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.g    Sports Betting Appendix 5

Last Update: December 15, 2003



Sports Futures

Propostion bets usually pay long odds that a specified team will win the playoffs or the season championship. For example before the beginning of the 2000 baseball season a bet that the Baltimore Orioles winning the world series paid 35 to 1 odds.

To calculate the house edge on a set of futures bets follow these steps to

  1. Convert all winning odds to a fair probability of winnings. For example if the Orioles paid 35 to 1 odds then a fair probability of winning would be 1/36. In general if the odds pay x to y then the probability of winning is y/(x+y).
  2. Add all the probabilities form step 1. Call this total t.
  3. The overall house edge on all futures bets is 1-(1/t).

Lets look at an example. The Suncoast casino in Las Vegas offered the following odds to win the Pontiac Excitement 400, which ran on May 5, 2001. The following table shows total probability of 135.04%. The house edge is 1-1/1.3504=0.259496714 , or 25.95%.

Odds to Win Pontiac Excitement 400
Driver Pays Fair Probability
Dale Jarrett4 to 120.00%
Dale Earnhardt Jr.7 to 112.50%
Bobby Labonte7 to 112.50%
Tony Stewart6 to 114.29%
Mark Martin10 to 19.09%
Jeff Burton9 to 110.00%
Rusty Wallace5 to 116.67%
Field (all others)3 to 240.00%
Total135.04%

Using this method the following list presents the house edge on futures bets on the Superbowl XXXVI at various casinos.

House Edge on Superbowl Futures
Casino House Edge
Imperial Palace28.09%
Palms32.1%
Frontier32.93%
Venetian33.57%
Rio33.78%
MGM Grand34.72%
Bellagio34.72%
Golden Nugget34.72%
Holiday34.72%
Stratosphere36.64%
Arizona Charlie's36.64%
Aladdin36.82%
Hard Rock37.09%
Suncoast38.3%
Regent40.35%
Ballys41.74%
Paris41.74%
Flamingo41.74%
Hilton41.74%
Caesars Palace41.74%
Mandalay Bay42.49%
Santa Fe Station43.66%
Plaza53.36%
Stardust53.57%
California53.57%
Luxor55.41%
Excalibur56.74%
Monte Carlo56.74%
Tropicana57.1%
Gold Coast57.33%
Circus Circus57.54%
Harrah's58.41%
San Remo59.09%
Fitzgeralds61.2%
Lady Luck61.2%
Binion's Horseshoe61.6%
Sahara68.69%

Many groups of sportsbooks share the same odds on futures with each other. For example Ballys, the Paris, and the Flamingo Hilton all offer the same odds, which are all owned by Park Place Entertainment. There is not always an obvious connection among sportbooks. For example the futures at the Rio are much more competitive than at the Las Vegas Harrah's, despite the Rio being owned by Harrah's. The MGM Grand offers the same odds on futures as the Bellagio. The Monte Carlo offers the same futures as the Excalibur.


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