3 ms·

i like to keep in mind that intrade had 80% odds on the supreme court ruling obamacare unconstitutional, right before it was declared constitutional: http://ww

by lmg643 14y ago

i like to keep in mind that intrade had 80% odds on the supreme court ruling obamacare unconstitutional, right before it was declared constitutional: http://www.intrade.com/v4/markets/contract/?contractId=745353 http://www.intrade.com/v4/markets/contract/?contractId=74535... the idea that bookies and betting sites have something to teach us about real outcomes is a little rich. the optimal outcome for a sports book is to have heavy betting in the wrong direction.

kristofferR 14y ago
They were right, there were probably an 80% chance that they would declare Obamacare unconstitutional. The thing with 20% chance to happen happened, like it does once in a while. If there's 80% chance of something happening, it doesn't mean that the 20% alternative won't happen or that you was wrong if it happened.
btilly 14y ago
If you believe that bookies are consistently giving the odds wrong, then you should start consistently taking their money. Yes, I'm aware that this way of thinking is odd to people who do not understand markets, gambling, and so on. But it is still true. Bookies try really, really hard to give correct odds. And if you look at 20 bets which had 80% odds, you would expect to find several examples where the expected winner lost. That's why the odds were set at 80% and not 99%.
- lmg643 14y ago
  i am only inspired to mention this because nate silver mentioned oddsmakers as evidence supporting his prediction. https://twitter.com/fivethirtyeight/status/263948034105278464 https://twitter.com/fivethirtyeight/status/26394803410527846... i'm mixing examples here. intrade is a betting market, no line is set by a bookie - it measures public opinion. one way to look at it is that intrade is efficient and there was truly a "20% chance it will occur." the other way to look at it is "the odds were never 80/20" because most people betting on it were uninformed or misinformed (clearly watching WAY too much Fox news). this is unknowable, because it's not a repeatable event. prediction markets were originally based on the idea that folks with inside information would bet heavily and clearly justice roberts had other stuff to do. understanding how sports books work is not the same as saying "i know enough about sports to bet profitably." that said, bets set by a casino or sports book are different than intrade. a bookie is trying to maximize house profit, whereas intrade is pure sentiment. a sports spread can be -2 with 80% of people betting one side. the house might think the real spread is -4, and they expect the line to pay off. here's an example of how lopsided bets can be: http://www.thespread.com/ncaa-college-football-public-betting-chart#.UJWDjKg0V8E http://www.thespread.com/ncaa-college-football-public-bettin... I'm reading "sharp sports betting" by sanford wong right now. good quote: "I had the opportunity to ask Robert Walker, race and sportsbook director at MGM mirage, whether his company's action is balanced on football games...it appeared to me that sportsbooks might be taking lopsided action on about half of all NFL games. Mr Walker answered that what I hypothesized was indeed the case....then i asked him why he did not make more line moves to try and balance the action. his answer was that to move the line to try to balance the action would result in less profit for the sportsbook."
  - btilly 14y ago
    If you know the odds that you think are right, and the odds that they are providing, you can read http://www.elem.com/~btilly/kelly-criterion/ http://www.elem.com/~btilly/kelly-criterion/ to figure out what your most profitable strategy is. (I include calculators, and explanations of how to modify the strategy if you are somewhat risk-adverse.) Seriously, if someone is offering wrong odds and you're sure of it, you can consistently make money. Go for it!
protomyth 14y ago
I think that goes to show more about the narrowness of the bet versus real life. Sports outcomes have scores and winners, case law has subtleties. Technically, the individual mandate was illegal under the commerce clause according to the ruling. This was the main area of debate and clause that people assumed it would fall under. The surprise was the expansion of the taxing power given in the ruling allowing the individual mandate to be considered a tax. It also was small enough not to be considered punitive, thus still legal under the "expanded" taxing power.

by lmg643 14y ago

kristofferR 14y ago

They were right, there were probably an 80% chance that they would declare Obamacare unconstitutional. The thing with 20% chance to happen happened, like it does once in a while. If there's 80% chance of something happening, it doesn't mean that the 20% alternative won't happen or that you was wrong if it happened.

btilly 14y ago

If you believe that bookies are consistently giving the odds wrong, then you should start consistently taking their money. Yes, I'm aware that this way of thinking is odd to people who do not understand markets, gambling, and so on. But it is still true. Bookies try really, really hard to give correct odds. And if you look at 20 bets which had 80% odds, you would expect to find several examples where the expected winner lost. That's why the odds were set at 80% and not 99%.

lmg643 14y ago
i am only inspired to mention this because nate silver mentioned oddsmakers as evidence supporting his prediction. https://twitter.com/fivethirtyeight/status/263948034105278464 https://twitter.com/fivethirtyeight/status/26394803410527846... i'm mixing examples here. intrade is a betting market, no line is set by a bookie - it measures public opinion. one way to look at it is that intrade is efficient and there was truly a "20% chance it will occur." the other way to look at it is "the odds were never 80/20" because most people betting on it were uninformed or misinformed (clearly watching WAY too much Fox news). this is unknowable, because it's not a repeatable event. prediction markets were originally based on the idea that folks with inside information would bet heavily and clearly justice roberts had other stuff to do. understanding how sports books work is not the same as saying "i know enough about sports to bet profitably." that said, bets set by a casino or sports book are different than intrade. a bookie is trying to maximize house profit, whereas intrade is pure sentiment. a sports spread can be -2 with 80% of people betting one side. the house might think the real spread is -4, and they expect the line to pay off. here's an example of how lopsided bets can be: http://www.thespread.com/ncaa-college-football-public-betting-chart#.UJWDjKg0V8E http://www.thespread.com/ncaa-college-football-public-bettin... I'm reading "sharp sports betting" by sanford wong right now. good quote: "I had the opportunity to ask Robert Walker, race and sportsbook director at MGM mirage, whether his company's action is balanced on football games...it appeared to me that sportsbooks might be taking lopsided action on about half of all NFL games. Mr Walker answered that what I hypothesized was indeed the case....then i asked him why he did not make more line moves to try and balance the action. his answer was that to move the line to try to balance the action would result in less profit for the sportsbook."
- btilly 14y ago
  If you know the odds that you think are right, and the odds that they are providing, you can read http://www.elem.com/~btilly/kelly-criterion/ http://www.elem.com/~btilly/kelly-criterion/ to figure out what your most profitable strategy is. (I include calculators, and explanations of how to modify the strategy if you are somewhat risk-adverse.) Seriously, if someone is offering wrong odds and you're sure of it, you can consistently make money. Go for it!

protomyth 14y ago

I think that goes to show more about the narrowness of the bet versus real life. Sports outcomes have scores and winners, case law has subtleties. Technically, the individual mandate was illegal under the commerce clause according to the ruling. This was the main area of debate and clause that people assumed it would fall under. The surprise was the expansion of the taxing power given in the ruling allowing the individual mandate to be considered a tax. It also was small enough not to be considered punitive, thus still legal under the "expanded" taxing power.