It’s not rigging. If you place a bet and it wins, they will pay you. It would only be rigged if a bookmaker decided whether or not to take your bet after the event.
"Rigged" is the wrong word. What it essentially says is that all of the data that a professional could reasonably analyze is already baked into the odds that bookies initially set, and if those odds stayed the same until bets were no longer being taken on the event, sports betting would be consistently unprofitable because of the 10% "juice" that most bookmakers charge. However, the odds do not stay the same. Once they are posted and bets begin to come in, the market takes hold and begins swaying the odds one way or another, because bookies change the odds in order to try to balance their books such that they have little to no actual risk. It is in the swinging of the odds by the market, which has many unsophisticated participants - people betting on a team simply because they live in that city etc. - where money can be made, because there is an incredibly large amount of "dumb money" in the sports betting market.
If they imbalance the book yes. But in this case the authors got the statistical edge because the bookie is trying to balance the book.
What difference does it make if the $10k the bookie needs at 4/1 to balance the book comes from professional better Bob or from long term loser Joe?
As soon as the book gets imbalanced again they would have to change the lines again.
so he was trying to bet on which way the odds would be placed and get in ahead of that, with some sort of hedging that would work regardless of how the games turned out? i have a feeling there's some key insight i'm missing here - is this like placing a bet on a dark horse before the public catches on and the odds swing closer to even?
> The bookmaker wants to balance his book for each game to make sure he makes a profit no matter what the outcome is.
This part is not really true. Bookies will very often have an unbalanced book and will be happy to keep taking action on the side that increases their exposure, if the price is right.
Echoing another comment, one huge problem with the current sports betting market is banning/limiting winners.
I started prop-odds.com to help the more mathematically inclined gamblers take advantage of mispriced odds or let them build and backtest their own models. So while it's actually not too difficult to beat the book, the challenge comes from evading their detection and getting banned.
> He sets and updates his odds such that he can match exactly the right amount of money for each outcome such that he makes a profit no matter the outcome.
This is only one way bookmakers work though and not the most profitable. If you have deep pockets, and there is tons of action on a bet that is very +EV for you, you will just let the action keep coming in rather than adjusting the odds to encourage balancing action on the other side. That would reduce variance (potentially to 0) but at the cost of EV.
In your case, at the end of the day you make money iff you get people to make individual bets that are unprofitable to them. If "there are plenty of suckers in the game," then you'll be able to do that. The other problem you're talking about is just variance control -- it won't affect your profits.
Given that this is only over one season, it's entirely possible that the gamblers were accurate and luck / coincidence accounted for the difference.
Additionally, there are very, very few gamblers savvy enough to make a living betting sports--and even they may just be "running good." Mostly that means it's hard to beat the bookmakers soundly enough to overcome the rake.
In traditional betting, you have an observable outcome that is external from the bookie (let's say most of the time, unless the match is fixed). Here, if I understand correctly, the bookies are also simulating the match or rather the season without any external control, or third party auditing. It would be pretty easy to tip the odds in their favor if they have too much to lose. Either I am missing the obvious, or this is a mind boggling stupid way to bet on something.
The well known bettors will place bets knowing others will emulate it, moving the odds in favor of their real bet they have yet to place. I wouldn't be surprised if some of the big Vegas books are in on it since they make their money long term on vig, and don't have to worry about short term losses (thus enjoying any increase in bets those schemes generate).
There is an older 60 minutes episode on Billy Walters that is a good watch for anyone interested in people trying to beat sports books.
Bookies have to eat. They are never going to give perfectly fair odds because then they don't make any money.
Also NB: The odds don't reflect the bookie's opinion of what the real outcome will be. They reflect the bookie's opinion of gamblers' willingness to bet on each option. The bookie is trying to get the odds-adjusted amount bet on each option to be as close to equal as they can manage. That way, no matter what the outcome is, they can just take the money paid by the losers give some of it to the winners and then keep what is leftover for themselves.
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