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Super Bowl Prop-A-Palooza

The common denominator between VIX betting and Super Bowl props

by 2/1/2013 7:33 AM
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So, just before I started sifting through Super Bowl prop bets, I see this go by on Twitter:

Free Money Alert: You can bet Jay Z will perform on stage w/ Beyonce at +200 at William Hill and Jay Z will NOT perform at +140 at 5Dimes. --@WagerMinds

Unfortunately, unless you live in Nevada or England, you can't wager with William Hill, as far as I know. Also unfortunate: that's the best deal you'll find anywhere. In English, those markets mean a $100 bet wins you $200 if Jay-Z does show up, or $140 if he doesn't.

And really unfortunate: the market must have adjusted. "Jay-Z does not appear onstage" is -130 at 5Dimes. Unless he performs from offstage... OK, never mind.

Who needs the game, for that matter? You can make or break the bank before it even starts. Here's a bunch of national anthem props from 5Dimes:

5Dimes Super Bowl bets
Chart courtesy of 5Dimes

Yes, you can try to catch a middle on the length of the national anthem. It just needs to go between 125 and 132 seconds -- and you have to pay into wide markets for the shot. There's likely also low dollar limits on all prop bets not related to the actual game.

If you want tight markets, nothing beats these:

5Dimes Super Bowl bets
Chart courtesy of 5Dimes

I read somewhere that "heads" has won four years in a row, so there's a trend you can ride! There's also a good investing lesson there about mistaking coincidence for causation. I've seen CBOE Market Volatility Index (VIX)-based market calls reading something into sample sizes of 1, as in, "Last time there was a debt-ceiling fight, the VIX did 'X'," so I'm playing for that again.

If props related to the actual game are your thing, you should brush up on Poisson Distribution.

Take this one, for example, off Bovada:

Bovada Super Bowl bets
Chart courtesy of Bovada

Niners games saw a total of 69 field goals in the regular season, while Ravens games saw 72. That comes out to 4.41 FGs per game. Now, let's throw that into a Poisson calculator like this one. We'll use 4.41 as the "Average Rate of Success" and 4 as the "Poisson Random Variable." And here's what we get:

Poisson Distribution Calculator
Chart courtesy of Stat Trek

If there are exactly four FG attempts, the bet "pushes," so let's subtract that out. The odds of >4 attempts are 45.07%. If we divide that by 80.85%, we get the odds of success (when the bet has "action") of 55.75%. That implies that the Over is worth -125. Yet Bovada is showing it at +115. So it suggests there's value on the Over on this prop.

Is there anything about this game that suggests we'll see fewer field goals than "normal," other than random variation? Not really. I'd think a one-sided game would see fewer FG attempts because: 1) It's only one-sided because one team scored a bevy of TDs; and 2) The losing team can't settle for FGs going forward. But it's a 3.5-point spread, so odds don't suggest a blowout.

Colin Kaepernick played only half the Niners season, so perhaps they're less likely to attempt a FG on a marginal fourth-and-short. Also, their kicker had a lousy season. On the flip side, Jim Harbaugh's one of the best coaches in the NFL in understanding the risk/reward of aggressiveness on fourth downs, so that's likely already baked into their total attempts.

Now, do this exercise 4,000 times or so, and there are probably many more props with edge.

Disclaimer: The views represented on this blog are those of the individual author's only, and do not necessarily represent the views of Schaeffer's Investment Research.

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