An Introduction to Professional Gambling

An Introduction to Professional Gambling
by Martell

People often ask me, “What's the best casino game to play?” Generally, I tell them, “Blackjack—but only if you are willing to forgo any joy you receive from gambling and treat the game like a business.” Often they follow that response with, “But I heard craps is pretty good!” or “What about roulette?”, at which point I tend to look at them like they just puked on my shoes. That usually ends the conversation.

With poker's recent popularity explosion, all of this has changed. Now all anyone asks is, “When should I bluff?” and “How do you know when someone else is bluffing?” I guess it's nice that people are concentrating on a game that is actually beatable for a change, but many of them end up incorporating their wacked-out gambling theories into poker. I'm not going to go into too many details at this time, but let's set the record straight: It is only okay to use the words “lucky” or “unlucky” when they are being used to describe something that happened in the past. Statements like “I'm so unlucky with this dealer” and “That's my lucky card marker” have no real value in the future, outside of announcing to the world that you have some serious statistical misconceptions, which only has value for your opponents.

In essence, what I'm talking about here are streaks, which are some of the world's trickier statistical illusions. Many otherwise smart people have fallen into this trap, assuming cause and effect where none exists. That's why, at the roulette table, there is an electronic board displaying the outcomes of the last dozen or so spins; the human mind automatically searches for patterns, looking for that uncovered path that will lead to “the answer,” be it something as simple as determining the next color to come up on the roulette wheel or as complex as beating the stock market. The idea of the streak, the pattern, is at the crux of the film A Beautiful Mind, as it is the reason behind why John Nash, a statistical genius, ultimately went insane. I think seeing a Nobel-prize winning mathematician getting caught in its web hammers home just how serious (and dangerous) this misconception can be.

Nothing lends itself better to analyzing streaks than sports betting. Practically every armchair quarterback/rotisserie league participant feels like they know sports better than 95% of the population. What better way to capitalize on this knowledge than to place a few timely sports bets? The funny thing is, the random fluctuations that surround everything statistical, including sports outcomes, lend themselves to infinite patterns. Just take this past weekend and the USC/UCLA football game, which had a 23-point spread. There were those betting on the “home-team covering” streak, who were counterbalanced by those betting on the “USC has won it's last six games by an average of 30 points” streak. Then there were those betting on the “underdogs in rivalry games usually cover” trend, who were offset by those betting on the “top 5 teams usually cover vs. unranked teams” trend. And on and on and on. In the end, there are as many streaks and trends in one direction as in the other, leading to a betting population that is roughly split down the middle, depending on which pattern each bettor considered most significant.

This leads to an important point regarding how the betting line is set. People mistakenly believe that the point of the betting line is to predict the expected outcome of the game—that is, what the average outcome of the game would be if it were to be played over and over again. Oftentimes the line will reflect this number, but that is more coincidental than anything. (Actually, if you have read the book The Wisdom of Crowds, it is probably a little more than coincidence, but that's another topic for another time.) No, the actual point of the betting line is to predict the gambling public's perception of the expected outcome of the game. This is an important distinction. If the casino sports book is able to split public opinion down the middle, it should end up with an equal number of bets on both sides of the line. Then, regardless of the outcome of the game, the losing bets would equal the winning bets, with the sports book keeping their percentage without taking on any risk.

Herein lies the secret to beating sports betting. If you are able to understand public perception and recognize where that perception differs from reality, you will be able to find an advantage. Don't worry about trying to guess what the actual outcome of the game will be—the sports books have already accounted for everything you know, as well as a bunch of stuff you don't know, and then adjusted for public misconceptions. Reversing that adjustment will leave you with the expected outcome of the game.

What this essentially boils down to is understanding which teams are overrated in the public's mind and which are underrated. For instance, there are a group of older major league pitchers that used to be amazing who are now only pretty good (Greg Maddux, Kevin Brown, and Tom Glavine, to name a few). The general public, though, still sees these marquee names and assumes they will perform as they used to. As a result, when they pitch, they odds get slightly skewed in favor of their opponents to compensate for this perception. Furthermore, the team itself can also add to that perception—the Yankees, Braves, and probably now the Red Sox all add to the public expectation of winning, skewing the line even further. If you look for instances where both of those misperceptions are present, AND their opponent happens to be starting an underrated pitcher—say when Kevin Brown of the Yankees is pitching against someone like Kelvim Escobar of the Angels or Jake Westbrook of the Indians—you should find betting opportunities where the odds you are being offered are better than the actual odds of occurrence. This general concept can be applied to any sport (and, some say, even to the stock market), but I prefer baseball because it provides the greatest number of profitable situations, due to its sheer number of games.

For those who identified with the person in the opening paragraph who asks, “What's the best casino game to play?”, here is the long answer you've been looking for. I haven't provided any of the mathematical evidence to back up these theories (that too is another issue for another time), but what I have provided is insight into how these types of questions should be approached. The best casino game to play is the one where you can get the highest positive expectation; calculating that expection oftentimes involves seeing through the illusions that statistics will create.

Martell can be reached at martell@babblog.com.