Why do prices drop on Favorites and Over close to Kickoff?
The price on favorites and over x goals often drop before kickoff. Here's why
I have been a serious punter for about five years. Today I have decided to reveal a small secret (Well I suppose it’s a secret…) in this blog post. I’ll start with a small example of a typical Monday, Tuesday or Wednesday evening.
I have decided that I will reveal a small secret...
I guess most of you work during the day just like me. While at work I typically check the prices and handicap lines for the upcoming Premiership match Monday evening. If it’s Tuesday or Wednesday it will be the upcoming Champions League match that I will be researching. Especially on the days when there is just one big match we all know the thrilling feeling of anticipation for coming home to watch the game - and of course place some money on the game… Well let’s stop here!
We all know that Man U home against Portsmouth is a sure win, right?
The rational man was just about to leave the building and turn into the extremely common and just as dangerous homo gamblingus… You know the guy, the one who must place money on a game, since it is otherwise too boring to watch a big favorite slaughter an innocent little (under)dog. We all know that Man U home against Portsmouth is a sure win, right? The question is only how big will they win and thus homo gamblingus will place a bet on either Manchester United -1.5 or go with over 2.75 goals.
Rational Man Seeks Value
Let’s turn away from homo gamblingus and back to the rational man trying to get a return on his betting investment. The reason why we see betting value is often the masses of homo gamblingus, who bet small amounts. But when aggregated, these small amounts will move the market with the result that the favorite is made too big a favorite and the expected number of goals is too high.
Few markets in economics are as inefficient as the football markets, since it’s subject to people whose betting pattern is dominated by lack of insights and rational calculation.
It makes sense that people tend to bet on favorites and many goals. It is the kind of football we enjoy watching and thus hope to see. You can take advantage of this by being the fish swimming against the current. Few markets in economics are as inefficient as the football markets, since it’s subject to people whose betting pattern is dominated by lack of insights and rational calculation. In the Graph below is shown the price development for tonight’s game Hull-Aston Villa. I see this as a very typical price development for a favorite in a game that is shown on television.
However from this we can’t deduct that the dog always is the valuebet. In the case above, Aston Villa might be an even stronger favorite than the price reflects. Let’s say Aston Villa is a 57 % favorite, with the current price of 2.06, we have around 17% value (note this not my real estimate and do check out our new value calculator tool!). You might ask then what use it has to us, knowing that prices on favorites tend to drop over time. It’s quite simple: <em>The chance of finding value will undoubtedly be bigger going with the dog just before kickoff compared to all other betting options.</em>
I'm looking so much forward to watch the game! Let’s hope for 0-0....
Homo gamblingus will of course find the over bets more appealing as he subconsciously is hoping for many goals in the match.
In social psychology this phenomenon is called cognitive dissonance: dealing with two contradictory ideas will lead you to adapt one of them to your beliefs, which I try to illustrate in the title of this paragraph. Knowing this it doesn’t take much knowledge to figure out that everything else being equal the chances of finding value is bigger going with the under than the over bet. Let’s look at the graph for tonight’s game.
There haven’t been placed many bets yet, but still the weak tendency this graph shows is that price is falling on the over bet. Again I’m not arguing that the under bet tonight is sure value, but rational man is likely to find value more often on the under bet than the over bet.
I have been following this strategy for several years and so far my ROI has been positive. I apply the same strategy in running and my absolute favorite bet is to back a dog leading with one goal against a big favorite in a televised match with 10 minutes left. You’ll find amazing value in the Betfair betting exchange.
Good luck to all rational punters out there!
Have your say. Do you agree with Jesper in his analysis? and have you any experience with such a strategy yourself? Any comments let us know!
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very interesting article.I am intrigued by the statement that football markets are inefficient.I was under the impression that they are very efficient,which is why football is supposed to be the hardest sport to profit from!? It has been the received wisdom for several years that the value lies in under 2.5 goals...yet i know someone who makes a good profit from betting on overs(over 4.5 goals in fact). (although this seems to contradict my first statement,it doesnt because he does something unusual which he wouldnt want me to divulge!)