Should You Still Bet MLB Favorites Early and Underdogs Late?
For years there has been a popular axiom that bettors should take favorites early and underdogs late. This theory is rooted in psychology since casual bettors prefer taking winning teams, and overwhelmingly put their money on the favorite. This influx of public money on the favorite will frequently cause oddsmakers to adjust their lines to encourage action on the underdog, which helps sportsbooks mitigate their risk.
Since sportsbooks know that they will receive public money on the favorite in nearly every game, many bettors believe that it’s best to wait until the last moment before placing a wager on the underdog. Hypothetically, this would ensure that bettors are able to get the best line possible which is particularly crucial when betting a moneyline sport like baseball.
I should start by noting that the line can move for a variety of reasons including injuries, weather and officials, but most of the time oddsmakers shade their opening lines to account for public money on the favorite and then allow sharp money from their most respected clients to shape the line. Contrary to popular belief, they’re not necessarily looking to encourage 50/50 betting on each side.
To determine whether it was actually advantageous to take favorites early and underdogs late, I decided to examine every MLB regular season and playoff game since the start of the 2005 season. When the line got worse for the favorite (i.e. moving from -150 to -160), I categorized the line as moving towards the favorite. When the line got better for the favorite (i.e. moving from -150 to -140), I categorized the line as moving towards the underdog.
My research found that over the past twelve seasons, the closing line at Pinnacle moved towards the favorite in 54.95% of all regular season and playoff games. Since the line got worse for the favorite in a slight majority of games, it would seem advantageous to take favorites early to get the best line possible.
Although this confirms a widely held theory, I wanted to see whether this trend had continued in recent years. The 2015 MLB season was the worst year for betting underdogs in our database, and the 2016 season is on pace to be even worse. With these changing tides, I wanted to find whether the closing line continued to move towards the favorite.
The closing line has moved towards the favorite in 61.17% of all games during the 2016 season, which is the highest figure in our database. This season favorites have gone 701-484 (59.2%) with +11.45 units won when grading on the closing lines, but bettors would have earned even more by taking those same teams at the opening line.
The next step was examining whether public betting was responsible for this line movement. Since 2005, a majority of public bettors have taken the underdog in just 18.5% of all games — but are the tides changing?
The table below displays the percentage of games where we tracked at least 51% of moneyline bets on the underdog.
|Year||Public on Dog|
The past three years have seen the most public support for underdogs, but a majority of MLB moneyline bettors continue to take the favorite. This seems to indicate that there hasn’t been a dramatic change in public betting patterns. However, I wanted to take it one step further and examine the most extreme levels of betting against the public.
Since 2005, teams receiving less than 20% of moneyline bets at our contributing sportsbooks have gone 1,136-1,702 (40%) with +39.31 units won and a 1.4% return on investment (ROI). Although the number of teams fitting these criteria has remained fairly consistent, they have produced a negative ROI in each of the past four seasons.
Even though MLB public betting trends have been relatively steady over the past twelve seasons, the value derived from betting against the public has started to wane. Although it’s still advantageous, bettors have to consider a variety of additional filters which we cover in our 2016 MLB Betting Against the Public report.
It’s not necessarily a steadfast rule that you should bet favorites early and underdogs late, but clearly there is some validity to this widely held belief. There aren’t any strict rules since lines will commonly move around throughout the day with teams often jumping from -160 to -170 before dipping back down to -150. Lines will drop just as often as they rise, but there is some value taking favorites on the opening line and underdogs as close to game time as possible.
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