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Weekend Coverage: Q&A With Sports-Betting Site Beyond The Bets


Beyond The Bets reveals betting odds and explains common mistakes, what's up with legalized gambling, fantasy sports, and more.

MINYANVILLE ORIGINAL Welcome to the end of the working week. We're branching out a bit this week. Our guest is Beyond The Bets. Beyond The Bets, based in Las Vegas, is a free sports betting information site with daily posts designed to educate and inform.

Adam Warner for Minyanville: In trading, money management skills tend to win out over stock picking skills over time. The best traders tend to be the ones that can max out their winning trades and minimize the losers. Easier said than done, of course. Do you think there's some similarity in this respect to the sports betting world?

Beyond The Bets: Yeah, I think so. Even the worst sports bettors in the world will still probably be right about 45% of the time, while the best shoot for around 55 to 60%. So, in the end, management of your bankroll is probably a bigger determinant of success than picking winners. It's easy to let emotions get the best of you after a string of losses and then unload on the Sunday Night Football game, for example, when if you'd won you might not have even made a bet that night at all.

What's interesting about sports betting is that 95% of people focus on teams rather than numbers. You see this most frequently in baseball. If 100 public bettors walk into a Las Vegas sportsbook and see Yankees vs. Athletics on the board, the vast majority of them are going to bet the Yankees, regardless of the money-line price. It doesn't matter if the Yankees are -125 favorites or -200 favorites. The public bettors are focused solely on "which team is the best?" The answer to that question will ultimately become their bet.

If you were to simulate the Yankees-Athletics game 100 times, the Yankees might come out on top of the hypothetical matchup 60 out of 100 times. If the money line of those games is -125, then that's a terrific bet. You only need to win 56% of the time to break even. But if the line is -200, it's a horrible bet. The Yankees would have to win 67 out of 100 times at that price just to break even.

I always say, "I'm willing to bet every team on a particular day, but only if the price is right." And the same is true in the stock market. People flock to overvalued stocks and buy them at their high point all the time. There's minimal upside in doing that, and most people get burned. If you make calculated bets (investments), buy low, and manage your risk appropriately, you can come out ahead in the long run. In the stock market and in betting.

MV: I do agree with that analogy. Price often gets forgotten. The Yankees are almost like a permanent momentum stock.

Facebook (FB) IPO Day was a well-publicized fiasco, but structural issues in the marketplace go well beyond that, as Joe Saluzzi and Sal Arnuk lay out in their book Broken Markets. (See
Weekend Coverage: Q&A With Themis Trading's Joe Saluzzi and Sal Arnuk.) Between leveraged ETFs and tradable VIX offshoots, investors have lost a collective fortune in complex products they don't fully understand. On the other hand, betting on a football game with a point spread is an incredibly simple proposition. Anyone can trade any product they want, yet if they want to wager on a game, they have to either go to Nevada or an offshore. I know I'm preaching to the choir here, but does this make the slightest bit of sense?

BTB: Of course it doesn't make any sense. But I disagree that people must go to Nevada or an offshore sportsbook if they want to place a bet on a sports game because the vast majority of them don't. They instead take their business to a local bookie or Pay Per Head shop, where their bets are logged, where money is exchanged, and where that money remains off the books - now and likely forever. That's what's so frustrating. The notion that this underground world doesn't exist is a ridiculous one. Billions of dollars are being illegally wagered each year in cities all across the United States. A 2007 study estimated that New York state, for instance, is losing $2 billion in yearly statewide revenue as a result of sports betting not being legalized.

The Unlawful Internet Gambling Enforcement Act passed in 2006, has been largely ineffective. The Department of Justice's seizures of offshore sportsbook domains has also done little to curb gambling in the United States. Is the process inconvenient? Yes. More inconvenient than it was in the early 2000s? Absolutely. But people are still finding ways to get their money down, and there are all sorts of mechanisms in place that will enable them to continue to place bets in the future.

The government's failed efforts to stop sports betting reminds me of when I was in college. Several years ago, me and a group of underage friends were drinking alcohol in our dorm room. The dorm's resident assistant ("RA") heard some noise, knocked on our door, entered the room, saw the alcohol, and told us to stop.

I said to the RA, "You do realize we'll just find somewhere else to drink, right?"

"Of course," he replied. "But this makes me feel like I've done something."

MV: Casablanca comes to mind as well. You'd think the revenue loss alone would spur some sort of action.

In that vein, New Jersey Governor Chris Christie recently announced he's giving the go-ahead for sports betting at race tracks and casinos starting this fall. I understand the National Football League ("NFL") and Department of Justice might have a little say on it first. I live in New Jersey. Do you think there's any chance I'll be able to run over to the Meadowlands race track and put money down on a game this Fall?

BTB: I see almost zero chance of New Jersey taking bets on NFL games this fall because I don't think the state has a legitimate plan to offer sports betting ... yet. I've written about this before, but I think Chris Christie took the stance he did to get people talking about an issue that hasn't been discussed much in the mainstream media.

He held a press conference, made a few provocative statements, and basically forced national writers to cover the story. Any time a state governor says he intends to defy the federal government, rest assured it will make headlines. And it did. The Scott Van Pelt show discussed the sports betting ban. Yahoo Sports columnist Dan Wetzel wrote about it. Tim Dahlberg, an Associated Press columnist, wrote an article that landed on hundreds of Internet home pages and newspaper sports sections. And on and on and on. US News & World Report, in fact, is currently hosting a debate in which they ask: "Should sports betting be legal?"

It's like Bruce Springsteen wrote, "You can't start a fire without a spark." Christie's words might not make an immediate impact, but they definitely got us talking, and hopefully we can sustain the momentum and keep the issue in the forefront.

MV: Maybe if Christie pulled a young Courtney Cox out of the crowd it might help. It's definitely a start. It had 2:1 support on the referendum last year if I remember correctly, plus Atlantic City must be itching for something like this to combat the casinos that have opened up all over the Northeast in recent years.

There are all sorts of Daily or Weekly Fantasy leagues out there that let you fund an account, field a "team," and play a virtual game vs. one or many opponents. It's all for money, and it's perfectly legal. You can't "fix" a Fantasy game, but that's actually more of an argument in favor of legalizing sports betting on the grounds that greater transparency would clearly help root out fixing. I realize this is kind of a rhetorical question, but I can't help but wonder why that's OK, yet betting on a game is not?

BTB: I'm not a legal expert, but it's always been communicated to me that daily fantasy sports are considered a game of skill. If that's true, then how is sports betting any different? In both, you're essentially predicting the performance of players and teams that you have no control of. Sports betting, I think, is a bit more complicated and difficult to beat long term. You're playing against trained professionals (bookmakers) rather than unskilled amateurs (friends and family and the public). Ask any Las Vegas bookmaker, and their estimates will be the same: 90 to 95% of all sports bettors lose long term. That doesn't sound like a game of chance to me.

MV: I guess in that sense, the Fantasy games are more like poker.

You've done an awesome job converting the football "markets" into implied won-loss records in both the college and pro games . Whose IPOs are opening on the 52-week highs here? I'm thinking Lane Kiffin might be the Mark Zuckerberg of the National College Athletic Association ("NCAA"). And Bill Belichek, I mean he already has the whole hoodie thing down.

BTB: People are eating up University of Southern California, but it has more to do with Matt Barkley -- the current Heisman Trophy frontrunner -- than it does Lane Kiffin, who has proven next-to-nothing in his coaching career. He stunk with the Raiders, pulled a hit-and-run job on Tennessee and ... well, who am I kidding? The Trojans are back, and Kiffin is a major reason why. He's kept USC on course despite NCAA probation, and they'll be among the favorites to win the 5-game Bowl Championship Series (Football) every year as long as he's there.

Another team trading high? Florida State. Phil Steele pegged the Seminoles as his surprise pick to win the national championship, and Las Vegas wiseguys bet them in a few marquee games in Golden Nugget's Games of the Year lines last week. Florida State has 10- or 11-win potential, but this team doesn't have the look of a national champion, at least not in my view.

MV: My 9-year-old can use words like "juice" and "chalk" in a sentence. He also pretty much understands pot odds. Does that make me a complete degenerate?

BTB: Can he name the starting lineup of the San Antonio Silver Stars?

MV: Pretty doubtful. I can't name the San Antonio Silver Stars, either. What is that, Women's National Basketball Association?

BTB: Silver Stars ... WNBA. Yep.

MV: I've failed! Or succeeded. Either way, many thanks to Beyond The Bets.

Twitter: @agwarner
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