Table of Contents
Key facts
- Hedge betting is a tool all serious gamblers should use when conditions are right.
- Over time, hedging is one of the most profitable strategies for betting, if not the most profitable.
- As in most money-related ventures, diversification is key. There are times to employ other strategies.
Every serious gambler thinks that he or she has cracked the code and developed the one methodology that is guaranteed to turn a profit. Since there are just about as many betting strategies as gamblers, and since the house always wins, that seems to imply that most gamblers are wrong.
How do we navigate this tangled mess of strategies and find the one that will be most profitable over the long run?
Hedge Betting
Hedging your bet is one of the most reliable strategies for the sports gambler, and the phrase has worked its way into mainstream conversation. Many gamblers will endorse hedging as the way to go, and it can be a very powerful tool for the serious gambler to employ.
Hedging a bet means placing a second bet, usually in the opposite direction on the same sporting event as your original bet, in order to reduce risk. If conditions are right, you can guarantee a profit on a bet by hedging. Essentially, you are buying insurance, giving up a portion of the payout on your first bet to ensure a smaller payout regardless of the result.
For example, if you have won the first four legs of a five-leg parlay, you could hedge by playing a separate bet on the final leg. If you selected Team A to win in the parlay, you would bet on Team B with your hedge. That way, if A wins, you win your parlay and are out the amount of your second bet. If B wins, you lose whatever you bet on the parlay but win the hedge bet. Since the parlay usually has a lower amount that you risked and a higher payout, the math often guarantees that you’ll walk away with positive income regardless of the outcome.
Other Methods
Hedge betting is often compared with arbitrage betting, since both involve placing multiple bets on a single event.
The difference is, with hedge betting, you are using the fact that conditions have changed since your first bet to place a second hedge and guarantee success. In our hedging example, the only reason it works is that you’ve already won the first four legs of the parlay.
With arbitrage betting, you are placing multiple bets at the same time, taking advantage of different odds at different casinos. For instance, if one casino has the points total for a game as +105 for the over, and another casino has it as +105 for the under, you can bet at both places and guarantee a profit —albeit a small one— regardless of how the game goes. Essentially, with arbitrage betting, you are covering all possible options and taking advantage of market inefficiencies between casinos to profit.
Fading the Public
Another popular strategy is fading the public. That means determining which way the action on a game is going and betting against the tide. The assumption is that most gamblers don’t know what they’re doing, and you’re “thinking like the book”. Since the house always wins, so will you.
This is most successful on major sporting events, like the Super Bowl, March Madness, and the Kentucky Derby, where many people bet for the only time that year, and there are far more novices in the pool of bettors.
Bankroll Management
The above strategies focus on how to bet. There are at least as many gambling strategies that look at how much to bet, from the Martingale System to the Kelly Criterion to Oscar’s Grind. They look at a variety of factors, including odds, recent results, and the status of your bankroll, to determine how much to bet on the next outcome.
Which is Best
Is hedging your bets the most profitable system? You might as well ask, “Is passing the most profitable system in football?” or “Is the pick and roll the most effective basketball play?”
Hedging is a tool, and a very effective one. A handyman would tell you that his hammer is a very effective one, but there are times —when he’s doing plumbing or installing windows— when he leaves it in his toolbox and uses something else. When the conditions are right, it’s good to be able to pull out hedging and guarantee yourself a profit. But, if you overuse it, or use it in the wrong situation, you are needlessly reducing payouts by placing extraneous bets.
Similarly, if conditions at different casinos allow you to pull off arbitrage, there’s no reason not to. You might as well take the small guaranteed payout while you can, hedge while you can, and, when the uneducated masses descend on the Super Bowl, to fade the public a bit as well. You’ll also want to choose a method or methods of managing your bet amounts and bankroll.
Like with any financial venture, diversification is key. The more tools you can master and employ, the better off you’ll be.
