any order. As long as there are 5 wins and 5 losses the results will be the same, minus about $50. The second thing to notice is that when you juggle the bet sizes, you have to win at a higher percentage rate to make money. Where 50% was break even, when varying bet sizes it’s a higher number.

Notice that we didn’t account for the vig in these examples. There’s no doubt about it, raising and lowering your bet sizes makes it harder for you win money.

This doesn’t mean to never raise your bet or lower it. If you use a bankroll, my advice is to only change your bet size at the beginning of the season and keep it at that level for the whole season.  If you don’t use a bankroll, and you should, you should never change your bet size during a season.

Most gamblers don’t understand this concept and consequently make it harder on themselves to win. Don’t fall into this trap!

Sunday, August 28, 2016


Who Pays the Vig?


 

Vig is short for vigorish, which is the amount of money that the bookmaker takes to handle wagering. It’s also called the juice. It’s how bookmarkers makes their money.

Who pays the vig when betting on football?  Even people who’ve bet football for decades get this completely wrong.

Let’s say two gamblers bet on a football game, they bet $11 to win $10, each of them taking opposing teams. One of them wins his bet and he wins $10. The other loses his bet, and he loses $11. Who pays the vig, the winner of the bet or the loser? The answer almost every person will give is that the loser pays the vig by virtue of the extra dollar he pays.  However, this is incorrect. The winner pays the vig. The winner always pays the vig in games of chance, whether it be in the casinos, the lottery or in sports betting. The reason for this is that the loser of the bet always loses what he had at risk, no more, no less. The winner always receives LESS than the correct payout, the correct payout here being $11 on a 50/50 proposition. The difference in what the winner should have been paid and what he received is what the bookmaker kept, or the vig. The only exception to this is when the lottery doesn’t have winner for so long that eventually someone wins one of those huge jackpots and he indeed gets more than the correct payout.  

Let me give a simple example. If two friends decide to bet $11 on a football game, one wins $11 and the other loses $11. There’s no vig in play here. Let’s say the same two friends decide to bet another game, but this time with a bookie. Once again they both bet $11. When the game is over, one of them losses $11, just like in the first case. However the winner wins only $10, as the bookie keeps a dollar as his fee, which is the vig.  In both cases, the loser loses the same amount. It doesn’t matter to him if a bookie was involved or not. He loses what he bet. Does it matter to the winner if a bookie was involved? Absolutely! He wins $1 less when the bookie was used.

I had a friend tell me once that I had it all wrong, that I was playing with the numbers somehow. He tried turning things around. His reasoning went like this: If two friends decide to bet $10 on a football game, one wins $10 and the other loses $10. There’s no vig in play here. Let’s say the same two friends decide to bet another game, but this time with a bookie. When the game is over, the winner receives $10, but the loser loses $1 extra for a total of $11. In both cases, the winner wins the same amount. It doesn’t matter to him if a bookie was involved or not. Does it matter to the loser if a bookie was involved? Absolutely! He loses $1 more when the bookie was used.

Can you spot the flaw in that reasoning?

What my friend forgot is that while the winner wins the same amount, he was risking $1 more with the bookie. He was still risking $11 to win $10. He was still shorted $1 in the payoff, which is the vig. 

Remember, the loser ALWAYS loses everything he risks no matter the game, no matter if a bookie or a casino is involved or not. The vig is always deducted from the winner and never added to the loser. The winner wins less than the correct payout. The difference between what the winner receives and what he should have been paid is the vig. 

Wednesday, August 24, 2016

NFL 2016 is almost here!


Let me introduce myself. I’m the Prognosticator, AKA The Prog.  I've been handicapping the NFL for over 40 years. Since 1996 I've had the Progspicks.com website. I've done very well throughout the years picking the winners of the NFL games, and showing people the way to win. Five years ago I lost my passion for writing and felt I wasn’t putting my best effort into my picks so I stopped selling picks on my site and gave up handicapping for a couple of years. Now I find I have the passion back and I’m working harder than I’ve ever have. I’m raring to go and more than ready for the start of the 2016 season! I’ll be giving away all my picks thing season here in my blog. All my Best Bets, free for the taking! I’ll have all picks up by Wednesday evening at the latest.

There’s 15 days until the season kicks off. During that time I’ll be posting some articles about the gambling side of football. Bet sizing, bankrolls, money management and other thoughts. Be sure to check them out!