Exercises: Betting Market Analysis

Exercise 1: American Odds Conversion

Convert the following American odds to implied probabilities:

a) -150 (favorite) b) +200 (underdog) c) -300 (heavy favorite) d) +150 (moderate underdog) e) -110 (standard vig line)

Show your work using the appropriate formula for positive and negative odds.

Exercise 2: Calculating the Vig

A sportsbook offers the following lines on a game:

• Chiefs -110
• Bills -110

a) Calculate the implied probability for each side b) Calculate the total implied probability (overround) c) Calculate the vig percentage d) What would "fair" odds be if we removed the vig? e) If you bet $100 on each side, what would be your guaranteed loss?

Exercise 3: Spread Interpretation

The following spread is posted: Chiefs -7.5 vs Bills +7.5

a) What does this mean for each team? b) If the final score is Chiefs 28, Bills 24, who covers the spread? c) At what exact margin does the favorite cover? d) Convert this spread to an approximate win probability for the Chiefs e) Why might a sportsbook use -7.5 instead of -7?

Exercise 4: Moneyline to Spread Conversion

A game has the following moneyline odds: - Favorite: -280 - Underdog: +230

a) Calculate the implied probability for each side b) Remove the vig to get "true" probabilities c) Using the relationship between spread and probability, estimate what spread this moneyline implies d) If the actual spread is -7, is there a discrepancy? What might explain it?

Exercise 5: Total (Over/Under) Analysis

The total for a game is set at 48.5 with both sides at -110.

Given historical data showing: - Average combined score: 46.2 points - Standard deviation: 12.8 points

a) Calculate the probability of the over hitting b) Calculate the probability of the under hitting c) Is there value on either side given the -110 price? d) At what total would you be indifferent between over and under?

Exercise 6: Market Efficiency Test

You have the following results from 100 games where your model disagreed with the market by at least 2 points:

a) Calculate the overall ATS record b) Calculate the win rate percentage c) Is this profitable at -110 odds? d) Calculate the p-value for this result being due to skill vs luck e) What sample size would you need to be confident in these results?

Exercise 7: Closing Line Value Calculation

You made the following bets during a season:

a) Calculate the CLV for each bet b) Calculate the average CLV c) Were you generally getting good or bad prices? d) If you had bet at the closing line instead, how might your results differ? e) Why is CLV considered a better skill indicator than win rate?

Exercise 8: Break-Even Analysis

Calculate the break-even win rate for the following scenarios:

a) Standard -110 on both sides b) Reduced vig: -105 on both sides c) Enhanced underdog: -110 favorite, +100 underdog (your side) d) Juice on favorite: -115 favorite (your side), -105 underdog e) Props market: -120 on both sides

Exercise 9: ROI Calculation

A bettor has the following season results:

• Total bets: 200
• Wins: 109
• Losses: 91
• All bets at -110, $100 per bet

a) Calculate the total amount won on winning bets b) Calculate the total amount lost on losing bets c) Calculate the net profit/loss d) Calculate the ROI percentage e) Calculate the required win rate to break even

Exercise 10: Line Movement Analysis

The following line movements occurred for a Sunday game:

a) What is the total line movement? b) What does the Tuesday move likely indicate? c) What might explain the Friday reversal? d) What does the final move to -7.5 suggest? e) If you had bet KC -6 at open, what is your CLV?

Exercise 11: Sharp vs Public Analysis

For a game with the following characteristics:

• 70% of bets on Team A
• 55% of money on Team A
• Line moved from Team A -3 to Team A -2.5

a) What is this pattern called? b) Which side are sharps likely on? c) Why might the line move opposite to bet count? d) What would you expect the closing line to be? e) How should this information influence analysis (not betting)?

Exercise 12: Key Numbers Analysis

Analyze the importance of key numbers in NFL betting:

Given 1,000 historical games: - 152 games landed on 3 - 98 games landed on 7 - 45 games landed on 6 - 42 games landed on 10

a) What percentage of games land on 3? b) What percentage land on 3 or 7? c) If you can buy a half-point off 3 for -120, when is this worth it? d) Calculate the value of going from -3 to -2.5 e) Why are 3 and 7 the most common margins?

Exercise 13: Model vs Market Comparison

Your prediction model gives the following outputs for Week 10 games:

a) Which games show potential value (difference > 1.5)? b) For valuable games, which side has value? c) What is the average absolute difference? d) Should you bet every game where you disagree? Why or why not? e) How would you track model performance over time?

Exercise 14: Expected Value Calculation

Calculate the expected value for the following bet scenarios:

a) You estimate 55% win probability, betting at -110 b) You estimate 35% win probability on a +200 underdog c) You estimate 60% win probability on a -150 favorite d) You estimate 48% win probability on a +150 underdog e) At what probability does a -110 bet have zero expected value?

Exercise 15: Parlay Analysis

A bettor considers the following parlay:

• Leg 1: Team A -110 (you estimate 54% true probability)
• Leg 2: Team B -110 (you estimate 52% true probability)
• Leg 3: Team C -110 (you estimate 56% true probability)

Standard parlay pays approximately 6:1 for 3 legs.

a) Calculate the probability of all three hitting b) Calculate the expected value of a $100 parlay c) Compare to betting each leg separately at $100 each d) Why do sportsbooks prefer customers bet parlays? e) When might a parlay be +EV?

Exercise 16: Teaser Analysis

A standard 6-point teaser moves each leg 6 points:

Original lines: - Team A -7.5 - Team B -8

Teased lines (6 points): - Team A -1.5 - Team B -2

Teaser pays -120 for 2 teams.

a) Estimate the cover probability for each original line (~50%) b) Estimate the cover probability for each teased line c) Calculate the probability of both teased legs hitting d) Calculate the expected value of a $100 teaser e) What makes teasers through key numbers valuable?

Exercise 17: Market Implied Ratings

Using closing spreads, derive implied team ratings:

Assume neutral field (ignore home advantage for simplicity).

a) Set KC = 0 as baseline. What is LV's rating? b) Using KC vs BUF, what is BUF's rating? c) Using BUF vs MIA, what is MIA's rating? d) Using SF vs SEA and additional inference, estimate SF's rating e) How do market-implied ratings compare to Elo?

Exercise 18: Seasonal ATS Trends

Analyze the following team's ATS performance:

Team X 2023 Season: - Weeks 1-4: 3-1 ATS - Weeks 5-8: 2-2 ATS - Weeks 9-12: 1-3 ATS - Weeks 13-17: 2-3 ATS

a) Calculate the overall ATS record b) Calculate the win rate percentage c) Is this team profitable to bet at -110? d) What might explain the declining ATS performance? e) Calculate the sample size needed to determine if this is skill or luck

Exercise 19: Live Betting Probability

During a game, the following situation occurs:

• Home team trails 14-21
• 8 minutes remaining in 4th quarter
• Home team has the ball at their own 25
• Pre-game home win probability: 55%

a) Estimate the current live win probability b) What factors most influence the probability? c) If home team scores TD on this drive, estimate new win probability d) How does the pre-game probability factor into live probability? e) Why is live betting generally harder to beat than pre-game?

Exercise 20: Comprehensive Market Analysis

For a playoff game, you have the following information:

Opening lines (Sunday night): - Spread: Home -3 - Moneyline: Home -155, Away +135 - Total: 47.5

Closing lines (Saturday): - Spread: Home -4.5 - Moneyline: Home -195, Away +165 - Total: 45.5

Betting percentages: - 62% of spread bets on Home - 48% of money on Home

Your model prediction: Home -3.8

a) Calculate the line movement for spread and total b) Interpret the spread movement given betting percentages c) Does your model suggest value on either side? d) What does the total movement suggest about the game? e) How would you synthesize all this information for analysis purposes?

Challenge Exercise: Building a CLV Tracker

Build a system that tracks Closing Line Value over time:

Requirements: 1. Store bet information (game, line, side, stake) 2. Record closing lines 3. Calculate CLV for each bet 4. Track running average CLV 5. Estimate expected profit based on CLV

Data to track: - Individual bet CLV - Moving average CLV (last 50 bets) - Cumulative CLV - Win rate vs expected win rate from CLV

Questions: a) Design the data structure for storing bets b) Write the CLV calculation function c) Implement the expected profit calculation (each point of CLV ≈ 3% edge) d) Create a method to identify which bet types have highest CLV e) How would you validate that CLV predicts long-term results?

Submission Guidelines

For each exercise:

1. Show all calculations with formulas
2. Include intermediate steps
3. Interpret results in context
4. Note any assumptions made
5. For programming exercises, include well-commented code

Note: These exercises are for educational purposes. Understanding betting markets helps evaluate model performance and understand information flow in NFL prediction.