Vegas Still Isn’t Buying The Orioles

A new list of World Series and playoff odds is up at Bovada. There are, at this point, few surprises. By September, we have a good idea of who the contenders and pretenders are; we know the teams on the periphery and we know the teams right in the thick of races. Seeing Texas and Cincinnati favored to win their leagues shouldn’t surprise anybody.

There is one particular bet, however, that caught my eye.

MLB Special – Will the Baltimore Orioles make the playoffs in 2012?
Yes -115 (bet 115 to make 100)
No -115

The Orioles at even odds to make the playoffs? You would be laughed out of the room back in April, but in September, with Baltimore tied atop the AL East and 3.5 games clear of the Angels for the Wild Card, it’s a sign that Vegas still isn’t buying the Orioles.

Even with the litany of numbers-based arguments against the Orioles’ quality — most prominently Pythagorean record and run differential — numbers-based playoff odds calculators give the Orioles a much better chance than Vegas. The number that matters most for the Orioles right now is 3.5, the lead over the Angels. As such, there are reasonable scenarios that see the Orioles still making the playoffs going under .500 down the stretch.

CoolStandings puts the Orioles’ playoff odds at a healthy 72.0%; Baseball Prospectus prognosticates a lower but still robust 62.4%. If you believe either of these, there’s a significant amount of expected value to be had in betting the Orioles to reach the postseason. The expected value of a $115 bet on the Orioles to make the playoffs comes out to $154.80 (.72*215) with the CoolStandings odds and $134.16 (.624*215) with the Baseball Prospectus odds. Bookmakers rarely offer 135% or even 117% return on investment bets like this — Vegas wouldn’t survive if they did.

And so that’s why I do a double take when I see an offer like this. CoolStandings sees Baltimore as a negligibly under .500 team. Baseball Prospectus sees Baltimore as a .455 team going forward. What does that mean Vegas has them at? A .400 team? .350? Is Vegas doing a better job of accounting for things like the Nick Markakis injury? Or is the betting public just slow to react to Baltimore grabbing hold of the second Wild Card? Baseball Prospectus says the Orioles added 36% to their odds with Thursday’s victory over the Rays; CoolStandings says each victory in the Orioles’ sweep over the Rays was worth about an extra 10%.

Is Vegas right? I’m not sure. They usually are, though, and so when I see a betting line like this one that differs significantly from what our other data sources are telling us, I think it can be telling — either telling of our data sources or telling about what the betting public thinks. In this case, I think we’re seeing just how little the sporting world believes in Baltimore. The Orioles get their chance over the next 19 games to prove them wrong.

We hoped you liked reading Vegas Still Isn’t Buying The Orioles by Jack Moore!

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RMR
Guest
RMR

We should remember that Vegas doesn’t price based on the actual odds of the event happening. They price based on predicted betting behavior. It’s not that they think the Orioles are .400 team. It’s that they thing the betting public views the Orioles as a 50-50 shot to make the playoffs.

And because the betting public doesn’t understand the odds in situations like this, you get a nice little arbitrage opportunity.

Ian G.
Guest
Ian G.

Bingo. This is why the Yankees always come out of the gate in April at the team with the highest odds of winning it all, regardless of whether more analytical baseball minds think they’re the best team (I’m guessing Texas was the favorite of the sabermetrics crowd on April 1st).

Back in 2008 (while I was in business school, incidentally), I began to wonder if one could build an algorithm to take advantage of this arbitrage opportunity. Specifically, how much money bet on the Rays vs. the Brewers vs. the Phillies vs. the Yankees would guarantee you a profit…

MikeS
Guest
MikeS

Exactly. Vegas doesn’t care and doesn’t actually try to predict who is going to win or lose. They just want an equal amount of money on both sides.

A more accurate title would be “Vegas odds show that people who bet on baseball still aren’t buying the Orioles.”

Jessup
Guest
Jessup

Not true for futures, because the public is only allowed to bet one side.

Scott
Guest
Scott

You are able to bet the other side of futures. You can bet either they will make the playoffs or they won’t. Even in cases where you can’t bet the other side directly, the sum of the other team bets has the same effect. If everyone bets the Yankees to win the WS, there odds drop, every other teams odds go up.

Vegas doesn’t like to gamble

Gaming Guy 702
Guest
Gaming Guy 702

Gaming industry guy here: Sports books do not try to balance their books, despite the popular notion.

They are trying to win money and actively take positions, more like traders than anything else.

Don’t believe me? Look at their monthly results, filed with NGC and open to the public.