Tipico Tips: Betting NBA futures

As the regular season is winding down, now is a good time to discuss NBA playoff futures. The math has changed slightly as the league experiments with expanding play-in games, but you will see that it tends to matter little in the overall scheme of things. Those teams playing for a chance at one of the lower seeds in the playoffs tend not to be teams that have a big chance of winning the championship anyway. The odds for one or both of those lower-rung teams tends to be 1% or less. 

We have an opportunity to bet NBA futures before the season even starts. Tipico Sportsbook has those odds live throughout the regular season. The odds do adjust as the season goes on and we learn more about where these teams might end up seeded for the playoffs. The odds can swing wildly throughout the season based on various factors. If a major injury to a key player happens, that could have a drastic impact. If a trade is made that helps or hurts a team’s chances, you will see major moves in their futures price to compensate for it. Finally, some teams are just better or worse than we thought and as they play more games the odds will begin to adjust to reflect that new normal for them. 

In order to understand how to beat a market like this, you have to understand how that market is made in the first place. The odds on each team are a reflection of their chance to win the championship. Every moneyline offered can be translated into a percentage chance of winning. If you add up all those percentages, you should get more than 100%. This is because the book has to build in a little profit margin for itself. The problem is, where that is built it in is what dictates where the most value can be found. A team that is 99-1 has a 1% chance of winning the championship. It would be priced at +9900. If you wanted to build in a little profit margin on a team like this, it would be noticeable. Adding an extra percentage point of juice on to a 99-1 shot would cut the odds from 99-1 to 50-1. That is a massive move from +9900 to +5000. If you did that for the lowest three or four teams, it would only allow you to build in a small cushion of 2-4% or so anyway. The real way to build in some juice for the sportsbooks is to add it to the teams on the higher end of the scale. 

If the favorite to win the championship has a chance of about 30%, that would equate to odds around +225. If those odds moved 25 basis points from +250, it would be a lot less obvious than the back end move from +9900 to +5000. It also yields more of cushion to the books. The move from +250 to +225 is a change of over 2% points from 30.7% to 28.5% implied probability of winning. By offering the lower payout, the books managed to gain a 2% cushion without too noticeable of a shift in the odds. The lower the price the favorite(s) are, the more advantageous it is for sports books to move the number a little bit as it helps them increase their edge by a larger amount. Therefore, the numbers the books tend to have the furthest away from their true percentage chance to win are the ones with the shortest-priced odds that are the most beneficial for the books to move. In other words, the favorites tend to be the ones that offer the worst value to a bettor. Sure, they may be the most likely teams to win, but even when they win you really lose. The payouts are below what would be required to break even over the long run.

If the favorites tend to be the worst propositions to bet, does that mean the longshots are the best? This is not really the case either. Sure, the percentage difference between the true odds of a longshot and the odds offered by the book tends to be the smallest, but these longshots have 1-3% chance of winning and pay off too rarely to be a viable strategy over the long term. That only leaves the middle group of teams left. Is this where the best value can be found?

The teams that are neither longshots nor favorites usually offer the best value to a bettor. If they are not one of the heavier favorites, they tend to have offered odds that are not as far away from their true odds as you see with the heaviest favorites. They are also better than the longshots, because you have a realistic chance of actually cashing this bet in comparison. A team that is 10-1 or 15-1 has a 6%-9% chance of winning the championship. This is not going to happen often, but the chances of making a long-term profit by looking for teams in this range is greater than the chance of beating the market by constantly taking favorites. You may cash more often by taking the favorites, but you will not make a bigger profit long term. In fact, the math would suggest you are more likely to take a bigger loss too. Remember, the favorites are the most likely to cash, but they are not the most likely path to making a long term profit. In order to do that, look at the teams behind the favorites that have the best chance of winning and odds that make taking that risk worthwhile. 

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