You are in charge of a large LV or online sportsbook. \u00a0 When Mayweather v Mcgregor is announced you figure a non-boxer going up against the 49-0 all-time champ has almost no shot, but the public likes the dog, so you will \u2018sucker\u2019 people by giving them 20-1 on Mcgregor*. \u00a0 Low and behold people flock to your 20-1 sucker bet offer, you lower to 10-1, then 5-1 and people keep pounding mcgregor.<\/p>\n
Overall you have $100k worth of bets on Mcgregor at 8-1 avg odds, meaning you will have to payout $800k\/losses if he pulls off the upset. \u00a0You now have 2 choices:<\/p>\n
1: offer Mayweather at -400, or risking 4 to win 1. \u00a0 This will get you Mayweather action because other sportsbooks are only offering -500. \u00a0 If you do this, you can book $720k worth of action. \u00a0 If Mayweather wins, you lose $180k on this bet (people risking -400 meaning $720k to win $180k), but win the $100k on Mcgregor and lose $80k total. \u00a0If Mcgregor pulls off the upset, you pocket $720k on Mayweather BUT\u00a0payout $800k\u00a0on Mcgregor and also lose $80k. \u00a0 This $80k is your guaranteed loss for \u2018mispricing\u2019 a fight where ALL the action came in one way.<\/p>\n
2: take your chances with Mayweather. \u00a0 If he wins, you make $100k of Mcgregor bet losses. \u00a0If he doesn\u2019t you payout $800k.<\/p>\n
This is the decision most sportsbooks face now. \u00a0 Close out positions for a loss ($80k in our example) OR take your chances with the greatest fighter of all time to profit \u2013 downside is losing $800k on the McGregor upset. \u00a0 My guess is most do the latter and take their shot. \u00a0 Why? \u00a0 Herd mentality. \u00a0 If Mayweather loses, sportsbooks will ALL lose and EVERY sportsbook operator could say \u2018who could imagine that would happen\u2019? \u00a0 In that case, the \u2018who\u2019 would be Joe Public who would get a laugh at the sportsbook expense.<\/p>\n
SPORTSBOOK ISSUE: it is NOT the operators money, they are \u2018just\u2019 management. \u00a0 IF it was their money, they\u2019d close it out, figuring they can handle losing $80k and fight another day charging great VIG, why get buried for $800k? \u00a0 BUT \u2013 when you are a hired gun, making a mistake that forces a locked in $80k loss means your heads on the chopping block, take your chances instead with the heavy fave for the win and the profit.<\/p>\n
*If Mcgregor has a 2% shot to win the fight as most expert predicted, the true odds are closer to 50-1 and you are making a great bet as the sportsbook offering only 20-1.<\/p>\n","protected":false},"excerpt":{"rendered":"
You are in charge of a large LV or online sportsbook. \u00a0 When Mayweather v Mcgregor is announced you figure a non-boxer going up against the 49-0 all-time champ has almost no shot, but the public likes the dog, so you will \u2018sucker\u2019 people by giving them 20-1 on Mcgregor*. \u00a0 Low and behold people …<\/p>\n<\/div>","protected":false},"author":1,"featured_media":82,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,5],"tags":[],"class_list":["post-88","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-betting-concepts","category-industry-trends"],"_links":{"self":[{"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/posts\/88","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/comments?post=88"}],"version-history":[{"count":1,"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/posts\/88\/revisions"}],"predecessor-version":[{"id":89,"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/posts\/88\/revisions\/89"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/media\/82"}],"wp:attachment":[{"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/media?parent=88"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/categories?post=88"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/designsdaddydev.com\/sharpedgepicks\/wp-json\/wp\/v2\/tags?post=88"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}