Baseball Betting 101: Understanding MLB Betting Odds
I think one of the single biggest misunderstandings that the DFS community and the general public has is where betting odds come from and how they are shaped. To be clear: THEY DO NOT COME FROM VEGAS! To understand betting odds it is important to understand the life cycle of a line.
Life Cycle of an MLB Money Line
- BetOnline (BOL) is almost always the 1st to open MLB numbers. They generally do this by 3PM the day before. Don’t be fooled though. These lines are as soft as they come and only low limit action is allowed on them. They do this mostly for PR reasons and the openers at BOL have 0 reliability for understanding a team's implied odds. As soon as 1 of the 2 big boys open up numbers (Pinny or CRIS), BOL moves numbers to match. If your market is small enough you can find nice value on these lines since the limits are too small for the sharps to hit they generally remain soft until the real numbers open. You should never use BOL numbers for anything DFS related.
- Even though Pinny and CRIS are considered to set the market, they don’t fully trust their initial numbers. These numbers are opened the night before at limits as low as $2500 a game. They do this to entice action on limits they cannot get hurt at, so that they can adjust numbers accordingly. This is really the start of the numbers taking shape. If they post a line that is way off, the lower limit players will move it closer to fair value. Considering full limits on an MLB side is as high at 30K, the overnight market is so small that even at these books it holds little insight into implied winnings odds. Again, if you have a small enough market you can find solid value in the overnights. But be aware that these numbers move very easily and you are hurting your future EV by shaping lines early.
- Sometime during the morning of the games, books will open full limits. All books wait until they are comfortable with where the line has begun to move to open. But in general it is around 10AM. Once limits are lifted, the sharp money can enter the market. The vast majority of MLB gamblers will hit the morning lines, as they will be the softest of the day. As the sharp money begins to take positions the books trade around these positions moving the numbers. This is called line movement (I will discuss this further below).
- Throughout the day numbers will move according to where the money is moving. Books do not move numbers, the market does. Ultimately, every betting line is made by the market. Books and certainly Vegas do not make decisions or know things outside of where the market is taking the number. These changes in the line are called line movement. A DFS player can benefit greatly by watching for these line movements to determine where the sharp money is going. One of my personal favorite ways to utilize line movement is to look for an underdog that has moved a lot towards the favorite. Doing this you can often find undervalued players that the market is putting faith in.
- When the event starts the line closes. The closing number at Pinny is the nearest representation of the implied odds of any number. If you have ever tracked your betting against opening numbers and closing numbers, you would know that a closing line at Pinny is very efficient and hard to beat. This is why most sharps will get down as early in the day as possible. Winning at sports betting is hard enough, let alone beating the VIG and taking mature numbers. From a DFS perspective, if you are making your own pitching projections you would be best to test them against Pinny closing odds rather than actual game results. Outcomes are random but the market is not.
A DFS player that understands this life cycle will have an edge over the casual player. Below is an example of a line history.
As you can see, Pinny opened up around 3PM the day before. The number was quickly bet into shape some in the afternoon moving from -112 to -121. The number drifted in the overnight through the morning at lower limits to -135. As you can see, the process of opening day before and through the overnight at low limits has squeezed 23 cents of value from the sharp bettors who need full limits. Limits are probably lifted between 10-10:30, which is where we see another quick 9 cent move. Ultimately, this number gets pounded to -150 from -112. If you are reading this line history, however, you should really ignore everything before 10AM, as this was all low-limit action. The key move here is really the 12:21-12:58 move. It takes an extreme amount of liquidity to move a number near close and is always the result of sharp action. This move also tells you that the sharps are confident in the lineups that the teams have posted as they are likely out at this time. From a betting perspective, all value is out of the line and the game is largely un-bettable. But from a DFS perspective, the Pitcher on the Fav is a very attractive play.