In my last two articles, I covered building a foundation for understanding betting on MMA fights. This article builds on that foundation, so if you missed the first two issues of FIGHT!, get your hands on a back issue. You can also find this information archived online in the “MMA Wagering Guide” on MMAjunkie. com.
If you are up to speed, you now know how to read a betting line, how to convert that line in to a percentage, how to set your own percentage for a fight, and then how to go about using your own line to start to fi nd value. It’s now time to dig deeper into probability and value as it applies to betting on MMA.
In my last article, I worked through the process at a high level for setting my own line for the Matt Hughes vs. Matt Serra fight scheduled for UFC 79. I had set the line for Hughes around 80%, or -400. The market line opened for this fight where I predicted, with Hughes hovering around -400. The line has moved a little from the open; early money came in on Serra, and the line has adjusted so that Hughes is available (at time of writing) at -360 on a major online book.
Sportsbooks move lines like this all the time. It’s ultimately a function of the market forces of supply and demand. Sportsbooks don’t typically get equal dollar action on both sides of a line – a common sports betting misconception – but books don’t usually like to be too significantly exposed on a given side of an event. So when line is set at something like Hughes at -400 and a significant amount of money comes in on Serra, the books will usually decide that they’d like to bring their books a little closer towards balance, and so they shift the lines to make Serra a little less attractive and Hughes a little more attractive. That’s exactly what has happened for the Hughes/Serra fight.
As outlined in previous articles, those numbers mean that you would risk $360 to win $100 on Hughes, and that the line of -360 converts to a percentage chance of 78.26% for Hughes to win the fight. It is then time to evaluate that approximate 78% chance, along with the initial 80% chance for Hughes to win that I predicted. A gambler can ultimately use these probabilities to determine if he should place a bet on this fight, and which side he should bet on.
If I’m correct, and the actual probability of Hughes winning the fight against Serra is actually 80%, then the 78.26% probability offered by the line of -360 presents a small
+EV (expected value) opportunity. In other words, a good bet. At the current market line, I think that a bet on Hughes has an edge of 1.74% – it’s not a significant edge where I’d make a multi-unit play, but it’s enough to represent a small play.
The reasoning behind this probability approach is most easily explained by considering a hypothetical series of ten fights, all using the -400 line I originally predicted. This means that fighter A in each fight would win 80% of the time and fighter B would win 20% of the time. If the fight series results followed their estimated probability exactly, fighter A would have eight wins and two losses. The net result at the line of -400 (risking 4 units to win 1 unit) would be +8 units from the eight wins (winning eight bets for one unit each), and -8 units from the two losses (losing two bets for four units each). This results in the corresponding breakeven for -400 at 80%. So if a bettor thinks Hughes will win this fight exactly 80% of the time and is being offered a -400 line, the proposition has a neutral expected value (EV). It’s like flipping a coin and betting on whether it will land heads or tails; you’re going to win and lose equally, assuming a fair coin.
However, if you were offered a line of -360, which has a breakeven occurrence of 78.26%, and you expected fighter A to win 80% of the time, this would be a bet with positive expected value (+EV). This bet represents an identified edge, thanks to your own handicapping between the line being offered and the expected outcome of the fight. Identifying these edges is the key to making money long term from MMA wagering. Ultimately, if you can be just a little bit better informed than the public lines, you can find value and can win over time.
If the line is -360 but the probability is actually 80%, we expect to net the same eight wins and two losses. On our eight wins, we still win the same +8 units, but on our two losses, we lose a total of 7.2 units (two losses of -3.6 units each time). As a result, we profit +0.8 units in total.
This is the same logic used in poker. In Texas Hold’em, a player holding a pair of aces is approximately an 80% favorite over a player holding a pair of sevens before the flop (equivalent to a line of -400). If the player holding the sevens were offered the opportunity to bet at an equivalent moneyline of +500 (for example, calling their last $10 in to a pot which already contained $50) this would be a good move, even if the player knew he was up against aces. Even though the player holding the pair of sevens expects to lose this hand more often than he wins, by making the right play based on the odds, he will profit in the long run.
MMA wagering works the same way: find an edge, bet it, and profit in the long run.