Vegas sportsbooks lose record $11.4M on baseball in November

[Tugg Speedman]

I don’t know enough about sports betting so maybe someone can explain ...

Why is the “house” making a bet?  Why don’t they set the odds where the money is balanced, pocket the vig, and then not care who wins?

Vegas sportsbooks lose record $11.4M on baseball in November
http://www.espn.com/chalk/story/_/id/21901749/houston-astros-title-results-114-million-baseball-loss-las-vegas-sportsbooks-november

The Houston Astros took an $11 million bite out of Las Vegas sportsbooks by winning the World Series.

Nevada sportsbooks lost $11.4 million on baseball in November -- the largest baseball loss in a month for the state's regulated books, according to the Nevada Gaming Control Board.

The previous largest loss on baseball came in November 1999, after the New York Yankees beat the Atlanta Braves to win the World Series. The books lost $6.2 million on baseball that November. The 2017 World Series was nearly twice as costly for the books and will be talked about for years in Las Vegas.

However, even after the record loss, the books were able to remain open. In fact, thanks to big wins in football and basketball, Nevada sportsbooks actually won $9.8 million overall in November. It's the 52nd straight month the books have come out on top, a streak that dates back to July 2013.

With December's numbers still to be revealed, the books have won a net $213.6 million in 2017, making it the fourth most lucrative year ever. 2015 was the most lucrative year, when the books won $231.7 million.

[GGGG]

I don’t know enough about sports betting so maybe someone can explain ...

Why is the “house” making a bet?  Why don’t they set the odds where the money is balanced, pocket the vig, and then not care who wins?

Why do you invest in Bitcoin instead of simply buying indexed mutual fund shares?

And they ended up making money for the month anyway.

[Tugg Speedman]

Why do you invest in Bitcoin instead of simply buying indexed mutual fund shares?

And they ended up making money for the month anyway.

They do not make money speculating on the outcome of sports matches.  They set odds so they have “balanced money” to pay the winners from the losers.  While doing this they keep a little for themselves, called the Vig.

My point is this is a profitable business.  So why do they deviate from it by speculating on the outcome?  They should have adjusted the baseball odds to balance the money so they were not on the hook to pay out.

[Tugg Speedman]

An example using this afternoon's Northwestern/Kentucky Music City Bowl

http://www.vegasinsider.com/college-football/odds/las-vegas/line-movement/kentucky-@-northwestern-university.cfm/date/12-29-17/time/1630

Northwestern is an 8 point favorite.  But the money line is -110.  So you have to bet $1.10 to win $1.00 (get your money back plus $1.00).  Take the points and Kentucky and you have -90 money line or you get your $1.00 back plus 90 cents. Most point spread bets have this built in 10 cents "vig" for the "house." 

If you want to bet the same game outright (without points)...

Northwestern -290 (bet $2.90 to win $1.00, or money back plus $1.00)
Kentucky +245 (bet a $1.00 to win $2.45, or money back plus $2.45)
Note the money line is not -290 and +290 (or -245 and +245).  The difference is the "vig" or the sportsbook's profit.

That's why I asked why do they not just balance everything off and keep the Vig?  Why do they speculate on the outcome?  Cost them $11 million on the World Series.

[JWags85]

An example using this afternoon's Northwestern/Kentucky Music City Bowl

http://www.vegasinsider.com/college-football/odds/las-vegas/line-movement/kentucky-@-northwestern-university.cfm/date/12-29-17/time/1630

Northwestern is an 8 point favorite.  But the money line is -110.  So you have to bet $1.10 to win $1.00 (get your money back plus $1.00).  Take the points and Kentucky and you have -90 money line or you get your $1.00 back plus 90 cents. Most point spread bets have this built in 10 cents "vig" for the "house." 

If you want to bet the same game outright (without points)...

Northwestern -290 (bet $2.90 to win $1.00, or money back plus $1.00)
Kentucky +245 (bet a $1.00 to win $2.45, or money back plus $2.45)
Note the money line is not -290 and +290 (or -245 and +245).  The difference is the "vig" or the sportsbook's profit.

That's why I asked why do they not just balance everything off and keep the Vig?  Why do they speculate on the outcome?  Cost them $11 million on the World Series.

They attempt to set a line for balanced money, but can only do so much.  Say a balanced like is Marquette -4 against an opponent.  Suddenly someone bets a huge sum on Marquette.  They can move the line to -4.5 or -5 to attract more money to the opposite side, but that doesn't mean it will flow in.  Its not like horse racing where odds are fluid, you can lock in a number.  And if the book's corrections to even out money don't attract enough money, they can find themselves heavily tied to a certain outcome.

[Tugg Speedman]

They attempt to set a line for balanced money, but can only do so much.  Say a balanced like is Marquette -4 against an opponent.  Suddenly someone bets a huge sum on Marquette.  They can move the line to -4.5 or -5 to attract more money to the opposite side, but that doesn't mean it will flow in.  Its not like horse racing where odds are fluid, you can lock in a number.  And if the book's corrections to even out money don't attract enough money, they can find themselves heavily tied to a certain outcome.

Why don’t they let the lines move more fluidly like horse racing?

[JWags85]

Why don’t they let the lines move more fluidly like horse racing?

Sorry, I phrased that poorly.  I meant once you place a bet on a sporting event, you get the number you bet.  So if you bet Marquette -3, and by tip off its moved to -6 due to money flowing on to Marquette, then you got a great number.  Conversely, the opposite can happen. 
Whereas, if you bet on Fast Willie in the Kentucky Derby and he's 8-1, but by race beginning, money has flowed in and he's 2-1, too bad.  You hold a ticket for the horse, not the line.

[tower912]

The seem to be doing OK.    They took a bath on the WS.   They made it up elsewhere.    It even says so in the quoted part of the article.