Ways to find value by creating and betting baseball money lines

Playing hunches is an extremely bad idea, so try to use statistics and probability as much as possible. One way to seek value on money lines is to compare the lines you create to those on your favorite book.

Before dropping your cash I suggest you follow this formula to get a feel for the outcome of a specific single game.

In the 1981 Bill James Baseball Abstract, Bill introduced the log5 method to answer the question, "how often should team A be expected to beat team B?" In his own Jamesian way he spent several pages discussing figures before boiling his finding to the following:

                               A - A * B 

BJ Projected Win % ----------------------------------

                              A + B - 2 * A * B

Where A is team A's winning percentage and B is team B's winning percentage. 

Let's say the Phillies were hosting the Mets - the Phillies winning percentage is .600 and the Mets is .400.

                                            .600 - .600 * .400                .360

BJ Projected Win % ----------------------------------           ------ =  69.2%

                                   .600 + .400 - 2 * .600 * .400        .520

The answer is 69.2%, meaning in a single game between these two clubs the Phillies are likely to win 69.2% of the time. 

To compensate for home field, add .040 to the final result.  In this instance, the Phillies chances of winning on a neutral field was .692. We add .040 to the .692 and now see the Phillies have a 73.2% chance of winning the contest. 

For those wondering, the .040 comes from the assertion that home teams win 54% of their contests.

Since we now know the Phillies have a 73% chance to win we can create our own money in a few different ways. The easiest is to simply take the winning percentages of the two clubs and dividing them. You then multiply by 100 and add 15 to the home team.

.600/.400 = 1.5

so

1.5 * 100 = 150  

so

150 + 15 = 165

Using this data, the Phillies should be somewhere near a -165 favorite at your book. 

You then can take the amount risked and divide it by the amount risked and the amount won. So, 165 / (165+100) = 65%

We have gathered two things from this exercise. First, the winning percentages coupled with home field advantage indicates the Phillies are 73% favorites to win the contest. Secondly, the book only sees the Phillies odds at winning at 65%., so we appear to have found some value if we go with the Phillies.  

When the difference is greater than 5% between my figures and the book, I tend to look more closely and place a larger wager.