Yes, it’s the one time of year when gambling is tacitly accepted in the United States. By comparison, my buddy Tony reminded me today that Europeans can openly bet on everything from Charlie Sheen’s next girlfriend to the Facebook IPO. I’m not going to go through all the Super Bowl prop bets — that’s been done to death. Instead, I want to look at the line movements for the Super Bowl, which shed some light on how line setting works (hint: it’s not always about getting half the betting on each side of the line).
The Patriots opened as 3.5 point favorites in many books, but it quickly became clear that the Giants would get many more bets at that number. The standard argument is that Vegas doesn’t care if their line is “accurate” (in terms of the actual game outcome); they just want 50% of the betting on each side of the line. If books can split the bets 50-50, they are guaranteed to make money (the losers more than offset the winners, since the book takes a cut from the winner).
So, Vegas needed to move the line down to encourage more betting on the Patriots. However, moving the line down to three (where it is right now on most books) creates a problem for Vegas. More than 15% of regular season NFL games finish with a margin of victory of three points (see my previous post on this). There’s a reasonable chance that all those Giants +3.5 bets will be winners and all the +3 bets will be pushes, and Vegas will be in a tight spot having to pay out all the winners with few losers to even them out.
This problem aside, moving the line to three hasn’t even balanced the betting. Should Vegas move the line to 2.5? Doing so opens up a true daily double, where Giants +3.5 and Patriots -2.5 both win on a Pats three point victory. Betters love these opportunities, and Vegas hates them. Even if a move to 2.5 balanced the money on the Giants and Patriots overall, most of the Giants money would be at +3.5, and most of the Patriots money would be at -2.5. The important factor here is that three point games are common — a big daily double win on those bets is plausible.
Whenever the line hovers near a “key point” (three or seven), the risk of the daily double limits what books can do to get a 50-50 split. Holding the line at three and shifting the odds around has evened out the betting somewhat, but the Giants are still getting more bets. Although a few books have moved to 2.5, most want to avoid the chance of the daily double.
Then where does Vegas stand right now? Most money will be bet today and tomorrow, but as of Thursday, 60% of all money was on the Giants. If the Giants win outright or lose by less than three, the lost bets and the juice paid on winning bets will erase most (but not all) of that imbalance. If the Patriots win by three (meaning that there are very few losing bets), Vegas will lose money, but there probably weren’t enough bets placed at 3.5 to bankrupt any books. Finally, if the Patriots win by four or more, Vegas stands to make a lot (since more than half the money is on the Giants +3 or +3.5).
There’s no guaranteed profit for the books from these bets, but they probably feel good about the Patriots chances of covering. Generally, the line is a pretty accurate predictor of game outcomes — almost exactly 50% of games finish above and below the line. But, in a game with lots of attention and a New York team involved, that theory goes out the window. Think of New York as a big pot of money that weighs down the teeter totter, sliding the line down in favor of the Giants. All the New York homers have likely forced the line below the balance point. Vegas has decided to follow this argument and risk the outcome of the game rather than go for an exact 50-50 money split and risk a daily double.
In other words, Vegas is hoping that their own line is too low. This happens a lot — books took the same approach in 2008, the Giants won, and Vegas got burned. Still, my advice is to follow the books and bet against that big pot of loyal, unthinking New York money.
Edit: When reading Simmons’s Super Bowl mail bag, I discovered that the daily double actually happened in Super Bowl XIII at four points and Vegas lost tons of money. No wonder Vegas is scared of one happening at three points. I also heartily agree with his assessment of the Boston fan base. They are desperately hoping for revenge in this game, but, despite living in Boston, I know almost no one that is going to the Super Bowl. It’s in Indy after all, which doesn’t have enough hotels or flights. My buddy Tony (Pats fan) had to stay in Louisville to get to the big game. Surely the Pats will be back in a warm location in a year or two, right? That’s the way these guys think — they are so spoiled now, after a city-wide championship drought of more than a decade through the 1990s.