Favourite-longshot bias in Sports Arbitrage

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Oldboy
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Favourite-longshot bias in Sports Arbitrage
« on: September 12, 2017, 09:10:11 PM »

Hi,

So I recently came across this article talking about the favourite-longshot bias phenomenon. To summarise it for those who are not familiar with it. Bettors tend to overvalue "long shots" and undervalue favourites. In the long run the ROI on favourites are better than on long-shots.

Does anyone know if this statistics is true for Sharp bookmaker as well? If so, wouldn't the best Sports Arbitrage strategy be to bias the stake for the favourite in a arbitrage?
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dealer wins
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #1 on: September 12, 2017, 09:13:36 PM »

Sharp books dont bias anything.
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Oldboy
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #2 on: September 12, 2017, 09:31:33 PM »

But odds at Sharp books reflect how bets are placed by bettors? So if this tendency exists among bettors it should affect the odds as well. Or is the ROI the same for all Pinnacle odds?

I found this article on Pinnacle that lists the ROI vs win expectancy of tennis matches between 2011 and 2015. According to these stats there's a difference in ROI of 20% between betting on the players with the highest win expectancy and the players with the lowest win expectancy.

Link to article: https://www.pinnacle.com/en/betting-articles/Betting-Strategy/explaining-favourite-longshot-bias/VUN2U32R85PPF4YP
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dealer wins
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #3 on: September 12, 2017, 10:40:44 PM »

But odds at Sharp books reflect how bets are placed by bettors?

Odds at sharp books reflect how bets are placed by SHARP bettors, mainly pros, arbers and people with inside info.    Their lines are spot on 99.9% of the time.
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NedlogViiibes
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #4 on: September 12, 2017, 10:55:41 PM »

But odds at Sharp books reflect how bets are placed by bettors?

Odds at sharp books reflect how bets are placed by SHARP bettors, mainly pros, arbers and people with inside info.    Their lines are spot on 99.9% of the time.

That is some statement :)
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Chipmunk
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #5 on: September 13, 2017, 12:47:58 AM »

.doublepost, sorry
« Last Edit: September 13, 2017, 12:52:50 AM by Chipmunk » Logged
Chipmunk
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #6 on: September 13, 2017, 12:52:13 AM »

Does anyone know if this statistics is true for Sharp bookmaker as well? If so, wouldn't the best Sports Arbitrage strategy be to bias the stake for the favourite in a arbitrage?

Pinnacle certainly do use fls. However, it's not as extreme as at soft books, due to the lower juice. In some sports it's not very noticeable as a result - eg in US baseball, you don't have very big favourites, so the juice bias is not that lopsided.
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dealer wins
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #7 on: September 13, 2017, 07:46:29 AM »


[/quote]

That is some statement :)
[/quote]

They have been in business many years, and dont limit anyone.  If there is value in odds, it aint gonna be on Pinnys side!
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Alfa1234
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #8 on: September 13, 2017, 09:25:03 AM »

You should probably amend that statement a bit...their closing line odds are spot on 99,9% of the time in the bigger markets.  Their opening odds or the odds a few hours before the game aren't and in some obscure markets the closing odds can be off a bit too. 

That still doesn't mean you'll be able to find value in them though.  ;)
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Oldboy
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #9 on: September 13, 2017, 10:15:40 AM »

I might be wrong here. But if there's value in odds for the favourite and negative value for the long shot, the juice for Pinnacle could still be the same.

I see the FLB as a psychological phenomenon that deviates from market efficiency.
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Alfa1234
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #10 on: September 13, 2017, 11:32:23 AM »

There is no value in Pinnacle closing odds for the favourite.  The ROI is simply higher, but still negative...you are wrong.

And the long-shot juice is definitely higher.  Simply check the closing odds for long shots on Betfair compared to Pinnacle for efficient markets (where Betfair should have close to 0 juice).  In large efficient markets the difference is often > 10%.  Eg. You can bet for Gibraltar on an odd of say 500 on Betfair while that same line is only 120 or so on Pinnacle.
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Oldboy
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #11 on: September 13, 2017, 12:27:22 PM »

Thanks for a good answer Alfa1234. I actually ment that the ROI is higher for favourites on Pinnacle, not that there's value.

My first question in this topic was if it would be profitable to bias the stake for the favourite in a arbitrage? What's your opinion on that?
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Alfa1234
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #12 on: September 13, 2017, 12:49:26 PM »

You bias the stake where the value is, so in the soft book.  Always.  Long term this makes the most money.

This has been covered several times in the forum already.
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Oldboy
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #13 on: September 13, 2017, 01:14:47 PM »

If the arb is between two sharp bookies / exchange? Any point to bias the favourite?
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Alfa1234
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Re: Favourite-longshot bias in Sports Arbitrage
« Reply #14 on: September 13, 2017, 01:21:41 PM »

1 of the odds will have value and the other won't.  Check other sharps to see which one...if you can't tell there's no way to know which would be most profitable so I'd just take equal profit on each side.
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