Greetings. Here follows our considered approach to sports betting.
First, we acknowledge the absolute certainty underlying sports betting, to wit, the irrefutable advantage belonging to the house, or any person holding, cashing, or collecting a sports bet. Because the house - bookie, or book, if you will - collects six dollars on every losing five-dollar wager, and pays winners only the same amount as wagered, over time this 20% vigorish grinds down the bettor. Because, exactly like flipping a coin, 50% is the best and only possible winning percentage available to the sports bettor, bettors will always offer positive cash flow to the house (and suffer a negative cash flow themselves) in all but the narrowest measures of time. Again, over time the 20% vigorish grinds down the bettor, and, in the long run the bettor must lose.
Still, in the long run every Mary, Jane, and Sally, and Tom, Dick, and Harry, and Ru-Paul, too, must die. Should this stop us from enjoying life? Do we not make the bet for fear of losing? Mais, non!
Second, we conceive of sports betting as a parimutuel system, and, as such, reflective of popular sentiment. Breaking it down, sports betting approaches the parimutuel model of the race track - and the classic economic model of prices set in an open market - when oddsmakers set the line, or point spread, for a game.
the model Working from the bottom of this model upward, Bernie, the bookie, takes bets on a game, for example, the Philadelphia Eagles versus the New York Giants in a pro football contest at Giants Stadium, East Rutherford, New Jersey. The oddsmakers (for most of us, Danny Sheridan, working for Caesar's Palace, Las Vegas, Nevada, who sells his odds to USA Today, where we read them) have set the Giants as a three-point favorites over the Eagles (the acknowledged value of the advantage to a team of playing on its home field). In other words, the bettor must decide and make her or his wager on either side of the proposition that the G-men will beat the Eagles by four-or-more points. (Notably, should the Jerseyites win by just three points, for example, 24-21, then the bet is off, never happened, Bernie doesn't pay, no one pays Bernie.)
Now, Bernie takes $1500 in wagers on the Giants and $1000 on the Eagles, thereby threatening his guaranteed $200 profit, or vig, should $1000 have been wagered on both teams, in the event that the Giants win the game by four-or-more points. Bernie, a responsible if somewhat timid sort, fears losing his guaranteed vig more than he covets the added income generated by an Eagle victory or a Giant victory by two-or-fewer points, for example, 16-14; therefore, he contacts another bookie with perhaps the opposite problem or a more prominent bookmaker with greater financial reserves, or, even a bona fide sports book, like Caesar's Palace, to wager $500 on the Giants. He has laid off the wagers which threaten his vig.
At last, we have arrived in the desert, at Caesar's Palace, in fabulous Las Vegas, Nevada. Oddsmakers, specifically bona fide sports books like Caesar's Palace, act as clearinghouses for the domino-effect accounting transfers of ordinary and large bookmakers laying off bets to each other until each achieves a balance of wagers on a given game. Because sports books, like Caesar's Palace, serve, if effect, as the reserve bank for all sports betting, they do not enjoy the financial protection of even the most small-time bookie: Caesar's Palace can not lay off a bet. Caesar's Palace can, however, adjust, or move, the line, or point spread on a game. For example, should wagering on the aforementioned Eagles-Giants game mount too heavily on side of the Giants with a spread of three (Giants favored), then the oddsmakers suddenly may make the Giants a four-point favorite (odds published by Danny Sheridan in USA Today) to attract bettors to the Eagles side of the equation.
line shifts How far will oddsmakers move a line? Surprisingly, not far at all in the face of even the worst torrent of wagers on one side of a given point spread. Why not? One, because moving a line too far would open the possibility of wealthy, experienced bettors and even other sports books offsetting earlier wagers at a given number with equal, opposite wagers at the higher number. For example, should the oddsmaker shift the point spread on the Eagles-Giants game, above, from three to five and the Giants win the game by four points (28-24), then the bettor who took the Giants minus three and the Eagles plus five cashes - and the sports book pays - both bets, hitting a "tweener!" Two, no one knows better than the sports book the oppressive certainty of their statistical advantage over bettors. Sadly, most likely every $100, $1000, or $10000 payed out as winning bets returns in the form of eventual losses over and over again.
Returning to the vaguely parimutuel system described above, then, odds reflect consumer, or bettor, preferences, changing like isoquants in a graphical illustration of a basic supply-demand equation. Gambling stalwarts, especially horse players and stock-market-derivative cowboys, surely already recognize the romantic and often quite real possibilities of a competitive advantage available to the clever bettor (horse player or stock trader) who recognizes excesses of bettor (investor) sentiment. Bettors (especially horse players) call these excesses "overlays" and gladly take the unpopular side of the bet (or cover a solid horse running at unusually long odds); stock traders term stocks reacting to similar excesses of investor sentiment either over-bought or over-sold and take positions in the stock market which anticipate a reversal, or correction, in the price of the stock.
Third, The Kennedy Letter bases its recommendations for sports betting on perceived overlays. After a fashion, we hang around the water cooler and listen for the volume of unsophisticated opinion to mount in favor of or against any team. Once we detect a quirk in bettor sentiment, we cover it on the short side, as it were. In a word, we bet against the schmucks. Generally, we take the points offered; sometimes, we go with a proven winner who may have hit a bump on the road to glory.
How successful is our system? Quite, but you be the judge. We post all our historical picks and cumulative records on a sport-by-sport, season-by-season basis. Do we guarantee that you will make money? No. See "First, ..." above, where we explain the grim mathematics of sports betting. Do we guarantee winners? ABSOLUTELY !!
Thoroughgoing contrarians, we live for the games and weekends when we stand alone, or among a proud few, who win while the great masses of bettors lose. And, since the masses lose regularly, any winning bet or weekend looks great in their eyes. Hit a couple? Walk tall, be proud.
Also, since one winning weekend, for example, hitting a four-bet parlay at 10-1, or picking up $100, $1000, or more on one surprising winner, pays for a number of near-misses and even seeming Waterloos. To cash a bet once in a while makes palatable the certain destruction implicit in the long-term odds of sports betting. Given the miserable and repeated failure which characterizes most sports bettors, a periodic win (and a healthy perspective on the whole enterprise) makes one a winner. You're the one taking the old man or the old lady out for drinks, dinner, and a night at a hotel.
Walk tall, be proud.