We already touched on this subject above. There is no way to accurately determine the probability of any sports bet winning or losing. It’s more a matter of personal opinion than anything else. Just watch Sports Centre for an hour or two, and you’ll see what I mean. One person says Team A is going to crush Team B, the other one says no, no, I think Team B has a chance. Then they go back and forth explaining why they feel that way. Every sports fan can relate to this.
If we’re able to remove all personal fan bias from the equation, we can come to a closer estimate of win/loss probability, but we still don’t know for sure if it’s accurate.
The best way to calculate probability is to listen to the experts. Those experts are the professional odds makers in Las Vegas. They spend every working hour inputting all the data they can find on every athlete and every team, from last week’s injuries to decades worth of past performance records, into a computer. The computer spits out a prediction for the game, and that prediction determines the original odds for every event listed by sportsbooks.
Notice I said the “original odds”. This is the key. Odds will shift in either direction as punters place their bets. Sportsbooks shift the lines to ensure they’re getting equal betting on both sides, thus ensuring that no matter what happens, they are most likely to make a profit. Once the lines shift, the accuracy of the original probability prediction becomes skewed.
Calculating Probabilities Based on Original Odds
You’re going to have to gather some information from a number of betting options to work out anything close to a genuine probability. For example, we can use the data from the point spread and the over/under totals to determine the probabilities on a straight bet to win.
Let’s say a sportsbook posts the opening point spread for a basketball game at Team A -5, Team B +5. This means they believe that Team A is going to win by 5 points. Now, look at the over/under totals line for the same match up. If they have the total set at 181, we can get the exact scores that the odds makers predicted.
If the total score is 181, and Team A is going to win by 5 points, then the final score should be 93-88.
Now, we look at the straight bet on this game, and we see the lines set at Team A 1.65, and Team B 2.70.
We know Team A is considered more likely to win by a score of 93-88; a 5 point differential with a total of 181 points. Assuming that’s what happens, we can figure out a probability based on these numbers. The equation is:
(100 / Total Score) x Team A Score = Win Probability
(100 / 181) x 93 = 51.38
That means Team A has been given a 51.38% win probability. The opposite of that, [100 – 51.38 = 48.62] represents Team A’s loss probability of 48.62%. Conversely, we can give Team B a 48.62% chance to win, and 51.38% chance to lose.
Inject those numbers into the Kelly Criterion formula with the available odds, and the result will be as accurate as reasonably possible.