Risk Management Consultant

This week, we team up with a NYC risk management consultant to see how he approaches proposition bets to form a winning strategy.  JR who has been a friend of ours for a while, and he is convinced that value exists in the proposition market due to a few factors.

1) Historically proposition (“prop”) bets have been viewed as high risk and therefore the sharp action avoids them

2) The lack of two-way action can open opportunities to take advantage of price movements or mispricing (more on this later)

3) Sports books are posting prop bets for more than just the Super Bowl or other high profile games (Thanksgiving, SNF or MNF)

4) Some prop plays such as first player to score offer the opportunity for parlay type returns without the same risk profile

While it’s true more players are looking to the prop or live action market to make plays, they are typically part of the “Public” that Vegas feeds on.  I have a friend at Westgate that admits the lines aren’t perfect, but the “Public” eats up the opportunity to make the games more interesting.  In fact, more than 65% of the action on prop bets produces wins for the sportsbook.

Over the last few weeks I’ve tracked performances and looked at a practical approach to share.  However, I’ve been betting props for a long long time and I personally love them and want to share some advice.

If you want to bet a prop you have to figure out how to price the risk – sometimes this is easier than others (such as first team to score or will there be a score under 1.5 yards).

A simple strategy to calculate the risk on first team to score is to look at the combination of 4 lines and find the implied score – 1) first half team totals, 2) first half spread, 3) full game team totals and 4) full game spread

• Now we can see that Detroit can’t score 10.5 points in the first half, but they are projected to score twice (10 = TD, FG).
• NO is also projected to score two/three times (2 TD’s or TD and 2 FG’s).
• The implied scores would indicate a first to score spread of -135 for NO and +115 for Detroit
  • Taking this a step further though, we can see that Detroit has put together some long drives this year and has a very good kicker.  They also have had some fast starts
  • New Orleans is coming off a bye week and before that had a poor first half performance against Miami – could they be rusty?
• I would look to take Detroit if the line is +115 or better
  • Additional measurements – Detroit averages more time on the field than New Orleans, more points per game and more plays per game
  • However, we see that Matthew Stafford is questionable and that should be monitored before placing any action