$500 on GSP FTW

January 27, 2009 12:50 PM

How do I make sense of the "moneyline" form of betting odds for mixed martial arts?

I'm trying to understand the way that betting on mixed martial arts works. I have read the description here, so I think I have the basics down. But I'm curious about one thing. The opening line for the GSP/BJ Penn fight is Georges St-Pierre -245 vs. B.J. Penn +175. If I understand this correctly, this means that a $245 bet on GSP results in a $100 profit, and a $100 bet on Penn results in a $175 profit.

My question is, why can't a savvy bettor hedge and come out ahead every time? For example, say I bet $100 on both fighters:

If GSP wins I win $140.82 and lose $100 to net $40.82.
If Penn wins, I win $275 and lose $100 to net $175.

So I come out ahead no matter who wins. This cannot be right; there is no way that I have stumbled on a foolproof moneymaking scheme. So what am I missing? Hidden commissions on placing bets? Have I misunderstood the explanation? Is my math bad? Do I need more caffeine today?

posted by googly to Sports, Hobbies, & Recreation (6 answers total)

Best answer: Your math for GSP winning is wrong. Your first $100 results in nothing, and your second results in $140.82, not $240.82, so you end up with only $140.82 out of your original $200.

The sanity check is that if the GSP bet paid out $140.82 in profit on a $100 bet, you would be getting better than even money odds (1:1=$100 in profit), and it wouldn't make sense for both of the bets to pay out better than even money. The negative side of a moneyline bet is by definition worse than even money odds.
posted by burnmp3s at 1:13 PM on January 27, 2009

Also, your net calculation for Penn is wrong. You walk away with $275 after risking $200, so you only have $75 more than you started with after both bets.
posted by burnmp3s at 1:23 PM on January 27, 2009

Response by poster: Thanks. I figured that must be it, but the explanation at the website I linked said "so if you were to bet $140 on Tito, you’d win $100 (profit) if he is victorious..." which sounded like a profit of $100 on a $140 bet, not a total payout of $100 on a $140 bet. I think that's what threw me off.
posted by googly at 1:30 PM on January 27, 2009

I figured that must be it, but the explanation at the website I linked said "so if you were to bet $140 on Tito, you’d win $100 (profit) if he is victorious..." which sounded like a profit of $100 on a $140 bet, not a total payout of $100 on a $140 bet. I think that's what threw me off.

No, your thinking was correct there, you just didn't adjust correctly for a smaller bet. You said that a $245 bet on GSP results in a $100 profit and then later If GSP wins [on a $100 bet] I win $140.82. So according to your calculation, a $100 bet would actually pay out more than a $245 bet. To put it another way, if you want a chance to win a profit of more than $100 on GSP, you'll have to bet more than $245, and if you bet less than $245 your possible payout will be reduced to under $100.
posted by burnmp3s at 1:47 PM on January 27, 2009

Response by poster: Oh my god I am an idiot. Got it now. Thanks!
posted by googly at 1:49 PM on January 27, 2009

Best answer: The easy way to remember this is think about it in increments of $100

A negative moneyline is how much money you must bet to win $100
And a positive moneyline is how much money $100 will get you

So -245 = bet $245 to take $100
+175 = bet $100 to take $175
posted by jckll at 2:17 PM on January 27, 2009