Vegas Line =/= Reality

Submitted by MGoDC on

I was going to post this on about 15 different threads but honestly its a mistake I see often enough on this board that I wanted it to be in a separate topic (obviously there are going to be people who dont feel like this post is worth its own thread).

I'd like to call attention to the various threads all talking about how we are favored the next two games and underdogs the last two, thus deducing that we'll finish 7-5. Is this possible? Sure. But to say we're favorites against Illinois is ridiculous.

Vegas lines are set to induce betting on both sides, not based on what the Vegas oddsmakers actually think will happen. Conclusion: Michigan has a stronger/larger fanbase that are willing to bet on Michigan than Illinois does despite the circumstances. Also, Denard is flashy and makes highlight reels, so casual fans who like to bet will probably tend toward Michigan especially in a home game because they remember Denard and don't know anybody from Illinois. Thus, Vegas sets Michigan as the favorite in order to induce betting on Illinois from people unaffiliated with either school or simply casual college football fans.

Reality,  on the other hand, says that Illinois beat Penn State by 20. We lost to Penn State by 17 (easy TD for them at the end if they didn't kneel). We are not favorites. We can win, sure, but it would be an upset despite the Vegas line.

Please please please stop assuming we're going to finished 7-5. That's a silly assumption. At this point it looks like 6-6 but again anything can happen. We could finish 9-3 even, but it would take luck. I just dont want to see a bunch of people outraged on these boards on Saturday night if we lose to Illinois. Cheer on the team but don't act as if it is an upset if we lose to Illinois. Make no mistake -- we are the underdog.

MGoDC

November 4th, 2010 at 12:34 PM ^

Oh I am very concerned! :)

But in all honesty there have been various threads "Hot for Harbaugh" and "My Two Cents on this Season and Rich Rod" on the front column today alone, along with a half dozen in the last couple days, that are comparing records with Harbaugh or otherwise assuming a 7-5 season with maybe an 8-5 record with a bowl win.

This is possible, sure, but at this point it would take a pretty sizeable upset that probably shouldn't be counted on as a sure-thing by any stretch.

RightKindaGuy

November 4th, 2010 at 8:34 PM ^

apparently you are not familiar with RLM and other nuances of betting practices. again, if the goal of vegas was to "split the money evenly" we would generally see 50/50 splits on public betting lines. this rarely happens. in fact, at quick glance the only game for this weekend where the public is split 50/50 is penn state -6 vs. northwestern. michigan-3 vs. iowa is split 33-67 just for comparison. 

steelymax

November 4th, 2010 at 12:38 PM ^

Illinois beat Penn State by 20. We lost to Penn State by 17

And Michigan beat ND in regulation on the road, but MSU barely beat ND with a trick play in OT at home... clearly Michigan will beat Sparty.

MGoDC

November 4th, 2010 at 12:44 PM ^

Michigan beat ND with a last-second TD -- they were very close to losing. MSU beat ND with an OT trick-play -- they were very close to losing. Both teams ended up winning.

My comparison is a beatdown win by Illinois over PSU, the game wasn't close at all. Then a beatdown win by PSU over Michigan (and the team Illinois beat wasn't starting McGloin). While the transitive property doesnt always work with sports, especially when games are close, usually two beat-down games do work.

But, in fairness to the other side, what evidence do you have to suggest that Michigan will beat Illinois? Is it just hope or is there a different set of games I should look at that suggest Michigan will win?

steelymax

November 4th, 2010 at 2:05 PM ^

There are no better comparables, but that doesn't make them reliable. I'm just suggesting that every week can be different. It's "why the games are played" and all that cliche shit you've heard a million times.

I agree that Illinois should win on Saturday and if they have to punt more than twice I'll eat my boxer shorts.

zguy517

November 4th, 2010 at 12:40 PM ^

First of all, we didnt lost by 17, sure they had the ball down near the endzone, but we gave it them close to it because we went for it on 4th down.  A situation like that at the end of the game causes you to call things differently, but will almost always play out like that.

Second, the Illinois beat PSU by 20 and we lost to PSU by 10 is a bunch of crap anyway.  That doesn't mean anything.  Remember last year when we beat ND?  Then ND beat MSU?  Did we beat MSU? No?  Transitive property doesn't work in college football.

MGoChairman

November 4th, 2010 at 12:46 PM ^

You are right that transitive property doesn't necessarily facilitate an adequate representation of what will happen in a college football season, but it is a good barometer. The only problem I have with saying that Illinois beat psu by 20 and we lost to psu by 10, is that you are looking solely at a single point, which is the final scoreline, and not factoring in other variables, such as turnovers, angry michigan hating gods, etc. 

jcgary

November 4th, 2010 at 12:43 PM ^

Last time I checked Penn St. won by 10 not 17 - Let's not alter what really happened just to make a point.  I know you stated that there was an easy touchdown at the end that PSU could have scored but that doesn't really matter since they didn't score it. 

Papochronopolis

November 4th, 2010 at 12:47 PM ^

But betters are generally smart people that know what they're doing with their money.  I don't see a bunch of donkeys that just blindly put money on Michigan, and even if they do they would have to reconsider after losing the last 4 weeks.  My understanding is that a lot more money is put down by professional and seasoned betters rather than the random Michigan fan here and there.  Clearly take lines for what they are but this definitely shows that the professionals that have historically been the most accurate with their predictions think this will be a close game.

BrewCityBlue

November 4th, 2010 at 5:25 PM ^

the true professionals have already bet on this game and they are the reason that it is at Ill is a 3pt favorite.

"vegas" probably opened it at Ill -1, and the pros/whales get a hack at that line before the public sees it. It's vegas' way of making sure they're not too far off before a line is realeased to millions of people to take advantage of.

Who knows, maybe it opened at Ill -6, and the pros are liking us... there's not much of a way to tell unless you know someone on the inside.

BrewCityBlue

November 5th, 2010 at 7:18 PM ^

Totally my bad. I just re-read my post and it's as if i was wasted at the time.

I don't know why i thought Ill was a favorite, maybe i was so convinced that's how it should be i forgot that it wasn't the case.

My point i was trying to make though (which was totally lost, understandably, in me claiming the wrong team was a favorite) was that the true "whales/professionals" get a look at those lines before the general public does.

Sorry for the confusion

UMaD

November 4th, 2010 at 12:45 PM ^

You're right that oddsmakers lines don't always reflect what they think will happen.  You're also, generally, right about why, but... its not always the case.  Sometimes the house makes hefty bets against the public.  Your analysis of common opponents (PSU game) is indicitive of the simplistic sort of thinking that the betting public follows - heavily weighing recent results. 

The argument that Michigan's fanbase is bigger and therefore more people are betting on them is weak.  Michigan fans are a disgruntled bunch right now.  You really think they're running out to bet vast sums on this team?

People use Vegas lines not because they're perfect but because they're an objective, neutral, unemotional take with a large financial investment involved that carries weight.

Agree though, people shouldn't EXPECT 7-5 or to beat Illinois.  But even if/when Michigan loses to Illinois theres still a greater than zero chance they can beat Wisconsin or OSU.  The difference between 6 wins or 7 wins will probably come down to a turnover here or a yard there.

mgohopkins

November 4th, 2010 at 12:50 PM ^

I wish you (and others) would stop saying we really lost to PSU by 17. The only reason that they were so close to the goal line is because they got the ball on our 28 after we went four-and-out. Had we punted it ala Bob Stoops it (probably) wouldn't have been so close. We lost by ten - and it wasn't close - but just leave it at that please.

 

EDIT: Beat to the punch twice - glad I'm not alone in this line of thinking...

MGoDC

November 4th, 2010 at 1:05 PM ^

You (and the other people commenting about it being 10, not 17) make a fair point, but I have 2 counterpoints to that which you can take how you want:

1) My issue with the "punting" line of thinking is that it doesnt assume both teams were trying their hardest during the entire game. In order for Michigan to try its best, we NEEDED to go for it on 4th down and not punt. In order for Penn State to try its best, it wouldve attempted to score another TD instead of kneeling. Obviously its not necessary to score the last TD but if both teams were trying their best to maximize their final score Michigan would've still gone for it on 4th down and Penn State would've gone for a TD instead of kneeling.

2) My other issue is that, 17 or 10, doesnt really change what I'm saying. Illinois beat Penn State with their starting QB by 20. Even if you say we lost to Penn State with McGloin starting by 10, that still doesnt give much support to thinking we're the favorites against Illinois which was the point of this thread.

psychomatt

November 4th, 2010 at 1:09 PM ^

Conclusion: Michigan has a stronger/larger fanbase that are willing to bet on Michigan than Illinois does despite the circumstances. Also, Denard is flashy and makes highlight reels, so casual fans who like to bet will probably tend toward Michigan especially in a home game because they remember Denard and don't know anybody from Illinois.

This is the logic often used by people who claim to be able to consistently beat the odds in Vegas. The problem is, just like stock picking, these effects are commonly known by the vast majority of people who bet on college football games and are generally arbitraged out of the betting lines as a result. The only exceptions anyone has statistically been able to show are extremely popular games where a large amount of the money being bet is by people who do not usually bet and therefore have no idea what they are doing (e.g. the Superbowl). Otherwise, MGoDC (and all of the people like him) would be fabulously rich because they could easily identify which betting lines are off each week and bet against them. Good luck.

GREEAR.10

November 4th, 2010 at 1:25 PM ^

MGODC,

You have a rudimentary knowledge of sportsbetting, and unfortunately it is leading you to wildly inaccurate conclusions.

The people that bet large money on CFB are the sharp bettors. If a line was significantly off because of your belief that casual fans bet on Michigan, the line would be hammered by the big-money sharp bettors.

For this reason, no Vegas line is going to be significantly off considering the knowledge that experts have about both teams. And the fact that UM has lost the last 4 against the spread would actually lead casual bettors to go against them anyways.

When all of the casual idiots say the line is way off there is a reason- public perception is wrong, and the sharp bettors know more than you.

In this case UM is unexpectedly favored by 3, and the over/under is unexpectedly low at 57. Maybe you know less than you think.

GREEAR.10

November 4th, 2010 at 1:34 PM ^

I tried to cram a lot of jumbled thoughts into one post, so lets try the KISS method:

Struggling teams are never as bad as people believe. Undefeated/"hot" teams are never as good as people believe.

Everyone is depressed about the last 3 games, everyone believes UM is in a tailspin and the season is effectively over. This is overblown.

The line is the evidence. Michigan is favored, and the over/under is only 57.

The defense is not as bad as they have looked, and I expect Michigan to "surprisingly" rebound on Saturday.

detrocks

November 4th, 2010 at 2:13 PM ^

I thought both of your post were well-thought out until the "The defense is not as bad as they have looked" line.  Given that they've looked bad all season, I'm not sure what would lead to believe that they're any better than they've shown.

GREEAR.10

November 4th, 2010 at 2:18 PM ^

detrocks,

Maybe a more accurate sentiment would be that the defense, although horrible, isn't as bad as people infer from the PSU game.

I would bet that Illinois scores 30 points on Saturday.

BrewCityBlue

November 4th, 2010 at 5:36 PM ^

Agreed, though, it's tough to quanitfy after being on this board the last eek or so.

I see that line and the first thing i think is... I need to do something i've only done once in my entire life and go huge against my wolverines. I also think... I am going to unload on that over.

Then i start to think about it... wait, why isn't everyone doing that and the line shifting drastically towards Ill and the over?

Oh, that's right, vegas knows more than me and i can not possibly have an edge on them. Even when i do have an edge on them, crazy shit happens and i get fucked.

Dammit, why do i even still gamble?!?!?!

BrewCityBlue

November 4th, 2010 at 5:45 PM ^

The OP is mostly right. It's how vegas makes their money.  $1 million dollars on each side of a bet means vegas makes $100,000 in juice from the losing side guaranteed. That is their general goal. The losers pay the winners their winnings and vegas pockets 10% juice/vig. In a push, depending on how it works (i'm getting confused between bookies/casinos/online betting over the years so i'm not exactly sure this is how it would work with a live bet at a casion in vegas) everyone loses the juice, meaning vegas' profits just doubled. Another advantage of calling a game "right on" when they set the spread.

How lines are set..

In general, this is my understanding. Let me preface this by saying i have no insider information and this is only how it has been explained to me over the years.

There is an elite group of very educated gentlemen that set the original lines for "vegas". This is the poirnt where they are taking everything into account... injuries, recent performance, related stats, strengths, weaknesses, what the public will think, whether or not more money will be on one side just due to idiot fans betting blindliy on them.. etc.

The original line is set, and it is released to a select group of pros/whales who have the first look at the lines. These guys are generally very good gamblers who are putting a lot of money on games. They take all the games they like, and this helps "correct" the line before it gets released to the public.

This ensures that a "bad" line will not make it to the public and allow everyone to take advantage of it incredibly quickly, before vegas has a chance to "move" the line in the direction of where the money is coming in.

I don't know why, but i felt the need to lay this out as I understand it, and if anyone has any "insider" knowledge on where i'm off or other things that happen, i'd be all ears for sure.