Sports Futures
Last update: December 15, 2003
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
- 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).
- Add all the probabilities form step 1. Call this total t.
- 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 Jarrett | 4 to 1 | 20.00% |
| Dale Earnhardt Jr. | 7 to 1 | 12.50% |
| Bobby Labonte | 7 to 1 | 12.50% |
| Tony Stewart | 6 to 1 | 14.29% |
| Mark Martin | 10 to 1 | 9.09% |
| Jeff Burton | 9 to 1 | 10.00% |
| Rusty Wallace | 5 to 1 | 16.67% |
| Field (all others) | 3 to 2 | 40.00% |
| Total | | 135.04% |
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 Palace | 28.09% |
| Palms | 32.1% |
| Frontier | 32.93% |
| Venetian | 33.57% |
| Rio | 33.78% |
| MGM Grand | 34.72% |
| Bellagio | 34.72% |
| Golden Nugget | 34.72% |
| Holiday | 34.72% |
| Stratosphere | 36.64% |
| Arizona Charlie's | 36.64% |
| Aladdin | 36.82% |
| Hard Rock | 37.09% |
| Suncoast | 38.3% |
| Regent | 40.35% |
| Ballys | 41.74% |
| Paris | 41.74% |
| Flamingo | 41.74% |
| Hilton | 41.74% |
| Caesars Palace | 41.74% |
| Mandalay Bay | 42.49% |
| Santa Fe Station | 43.66% |
| Plaza | 53.36% |
| Stardust | 53.57% |
| California | 53.57% |
| Luxor | 55.41% |
| Excalibur | 56.74% |
| Monte Carlo | 56.74% |
| Tropicana | 57.1% |
| Gold Coast | 57.33% |
| Circus Circus | 57.54% |
| Harrah's | 58.41% |
| San Remo | 59.09% |
| Fitzgeralds | 61.2% |
| Lady Luck | 61.2% |
| Binion's Horseshoe | 61.6% |
| Sahara | 68.69% |
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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