Does Fading Public Work in Efficient Betting Markets?

Back in the early to mid 1980’s independent sports books existed in Las Vegas, and anyone halfway sharp could make a killing betting sports. This was a time where wagering an NFL point spread at +7.5 at Castaways’ Hole on the Wall Sports Book and their opponent -5.5 at Gary Austin’s Sports Book wasn’t all that uncommon of a scenario. Back then and on through the early days of online sports betting a popular way to profit betting sports was a system called “Fade the Public”. This system worked because the betting market was controlled by recreational punters, and things were not all that unified.

Fading the Public: Simple version, find the worse sports bettor you know, find out what team he’s betting and bet their opponent.

If you don’t know losing sports bettors, dozens of services such as sportsinsights.com exist to show you what the public is betting. Before you get excited…in this article I’m going to cover the evolution of the betting market and by the time you’re finished reading you might realize such services are a waste of money. Reading this article will help you better understand the betting market, and with that understanding you’ll be well equipped to dive into profitable sports betting.

Brief Online Betting History

The first offshore sports books were established in the 1980’s by bookmakers. Intertops founder Detlef Train and BetCRIS icon Ron Sacco were taking sports bets illegally from their home countries long before the idea of doing so legally from an offshore location was so much a thought, let alone an easy to pursue possibility. Prior to reliable internet service and affordable home computers, these bookmakers paved the way via toll-free phone in betting shops set up offshore. However in the mid 1990’s when personal computers became affordable and MSN/AOL started losing money in an attempt to overtake CompuServe the online betting boom started. This is when Jay Cohen, Dalton Wager, Calvin Ayre and countless others with next to no sports betting experience launched online betting sites.

In the early online days the odds were incredibly soft and many wannabe bookies with recently established online sportsbooks were extremely clueless. In a move to compete many sportsbooks offered 3-team parlays at 7-1 which is what the odds would be if there was no juice at all; theoretically, they had zero margin of error to obtain breakeven results. Of course running the risk of getting banned and/or stiffed doing so – there were also flaws in betting sites software that could be exploited. For example in 1999 I actually placed an if-bet on a soccer match of $5.00 on draw if lose $1,000 on the favorite using a credit account. To my surprise the site processed my P2P withdrawal about a week later paying me on the win. The point I’m attempting to make is that it was extremely easy to make profit betting online from 1996 to around 2001.

Taking Advantage of the Public

Even though it appeared online sportsbooks were giving away free money, the public is what allowed them to rake in massive profits. The reason was small limits, limit collars, or just refusing action, kept the savvy punters at bay and massive line shades made the odds worse for recreational bettors.

The idea here is it was rather easy to predict what most recreational punters (the public) were going to bet. If the public loved the New England Patriots and the fair line was -6 +100 the bookmaker might offer Patriots -7 -115. Doing this “the public – also known as squares” as opposed to “professionals – also known as sharps” would end up in a spot where they were only going to win this bet 45.2% of the time, but the -115 required them to win 53.5% of the time just to breakeven (this math is explained in our article on buying half points). Meanwhile the betting sites treated players who never bet the square sides horribly. Many of the nicer shops would just place the punters on a very tiny maximum bet (say $100.00) or ban them, while less than reputable sites would gross slow pay them, or make up excuses to steal their balance, or do anything else they could to make the professional think twice about ever using their betting website again. Eventually, honest bookmakers came about and this changed everything.

The Betting Market Matures

In the early days of online betting the limits were quite small. $2,000 maximum was considered a high limit sportsbook until around 2003. One company touting the highest limits was 5Dimes.com; their deal was you could wager $500 max a total of 10-times on a football point spread to get down 5 dimes ($5,000) of action; this was huge at the time. However, any punter who proved to be sharp (professional) would have their limits cut much lower, for example $50.00 with 10 maximum bets for $500 total. Limit collars were very common industry wide, because honestly online sportsbooks could get away with just about anything back then, because the number of sharp punters was scarce.

There are many things that helped contribute to the industry maturing; naming just a few we have reliable payment processing, SBR going from a simple watchdog site to a full blown portal in summer 2004, more savvy punters as the result of strategy forums becoming available and e-books written about advantage sports betting, as contributors. The greatest contribution however was the advent of sharp sportsbooks; betting sites that actually targeted savvy punters.

Pinnacle Sports

The largest and most successful sharp book, then and still to this day is Pinnacle Sports. You can read our articles on the history of Pinnacle Sports to learn how they progressed to this point, but for now here is quick overview of their current system: At pinnaclesports.com NFL point spreads are offered at -104 base pricing, and as they accept wagers the lines move. For example starting at Packers -7 -104 / Jets +7 -104 a large wager on the Packers might move the line to Packers -7 -106 / +7 Jets -102, another large wager on Packers might move it to Packers -7 -108 / Jets +7 +100. This all happens on automation and the size of a punter’s bet, as well as how Pinnacle has profiled that punter determines how much the line will move. At Pinnacle players can wager up to $30,000 per bet on an NFL point spread and can place an unlimited amount of “$30,000 per” wagers, so as long as after each one the line moves (in which case they can make another instantly), or 4-hours has passed.

Pinnacle is just one example of a betting site targeting professional bettors. In addition there are now peer to peer betting exchanges such as Betfair.com where a punter can wager as much as his peers are willing to match. Meanwhile our history of bookmaker.eu article covers a company willing to take $20,000 maximum bets on NFL Teasers and $40,000 max bets on NFL point spreads; these guys built their reputation servicing high stakes sophisticated punters, while claiming to have never once reduced any players individual betting limits nor have they ever banned anyone for winning too much. Sites such as Pinnacle (no US allowed) and Bookmaker (US allowed) earn their profits by setting accurate lines – if you win fine they have no problem paying even seven figure amounts. Meanwhile exchanges have no challenge paying either, as money is won from other users and therefore winning punters don’t hurt their bottom line.

Bigger Smarter Money and More Sharp Bettors

Once online betting sites with high limits, solid track records and reasonable odds came to the market – big money entered as well, and once it did everything was changed. In 2005, arbitrage betting (sometimes called sure bets) was extremely popular. There were a number of tracking websites which listed any opportunities to bet both sides of a match at different sportsbooks in such a way a guaranteed profit could be made. This was only possible because recreational sites were still trying to shade the lines for the public. For example if Saints were -6.5 +106 and their opponent was +6.5 +100 at Bovada here you could bet in such a way you were guaranteed a 1.48% ROI no matter which side won. This might not sound like much, but keep in mind this was free money and the turnover happened in a matter of hours.

In time a lot more football strategy was written and even less experienced gamblers caught on to the fact if you skipped betting the Pinnacle side of an arb, and bet only the recreational side you’d make more money long term. There were e-books sold that touted this exact system – remove juice from Pinnacle’s lines scour the web and bet any odds that beat their no vig prices. Eventually odds services such as SBRLines, Oddsportal and dozens of others were available for free. Here at the glance of a computer monitor you could see the odds at dozens of online sportsboks; with this, it took no more knowledge than could be assimilated via a 3,000 word e-book to spot profitable betting opportunities. As a result, recreational sportsbooks were forced to go legit. The arbs dried up and fade the public no longer worked.

The Current Betting Market

Today, if you bet-off market prices on point spreads routinely at the same online sportsbook it’s highly likely you’re going to get stiffed. This is because reputable online sportsbooks don’t routinely offer off-market prices. However, less than reputable betting sites still operate targeting the public. These websites service recreational players well and will offer lines that should be -6.5 at -7.5 because they service clients who don’t know any better. If you show up and start betting the opposite side – these sites will generally find a way to make sure you never bet with them again. This is often via gross slow pays, or just flat out stealing balances. As the old saying goes “if it sounds too good to be true, it probably is”. These sites will service and cash out the public – but if your betting activity indicates you’re at all sharp, only a fool’s chance exists you’ll ever see a dime of your winnings.

Reputable betting sites make their money by doing the best job possible to arrive at betting odds smart money has no interesting in betting. If they hang out a betting line that is +EV, big money shows up placing maximum bets. Even if this is a reputable recreational sportsbook with a small maximum bet of $1,000 (example Bovada, Intertops etc.) all the maximum bets they receive from smart money and from those using Pinnacle to cap the market is going to FAR exceed the dollars wagered by recreational bettors. For example, if a recreational focused online sportsbook has an average bet size of $55.00 per and a professional can wager $1,100 to win $1,000 – this site theoretically needs 20 recreational punters to offset action from professionals. However it doesn’t even work out this ideal, because what happens is when the lines -7.5 instead of -7.0 only 65% of their bettors are going to bet the wrong side because many recreational punters bet randomly. With this being the case the site might need 60 or more average bettors per one professional. This makes shading the lines to service the public risky.

In summary, “fade the public” no longer works because “reputable” online sportsbooks no longer shade the lines enough that they routinely give away +EV wagers. Now this doesn’t mean they don’t shade them: www.bovada.lv and www.betonline.ag are two sportsbooks that offer great value and are reputable. These two sites deal mostly with recreational bettors and often do tilt lines in such a way there is slightly better value on the non public team, but 49 times out of 50, it’s not enough for this to be +EV. If you read our articles on football betting strategy you’ll learn why these are two of the best sites for both recreational bettors and for bettors who understand even very basic betting strategy.

The Betting Market is Near Efficient

To make sure the main point in this article is very clear; I’ll spell it out one final time. The sports betting market is very near efficient because anytime a reputable online sportsbook offers a +EV wager savvy sports bettors (be it professionals, or those who can cap a market via a line feed and calculator) will be there to bet and keep betting until that sportsbook moves the line to the point smart bettors no longer have an interest. Considering savvy bettors wager much more than recreational ones, the money an online sportsbook stands to lose offering +EV bets is hard to recoup. Now to be clear +EV bets pop up all time as lines open and move towards efficiency; when they are available, 2, 3, maybe 4 people per site can wager the +EV line before the odds are adjusted. A great way to make money is betting with www.betonline.com who offers bonuses, and open betting lines well in advanced, even though they’re not all that sharp. Meanwhile if you understand teaser betting strategy Bovada.lv is a great site to profit from later in the week or on game day.

As much of our websites covers there are MANY ways to win betting sports. If you however get caught up in the notion that fading the public on major markets (NFL, NCAAF, NBA, NCAAB, MLB, and NHL) is a viable means to profit, you’re more than likely going to end up losing to juice and wasting time that could be spent learning actual winning strategy. For some outstanding use of the information contained in this article read the page that contains our no-vig calculator or my article on football derivatives.

Author & Professional: Jim Griffin