A good sports betting column should be backed by a profitable gambler with a proven track record. It should offer picks generated by a sophisticated and conceptually sound model. Most importantly, it should treat the subject with the seriousness it warrants.
This is not that column.
Instead, this will be an offbeat look at the sports betting industry-- why Vegas keeps winning, why gambling advice is almost certainly not worth the money, and the structural reasons why even if a bettor were profitable, anything they wrote would be unlikely to make their readers net profitable, too.
While we're at it, we'll discuss ways to minimize Vegas' edge and make recreational betting more fun, explain how to gain an advantage in your office pick pools, preview games through an offbeat lens (with picks guaranteed to be no worse than chance), and touch on various other Odds and Ends along the way.
Seeing the Future(s)
The season is nearing its end and futures bets are starting to pay out (provided you bet the over, at least), so I wanted to take this week to talk about what they are, why they're not all that great for professional gamblers, and also why those same reasons make them pretty fun bets for recreational gamblers like ourselves.
To start with, a "futures" bet is just any wager that won't resolve in the near term. If you bet today on who will win the Super Bowl this year, that's a futures bet. If you make that same bet in February, it's just a regular bet.
The most common examples of futures bets in the NFL are season win totals, award winners, and the Super Bowl champion. Award-winners and Super Bowl champions are fairly straightforward, but since the field of potential winners is so much bigger early in the year (theoretically, all 32 teams have a shot) than late in the year (only two teams can still potentially win it by the time it arrives), you can get "longer" odds by betting it early.
For instance, you could have gotten New England Patriots' Super Bowl futures at 80-1 this offseason. This means a winning bet of $100 would return $8,000 (plus the original $100 stake). These odds are substantially higher than even the longest-shot moneyline bets. The largest spread of the season so far was 14.5 points—if you wanted to pick the underdog to win outright in such a game, you'd typically get odds around +800. That's more in line with the preseason odds you'd see from a Super Bowl front-runner like the Kansas City Chiefs.
(Remember: "American odds" tell you your return on a hypothetical $100 bet. As a result, +800 doesn't mean "800-to-1", it means "8-to-1". Can this be a bit confusing, especially if you're an inexperienced bettor? Yeah. Is that by design? Also yeah. In addition, I have a feeling the odds were tied to a $100 bet to subtly encourage gamblers to bet larger sums. Many fundraisers that offer something nominally for free with a "suggested donation" do so because they believe people will give more than they otherwise might be inclined to do. Likewise, Vegas probably wants you to believe that all of your peers are out here wagering $100 per bet, so you'll feel pressured to match.)
Why Serious Bettors (Often) Avoid Futures
The primary problem with futures bets is that whole "resolves in the future" thing; this is why high-volume gamblers don't tend to like them as much. If you commit money to a futures bet, that money will be tied up for months or potentially even longer. This increases the opportunity cost.
Over the last 30 years, the S&P has grown by an average of 8.4% a year, which is 0.678% a month. Over the last 10 years, that's 11.6% per year, or 0.917% per month. Obviously, on a month-by-month and year-by-year basis, there's a ton of volatility; in a given year, the market might be up 25-30% or down entirely. But the long-run expectation is a gain of around 8% a year or around 0.6% a month. That means if you tossed your $100 in the market instead of a futures bet, your expected payoff in six months would be $103.65. The opportunity cost of a 6-month futures bet is almost as large as a typical vig (standard -110 odds translate to a 4.54% vig.)
Because of this opportunity cost, for futures bets to be worth it, you need to find an edge that's not just enough to beat the vig in expectation, but enough to beat both the vig and the market. And the longer the timeline, the bigger that edge needs to be. If you were betting today on who would win MVP next year, your money would be tied up for thirteen months, and the opportunity cost of not putting it in the market would be 8.1%.
The other problem with futures bets for serious bettors is that they resolve in the future. No, this isn't just restating the same problem all over again; if you remember from earlier in the year when we discussed optimal bet sizing (or "Kelly" betting), gamblers with an edge who bet optimally should be expected to make an average percentage return on every "cycle" of bets, leading to geometric growth (where your bankroll grows faster and faster over time).
When bets resolve in a week and give you your money back to allocate again, you can go through 16-20 "cycles" in a year, getting 16-20 periods of exponential growth. Small growth, for sure, but the point of exponential growth is that it compounds over time. If you have just a 1% edge and manage to compound it 20 times, you'll go through 200 "cycles" in 10 years of betting on the NFL and increase your bankroll by 632%. If you instead limited yourself to one "cycle" a year (say by tying all your money up in preseason futures bets), you'd only get ten "cycles" of compounding growth, and your bankroll would increase by just 10.5% over the decade. That's... a pretty stark difference.
(This is, of course, contingent on you actually having a 1% edge; if you don't have an edge, betting weekly just ensures you go broke that much faster.)
This isn't to say that professional bettors never make futures bets. It just means they need a substantially larger edge before they'll commit money there. I've heard some bettors have had success with correlated futures bets (betting on two events where if either one occurs, it makes it more likely that the other occurs as well), for instance. But futures will never be the bulk of their betting strategy.
Why They're (Often) Great for Recreational Gamblers
Of course, all of these things that are liabilities for professional bettors can be viewed as assets for recreational gamblers such as ourselves. If you have an edge, futures bets will limit the amount of money you can win. If you don't have an edge, they'll likewise limit the amount of money you'll lose.
Futures bets can drag out the suspense (which is primarily where the fun is), doling out the tension and release in drips over weeks instead of in a flood over hours. This gives them a strong return on investment from an entertainment standpoint.
Also, because futures bets can get such long odds, they can easily tickle some of the same pleasure centers as the lottery, which is simultaneously the most popular form of gambling and also the least rewarding. You'll lose a lot less money in the long run betting it on 2,000-to-1 events than you will spending the same amount buying MegaMillions tickets.
One of the most famous bets of all time came in 2016 when Leicester City won the Premier League in soccer. No team out of the traditional soccer powers had won the league since 1993, and Leicester City had only joined the league the year before. As a result, they were given 5,000-to-1 odds (or +500,000 in more standard American terms), which meant tossing $10 on them before the season would have returned $50,000, and dropping $100 would have paid out a half-million dollars. It's not quite as lucrative as winning the lottery, but that's still a pretty massive return.
(As an aside: the fact that the lottery pays out even more than betting longshots is arguably a point against it; 70% of lottery winners wind up broke within seven years and many have their lives ruined by the sudden influx of money. A half-million dollars is a lot less likely to ruin your life than $232 million.)
Now, I want to reiterate: the overwhelming majority of 5000-to-1 bets are not going to win. You'll lose money betting futures just as easily as you will betting sides. But even the bets that don't win can still provide plenty of excitement along the way.
In 2017, Las Vegas was awarded an expansion franchise in the NHL. Excited to finally have a hockey team, many locals bet on it to win the Stanley Cup at +50,000 (or 500-to-1).
They were more betting on the team as a show of support than as a serious bet, but the Golden Knights broke all records for success by an expansion franchise and made it all the way to the finals, where they lost in five games. That +50,000 bet didn't ultimately pay out, but the excitement in the city became more and more palpable the further the team advanced as those life-changing payouts became easier and easier to imagine.
One Last Consideration: The Hedge
There's one other aspect of futures worth discussing: the possibility to "hedge" (or bet against your original bet) if the odds have moved significantly, guaranteeing you money from your original bet if it wins and also guaranteeing money from your hedge bets if it loses. Every hedge incurs the vig all over again, but they offer a chance for you to "cash out" any line movement in the form of guaranteed profits.
Let's return to the Patriots and their +8000 preseason Super Bowl odds. If you put $100 on the Pats, you stand to pocket $8,000 if they win the Super Bowl. They're still unlikely to win it all, but a stronger-than-expected start (they've already topped their preseason over/under for total wins) and a sensational performance from Drake Maye have pushed their Super Bowl odds as high as +1100 now. You can, at any point, "borrow" from that potential $8,000 to place bets on the Patriots not winning the Super Bowl.
There are lots of ways to go about this, but I'll detail what's probably the simplest, conceptually. New England's odds of missing the playoffs currently sit around +10,000; you could put $5 on them to miss the playoffs, and if they do, you make about $500. Subtract the original $100 bet on New England's Super Bowl futures, and that's a $400 profit for the year if New England misses the playoffs. If New England does make the playoffs, you lose that $500 but still stand to profit a potential $7,995 if the Patriots win the Super Bowl.
Now, let's say that New England's opponent in the wildcard round has a moneyline of -120. You can bet $500 on New England's opponent to win outright. If the Patriots win, your original futures bet is still alive with a potential profit of $7,495 (the original $8,000 minus the $505 spent on hedges). If New England loses, you make $416, which comes out to $311 after you factor in the cost of your two losing bets (the original $100 future and the initial $5 "miss the playoffs" hedge).
You can continue making individual bets on the Patriots to be eliminated, and provided the total cost of those bets doesn't exceed $8000 and the total payoff remains higher than everything you've already wagered on the Patriots, you're guaranteed to walk away with some money. The sooner you start hedging, the more bets you'll need to make and the less guaranteed profit you're walking out with; the longer you risk your initial bet ("let it ride"), the more you stand to make, but if you hold on too long, the bet could go to zero.
(Note that this is conceptually the simplest way to hedge, but that doesn't mean it's the best. You could also, for instance, calculate how much to bet on every other team's Super Bowl futures to ensure an equal profit no matter who wins.)
The thing to keep in mind about hedging is that the more the odds have moved, the greater the profit you guarantee yourself, so it's all a function of risk and reward. Because New England has seen its odds rise from +8000 to +1100, you can lock in a profit today, but it'll be a relatively small one. If you let the bet ride until the AFC Championship, you can lock in a larger profit, but you run the risk of an early elimination.
And remember, every bet you place incurs the vig all over again; hedging is negative value in expectation.
Are Futures Right For You?
As I said, most longshots lose; the Falcons and Dolphins also had +8000 Super Bowl odds, but if you'd instead put that $100 on them, that money's already up in smoke (neither team is technically eliminated, but their Super Bowl odds are up to +100,000; that $100 would go a lot further if you were betting them today). But for recreational bettors, this isn't a dealbreaker; all of our bets are more likely to lose money than not.
In terms of maximizing the amount of enjoyment we get per dollar staked, futures bets can be a powerful tool, offering long-term enjoyment with a minimal stake and plenty of opportunity to strategize on when to hedge or let it ride.