Top-Down Betting & Profiting in Sports Betting
Top-down betting refers to an approach where bettors start with a broad, macro-level analysis of the betting market before zooming in on specific events or games. Essentially, instead of analyzing individual matchups in isolation, top-down bettors first evaluate the overall state of the market, considering factors like:
- Market Efficiency: How well is the market priced? Are there inefficiencies or mispricings that can be exploited?
- Market Liquidity: How dense is the market? Are there enough bettors and money flowing through the lines to keep the odds sharp?
The "top" part of top-down betting involves taking into account available information and before narrowing the focus to individual matchups or specific bets. For example, if you believe that a sportsbook is better at pricing a certain market consistently (or take big bets from sharps constantly), you might use this theoretical efficiency to find mispricing within the marketplace. This broader perspective helps bettors make more informed decisions while also allowing for significant volume as they are evaluating the entire betting ecosystem rather than diving into the specifics of a matchup. Before breaking down how to find profitable wagers, first you should understand the dynamics of a market & how they use all possible info to create efficiency in the prices you pay.
Efficient Market Hypothesis (EMH) and Sports Betting
The Efficient Market Hypothesis (EMH) is a financial theory that suggests that all available information is already reflected in asset prices (or, in the case of sports betting, in the odds). According to EMH, it is impossible to consistently "beat the market" because any new information that could influence the outcome of an event will already be priced into the odds as soon as it becomes public.
In the context of sports betting, EMH suggests that sportsbooks set odds based on all known information (team performance, injuries, betting trends, weather, etc.), and that over time, odds will adjust to reflect new information. If you’re betting on sports using traditional methods (like evaluating matchups, injuries, etc.), you're unlikely to gain a consistent edge over the sportsbook if the market is efficient.
However, some sports bettors believe in "semi-strong" or "weak" forms of EMH, which posit that not all information is priced into the odds, especially when you account for things like public betting bias or inefficiencies in market movements. For example:
- Sportsbook Inefficiencies: Not all sportsbooks are equally efficient. Some may adjust odds more slowly or not react quickly enough to new information, offering value to savvy bettors who can identify these discrepancies.
Thus, while the EMH suggests that it’s difficult to consistently beat the market, many bettors believe that by identifying inefficiencies (like mispriced odds or biased betting patterns), they can gain an edge.
Efficiency by Volume: Wisdom of the Crowd
The wisdom of the crowd theory in sports betting suggests that, when aggregated, the collective knowledge and decision-making of a large group of people can lead to more accurate predictions than those made by any single individual. This concept has roots in psychology, sociology, and economics, and it has been increasingly applied to sports betting in recent years. Here's a breakdown of how it works and how it can be leveraged in sports betting:
Key Ideas Behind Wisdom of the Crowd in Sports Betting:
- Aggregation of Information:
- Diverse Opinions: Crowds, when composed of individuals with different backgrounds and perspectives, are likely to have access to different pieces of information and analysis.
- Error Correction: While individual bettors may have biases, collectively, those biases tend to cancel each other out. The more people participate in predicting an outcome (e.g., the result of a game), the more likely it is that the overall prediction will be close to the true outcome.
- Market Efficiency:
- Betting Markets as a Crowd: In sports betting, the odds set by bookmakers reflect the aggregated predictions of all bettors. If many people bet on a team to win, the odds will shift accordingly to reflect the new market consensus. This aggregation often leads to fairly efficient pricing of the outcomes.
- Odds Movement: If a large group of bettors believes a particular outcome (like a team covering a spread), the odds will change as the crowd's collective sentiment influences the market. In the long term, the betting market becomes an efficient predictor of outcomes because of this aggregation.
- Herd Mentality vs. Wisdom:
- Herd Mentality: Not all crowd behavior is rational. Sometimes, crowds may become overly influenced by emotions or biases, causing betting patterns to become irrational (e.g., betting heavily on a popular team without regard for the actual odds or statistical analysis).
- True Wisdom: In order for the wisdom of the crowd to manifest effectively, the crowd needs a level of diversity (in terms of knowledge, experience, and perspective) and independence (each bettor should make decisions based on their own analysis, not just follow the crowd).
Understanding how the betting market gets to its state of efficiency can help understand why smaller, lower liquidity markets can remain inefficient & cause issues to top down bettors
Integrating Top-Down Betting, Vig, and EMH to Profit on Sports
By combining the top-down betting approach with a solid understanding of vig and the Efficient Market Hypothesis, bettors can make more informed decisions by:
- Assessing the Market: Evaluate the broader market for inefficiencies. If you believe that the market is efficient, finding outliers from what the sportsbooks believe will happen theoretically will lead to successful trading.
- Calculating Vig: Always calculate the vig to understand the bookmaker’s margin and how it affects potential profitability.
- Looking for Opportunities: Seek out situations where the market has overreacted to information or where a sportsbook’s odds don’t fully reflect the underlying probabilities.
Find what Sportsbooks you believe are sharp, price out their fair value, and get to firing! But before clicking wagers across the entire betting market, take the overall market efficiency into account. As the EMH would back, the more $ into the marketplace, the more certainty behind the line. Building a fair value with respect to the quality of the odds is a massive step in the right direction top down betting.
How to Find the Vig (Bookmaker's Margin) & why it matters
Vig (short for "vigorish") is the bookmaker's margin — the percentage of each wager that the sportsbook keeps as profit. It's the "house edge" that guarantees the bookmaker will make money in the long run, even if the betting action is evenly distributed between both sides of a bet. By finding (and removing) vig, we can find the true probability a sportsbook believes an event will happen.
When you're analyzing odds, it's important to calculate the vig so that you understand how much of a margin is built into the pricing. Here’s a simple method to calculate the vig from the odds provided by a sportsbook.
Calculating the Vig with American Odds
Let’s say a sportsbook offers the following American odds for a matchup:
- Team A: -150 (betting $150 to win $100)
- Team B: +130 (betting $100 to win $130)
To calculate the implied probability of each outcome and the vig, use the following steps:
- Convert American Odds to Implied Probability:
-
For negative odds (e.g., -150), the formula is:
Implied Probability= (abs(odds)) / (abs(odds)+100)
For -150 -> 150/(250) -> 60% -
For positive odds (e.g., +130), the formula is:
Implied Probability= 100 / (abs(odds))+100)
For +130: 100 / (230) -> 43.5%
-
Sum the Implied Probabilities:
Add the implied probabilities together:
60%+43.5%=103.5% -
Calculate the Vig:
The vig is the difference between the sum of the implied probabilities (103.5%) and 100%. In this case, the vig is:
103.5%−100%=3.5%
This 3.48% represents the bookmaker's edge on the market. In the absence of vig, the probabilities would sum to 100%. This margin can significantly reduce the profitability for bettors over time, which is why understanding and accounting for vig is crucial.
So we have found the vig priced into the market, why does that help? Knowing the house edge on an event, we can remove it to find the sportsbooks true probability they believe an event will happen!
In our Example: -150/+130 we came up with (60%/43.5%) including the 3.5% vig
Taking our win rates and subtracting their side of the vig (assuming equal margin Vig, which is typically not the case but sufficient for this example)
60% - (3.5/2) -> 58.25% chance to win
43.5% - (3.5/2) -> 41.75% chance to win
Turning these % 's back into American odds, we get the vig free price of this game to be (-140/+140). So any price better than 140 for the fav or dog would in theory be a quality bet using this single books fair value
Pictured Below: Cowboys team total over 20.5
Fair Value (via Bettor Odds) of +235
Bet 365 is offering +260 (Good bet). Using a staking method such as Kelly, a user could easily determine the theoretical edge & wager accordingly
Draftkings is offering +205 (Bad bet)
Why Is There More Vig on Smaller Markets?
Vig can vary significantly depending on the market in question. Smaller markets—those with lower liquidity, less public interest, or fewer participants—tend to have higher vig for several reasons:
1. Lower Liquidity in Smaller Markets
Smaller markets refer to niche sports or less popular events—think of betting on things like eSports, minor league baseball, lower division soccer, or special prop bets on major sports events. These markets are typically less liquid, meaning there is less money being wagered overall compared to more popular markets like the NFL, NBA, or major soccer leagues.
- Liquidity refers to the amount of money being bet and the number of people betting in a given market.
- The more liquidity a market has, the more efficient the odds become, since there are more bets placed and more information is being factored into the odds.
- In smaller markets with less liquidity, oddsmakers are often forced to build in higher margins to protect themselves from the inherent risk of limited betting volume. This makes it harder for bettors to find value since the vig is inflated.
In large markets, odds adjust quickly in response to betting action, with millions of dollars changing hands on major events. This provides sportsbooks with a stable flow of information, enabling them to offer more competitive odds with lower vig. In contrast, in smaller markets, sportsbooks may have less data to work with and fewer bettors to balance out the risk, so they increase the vig to account for the potential uncertainty.
2. Less Market Efficiency
In high-volume, widely-followed sports like the NFL or NBA, odds are often very competitive. This is because many bettors, both professional and recreational, are paying attention to these markets, so sportsbooks must offer attractive odds to capture the action. The increased attention and betting volume lead to more efficient markets, with odds reflecting the true probabilities of an outcome.
However, in niche markets—such as esports, smaller European soccer leagues, or niche prop bets (e.g., “how many yellow cards will there be in a match?”)—there are fewer bettors involved. As a result, the odds may not always adjust as quickly or efficiently to reflect changes in information, making it easier for sportsbooks to inflate vig and protect their profits. The lack of market efficiency means that odds can sometimes be less accurate, so the sportsbook compensates by increasing vig to cover potential mispricing.
3. Reduced Competition in Smaller Markets
In major sports, multiple sportsbooks are competing for your action. This competition can drive the vig down, as sportsbooks are keen to offer the best odds to attract bettors. In smaller markets, however, there are often fewer sportsbooks offering lines. The lack of competition allows sportsbooks to increase the vig, as they don't face the same pressure to offer the most attractive odds.
For example, if there are only a few sportsbooks offering odds on a minor league hockey game or a niche betting market in esports, those sportsbooks may be able to set higher vigs because bettors have fewer options to shop around for better lines. This is especially true for less popular events or markets where the oddsmaker’s risk is higher.
4. Higher Risk for the Bookmaker
In a smaller market, the sportsbook is exposed to more risk for a few reasons:
- Limited Information: There may not be as much historical data or comprehensive analysis available for smaller sports, so the sportsbook might need to adjust odds with more caution.
- Imbalanced Action: With less betting volume, there is a higher chance of one side of the bet being overexposed, which increases the sportsbook's potential liability. To offset this risk, bookmakers raise the vig.
In popular sports like the NFL or NBA, the odds tend to be more predictable, and sportsbooks can handle large amounts of action without significant exposure to risk. In contrast, a niche sport like snooker or a low-tier soccer league may be harder to price accurately, so bookmakers include higher vig as a cushion against unforeseen results or market fluctuations.
How Vig in Smaller Markets Impacts Bettors
Understanding how vig works in smaller markets can help you adjust your betting strategy accordingly:
- Shop Around for Better Odds: If you bet on niche markets, always compare odds across multiple sportsbooks to find the best value. While there is typically less competition in smaller markets, some sportsbooks may offer more competitive odds or lower vig.
- Account for the Higher Uncertainty: If you choose to bet on smaller markets, keep in mind that the vig will likely be higher due to the lack of information. To offset this, you’ll need to be more selective with your bets and ensure you’re finding truly valuable opportunities. An expected value of 3% in small markets is not the same as 3% in Main Markets where there is more certainty
Roadblocks to Top Down Betting
1. Sportsbook Limits
- Betting Limits: Sportsbooks often set limits on the amount a bettor can wager, particularly when they identify someone making consistent profits or using sophisticated betting strategies. This can be frustrating if you're placing multiple bets or betting large amounts based on your analysis..
2. Line Movement and Speed
- Line Shifts: In a "top-down" approach, you often have to place bets quickly based on the value you're identifying. Sportsbooks and market odds can move rapidly. By the time you've analyzed the odds and found an opportunity, the line may have already moved, making your bet less valuable or causing it to be unavailable.
3. Data Assumption
- Cognitive Bias: Top down bettors are always looking for the best ways to attack the market, from staking sizes to who they deem “sharp sportsbooks”. Often, these are assumptions made without context, more a feel through the hours they have put in betting. Incorrect assumptions & betting above the correct staking amount can cause a top down bettor to lose money quickly as the volume increases
4. Imperfect Information
- Inconsistent Data: Not all sportsbooks or data providers offer the same level of detailed, accurate, and up-to-date information. This can be a big problem if you're relying on certain advanced stats or metrics to inform your top-down strategy.
- Limited Public Info on Sharp Action: Many of the most profitable opportunities in top-down betting come from recognizing patterns in sharp betting action. However, sportsbooks and market movements don’t always make it clear where the sharp money is flowing, and without access to insider info, bettors might miss out on opportunities.
5. Time and Effort Investment
- Research and Analysis: The time and effort required for comprehensive top-down analysis can be considerable. If you’re tracking the market moves of every provider, watching every line movement, etc this can become a taxing gig.
- Maintaining Consistency: To implement a top-down approach effectively, consistency is key. This means continuously monitoring and adjusting to changes in the market, keeping track of bets, and learning from mistakes. This can be mentally taxing and difficult to sustain over time.
6. Betting on Less Popular Markets
- Liquidity Problems: If you're betting on less popular sports or niche markets (e.g., lower-tier leagues, player props, etc.), there may not be enough liquidity to place large bets without significantly moving the odds. This can reduce your potential profitability and make it harder to scale your betting operation.
How to Mitigate These Roadblocks
- Line Shopping: To combat line movement, use multiple sportsbooks and line comparison tools to get the best odds.
- Automated Tools/Betting Bots: Using betting bots to place bets rapidly or automate certain processes can save time and improve efficiency, but be mindful of any restrictions on automation by sportsbooks.
- Data Quality and Sources: Diversify your data sources and always cross-check stats from multiple providers to ensure accuracy.
- Time Management: If you’re working with data and analysis, create a system or schedule for how and when you research and place bets to prevent burnout. For example, Several sharp books will post their opening lines at a specific time daily, given this information you can be sitting at the computer screen at post & grab off market lines in the less sharp books
How Software can make betting simple
Seven pages in, the focus has to this point been explaining how sportsbooks work and the logic behind top down betting. But after going through the roadblocks to success, it’s easy to see where this betting style could quickly become cumbersome. In comes software
Eliminating Roadblocks
- Tracking Every sportsbook: As a top down bettor, you need to quickly be able to see the price from every sportsbook for a specific play. Having a software which scrapes this data for you saves loads of time for bettors.
- Market Speed: If there is an inefficiency in the betting market, sportsbooks don’t want to keep it on the board and will be quick to lower the price of the wager. Software products that offer 1 click bet links & alert systems will help users locate & place the wagers before sportsbooks can adjust.
- Pricing in Market Efficiency: One major issue with bettors is cognitive bias of “what is the fair price” or even “is there a fair price” (for small markets). Building some form of tracking sportsbook performance to have a consistent fair value system can help make future value more predictable
- Time Management: Without software, users are in a battle of effort vs value. Clicking through sportsbooks to find inefficiencies, staring at the betting screen constantly, etc. Finding software that will input a users settings to auto alert them can greatly reduce the time needed to place significant volume
- Reducing Limits: Tools that allow users to disguise +EV wagers to look more casual can allow top down users to have longer lifespan on betting accounts
Bettor Odds: Your Top Down betting software
We have taken all the day to day headaches of top down betting & minimized the effort for the user
- Custom Feeds tailored to your needs (w/ bet links directly to wager
- Custom Alerts. Allow our bots to watch the betting feed & dm you wagers
- Fair Value Machine tracks every sportsbooks performance metrics & weighs each proportionately to create the most accurate fair value possible
- Historic Charts allow for users to open up any bet option & see how the market has moved throughout the bets shelf life
Guide to Starting
When starting top down betting, there are endless resources and quality wagers to be placed. Betrivers is still taking bets, you’re given full access to boosts across the sportsbook scene, and you’re in prime position to grow a bankroll quickly. A guide to the lowest hanging fruit & how to start your betting journey off on the right foot
Price shopping will benefit with more sportsbooks in your toolbelt as well as beginning bettors grabbing as many promotional boosts as possible. Check out the books which are legal in your state + promo offers to each -> Best Sportsbook Promos in your state
With fresh sportsbook accounts, you’ll be offered a full slate of boosts and promos to incentivize betting. By using a feed like Bettor Odds, you can quickly identify the most optimal ways to play Boosts & maximize profits in the early going.
Shameless plug to our product, Bettor Odds, which helps users find value across countless wagers daily. Tailored to the user to help you easily find profitable wagers. Free trial + 80% off your first month (code CC at checkout) -> Free trial
Sportsbooks are quick to assess an account and determine if itll be a net winner for them long term. Building a profile which seems less “I’m a top down apprentice” and more “I enjoy betting casually”.. I.e. take small +EV spots in big events & parlay them together. The overall expected value will be ok profitable (though small) but will help in keeping the account to flood with snipes, boosts, etc for more time to come
Once Sportsbooks are locked and loaded & you understand Top Down concepts, get to clicking! Correct staking vs your implied edge can make or break a profitable betting strategy, tracking the early stages can help visualize the process and adjust accordingly
Hopefully this helps you on your way to taking profitable wagers sports betting. If you have any questions, feel free to reach out to @GetBettorOdds on X and our team will be glad to assist in your journey!
Answering DM's into a FAQ Below!
"How do you determine what book to use for 'fair value' per sport?"
- There are a lot of common assumptions when building a fair value per sport
Pinnacle/Circa for main markets, Fanduel for Props (though more unstable), BetOnline for fighting, etc etc.. BUT what basis do they have? Likely due to a ton of volume and assumptions by bettors, but what we wanted to do with Bettor Odds is build an algo to track & look into the fundamentals behind each sportsbooks shape toward the market & adjust according to their success. Example: Why is BOL the fighting book? Likely a couple originators who are within the company and crush, but what if they move to Fanduel or retire? It could quickly put a dent into your pocket to not track the books success and weigh accordingly. We track open vs close price, Markets respect to book moves, speed of reaction to info, etc to build a basis of consistent fair value reports