Very good explanation of some of the various elements that are involved in constructing a sound overall understanding of the world of gambling. From poster IrishTim at Cappers Mall forums:
So Boston’s implied winning percentage would be 192/(192+100) so 192/292 = .6575 and then you multiply that by 100 to convert the decimal to a percentage, so according to Pinnacle’s line, Boston has a 65.75% chance of winning the game.
For teams with a price greater than zero (i.e. +101 or more) you determine the implied winning percentage by dividing 100 by the line plus 100.
So Texas’ implied win percentage would be 100/(180+100) which is 100/280 = .3571 or 35.71%.
So according to Pinny’s lines, the implied winning percentages are as follows:
Boston: 65.75%
Texas: 35.71%Now the problem is that when you add these percentages, you get a number over 100%. Obviously this is a problem, as when you only have two possible events, the respective probabilities must add up to exactly 100% (or 1 in decimal form).
This small percentage over 100% is what is called the overround which in practical terms, is the book’s theoretical hold percentage. That is, this is what % of every dollar wagered that the book would make (“hold”) if there was equal action on both sides. It’s theoretical because of course there won’t always be exactly equal action.
In our case, 65.75% + 35.71% = 101.46% so Pinnacle can expect to make 1.46% of every dollar wagered. You’ll see other full-juice books with a significantly higher expected hold, but Pinnacle makes up for this with their incredible volume. They take $30k on an NFL side where other books will only take $5k. This is the primary reason why their lines are so efficient (accurate) – because they cater to sharps with reduced juice, early lines, and high limits. So they have the sharpest bettors shaping their markets.
But obviously there is a problem with analyzing winning percentages that have the books hold (the vig) factored in to it. What we are after are the true probabilities of an event occurring, which we determine by the zero-vig line.
The way to factor out the book’s hold is to divide each implied win percentage by the sum of the two implied winning percentages.
Boston: 65.75/101.46 = .6480 or 64.80%
Texas: 35.71/101.46 = .3520 or 35.20%As you can see, 64.80% + 35.20% add up to exactly 100%. So these are the true or zero-vig probabilities of each team winning, according to Pinnacle’s markets.
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