Posted 02/14/2014 by Mike Fagan in Untethered MMA

Betting on MMA: Advanced Techniques for the Serious Gambler

Last week, I showed you the basics of betting on MMA: how to read a line, the various types of wagers, and where to put your money. This week, we’ll get into some more advanced techniques that will help stretch your betting dollar. A reminder: I won’t teach you how to handicap a fight. It’s time-consuming, it’s difficult, and it’s not practical for the average casual bettor.

Bovada, 5Dimes, and BookMaker (and other A-list books at Sportsbook Review) are great options for gamblers in the United States. Splitting up your bankroll across multiple sites is even better. Spreading your money allows you to line shop. Consider the following lines on Lyoto Machida for his fight with Gegard Mousasi:

Bovada: -240
5Dimes: -235
BookMaker: -230

To win $100, you’ll have to lay $10 more at Bovada than at BookMaker. That’s a 4% tax on your bet. That might not sound like much, but it adds up over the long run. Plus, you’ll often see wider spreads on other fights. For instance, the lines for Ivan Jorge from the same card:

Bovada: -140
5Dimes: -130
BookMaker: -120

That $20 increase between BookMaker and Bovada represents a 17% increase in your wager to win the same amount back.

Spreading your money around also allows you to take advantage of arbitrage (“arb”) opportunities. Arbitrage allows you to bet both sides of a wager and guarantee a profit. Here’s a current example:

Rory MacDonald: -222 (via Sports International)
Demian Maia: +249 (via SportBet)

If we put a $222 bet on MacDonald and a $100 bet on Maia, we break even with a MacDonald win (we lose the $100 on the Maia bet, but make it back on the MacDonald bet), and we profit $27 on a Maia win ($249 from the Maia bet minus the $222 we lose on MacDonald). You can play with the numbers (or use an arb calculator via Google) to shift your profit one way or the other.

Best Fight Odds is an essential tool to reap the benefits of line shopping. BFO lists odds from twelve major online books. It provides a wealth of other data, including the mean (average) line across sites, graphs showing line movement over time, and a fighter’s odds history. It also allows you to set up alerts to notify you when a wager first becomes available or a line hits a certain point.

Now you’ve got your money on a few websites, and you’ve used Best Fight Odds to shop a good line on Lyoto Machida for Saturday night. Just how much are you supposed to bet? Proper bankroll management can help prevent you from having to reload your account every month.

You typically want to designate 1-2% of your bankroll as a unit. (This depends on how aggressively you bet, your risk aversion, etc.) For simplicity, we’ll use a $100 bankroll and $1 units. You have a couple options for handling your bankroll.

First, you could wager a consistent amount every time. That could mean betting 1 or 2 units regardless of whether it’s a favorite or underdog. That could also mean wagering 1 or 2 units on underdogs and risking X to win 1 or 2 units on favorites. Typically, though, using this strategy, you wouldn’t want to venture to far from the risk/to win 1-2 units.

Your other options is to vary your bets based on your perceived edge. This is tricky, and you should be conservative about it if you aren’t breaking down fights or have inside information. You could do it simply by, say, risking three units on the wagers you have the most confidence. Or you could do it mathematically using the Kelly Criterion.

There are Kelly calculators out there, but the basic formula looks like this:

F = (b*p-q)/b

F = fraction of your bankroll
b = the odds of the bet in decimal form
p = the odds of the bet winning
q = the odds of the bet losing

To demonstrate this, we’ll use my favorite example of a mispriced line in MMA history. When Affliction scheduled Gegard Mousasi against Renato “Babablu” Sobral, oddsmakers opened Mousasi somewhere in the neighborhood of +150. (It may have been better than that, but memory and Google are failing me.) By the time the fight actually went off in Strikeforce, the market moved Mousasi to -175. If we assume that -175 is the “true” line, we can figure out what percentage of our bankroll we should have bet at +150.

First, we reduce the line (+150) to a decimal. We do this by dividing 150 by 100, and get 1.5. (For -150, we would divide 100 by 150, and get .667.) Next, we convert -175 into the break-even rate, which we’ll use as our expected win percentage. As I noted last week, we do this by dividing 175 by 275, giving us .636. Now we can run it through the function:

F = ((1.5*.636)-(1-.636))/1.5
F = .393

Given a $100 bankroll and believing he wins the fight 63.6% of the time, the Kelly Criterion recommends you wager $39.30 to win $58.95 on Gegard Mousasi at +150.

Those earlier caveats apply, though. Wagering full Kelly is a good way to go broke, unless you’re doing SERIOUS fight analysis and/or have a system of inside information. Even then, it’s doubtful you can be 100% confident in your perceived edge. Using a fraction of the Kelly mitigates that risk. For example, a fourth of the Kelly bet on Mousasi has you wagering 9.8% of your bankroll. That’s still a sizable chunk, but far less risky than nearly 40%.

The last consideration you want to make is the timing of the wager. Initial lines are often opened to sharp bettors for further fine tuning, but still often move before settling. You, typically, won’t see any intense movement again until the time leading up to a fight. You can use this to your advantage. If you expect a line to move sharply, you can place a bet now with the intention of finding an arb opportunity down the line. For example, if we had bet $100 on Mousasi at +150 when the lined opened, we could have arb’d that with a $100 bet on Babalu at +150 closer to fight time, locking in $50 profit no matter the result.

That should get you on your way. Spread your wealth, manage your bankroll, shop lines, and mind the movement. I’ll leave you with two final bits of advice:

1) Stop betting parlays. I’ll avoid the math here, though you can Google “parlay vs. straight wager” if you want to read up about it. Simply put, if you’re a losing gambler, you’re going to lose quicker, and if you’re a winning gambler (and if you’re a winning gambler betting [non-correlated] parlays, good job), you’re increasing your variance while decreasing your expected growth (ironically). But yeah, go read up on that.

2) Don’t pay for picks. Touts (people who sell gambling advice) at best are winning gamblers who want to decrease their variance or avoid risking any of their own money. At worst, a tout is a con artist. I hate con artists. Please don’t give them your money. Think about it: someone with an edge on the house is going to exploit that edge for their own benefit.

Mike Fagan is a weekly contributor to MMA Owl. He also hosts Untethered MMA every Thursday at 7 p.m. ET. Follow him on Twitter


Mike Fagan