Juice, and the power of 56%

Even though most sports bettors are losers in their own right (as a whole, bettors actually win an average of only 48% of their bets - less than they would expect to win if they just flipped a coin for every game), their losses are compounded by the fact that the house takes a cut of winnings, also known as the 'juice' or 'vig.' Most sports books charge a 10% commission on wins, which means that a bettor must actually win 52.4% of his games just to break even. (Wagering $100 per game, a bettor loses $100 with a loss and wins $90.91 with a win, so he must go 11-10 (11/21 = 52.38%) to break even). Recently, some online books have started to offer lower juice, betting exchanges and deposit bonuses, which reduce the house edge.

In order to beat the juice and win in sports betting, a bettor must employ a disciplined approach in their analysis of each game using methods that have proven to be successful in the long run. I discuss my math models and analytical metrics in my Handicapping Methods essay, but you must realize that only the best and most knowledgeable handicappers can win 55% of their games. In their 2007 two page article about my handicapping success, the Wall Street Journal wrote, "...fewer than 100 people can sustain (win rates of 55%) over time. Most of them belong to professional betting syndicates that hire teams of statisticians, wager millions every week and keep their operations secret." Even fewer bettors can hit 56-57% over a 20 year period as I have.

Touts often claim to be able to hit 60% or higher, but as I explain in my essay on Bayesian Probability, anyone who tells you that their long term expected winning percentage is higher than 60% is deluding themselves. For a bettor to claim a greater than 60% long term expected win percentage, that would be mean that Vegas would have to consistently release lines with egregious errors, and that simply just does not happen often enough for claims of greater than 60% long term expected win percentages to be caused anything other than blind, short-term luck.

I often hear amateur gamblers erroneously claim that winning 56% of games isn't even enough to beat juice. As demonstrated above, a bettor only needs to win 52.4% to break even, and a 56% bettor will be profitable in the long run if they pursue an optimal money management strategy.

Of course, as in any game of chance, there is variability in the actual results and just because you have won 56% in the past and expect to win 56% in the future doesn't mean that you're going to win 56% this upcoming season. There is variance in sports betting, as there is in most investments, and I calculate the standard deviation to figure out how much of my bankroll I can safely wager on each game during the season to accommodate potential negative swings while having very little chance of exhausting my bankroll. I have extensively quantified the variance that exists in sports betting, and use mathematical formulas to dictate the exact optimal amount to invest so as to maximize the ratio of profits to variance.

A football season with 56% winners (my long term percentage) on 400 units or 'stars' would on average yield +30.04 stars ( (400*.56) - (400*.44)*1.1 ). Even using a very conservative 1.5% per star (in the past, I have recommended 2%), that's an expected return of 45.06%.

A basketball season with 54% winners (my long term percentage) on 1,050 units or 'stars' would on average yield +35.7 stars ( (1050*.54) - (1050*.46)*1.1 ). Using a conservative 1.1% per star (in the past, I have recommended 1.5%), that's an expected return of 39.27%. So, despite a lower overall winning percentage, I expect a season's worth of basketball wagers to be almost as profitable as a season of football in the future. Over the last ten years, my basketball wagers have actually been more profitable than football, but I have done a lot of analysis this summer and I expect my football wagers to be even better next year than they have been in the past.