100 Fantasy Football Tips in 100 Days, Day 81: Using the Vegas Lines
Last week at rotoViz, I broke down how and why to use the Vegas lines when playing daily fantasy:
In my latest book on daily fantasy sports, I interviewed some of the game’s top players to learn how they’re so profitable playing daily fantasy sports on DraftKings. One of those players was a really smart guy named Mirage88, a.k.a. A.J. Bessette. He’s actually written some ridiculously awesome articles here at RotoViz on how to use Monte Carlo simulations to win best ball leagues.
Mirage88 (if you think I’m going to continue to refer to a grown man with his real name, you’re sorely mistaken) is a big proponent of using the Vegas lines to create daily fantasy lineups, and I spoke with him about how he does that.
First, he discussed why the Vegas lines can be trusted.
I think it’s important to understand how the Vegas lines are created, which then aids us in figuring out how useful they are. There’s a perception that Vegas sets lines solely to get 50/50 action on each side of the bet. And to some degree they probably want that in many situations since they’ll guarantee themselves profit just from the juice (the commission they charge to play). But what happens is people will sometimes use that as a reason that Vegas shouldn’t be used in projections, saying something like “Oh, they just care about whatever popular opinion might be and just getting in the middle of that.”
The problem with that is that there are a lot of sharp bettors out there with a lot of money, so if Vegas indeed produces a line to equalize bets but it’s weak, those sharps are just going to pound that bet and Vegas will be in a really poor situation in terms of expected value.
So the way I like to think about Vegas is that it’s really where the most risk is in terms of projecting any player results—at least the most financial risk from one entity making projections, anyway. So if Vegas posts a poor line—let’s say they post a total that’s way too low—then all of a sudden anyone who can bet on that who is relatively sharp will just start hitting the over, and Vegas will realize that the bet isn’t really balanced.
Vegas will compensate for that by moving the total up to get more action on the under. That’s fine, but then there’s this area in the middle which was over the initial line but under the new line movement bet that’s now a really bad place for Vegas. If the game ends up in that spot, they could theoretically lose a whole lot of bets to sharps who bet the original over, but at the same time lose late bets that came in on the under when the total was higher.
Vegas doesn’t want to put themselves in that position where they can be arbitraged, so it’s really important for them to create an accurate line from the start. Even if they don’t guarantee a profit by getting equal money on each side, they can limit their downside—their risk of ruin—by making the line accurate. They really don’t want to be in a situation where they set a bad line that moves a whole lot and they could potentially lose their share on both sides of a bet.
Ultimately, making accurate lines is just a safer way for Vegas to make money than trying to predict public opinion, especially when there are sharks out there who might not agree with public opinion. Vegas has a very clear financial incentive to make accurate lines, and they do. So that’s my little rant on why we can trust the lines and why the idea that all Vegas wants is to balance bets is false.