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Money line

You probably just rubbed your forehead and thought, This is getting complicated. I know it seems that way, but once you understand the basics, they apply to everything.

Let's go over the money line. So far, we've determined that most sports wagers are based on points. Whether it's the line that one team has to cover, or the total number of points scored in a game, giving or taking points is a good way for the sports website to even out the chance of either team winning the wager. This system works very well in football or basketball where there are a lot of points scored, or at least there is the potential to score a lot of points.

But what about games or events where there are no, or very few, points scored? In these cases it is not possible to even out the chance for either team to win. A couple of examples will make this easier to understand. Let's start with the most common money line in sports-baseball. Many years ago, before sports wagering was legal in Nevada, the betting lines were set primarily in New York, Detroit, and Chicago. In the early 1900s, baseball was truly America's game, and it garnered most of the betting action. Betting lines were expressed as odds. The Yankees could have been 6/5 favorites over Boston in a particular game. Odds lines are always expressed as the amount of money you stand to lose compared to the amount you stand to win. In our Yankee versus Boston example, you have to put up $6 to win $5. The $5 odds line was popular in the early 1900s because $5 was a common amount bet on a game-that doesn't seem like a lot now, but five bucks was a lot of money back then. We'll discuss, in detail, how the lines are set a little later in this chapter, but for now let's just say that if the linesmaker thought that a particular baseball game was evenly matched, and he was charging no juice or handling fee, the game would be 5/5 under the old system of odds lines. You would risk $5 to win $5.

If the linesmaker thought one team was considerably better than the other team, the odds line might be 7/5-you risk $7 to win $5. Remember, odds lines are always expressed as the amount you risk compared to the amount you stand to win.

The odds line based on a $5 bet was fine until the normal, or average, amount wagered went up. On larger amounts it was hard to calculate, and the easy answer was to base everything on units of ten. A 6/5 line becomes a 12/10 line. A 7/5 line would be a 14/10, and so on.

Now that we've got everything based on units of ten, I think you can see where we're headed. An odds line of 7/5 is the same as 14/10, which is the same as saying that you will risk $14 to win $10, or $140 to win $100, which all boils down to the fact that you risk $1.40 to every $1 you bet. Congratulations! You have just arrived at the money line!

Remember that money lines are normally used for wagering situations where it is impractical or impossible to even out the wager using points. And you must also understand that each wagering situation we have dealt with so far has been assuming that you are betting the favorite. The same Yankees 6/5 over Boston that we started off with has now become Yankees minus 120 over Boston, or the Yankees minus $1.20 over Boston. Why did we say "minus 120"? Because you will lose, or be minus, $120 for every $100, or $1.20 for every dollar, that you bet on the favorites, the Yankees.

We said "minus" for another reason. It's the opposite of "plus," which is the way the bet would read if you took the underdog. When you bet the underdog, you have a chance to win more than the amount you wager. It's your possible reward for betting on the team that is not supposed to win. Keep in mind that this wager has not been evened out by adding or subtracting points. This wager is strictly based on who wins the game.

Let's say you like Boston in this game against the Yankees. You bet Boston plus 120 over the Yankees. Now the money line is working in reverse for you. If you bet $100, and Boston wins, you win $120. You would win $120 for every $100 you wagered on Boston.

If the line shown on the sports website board was Yankees minus 160 over Boston, and you bet Boston and they won, you would win $160 for every $100 bet.

So how does the sports website make a profit on money line bets? To explain, we need to go back to the points line. When dealing with a points line, we know that the juice is normally 10 percent of the bet, and is charged to those players who bet the favorite. There is no juice charged for handling a wager on the underdog on a points line bet.

We know that in theory the points line is set and adjusted to hopefully attract an even amount of money on both teams so that the sports website essentially pays the winners with the losers' money, and keeps the 10 percent for handling the bets.

When the sports website posts a money line on a game or event, it sets and adjusts the money line to hopefully attract enough wagers on the underdog so that once again it would be able to pay the winners with the losers' money. Taking a chance on losing more than you stand to win is the penalty for betting the favorite. And taking things to an extreme example, you could not expect the sports website to give you an even-money bet-risking $100 to win $100-on a game where the world champion Green Bay Packers, who are 14-0, are playing the New York jets, who are 1-13, and whose star quarterback, running back, and wide receiver are injured.

So let's assume that the money line has been properly set, and the sports website has enough wagers from the losers to pay off the winners. That works out fine, except for one thing: There's no handling fee for the sports website. You can't add the handling fee to the money line because the bettors are already paying a hefty premium for wagering on the favorite. The obvious solution is to take the handling fee from the bettors who played the underdog.

Here's where I think the sports websites can take advantage of the bettors. The juice on points line bets is always 10 percent. It is for all practical purposes a 10 percent or ten-cent line. On the other hand, the juice on money line bets varies from sports website to sports website, and from event to event. If a particular sports website is running a 10 percent line, it takes ten cents from the payback based on every dollar wagered on the underdog. If you bet Boston plus 140 and Boston won, everyone who bet $100 on the Yankees minus 140 would lose $140, but you would only win $130. A fifteen-cent line (15 percent) would give you $125, and a twenty-cent line (20 percent) would give you $120.

For years and years, until wagering became more competitive because of legalized sports betting in Nevada, baseball was bet on a twenty-cent, or 20 percent line, because that 6/5 odds line that equated to 12/10 was actually a twenty-cent line. As sports wagering became more competitive, sports websites dropped the line to fifteen cents, and ultimately to ten cents, or 10 percent, the same as on points line bets. Most websites now use a ten-cent line for baseball. If the line is higher, make your wagers elsewhere.

As I said earlier, the handling charge on money line bets varies from sports website to sports website, and from event to event. You will know if the line is something other than 10 percent if the payback is listed after the underdog on the board in the sports website.

The payback on the underdog varies as the lines get higher and higher because the favorite in a particular betting situation becomes more and more a prohibitive favorite, like our Green Bay-Jets example. The sports websites will gladly take your money on the favorite in hopes that the favorite loses, no matter how high the money line goes, but they are not quite as willing to pay out high paybacks on the underdog when there is a major upset. You'll see that major difference when the positive, or plus, money line is posted after the underdog.

For example, you want to place a wager on a boxing match. Mike Tyson is to fight another one of Don King's tomato cans, and Tyson is almost a guaranteed winner-the tomato can has virtually no chance of winning. In a wagering situation like this, you won't see lines like in baseball. The money line you see posted in the sports website is Tyson - 2500, Tomato Can + 1800. That money line means that you will have to risk $2,500 to win $100. There are no points in boxing just a winner and a loser, and in this case Mr. Tomato Can has no chance ... well, no chance? There is always a chance. Ask Buster Douglass, who went off a forty to one underdog against Tyson in Japan. Quick ... give me the money line on that fight. Risk $40 to win $1, $400 to win $10. Now, remember that money lines are based on $100 wagers, so, risk $4,000 to win $100. If you have $1,000,000 to put down to win $25,000, you'll probably win the bet, but you have to be absolutely crazy to make that bet. Most players who have that kind of money to bet aren't crazy, so the sports websites take very little action on these types of bets. It's a tough situation to be in on either side of the bet. If you bet the underdog, the chances are very good that you are throwing your money away, since most favorites in that money line manage to win. You can't bet the favorite because we've already established that you're not crazy, and the fact is that Vegas really doesn't want a lot of action on these money lines.

The sports websites don't like to be put in positions where they stand to lose several more times than they can win, so they make the handling charge much larger than normal to minimize their risk. In the Mike Tyson minus 2500/Tomato Can plus 1800 example, the sports websites will take your $2,500 for every $100 bet on Tyson if Tyson loses, but they will only pay out $1,800 for every $100 bet on Tomato Can. That's a $700 handling charge-pretty hefty juice!

It's also a pretty extreme example, and long shots do occasionally come in. Evander Holyfield started off as a twenty-one to one underdog against Tyson. A lot of very knowledgeable boxing fans took Vegas up on that one, and by fight time Holyfield was down to a six-one underdog, because the line was adjusted down as more and more money came in on Holyfield. Even with the rapid adjustment of the line, Vegas lost millions when Holyfield won the fight.

Most money lines are not as extreme as the examples above. I used them to help you understand the difference between a points line and a money line, and to demonstrate that you must know how much you are risking compared to how much you stand to win.

Money lines are posted on games where there are also point lines-football, for example-to give you the option of giving or taking the points in a game, or playing the game "even" as far as points go, where you only have to pick the winner, but risk a higher dollar loss if the favorite loses.

Every sports website has its own formula for converting point lines into money lines. As an example, in our Notre Dame minus 11over USC game, the money line would be something like "Notre Dame -270, USC +230." In this case you would risk $270 to win $100 to bet Notre Dame, and you would win $230 on a $100 bet on USC.

On money lines in football, or any other event for that matter, you simply have to pick the winner. It's just another option when considering how you want to place your bet.

So what does it all mean? How does the juice affect you? How do you calculate your win percentage on money line bets? Does it matter which way you play? Let's look at some numbers:
On straight line bets where the juice is 10 percent, you must win 52.4 percent of your wagers to break even. For easy verification, if you placed 1,000 wagers of $100 each, you would have to win 524 of them to win $52,400, to balance out losing 476 wagers since you lose $110 (476 x $110 = $52,360). As a professional handicapper, I can on average hit about 65 percent on football, about 60 percent on basketball, and over 70 percent on baseball.

Boy, that baseball number sounds impressive! We'll get to that in a moment. If I hit 65 percent in football, and you take that win rate and calculate the return on your money, you'll find that it represents a 24.9 percent return over a five-month season. That's a 57.8 percent annualized return, and that beats the S&P 500 by a long shot.

Scratching your head again? If you bet one hundred games, $100 per game, and won sixty-five games, you would win $6,500. You would lose thirty-five games at $110 each, for a total of $3,850, winning a net total of $2,650. Since your total exposure on one hundred games would be $11,000 if you lost every game, your return on investment would be $2,650 divided by 11,000, or 24.9 percent over the five-month season. Annualized, that's 57.8 percent! The 60 percent win rate works out to 14.5 percent over four months, or 43.6 percent annually. Very impressive numbers-and it's a lot of fun, too!

While we're talking about win percentages, a word of caution: In the world of professional handicapping, many unscrupulous firms will tell you that they hit 80 percent or more, and I will tell you in big bold letters, that is simply an outright lie!! In over thirty years of professional handicapping contests in Las Vegas-contests that have attracted the very best handicappers in the country-no one has ever hit over 70 percent for the season.

Let's get back to baseball, the money line, and our 70 percent plus win rate. There's one basic principle here: The higher the money line, the higher your win percentage has to be to break even. The equivalent money line on a points line bet-where the juice is 10 percent-is minus 110. We've already seen that you must win 52.4 percent to break even. In baseball, it is not uncommon to see money lines where one team is minus 150, minus 160, or more. The highest line I can personally remember seeing in baseball was minus 340, which means that if you bet $100 on a minus 340 favorite and lost, you would lose $340.

From a professional standpoint, we seldom use games where the line is over minus 150. Playing 150 games, or games that average minus 150, you must win 60 percent of your plays to break even. Playing minus 200 favorites, you have to win 66.6 percent to break even. So you can see that the higher the favorite on the money line, the more you must win, percentage wise, to break even.

Our 70 percent win in baseball during the 1996 season was done with an average money line bet of minus 128. It should be very obvious to you that you must have a lot of self-discipline and good money management skills to wager on sports using the money line.

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The beauty of poker is that on the surface it is a game of utter simplicity, yet beneath the surface it is profound, rich, and full of subtlety. Because poker basic rules are so simple, anyone can learn poker in a few minutes, and novice players may even think they're pretty good after a few hours. From the expert's point of view, the veneer of simplicity that deludes so many players into thinking they're good is the profitable side of the game's beauty. It doesn't take long for pool players or golfers to realize they're outclassed and to demand that a match be handicapped, but losers in poker return to the table over and over again, donating their money and blaming their losses on bad luck, not bad play
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