Wednesday, July 20, 2011 | 7:26 p.m.
The sports book at Wynn Las Vegas offered five betting propositions on this year’s World Series of Poker main event, the first of their kind since the Nevada Gaming Control Board voted in January to allow wagers on events outside the realm of traditional sporting events. The most intriguing prop asked whether at least one of the following players would finish in the money: Johnny Chan, Allen Cunningham and Erik Seidel. This prop is worth examining because bettors can apply the analysis to similar exotic betting opportunities.
The main event drew 6,865 players. The top 693, or approximately 10 percent of the field, finished in the money. The opening line on the wager was minus 160 (bet $1.60 to net $1) that at least one of the three players would finish in the money. It was plus 140 that none of the three would cash. That line equates to a 60 percent chance that one or more of the players would finish in the money.
Let’s determine how the line was established. It was not created by giving each man a 20 percent chance of cashing and adding them up to reach 60 percent. That approach is a common probability error.
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Instead, the line was suggesting Chan, Cunningham and Seidel each had an average of a 26 percent chance of cashing. There are several ways to reach that conclusion, but here is the most elegant: Take the odds each man won’t cash expressed as a decimal (.74), cube it (because there are three players involved) and subtract from 1. That gives us .6, or 60 percent, or minus 150—the precise opener at the Wynn once you take the house’s commission into account.
It is crucial to understand this type of reasoning if you are going to get involved in wagering in sports books. Without a baseline analysis grounded in probability, you are gambling recklessly at best and are, more likely, utterly lost.
So much for the science of breaking down this wager. Let’s look at the art. As talented as Chan, Cunningham and Seidel are, I was not convinced their edge against the field was quite so substantial. I made their average chances of cashing a bit south of 25 percent. For me, it was “no” or pass.
It’s just as well I decided to pass. Chan and Seidel finished out of the money, but Cunningham came in 69th place to make the “yes” side a winner.