Photo: Life On The Line
The S&P 500 futures contract is the most liquid equity index product in the world. The more liquid a product becomes, the more interest it attracts from outside people. This year’s Super Bowl will be the most liquid sports betting event of the year with an estimated $10 billion being wagered globally. And the strategies and tactics used by both professional and amateur bettors are analogous to what we see on Wall Street everyday.
To gain insight into the inner workings of the sports betting market, Business Insider spoke with Ted Sevranksy (a.k.a. Teddy Covers), a well-known professional sports bettor and columnist for ESPN.
Here’s what we’ve transcribed from our interview:
JL: How does a person become a professional sports bettor?
TC: That’s a good question. The answer to how does a someone become a professional sports bettor is they start relying on sports betting for a large portion of their income. That’s the bottom line. The only barrier to entry is being able to win enough to survive. But, obviously in order to be able to win enough to survive in the long term there’s certainly some skill sets that you want to have. But for barriers to entry, there’s none.
JL: How did you become a sports bettor?
TC: Trial and error. I moved out to Las Vegas with some pretty poorly conceived notions about what it would take to be a professional sports bettor and luckily the first few years I was out here I was able to go through my growing pains without losing my entire bankroll. As any trader will tell you, learning how to trade can be an expensive process and learning how to bet can also be an expensive process obviously. My story was just a desire and ambition coupled with a long enough time frame to get my feet down on solid ground.
JL: Just generally to those growing pains you talked about can you highlight three or four of them that most sports bettors make and where they tend to fail and why you succeeded?
TC: One of the biggest lessons every sports bettor has to learn is he has to learn how to lose and how to accept losing and how to take a small loss, how to have a bad day. When you talk about the amateur stock pickers what do they do? Well, they hate to take a loss. They never want to take a loss. They end up taking a bath a lot of times. As a sports bettor, if you have a losing day and you can’t handle it and you have to bet the late game and you double up on the late game and you double up for tomorrow and you can’t concentrate on tomorrow’s work and all the things that come with losing, you’ll never survive. No chance. So I guess learning how to lose would be my No. 1 lesson.
JL: What process do you use when selecting winners. And is it analogous to investing in the markets?
TC: There’s two thought processes here. One is trying to beat the market and for a game like the Super Bowl, that’s huge. It’s a major factor. There are other situations where I’m not trying to beat the market where I’m trying to handicap the game and have a feeling on how the game is going to play out. There are two very different strategies or styles of betting and frankly you have to use both of them. I use both of them depending on the circumstance. So for a game like the Super Bowl, there’s a huge element of making sure that when that line comes out you’re ready to pounce and lock in on the number. You have to be able to read the direction the market is going to go and take advantage of the opportunity there.
JL: When does that line come out and when do you have to be ready to pounce on it? (Note: a line is a point spread in the game)
TC: The line for the Super Bowl came out in the fourth quarter of the Patriots/Ravens game when it was obvious that Baltimore was going to win boom! lines started popping up everywhere. Before the game’s even done, before the championship games are even through, there are lines popping up for the Super Bowl and the market is starting to move. In this instance, the market gave us initially a false move because the first bets were on San Francisco and then it changed boom! the money started pouring in on Baltimore. It went from 5.5 to 5 to 4.5 to 4 and the next day all the 4s got taken out and it was mostly 3.5s out there. Now you say, ‘Well a point to a half point, how much difference does it make?” One of the other things that I think professional sports bettors have to have is they have to have the ability to say, “Well I didn’t get the best of the number, I didn’t get close to the best of the number. I’m not going to beat the closing number with this particular wager.” Guess what, it’s not a great wager anymore. So in this instance, the opportunities that were there between 5.5 and 3.5, that’s what five cents advantage in your pocket, six, seven cents of an advantage in your pocket if you can get a 5.5 instead of a 3.5. And obviously those little edges overtime are how you make your money.
JL: What are the differences and similarities to selecting the Super Bowl winner versus a regular NFL game?
TC: Well, it is a regular NFL game in a sense. The only difference is it has an enormous magnifying glass on it. So for something like the Super Bowl, you’re not going to find information out there that other people don’t have. You’re not going to be able to take advantage of teams that people don’t know players. It’s very different from saying trying to bet college basketball because here the information is out there and it’s widely available. The key is figuring out which information is important and that is certainly the case for the regular season in the NFL and for the Super Bowl that’s even more paramount. People are going to quote all kinds of regular seasons statistics…all the metrics that sports bettors use to differentiate teams from one another. And in my mind, a lot of that stuff turns out to be fluff. And the real data is trying to analyse the coaching stats and trying to analyse the moves they’re going to make with extra time to prepare.
JL: Final question. Can you walk us through some of the investments you have in your Super Bowl portfolio?
TC: Yeah. Sure, I’ve got a ton. I bet some Baltimore early. I bet some more San Francisco late. So I have both sides there. I have a little bit of Ravens to win the game straight up. I expect to have more on San Francisco to win the game straight up although I don’t have that in my portfolio yet. That’s a thing that you want to wait until the weekend before you get involved with because that’s when you get the best of the number in terms of the proposition wagers and that’s what makes the Super Bowl such a unique animal. All the propositions wagers that are available and the opportunities that professional sports bettors have feasting against the public and public numbers. There’s been a lot of under money on the Super Bowl–people betting total points under. But we didn’t see the corresponding move with a lot of the player props. I’ve been looking to bet guys under. I bet Ray Rice, for example, with under 69.5, under 66.5 rushing yards in my portfolio. If I see something in the upper 50s before kickoff, maybe I bet back the other way. But in general there are a lot of unders in the player props I’ve been looking to get involved with. That’s something I’ll do as the public comes into town this weekend.
Now check out Teddy Covers in this trailer for “Life On The Line,” which premiered this weekend at LVH in Las Vegas: