How to Compute Teaser Odds/Hold Percentage.
You`re getting 6, 7, 10, 14 or 20 points. How can you lose?.... There is a reason they call them Teasers.
When I first learned about teasers, I was shown the standard Vegas odds (like they had come from Moses`s third tablet). When I asked about the odds for 2-team 10-point teasers, the old-timers basically said "There ain`t no such animal." Of course, this is ridiculous as the bookmaker can always set odds that he likes (no one is forced to bet them).
Now, before we delve into some theory, I want to make it clear that I`m purposely ignoring special cases such as games with key numbers for the spreads like 3 or 7. Dealing with that is left, as my professors would say, "as an exercise for the student". Also, I will be using some approximations to keep the computations simple. Finally, I will be using the closing line as the "best" predictor (though top handicappers would tend to use their own guesses).
Theoretically, an ideal "closing line" would represent a 50-50 chance of either side winning. If you run the scores/results of MANY football games against the closing line and an additional buy of 6 points, you will find that the 6 points changes a 50% winning percentage to about 70%. This figure holds roughly true for Home/Away, Favorite/Underdog, or Over/Under.
So, if the chance of winning a single event with 6-point buy is 70%, then the chance of winning two-events (in a 2-team teaser perhaps?) is 0.7 x 0.7 = 0.49 = 49%. Given the 70% is a rough approximation, rounding the 49% to 50% is safe for this this discussion. So, what we have is the chance of winning a standard 2- team 6-point teaser is about the same as winning a coin flip. So, the juice comes from the teaser payout odds like lay/get 6/5 or 11/10 instead of even money.
So determining proper teaser odds is as follows: Step 1(anyone) Compute the chance of winning for events with 6.5 points, 7, 10, etc. (Don`t forget to check for ties, though it should be about 1% effect.) Step 2(anyone) Determine what lay/get these numbers correspond to using 1, 5 or 10 as a base number for the lay or get. Step 3(book) Increase the lay number a bit (add some juice), or pick a nice pair of integers whose ratio is still in your favor and looks appealing to players. Step 3(player) Check all your books to see how much juice is present in each set of odds and look for deals/ripoffs.
Since many places (especially amateurs) don`t know how to compute the proper odds (they just copy from other books), you will find some uneveness. By this I mean that even within the same book, some teasers will have 8% juice and others will have 12% or 15%. Of course, the juice and hold percentages are based upon similar wager sizes over thousands of games. The books do need a safety margin for the cases where the game falls on a key number because there may be more wagering on those events, especially by sharp/max limit players.
I look forward to the threads on majorwager forum discussing and evaluating the various books. You`ll probably see some changes as both players and books get sharper on this.
Computing this does require access to the scores and the line/handicapping data. Your choice of line/handicapping may contain some opinion, but you are entitled to an opinion. This can be run for basketball as well as football. Some people will jump on minor differences between Over/Under or based upon high/low spreads or totals. Make sure you have enough data in your samples.
Another variation on the teaser, is the pleaser. In this case, you give up 6- points for an underdog position and a higher payout. Well, if the chance of winning a 6-point buy is 70%, then the pleaser is like the other side giving up 6 points, so it`s going to be the 30% flip-side event. So, a 2-team pleaser is 30% x 30% = 9%. This is about 1 out of 11 chance, so the payout should be lay 1 to win 10 for the break-even point. Anything less than 10 is juice for the book.
Finally, this applies to n-team teasers/pleasers, where the chance of winning is (prob of single event) to the n-th power. So, chance of winning a 3-team 6-point teaser is 70% cubed, is just over 34%. This is a little better than 1 in 3 odds, so 10 to 20 payout would be break-even, and less payout after juice applied.
Holding percentage formula: Let x = chance of winning 1 game. P = x raised to the number of games in teaser = chance of winning teaser L = Lay. G = Get.
Then: Hold = (L*(1-P) - G*P)/L
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Following weeks: Poker Bots Attack and Defeat (possible two-part series).