For a sportsbook, the #1 goal is to make money. Money is made from the “vig”, where if an event has a 60% chance of happening, the sportsbook offers odds that imply a 65% chance.

Overpaying this 5% may seem innocuous in the short-term, but for a sportsbook, it is what guarantees a long-term profit and consequently, a guaranteed loss for the bettor.

However, there’s a new, but major risk factor brewing.

The Quants Are Coming

An increasingly popular method of betting known as “+EV betting” involves bettors underpaying for bets such that the bettor locks in the long-term profit guarantee, at the expense of the sportsbook. Historically, this was done by professional bettors who would pain-stakingly monitor multiple books and check for which book posted the largest deviance from the “true” odds of the event (“true” odds derived from a sharp sportsbook, e.g., Pinnacle).

However, real-time data feeds have nearly perfected the commodification of sportsbook data, making way for a new breed of sophisticated, high-frequency bettors. Whereas a book previously had the luxury of simply limiting large sharp bettors, the absolute speed now offered means that instead of 1 sharp with a large wallet, books must now be on the guard for thousands of small, blazingly-fast algorithmic sharps. As we’ll demonstrate shortly, with OpticOdds, we are able to screen hundreds of different books across hundreds of markets for discrepancies – in seconds.

But don’t just take our word for it, let’s check out a real-life example.

Real-Time Data Feeds: A Game Changer

Take your standard, major market bet – say, an NBA moneyline bet. These odds are liquid and stable enough that, on average, there aren’t many discrepancies to be exploited. Take a look:

Pictured above are the Pinnacle listed odds for a sample NBA game pulled from OpticOdds. This is considered the “sharp” line, so as a sportsbook, you want your line to be as close to this as possible. This is generally the case, but in less than 10 seconds, we can scan hundreds of different books to make sure everyone else is in line:

As expected, most books are in-line for this heavily-traded liquid market with limited variance from the odds posted by the sharp book.

However, if we switch over to a marginally less liquid market, this relationship changes completely.

Expanding Opportunities

Let’s pull the most recently updated odds for moneyline bets on a College Basketball (NCAAB) game:

We start with the odds offered by the sharp book. As pictured, we expect the other books to have bets for team 1 at ~-160 and bets for team 2 at ~+143. Now, let’s quickly scan to make sure the other books are in line:

As demonstrated, most books are right in-line with the sharp books’ odds, however, one book glaringly stands out. On the BetAnySports book, we can bet on the underdog to win for a price that implies a ~35% probability.

In this case, a savvy bettor can take advantage of this discrepancy in two ways:

• The bettor may place a bet for the favorite to win at the sharp book for a price of -163, then at the duller book, they may place a bet for the underdog to win for a price of +180. This would lock in a guaranteed, 2.3% arbitrage profit.

• Alternatively, the better may take the underdog bet outright for the maximum bet size possible. This bet would be classified as +EV since the edge over the true odds guarantees a long-term profit for the bettor, but not for the sportsbook.

In any scenario, what this represents is just how quickly and easily these deviations can be spotted. It doesn’t matter if the book’s pricing is skewed due to a customer imbalance or even just due to their own slow data – it only takes seconds for the error to be spotted and seconds more for hundreds of automated bettors to receive the signal and place wagers.

The above example featured a mispricing on a major NCAAB line, often grouped in the category of efficient markets. However, OpticOdds extends this exact same functionality to essentially all listed derivative markets (e.g., first half total points, player touchdowns, etc.) – markets that are inherently less efficient due to their smaller size.

Mitigating Risk

Let’s take a look at one more real-example of this: we’ll go to a lesser-volume, but still liquid market: NBA player rebounds:

For the first Over/Under bet for Bam Adebayo, we see the sharp over price at +117, and the sharp under price at -154. Let’s quickly scan and see where a discrepancy can be found:

In less than 10 seconds, we were able to spot that at Caesars Tennessee, we can take the favorite of Bam Adebayo Under 10.5 for a price of -121 (54.75% probability) instead of the “proper” price of -154 (60.63% probability) – a massive edge.

Automated Trading and Risk Management

As previously mentioned, historically, a book would just limit anyone making a big splash in these tiny markets, but as data and error-spotting becomes faster and easier, thousands of smaller players of diverse origin will hammer these inefficiencies in unprecedented time and volume.

However, as a sportsbook, you don’t have to be vulnerable to this coming risk factor. The simplicity of OpticOdds makes complete integration into your operation seamless. Additionally, by having a central, real-time source on thousands of odds, you gain the potential to offer more niche markets since you can effectively “outsource” the fair prices of even the most arcane markets.

Contact OpticOdds today to learn more about our product offerings.