How Do I Know If I’m Winning?

This is the question at the heart of it all. Am I winning? Am I beating the system? Is what I’m doing good enough?

It can be fiendishly hard to figure out the answer.

If you’re winning money, it’s tempting to assume you’re the smartest person in the world, and the good times will keep on rolling. If you’re losing money, it can be intensely frustrating, especially if you’re convinced what you’re doing should be winning.

Throughout the book I’ve talked about winning and losing like it’s some foregone conclusion. Do this and it will win. Do that and it will lose.

The reality is a lot messier than that. Whenever I say, “win,” I mean, “win on average,” or really, “will win eventually if you keep on doing it over and over again and don’t give up and nothing important changes in the interim.”

I didn’t really talk about things like risk, variance, and bankroll in depth because it’s a huge topic worthy of its own book. But the main idea is that in the long term, winning strategies will win and losing strategies will lose. In the short term, absolutely anything can happen. And the short term is a whole lot longer than most people without years of gambling experience appreciate. The long term is always longer than you think it is.

Thus, the question. How do I know if I’m winning?

First, you have to start betting. There’s no such thing as figuring out if you’re going to win without getting your beak wet. Sports betting is a multiplayer game, and if you’re not betting, you’re not playing. Tracking make-believe bets is not the same as betting.

That’s step one. Get in there and bet. Start with low stakes if you like. But if you’re betting real money then you’re playing the game.

Step two is to keep records. Record what you bet, how much you bet, the result of the bet.

Step three is to do it for a while until you get a nice record of settled bets. Are you winning or not? At some point this record begins to speak for itself. If you’re ahead after, say, a thousand bets, that’s a good sign.

But even then, record is not definitive. The long run is a very long time. No doubt you will have improved your process over those thousand bets. But also, the sportsbooks you bet into will likely also have gotten smarter during that time as well.

So here’s my best answer to the original question.

Sports betting is a multiplayer game. You know you’re winning at sports betting the same way you know you’re winning at poker. You have to evaluate your opponents. You’ve got to be able to spot the sucker.

Each bet you make has a break-even percentage. To be profitable, your bet has to have a higher winning percentage than that number. The market, by definition, thinks it doesn’t. Why are you right and your opponents wrong? Who’s the sucker?

In my experience, every winning bet fits into one of two categories. Either you’re winning because you have more information than your opponents. Or you’re winning because you are using available information better than your opponents. If you

can’t point to which one of these applies to each bet, it’s probably not a winning bet.

Do you have more information than your opponents? This is information that is not included in the line you are betting into and can range from market to weather to injury information.

Chasing steam is an example of having more market information. You know the line moved at the market makers. You notice that Sportsbook ABC hasn’t moved yet. You have more information about the line than the employee at Sportsbook ABC has. That’s your advantage.

In this case it’s obvious you have more information—you can see the line at the market maker, you can see the line at Sportsbook ABC, and you can see that the line moved at the market maker and that five other sportsbooks followed the move and ABC just hasn’t moved yet.

It can be trickier to tell if you have weather or injury information that others don’t, but keep in mind you don’t need to have the entire market scooped. You just need one sucker.

Say you’re watching an NBA game, and you see a player writhing on the ground after a hard foul. The game goes to commercial. You rewind your DVR, and it appears to you that the player simply had the wind knocked out of him and perhaps is playing it up a little for the refs.

Sportsbooks come out with their in-play lines. Most sportsbooks have something around Warriors -7 -104. But one sportsbook has Warriors -7 -120 and Rockets +7 +100. Your experience tells you the line should be Golden State -6.5, but you suspect you’re seeing higher numbers across the board due to the indelible image of the Rockets’ best player rolling around on the ground.

You can create a synthetic market with 1% hold between the Warriors -7 -104 at one book and the Rockets +7 +100 at

another. It’s probably a good idea to bet the Rockets +7 +100, and the reason you’re betting is because you think you have more information than that one sportsbook. You watched the DVR replay. They likely didn’t.

The other category of bets is when you have the same information your opponents have, but you use it better. Better analysis, better insight, better ideas. That’s really all an angle is, after all. You’re looking at information that’s freely available to everyone. Travel schedules. Weather. Or things like tipoff or coinflip strategy. And you’re putting the pieces together better than other people are. Using statistical models to bet also fits in this category.

If your perceived edge comes from using information better, make sure you can specifically point out how. What are you doing better than your opponents? Better math? Better insight? Have you sorted the data in a unique way?

If your big idea is, “I can download a bunch of data and run a regression on it better than everyone else,” well, you’re probably fooling yourself. Instead, if your idea is, “I know more about how travel schedules affect hockey teams than other people do,” you might be right.

The “better than other people do” part of it is, of course, the key part. You need to figure out what you’re good at, and then you need to get an idea for where the other players are in the same space. Say you’ve done some research, and you now know that a difficult travel schedule has a bigger effect on the travelling team during one specific period of a hockey game. Do the people who open the single-period derivative markets seem to know about this? You can look at the numbers they open in travel-relevant games and figure this out.

Do other bettors seem to know this angle? When the markets open, do the lines move in the way you’d expect? By watching the

line movement (or lack thereof), you may be able to get a good idea of what people do and don’t seem to know. Maybe they seem to understand in general that travel matters, but they don’t have one of the nuances of it figured out. So they underbet the travel angle in some games and overbet it in others.

It’s like poker.5 If you sit at the table long enough and watch the actions of your opponents, you can sometimes reverse engineer their thought processes. You can make predictions about how they will react to future situations. You can get a sense for what they know and what they don’t. You know you have an edge at poker when you can clearly explain the mistakes your opponents are making, and you can formulate a counterstrategy to exploit those mistakes.

Sports betting is the same. However, you should give your opponents in this game plenty of respect. Every one of your relevant opponents is a smart, informed person with experience playing the game. They don’t know everything, but they also aren’t dumb. Don’t pretend you are playing against the “Joes” of the world. “Oh, the public can’t get enough of the huge favorites and there’s value everywhere on dogs!”

No that’s not how it works. There are plenty of Joes out there, but they aren’t playing your game. They’re betting into retail sportsbooks, and the retail sportsbook business model is designed to profit from their mistakes without sharing any of those profits with you. No easy money for you.

Your opponents are sportsbook employees and other smart bettors. They read the sports analytics websites. They look at data.

5 If you want to check out Ed’s poker strategy books, try The Course: Serious Hold ’em Strategy For Smart Players.

They do research. They follow Twitter for breaking news. It’s not easy to beat them at their game.

The good news is that the more sports betting expands, the more attack surface there will be. There will be more props and derivatives and in-play bets on offer, and these bets will appear on betting menus before anyone at the sportsbooks have really nailed the math on them. Bigger menus mean more ways for a sportsbook to overlook something—perhaps allowing parlays on bets that are correlated. Bigger menus also mean more ways to turn angles or other insights into profitable bets.

Sports betting expansion will also bring bigger marketing budgets. Deposit bonuses and odds boosts and loss rebates and other promotions can be a great source of winnings on top of what you can win just by finding good bets.

One day it may be impossible to win. All-knowing AI algorithms may make precise line moves on all incoming information and then may perfectly adjust all bet menu pricing on the fly as new information comes in. Maybe one day.

But that’s not today. The sports betting of today is a big frothy mess. There are some things the market does very well. Price discovery on major markets is a powerful force, and it’s hard to take the biggest markets head-on and win.

But there are also many weaknesses lurking just under the surface. If you can create information advantages for yourself, and you can identify those advantages with a clear head and turn them into bets, then, if just for a little while, you’ll be able to open a new account at a brand new sportsbook and say, “I found the sucker.”