Multiway Markets

Mult iway Markets

All the markets I’ve discussed so far have been simple two-way markets. Bet on this team or that team. Bet over or under. Sportsbooks also offer multiway markets.

In theory nothing is special about a multiway market. There’s nothing fundamentally different about betting on one of three outcomes or one of five outcomes or one of 100 outcomes versus one of two outcomes.

Be careful with multiway markets, however. They sometimes obscure a very high hold.

The annoying math in the last chapter notwithstanding, it’s not too hard to look at a two-way market and eyeball the hold. If it’s -125/+105, it’s a “standard” hold (in the 4-something percent range). If you see -120/-105 then it’s a little higher (5-something percent). If it’s -120/-110 it’s higher still (6-something percent).

Okay in two seconds estimate the hold on this five-way market:

+140 / +245 / +375 / +725 / +1325

Buzz. Time’s up.

Once you get used to it, estimating the hold for any two-way market gets to be second nature. I don’t know anyone who can just look at a multiway market like the one above and make a

quick and accurate estimate of the hold. (The hold in the example is about 9.8%.)

This fact makes it more difficult to bet intelligently into multiway markets, since the size of the hold in a market is one of the most important factors in whether you will find good bets in the market.

Some markets are multiway by nature. Futures markets like “pick the league champion” or “who will win the home run crown” bets obviously lend themselves to multiway markets.

But it’s become an unfortunate trend these days to take natural two-way markets and convert them to multiway markets. I call these artificial multiway markets.

For example, one of the most popular ways to bet golf is to bet a matchup between two paired golfers. Who will score better in the tournament, Jordan Spieth or Justin Rose? Maybe you can bet Spieth at -130 or Rose at +110. And if they score the same, the bet pushes.

The book would hold about 4% in this market if there were no pushes. Because pushes return the full bet to bettors on either side, the chance of a push drops the hold percentage below 4.

Some books don’t like low hold percentages and don’t like pushes. So they’ve “solved” this “problem” by converting the natural two-way market (Spieth or Rose, who do you like?) to a three-way market.

You can now bet Spieth, Rose, or… Tie?

This is not a natural market. Who wants to bet on a tie between two golfers?

“Yeah, man, Spieth’s putting has been next level. But Rose has put a couple good tournaments together. I think I want to bet that they will have exactly the same score after four rounds.”

Let’s be real. The main purpose for presenting the matchup this way is to convert the pushes into wins for the book on both golfers.

And superficially they can make it look like the hold is minimal. They could price the market Spieth -125, Rose +115, Tie +1800 for example. If you ignore the tie and just look at the two golfers, it looks like you’re getting a deal.

If the tie pushed like a normal market, -125/+115 would be a pretty good deal with about a 2% hold. But add in the separate tie bet, and the hold balloons to about 7%.

I’ll have a lot more to say about multiway markets later in the book—including their inherent weaknesses that often allow you to beat them despite the high holds. But right off the bat I wanted to make two points:

• Multiway markets almost always have higher holds than two-way markets, so tread carefully. • Don’t be fooled by artificial multiway markets where the push has been pulled out into a tie bet. This is almost always done to create much larger holds for the sportsbook.