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Sports Futures
Introduction
Proposition bets often yield high odds on the chance that a certain team will secure victory in the playoffs or clinch the season championship. For instance, prior to the start of the 2000 baseball season, a wager on the Baltimore Orioles claiming the world series had odds of 35 to 1.
For determining the house edge on a series of futures bets, you can follow these straightforward steps.
- First, convert all winning odds into an equivalent fair winning probability. For example, if the Orioles had odds of 35 to 1, the fair winning probability would be calculated as 1/36. Generally, if the odds are expressed as x to y, the probability of winning can be derived as y/(x+y).
- Next, sum the probabilities you got from the previous step. Let's designate this total as t.
- The total house edge across all futures bets can be calculated using the formula 1 - (1/t).
To illustrate, consider an example from the Suncoast casino in Las Vegas, which provided odds for the Pontiac Excitement 400 race held on May 5, 2001. The accumulated probability indicated a total of 135.04%. Based on this, the house edge was computed as 1 - 1/1.3504, roughly 25.95%.
Odds to Win Pontiac Excitement 400
| Driver | Pays | Fair Probability |
|---|---|---|
| Dale Jarrett | 4 to 1 | 20.00% |
| Dale Earnhardt Jr. | 7 to 1 | 12.50% |
| Bobby Labonte | 7 to 1 | 12.50% |
| Tony Stewart | 6 to 1 | 14.29% |
| Mark Martin | 10 to 1 | 9.09% |
| Jeff Burton | 9 to 1 | 10.00% |
| Rusty Wallace | 5 to 1 | 16.67% |
| Field (all others) | 3 to 2 | 40.00% |
| Total | 135.04% |
The following overview displays the house edge on Super Bowl futures across major sportsbooks in Las Vegas, ranked from the lowest to the highest house edge. This analysis was conducted in August and September of 2014.
House Edge on Superbowl Futures
| Casino | House Edge |
|---|---|
| CG Technology* | 21.90% |
| William Hill | 26.63% |
| Wynn | 27.96% |
| Caesars | 35.49% |
| Stations/El Cortez | 38.33% |
| Golden Nugget | 39.75% |
| MGM | 40.88% |
| Boyd/Coast | 49.35% |
| TI | 57.93% |
*: Formerly known as Cantor Gaming
Many sportsbook groups frequently share identical futures odds. For instance, Bally's, the Paris, and the Flamingo Hilton, all owned by the same parent company, provide the same odds. Park Place Entertainment Not all sportsbooks have clear connections. For example, while the Rio is owned by Harrah's, its futures odds are significantly more appealing compared to those at the Las Vegas Harrah's. Likewise, MGM Grand has consistent futures odds as the Bellagio, and the Monte Carlo's offerings align with those of the Excalibur.
