Vegas futures odds out for the season

[mpfunk]

Originally Posted by CardiacCoug

For all the hype BYU is getting, we're still 60/1 to win the National Championship (same as UCLA and Oregon), over/under is 9 wins for the season.

I think that's realistic. A lot of things have to work out for a team like BYU to get to the National Championship game and then win it.

UNLV is at 1000/1. That seems pretty generous.

http://www.vegasinsider.com/college-.../odds/futures/

I think 60/1 is extremely generous odds for BYU to win the MNC. I don't think that any non-BcS team should ever be anything better than about 500/1 to win the MNC.

[jay santos]

Originally Posted by mpfunk

I think 60/1 is extremely generous odds for BYU to win the MNC. I don't think that any non-BcS team should ever be anything better than about 500/1 to win the MNC.

Maybe the irrational folks that claim to have certain knowledge a non-BCS team will never win a BCS championship should ponder this more seriously. Vegas doesn't get things wrong on a regular basis.

[TripletDaddy]

Beat the Luckeyes!

Sep 13.

Now how about a little sample clip of the best college football intro of all-time....Tribute To Troy. There is no denying the general bad-a**ness of that tune.

http://www.youtube.com/watch?v=ChcZaQ_PI-g

[il Padrino Ute]

Originally Posted by jay santos

Maybe the irrational folks that claim to have certain knowledge a non-BCS team will never win a BCS championship should ponder this more seriously. Vegas doesn't get things wrong on a regular basis.

Irrational? Because we don't believe a non-BSC team will ever win a BCS title, or even get an invite to the title game?

No, if you believe it can happen, you are the irrational one. Remember, data can be manipulated anyway the computer operator wants to manipulate it. The BCS folks will never allow one of the little guys to play for their title.

[pelagius]

Originally Posted by mpfunk

I think 60/1 is extremely generous odds for BYU to win the MNC. I don't think that any non-BcS team should ever be anything better than about 500/1 to win the MNC.

Every odds ratio in this setup is probably to too generous so I agree with you to a certain extent. Its part of the cost your paying when you bet. A higher odds ratio than the true probability implies that payout is low relative to the probabilities. The book is embedding some transaction costs in the odds ratio; they are overcharging or overpricing in a loose sense of the word. This is pretty easy to see. Add up the implied probabilities from the odds and they add up to,

2.06 (probabilities should add to one)

So in some sense the overcharging is double what it should be in aggregate. How much overpriced is the BYU offering? I don't know but clearly some. There is some empirical evidence for equities that investors like positive skewness (long shot bets). Its not overwhelming evidence but it does exists. Thus it could be that teams like BYU are more overpriced relative to teams like USC and Ohio State because bettors like taking long shot bets and are willing to pay more relative to the true probability of the payoff than they would with more likely teams.

[il Padrino Ute]

Originally Posted by pelagius

Every odds ratio in this setup is probably to too generous so I agree with you to a certain extent. Its part of the cost your paying when you bet. A higher odds ratio than the true probability implies that payout is low relative to the probabilities. The book is embedding some transaction costs in the odds ratio; they are overcharging or overpricing in a loose sense of the word. This is pretty easy to see. Add up the implied probabilities from the odds and they add up to,

2.06 (probabilities should add to one)

So in some sense the overcharging is double what it should be in aggregate. How much overpriced is the BYU offering? I don't know but clearly some. There is some empirical evidence for equities that investors like positive skewness (long shot bets). Its not overwhelming evidence but it does exists. Thus it could be that teams like BYU are more overpriced relative to teams like USC and Ohio State because bettors like taking long shot bets and are willing to pay more relative to the true probability of the payoff than they would with more likely teams.

Dang, nothing takes the fun out of betting than a post like this.

You ought to make a big banner with this post on it and get a few friends to march up and down the Strip with it. I'll help.

[pelagius]

Originally Posted by il Padrino Ute

Dang, nothing takes the fun out of betting than a post like this.

You ought to make a big banner with this post on it and get a few friends to march up and down the Strip with it. I'll help.

The transactions costs are very high compared to other speculative markets. There is no question about that. Sportsbooks are the only speculative market that I can think of that hasn't experienced a huge drop in transaction costs over the last 20 years. My first take on the reason why is barriers to entry. The high costs imply large economic profits. The standard economic response is for others to enter to the market which leads to more competitive pricing. But the sportsbook industry has some fairly substantial barriers to entry. On the other hand there has been a some entry in the last 20 years so some of the high costs my reflect that the sportsbook market is particularly subject to problems of assymetric information (for example, there could be a few bettors who are really well informed and if the book gets odds wrong then these bettors could win a lot of money quickly).

[jay santos]

Originally Posted by pelagius

The transactions costs are very high compared to other speculative markets. There is no question about that. Sportsbooks are the only speculative market that I can think of that hasn't experienced a huge drop in transaction costs over the last 20 years. My first take on the reason why is barriers to entry. The high costs imply large economic profits. The standard economic response is for others to enter to the market which leads to more competitive pricing. But the sportsbook industry has some fairly substantial barriers to entry. On the other hand there has been a some entry in the last 20 years so some of the high costs my reflect that the sportsbook market is particularly subject to problems of assymetric information (for example, there could be a few bettors who are really well informed and if the book gets odds wrong then these bettors could win a lot of money quickly).

Barriers to entry = horse head in your bed.

[jay santos]

Originally Posted by pelagius

Every odds ratio in this setup is probably to too generous so I agree with you to a certain extent. Its part of the cost your paying when you bet. A higher odds ratio than the true probability implies that payout is low relative to the probabilities. The book is embedding some transaction costs in the odds ratio; they are overcharging or overpricing in a loose sense of the word. This is pretty easy to see. Add up the implied probabilities from the odds and they add up to,

2.06 (probabilities should add to one)

So in some sense the overcharging is double what it should be in aggregate. How much overpriced is the BYU offering? I don't know but clearly some. There is some empirical evidence for equities that investors like positive skewness (long shot bets). Its not overwhelming evidence but it does exists. Thus it could be that teams like BYU are more overpriced relative to teams like USC and Ohio State because bettors like taking long shot bets and are willing to pay more relative to the true probability of the payoff than they would with more likely teams.

No matter how you slice it, Vegas clearly believes BYU's chances are substantially better than funk's 500:1 and IPU's never a snowball's chance. And there have been in the past and will be in the future non-BCS teams with a better chance than this year's BYU team.

[pelagius]

Originally Posted by jay santos

No matter how you slice it, Vegas clearly believes BYU's chances are substantially better than funk's 500:1 and IPU's never a snowball's chance. And there have been in the past and will be in the future non-BCS teams with a better chance than this year's BYU team.

That's probably right. Even with substantial "overcharging" and "overpricing" due to a preference for skewness, 500/1 is probably pessimistic. Somewhere between 120/1 to 240/1 would be my guess. But its just a guess.