Is There Ever a Good Reason To Buy Sports Picks?
The promise of easy money is what lures many to sports betting. What easier way to make money than to buy sports picks from Vegas Dave or Fezzik or any of the other services promising to pave your way down Easy Street? For new bettors, paying for handicapping advice seems like a quick shortcut.
However, the more seasoned sports bettor will tell you “Never buy sports picks from a tout.” With experience comes wisdom, so it would seem using a tout service is a bad choice. Black and white. Cut and dry, right? You might be surprised at what you are about to read.
Do Sports Betting Touts Win?
Touts, or tipsters, or whatever you want to call them, generally believe they can win at sports betting. In the vacuum of a small sample size, anyone can look like a winner. The same statistical fallacies that may lead you to believe you have a certifiable edge might also be leading a tout to think they can make a career as a professional prognosticator.
Just through sheer normal distribution, some touts are going to win and a few could indeed have impressive records. There are even touts out there that are good at their craft, study diligently, use effective models, and put out picks that can beat the market. Yes, Virginia (and other legal betting states), winning sports touts do exist!
Signs Of A Bad Tout
Before we get any deeper, it would be best to identify some warning signs of a bad tout. To many consumers, these warning signs are fully evident and obvious from the jump. However, novice bettors often look past the glaring evidence when they buy sports picks.
First, their record. If a tout posts a fantastical record, chances are they are not based in reality. An expert bettor can’t realistically expect to consistently achieve greater than 57-60% against -110 lines. To a tout, that is far too mundane. Most will advertise a record far in excess of 70% to get noticed. Which leads to the next warning sign…
If a tout does not have a verifiable detailed complete record, chances are they are not being honest with you. My favorite move is when they cherry-pick seasons or months and then have an explanation as to why their system didn’t work outside their chosen sample.
If a tout only shows winning tickets on social media, be suspicious. Many touts buy pictures of winning tickets to post on their social media accounts. Others will be both sides of the same game and eat the juice to show a winning wager. Speaking of social media…
If a tout is flaunting his cash wealth all over social media with fancy cars, hot women, and expensive man-purses (*ahem* Vegas Dave), be very suspicious. Beating sports markets takes a lot of time and effort. You can’t be spending your wealth all over the world and still be on top of your craft. It is far more likely that the money he is flashing about is not sports winnings, but rather the flushed away money of naïve subscribers.
Why Do Winning Touts Sell Picks?
Now that we have ruled out the scamdicappers, let’s focus on those who pass the initial sniff test. They have believable records. They have plenty of sports knowledge. Also, they seem credible. Could they be the unicorn you’re looking for? Perhaps, but we need to continue to apply a few more filters first.
Predominantly, the biggest reason a winning bettor shouldn’t need to sell picks is because, well, they shouldn’t need the money. An under-funded, but winning, bettor can build a sizable bankroll by properly managing their own risk and stake sizing. If you can win, there is no need to sell. It is a major and clear flaw in the economy of pick selling.
If they are so good, why aren’t they out there doing it instead of selling it?
Many touts have answers for this contradiction. They claim they are so good they are unable to get their action down anymore. Others will claim that they sell picks to smooth out the variance for themselves. The truly bold claim they do make plenty of money from their own betting and selling picks is just a little something extra in their pocket. All three of these reasons are technically valid, but still flawed statements.
Let’s break them down one by one.
Tout Tricks: Selling Picks Because They Can’t Bet Enough
Getting the money down is the art of sports betting. The science is picking winners, the art is being able to make the bet. There are many avenues to overcome the barrier of getting money down. Bettors could work with betting syndicates which spread the action around to different accounts in exchange for a piece. They could work to establish their own network of accounts and outs.
In reality, selling the play is one of the least efficient means of getting more money down. In doing so, they are exposing their golden goose to the world. If the market gets hit with a flood of sharp action, it will adjust. It will become more efficient. Other sharps will figure out what is moving the market. Eventually, all angles dry up, but a tout leading a large onslaught of action will speed that evolution significantly.
If you had a license to mine gold you wouldn’t want to sell access into your mine until you were sure there was not much gold left to be found.
Tout Tricks: Selling Picks To Smooth Variance
The tout that claims they sell picks to smooth out their own personal variance is either lying or is not a disciplined bettor themselves. The variance that you can’t handle comes when you over-bet your bankroll or have a flaw in your staking. Your bankroll needs the boost of selling picks when you have leaks in your game that are draining your bankroll.
There is benefit in diversifying your action and betting so it is not heavily correlated and becomes less fragile. However, selling information that will lead to a more efficient market is, again, a poor way to do it.
Tout Tricks: Unattainable Lines
A common tout trick is to advise you to bet a line at a price you can’t find. Maybe the line existed at the time the pick was made, but more likely the line disappeared even before that. The tout saw the line move and jumped at the chance to get ahead of the steam. People tend to misunderstand the value of a half-point or the effect of a move in the vig on a sports bet.
Here at Unabated, we want you to be able to measure the effect of a half-point or the change in implied probability a 10-cent move from -110 to -120 might cause. A savvy bettor knows that a move from -110 to -120 raises the break-even point from 52.38% to 54.55%. it’s easy to recognize that an extra 2% move in the probability you need to beat is a big hurdle. However, what about a half-point move in an NFL spread?
We have tools such as our Compare Lines Calculator which could show you that betting -6.5 -110 in the NFL when the pick was -6 would be like betting -6 -118. So instead of having to win 52.38% (-110) to break even, you have to win 54.13% (-118) to turn a profit.
It’s also easy to see how the tout benefits from a move like this. By gaming their subscribers and releasing a pick at -6 when the true market price is actually -6.5, they are getting to push when the game lands on -6, while the subscribers take a loss. 3.78% of the time, that game is going to land on -6 and the subscribers take a loss, while the tout gets a push. Seems like a small number, but remember, this is an industry of small margins.
Getting that 3.78% is enough to basically give the tout a 50/50 chance of showing a long-term profit with that pick. That’s just a half-point. They essentially remove the vig by just gaining a half-point on their subscribers. Imagine how good their record would be with a full point better than what subscribers could bet? To learn more about the effect of gaining a half-point against the closing line, check out the Unabated Closing Line Value Calculator.
What About Real Winning Sports Touts?
A few moments ago, I did tell you that yes, some winning sports touts do exist. So assuming you have completely vetted your preferred prognosticator, you should be all set to begin tailing their plays and winning, right? Unfortunately, not. Even if you find a winning tout, you face an uphill climb to profitability if you buy sports picks.
The Information Tax
To be able to buy sports picks as a shortcut to profitability fascinates new bettors. Unfortunately, they don’t know what they don’t know. Even if they are following a reputable tout, they may be setting themselves up for failure given the tax that the sports handicapping service represents to their bankroll.
Take for instance, a winning College Football tout. They’re able to hit 55% against attainable lines. They charge $500/month for their service. They typically put out 8-10 plays per CFB weekend, so roughly 40 plays per month. Their expected record would be 22-18.
|Bet Size||Sunk Cost||Equivalent Line||Expected Result|
Unless the consumer is betting more than $200 per pick, the cost to buy sports picks completely outweighs the expected profit. Full stop. They need to bet to win over $1000 before that Information Tax doesn’t significantly eat into their expected profits. Also keep in mind that a legitimate 55% picker, still has 31.55% chance of being 50% or worse over a 40 pick sample. If your anointed tout has a cold streak where they are just break-even, you’re a net loser no matter how much you wager. The only thing the tout is selling you are the picks, and if the picks aren’t winning the consumer is going to feel like they didn’t get their money’s worth.
The information tax can’t be overstated. It is going to slowly creep into their profits win or lose. You need to go into the arrangement knowing that the sunk cost is going to weigh unfairly on you. If it is ignored it can potentially turn what seems like a winning system into an unprofitable one.
How Sports Betting Markets Become Efficient
A popular and necessary disclaimer in financial investing is “Past results do not dictate future earnings.” In other words, there’s no guarantee that what has worked in the past will continue to work going forward. This is very true with sports handicapping. As mentioned earlier, angles dry up. Markets tend towards efficiency. A successful tout speeds that process up if they have an influential following in the market.
At best, the market reacts quickly to a release and adjusts. At worst, the market reverse engineers the angle and it begins to compensate for it before the tout can make their pick. In the latter situation, you can very much have a situation where the handicapper had a 55% win rate but now would average 52%.
On top of that, regression is a factor. If you opt to tail a hot handicapper, it is possible you will be riding along as they regress to their mean. Hot Hand Fallacy is a term for doing exactly what that financial disclaimer cautions against — using recent results to dictate the short-term future. You may bemoan your timing as this seemingly hot 60% handicapper goes on a poor run over the next 50 plays. However, it is possible you simply got on the roller coaster just ahead of the ride back to level ground.
What Can Be Learned By Following a Tout
We have established all the reasons not to follow a tout and not to pay for picks. However, what if we are certain the tout is a bona fide winning one? What if the cost was trivial to the amount we could wager? What if our resources were such that we could get down our bets in time to take advantage of their information? Could this actually be a profitable approach?
You can learn a lot from following a winning tout. However, it is not what you might expect. The first thing you can learn is Market Behavior.
A key aspect of the Art of Sports Betting is knowing how the market reacts to information. In this case, a winning tout will move the market. This allows you to know the origin of the information and see how the ripple moves across the waters in the market. You can see which books are first to react and how quickly they move. It also gives you insight into which books are reacting not to the information but to the movement at other market-leading books.
Knowing how sportsbooks react to this information not only points out the books susceptible to stale lines, but also the pecking order in the industry. Now that you know that, it’s time to determine the Market Elasticity.
This is a measure of how much the market moves based on this information. In other words, does the market overreact to this information? A good handicapper might give you a strike price at which they think the play has value. Subscribers may exceed this strike price in their own betting. If a college basketball total is given out at u145, it is not unusual for bettors to think a half point would not matter and play u144.5 or u144. Furthermore, people reacting to the move in the market may push that price even further.
If the market moves on the information but quickly moves back, that is a sign of market resistance. If you follow a winning tout who moves markets, you can exploit that market movement to lower your variance and use the tout as an arbitrage tool.
The tout gives out an under and says it is good up to 145, the line is currently 147, and you grab that under. You watch as the line drops as followers tail the pick. The line gets to 144 and you grab some over. You may have more on the under 147, but you have mitigated risk and set up a small middle. The value of knowing what is moving the market and how much the market has over-reacted could be extremely valuable information. Valuable enough, in fact, to make it worth your while to buy sports picks from this tout.
The value of a middle and the cost/benefit analysis varies by sport. Fortunately, Unabated offers tools, such as the Alt Lines Calculator, to aid you in your decisions. If you haven’t used the Unabated Alt Lines Calculator to price the value of neighboring prices, you should get familiar with this tool.
- Scamming touts should be easy to spot.
- The touts that require deeper inspection are the ones that seem plausible.
- Be aware of common tout tricks.
- Anytime you buy sports picks you are paying an Information Tax
- A winning tout can provide key market information.
- You can use a winning tout to know which way a market will move and by how much.