Baseball BeatAugust 18, 2007
The Wizard of Odds
By Rich Lederer

I just returned from an overnight business trip to Las Vegas and thought I would share the baseball odds posted at Caesars Palace and all the other (Toby) Harrahs properties (such as Paris, Flamingo, Imperial Palace, Bally's, Harveys, and the Rio).

Odds to Win the 2007 World Series

                       Opening   Current
Team                   10/9/06   8/16/07
New York Yankees         4/1        7/2
New York Mets            9/2        4/1
Chicago White Sox        5/1     2000/1
Minnesota Twins          6/1       40/1
Detroit Tigers           6/1        7/2
St. Louis Cardinals      7/1       25/1
Oakland A's              8/1      300/1
Los Angeles Dodgers     10/1       40/1
Boston Red Sox          12/1        5/2
Los Angeles Angels      12/1        4/1
Philadelphia Phillies   12/1       22/1
Florida Marlins         12/1      300/1
San Diego Padres        18/1       18/1
Toronto Blue Jays       20/1      250/1
Houston Astros          22/1      500/1
Cincinnati Reds         25/1      750/1
Atlanta Braves          35/1       15/1
Cleveland Indians       40/1        8/1
Colorado Rockies        50/1       45/1
Chicago Cubs            50/1        4/1
Texas Rangers           60/1     2500/1
San Francisco Giants    60/1     2500/1
Arizona Diamondbacks    75/1       12/1
Seattle Mariners        75/1       18/1
Baltimore Orioles       85/1     2000/1
Milwaukee Brewers       85/1       10/1
Washington Nationals   100/1     2000/1
Pittsburgh Pirates     150/1     2000/1
Kansas City Royals     200/1     5000/1
Tampa Bay Devil Rays   200/1     5000/1

None of the above lines are particularly appealing in my judgment. As with all futures bets, the odds are stacked against the bettor and in favor of the house. Assuming equal money is wagered on all teams, the book has about a 90% profit margin built into the cumulative lines (vs. a more typical 10-20% for individual games).

The Chicago White Sox have been the biggest disappointment in 2007, going from the team with the third-lowest odds in the opening line to 2000/1 with a month-and-a-half still to go. The Oakland A's have also failed to live up to expectations this year.

All has not been lost on the Windy City as the Chicago Cubs have arguably turned in the biggest positive surprise of any team in baseball, going from 50/1 longshots last October to a one-in-five chance as the season hits the three-quarters pole. Cleveland, Milwaukee, Arizona, Atlanta, and Seattle have outperformed initial expectations as well.

At 3/2, the New York Mets were favored to win the National League Championship. The line on the Cubs (8/5) seemed a bit short to me, probably reflecting the hope of the fans more than the sentiment of the professional bettor. The other teams with a reasonable shot include the Brewers (9/2), Diamondbacks (5/1), Braves (6/1), San Diego Padres (9/1), and the Philadelphia Phillies and St. Louis Cardinals (both 10/1).

Over in the American League, the Boston Red Sox (6/5) were almost odds-on to win the ALCS. The New York Yankees (9/5), Detroit Tigers (9/5), Los Angeles Angels (2/1), and Indians (3/1) were the only other clubs given much of a shot at winning the pennant. If the season ended yesterday, the Mariners (8/1) would be the Wild Card team and would have a one-in-four chance of representing the AL in the World Series if you believe, like Billy Beane, that the playoffs are nothing more than a crapshoot.

On the non-baseball side, you can bet $50 to win $20 on Roger Federer winning the U.S. Open Tennis Championship for the fourth consecutive time.

Get this, the AFC team is already a seven-point favorite to win the Super Bowl. Based on the odds to win the conference championships, the New England Patriots (6/5 to win the AFC and 5/2 to win the Super Bowl) and Chicago Bears (7/2 NFC, 7/1 Super Bowl) are favored to oppose each other in Glendale, Arizona on February 3, 2008. The over-under is 47.

For the patient, you can place a futures bet on the Men's NCAA basketball tournament (March 18-April 7) or the 2008 Masters golf tournament (April 10-13). The favorites? North Carolina at 7/2 and Tiger Woods at 9/5.

If you've got money to burn, Las Vegas stands ready to take it with the odds clearly stacked in favor of the house. Before you place that bet, take a deep breath and decide where your money could be better spent.


It's funny that the Royals have longer odds than the White Sox when they have the same record.

Although it may not have been the case when you got the figures.

Of course odds aren't determined by evaluating how likely a team is to win, but by how much people are betting for them to win.

the book has about a 90% profit margin built into the cumulative lines

I think that misses how "the book" gets set. Because there is a whole lot more money bet on some of those teams than others. That's why the odds are different. They don't set the odds and then take bets, they take bets and adjust the odds as bets come in to guarantee they make a profit regardless of who wins.

I understand how odds are set and adjusted. However, the odds are set before any bets are made. The lines are then adjusted based on the bets. I even showed the opening lines so readers could see how they have changed.

For the record, the full quote in the article above is as follows:

"Assuming equal money is wagered on all teams, the book has about a 90% profit margin built into the cumulative lines (vs. a more typical 10-20% for individual games)."

The "Assuming equal money is wagered on all teams" is an operative phrase in that sentence. Leaving it out misses a critical part of my statement.

You cannot say what the margin is if equal money is wagered on all teams since it depends on who wins. OTOH, if you look at an even payout, you would have to bet around 1.90 to get a payout of 1.00. So the profit margin is a little under 50 percent.

"Assuming equal money is wagered on all teams" is an operative phrase in that sentence.

The fact is that "assuming equal money is wagered on all teams" the odds would be the same for all teams. Which is why this statement completely inaccurate:

"the book has about a 90% profit margin built into the cumulative lines (vs. a more typical 10-20% for individual games"

There is certainly a profit margin built into the odds, but there is no way for you to know what it is just by looking at the odds. You have to know how much was bet on each team.

Well - I screwed that up. Never mind.

Another way to look at the profit for the house is to place a bet on each team so that you will win $10,000 no matter which team wins the World Series. You would need to place $2,500 on the Mets, $5 on the White Sox, etc. The total bet would be $23,824!


What you are missing is that you get your bet back on the winning bet. So to have a payout of 10k, you would pay around 19k.

My math shows that you have to lay out $23,824 ($2,500 each on Mets, Cubs, Angels; $4,000 on Red Sox, etc.)in order to guarantee a payout of $10,000, which means your return is an abysmal 42% of your investment. Compare this to standard casino games, which have a return of 95% - 98%.


If you put 2,500 on the Mets and they won, you would get 12,500 back. In order to get a 10k payoff, you would only have to bet 2k.

let me put it this way. Use your algorithm to analyze the payoff for roulette. In order to guarantee a payout of 1k, you would have to put 1k on red, 1k on black and around 30 each on single and double zeros. So, by your math, you have an outlay of over 2k for a 1k payout and roulette has a return of under 50 percent. But, as I am sure you know, roulette has a payout of ~95 percent.

Yes, betting an equal *payout* (rather than laying out an equal amount of money) produces the 90% margin I quoted for the house or about half that if you base it on the total outlay.

Re routlette, I just think of it as 36/38 = 94.7%. The two house numbers are the juice.

Oops -- you guys are right - the outlay to win $10,000 is $19,000+, not $23,000. Either way, what a bonanza for the casino!