Gambling on MMA 101

via cdn2.sbnation.com

Napoleon once said, "if you want to make a small fortune gambling, make sure to bring a large one."

MMA is one of the most volatile and unpredictable sports today. At such a high level of athleticism a mistake lasting only .1 of a second could be a fighter’s undoing. I would like for you to wrap your head around this concept. An average UFC fighter has been an athlete the majority of their life. They’ve spent near a decade training in combat sports. They spend years fighting for little to no money to get there. A gruelling 8 week training camp of two-a-days, forgoing all foods that taste good, starving themselves to lose weight to compete for what at the most is a 15 minute fight. A slip of mind lasting less than a tenth of a second could separate them from their conciousness, or their shoulder from its socket, potentially undoing all of their hard work.

Serra/GSP, BJ Penn/Matt Hughes, Jens Pulver/Joe Lauzon, the list of upsets goes on. One sure thing about MMA, is there is no sure thing. Injuries happen, fighters blink, trainers give bad instructions, fighters get sick the week of a fight, a fighter chooses to travel too close to the fight time and doesn’t take the jet lag too well, staph creeps up 2 weeks before a fight. Many things can happen that can easily take a fighter from 90-100% of his potential down to 60% despite having every athletic and mental gift in the world. Now despite all of this there is still and will still be a lot of money to be made in gambling on MMA. I am here to tell you in mini-series format some of the things that have worked for me, and most importantly why. Let me preface any advice I give by saying, I will not tell you who to pick, but how to pick, and why to pick. This is a constantly changing system that has worked for me, some things get thrown out, others get brought in.

I have a degree in economics, and finance. I got into this major because of how closely it related to gambling (something I was knowledgeable and proficient at before college). Any financial formulas that are applied to stocks can be directly applied to sports betting. I have been playing poker since a little before the Texas Hold’em boom. I read tons of books (the best being The Theory of Poker by David Sklansky) by professional gamblers, and attempted my best at tailoring my craft.

I applied my knowledge to gambling, and with a naive confidence in myself have managed to over come a lot of loss to the point where I can turn a decent profit off of gambling MMA. What the actual number is isn’t important, but It’s in the positive and above any amount you’d get in any mutual fund or savings account. I went into finance because of my direct fascination with games, and how to win them.

There’s a negative stigma surrounding gambling, but it is no different than investing in stocks. It’s taking applied knowledge of a sport (a strong wrestler with little striking, stands a good chance of beating a strong striker with weak wrestling) or stock (EA is potentially interested in purchasing a small video game developer) and applying it to purchase a stake in the activity (betting that the wrestler will win, or purchasing stock under speculation that EA will attempt to buy the company, causing the stock price to go up). In each of these scenarios you stand a chance to win (the wrestler takes down and dominates the striker, or EA does purchase the company and the stock rises $10 a share) or a chance to lose (wrestler takes a knee on a shot and gets KO’d, EA rethinks their takeover and the price of the stock drops, leaving you down $5 a share). Now these are both identical scenarios, just with a different type of applied knowledge. I happened to prefer watching hot, sweaty men grapple each other over reading the wall street journal any day of the week, so with a sound mind and solid financial approach, we stand a good chance to make money off of our investment. To do this you will need a solid understanding of the sport, and of risk.

I will relate a lot of concepts to Texas Hold’em because well, it’s my background in games, lots of people know it, and well, it’s one of the most direct and parallel games to gambling on MMA. Part of the beauty about Texas Hold’em as a game is it’s easy (strike easy.) I could teach a 10th generation West Virginian how to play the game in 5 minutes. Will they be good? No. Will they still have the thrill of gambling? Yes. Will they lose copious amounts of money to experienced, educated players? Yes. Will I eventually start talking about gambling on MMA? hopefully. The majority of people playing Texas Hold’em in casinos are amateurs who don’t have any idea how to play the game. This is all at a benefit to experienced, educated gamblers. How does this relate to MMA? As the sport has grown the lines in MMA are getting better written, but are being swayed more by popular opinion. One door closes, and another door opens.

1. People are retarded.
Most people are stupid. Don’t believe me? Go to an MMA event. Not a local show that will be compromised of local gyms and fighters and the more educated class of MMA fans (or do, they aren’t the brightest tools in the shed either). Go to the UFC events and listen to the people around you, you will hear all about the time Tim Sylvia lost to Jens Pulver in Japan, how Joe Rogan is a pussy, and how Chuck Liddell should still be the UFC lightheavyweight champ. Don’t have time? go read www.sherdog.com. This directly relates to poker in that, as the sport becomes bigger the more fans will jump on the bandwagon. More uneducated fans that are on board, the less bets will be placed on unknown, and (here’s the key word) unmarketed fighters. The crowd will bet on starpower and excitingness moreso than not. This will swing the odds away from where they should naturally settle if there was no hype around a fighter, to what the public’s opinion of a fighter is. Since we know that people (especially people who are "MMA fans") are retarded.

2. Bookmakers(the elves baking cookies in the gambling tree) aren’t paid enough.
Some of the most successful pro gamblers bet exclusively on baseball and basketball. Do you know why? Because there are 2,430 baseball games that compromise one MLB season. That’s 21,870 innings. That’s roughly 7,000 hours of baseball in a year (There are 8,760 hours in a year). With so many games, if odds makers correctly place odds on 99% of games, that leaves 24 games where the odds are completely wrong. That’s 24 serious opportunities for large monetary gain in one year. For an educated gambler and baseball fan thats a lot. The same goes for basketball, lots of games, not enough time to watch. A lot of the time odds makers don’t get down into the nitty gritty of match ups and such like (if team A beats team B who beat team C then A > C right? What if C presents a terrible matchup for A and should be favored? This is especially important for MMA.  The amount of money bet total (the volume if you will) on a big UFC card if less than the smallest volume NFL game. So if a bookmaker wants to use his time effeciently, he/she will spend less time writing odds for MMA, and likely lift them from some online site instead of researching themselves. These are pulled from a lot of the time betus.com or bodog.com, where we can see the odds are not always written correctly. You’ll also notice, once one site puts up odds, they all do. This gives you more a bigger chance for gain. One for all and all for one doesn’t work if you’re all wrong.

Join me next time as I will explain American Odds, the implied percentages of american odds and explain how to calculate the economic value of said odds.