Bet here, not there, for a reasonable house edge

By Jeff Haney

Tuesday, June 16, 2009 | 2 a.m.

Bettors in Las Vegas can wager on the Chicago Cubs to win this year’s World Series at odds of 7-5 at any Harrah’s property.

A strong argument can be made that this is the worst possible bet anyone could make in Nevada — not just in sports betting, but in any form of state-sanctioned gambling.

The crux of the argument would go like this: Odds of 10-1 on the same proposition — the Cubs to win the World Series — are available at several sports books, including at least one within easy walking distance of Harrah’s.

That represents an eventual payout to the bettor that’s 714 percent of the one at Harrah’s properties — a Ruthian figure in more ways than one.

Likewise, the odds on the Yankees to win the World Series are 8-5 at Harrah’s. Odds of 9-2 on the Yankees (perhaps a tad higher if you shop rigorously) can be found all over town. That payout is about 280 percent of the first.

Ah, but perhaps this criticism is unfair, right?

I mean, surely those abysmal odds — Seven to five! One-point-four to one! In the middle of June! — merely reflect the fact that these particular casinos have accepted a ton of wagers on the Cubs. And the Yankees. (And the Red Sox, for that matter.)

Surely they made up for it by raising the odds enough on various other baseball teams to pursue balanced action and maintain a fair World Series future book.

Right?

Well, to paraphrase the Gipper ... There you go again, trying to impose your logical, coherent thought process on the world of Las Vegas sports betting.

Actually, the Harrah’s properties have the least advantageous — that is, the worst for the bettor — World Series future book in Las Vegas, according to our analysis of baseball odds at 13 major sports books.

The theoretical hold percentage, or “house edge,” in the Harrah’s baseball future book checked in at 60 percent, the highest among the 13 books. The higher the house edge, the worse it is for the bettor (see postscript).

House edge is the best tool to use to analyze sports future books because it provides a complete picture of the odds from the top of the betting board to the bottom. A casino can offer extremely low odds on a particular team, for instance, but still maintain a competitive house edge by offering more attractive odds on the other teams. A casino could also offer unspectacular but solid odds on every team and score well in an analysis of theoretical hold percentages.

A high house edge, however, indicates poor odds across the board.

Bettors looking to get the most bang for their buck should check out the Venetian, which had the most competitive World Series future book in our survey, with a house edge of 22 percent. The Venetian was followed by the Las Vegas Hilton and Lucky’s at 27 percent, followed by the Palms, Wynn Las Vegas, Cal Neva and the M Resort (see chart).

The performance of those major sports books shows that future-book wagering can be done right in Las Vegas, that bettors can find a fair shake in this form of gambling.

It would be ideal if the others followed suit, driven either by respect for their own bookmaking abilities or by a desire to present a positive image of Las Vegas to visitors.

Until that happens, if you risk any of the $2 billion-plus wagered in Nevada sports books annually (last year’s figure was $2.57 billion), the best course of action is to vote — that is, bet — with your feet.

All else being equal, patronize sports books that show respect for bettors by offering fair future books rather than building exorbitant takeouts into the odds on their betting boards.

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Postscript: Here is a good way to determine the theoretical hold percentage, or “house edge,” on a set of futures wagers, courtesy of the Wizard of Odds Web site at wizardofodds.com:

1. Go down the list and convert the betting line on each team into a probability of winning expressed in percentage form. For example, if the odds on the Dodgers are 6-1, the probability of winning would be 1/7 or 14.29 percent. Basically, if the odds pay x to y then the probability of winning is y/(x+y).

2. Add all of the probabilities from step 1. You’ll get something like 135.4 percent, for example. Call this total “t.”

3. The house edge on the future book is 1-(1/t). Sticking with the example from step 2, 1/t would be 1/135.4 percent, or 1/1.354, or .7385. And 1-.7385 is .2615. So the house edge would be 26 percent.