To build a profitable gambling strategy you have to calculate probabilities of success for the event that you’re betting on. If you’re betting on a baseball game, you need to know how likely it is that the team you’re betting on will win. If you don’t get a good estimate of that probability, then you’re setting yourself up to take unintended risk. The sportsbooks know this and have gotten very good at these calculations for many sports. Below I will show how good Draft Kings is at predicting the outcome of MLB games.
Here we see the predicted probability of the desired outcome against the observed probability of the desired outcome.
In the plot above the black line represents the equation y = x. This line is used as a reference so that we know how close the blue line is predicting these probabilities correctly. So, if the blue line were directly on top of the black line, we would know that, on average, when Draft Kings predicts a 40% chance of an outcome, the observed rate of that outcome occurring will be 40%. You can see that from about 0.3 to about 0.7 Draft Kings’ blue line is very close to the target, following just below.
The method they use to make money is to figure the odds and then adjust them such that each side of the line is slightly more likely than they actually calculated. For example, if they determined that an MLB game was 50/50, the moneylines for the game would probably be something like -110 on each side. Doing this means that they will make money regardless of the outcome, as long as people have roughly bet on each side equally. This is what is causing their blue line to ride just below the target black line; that is intentional.
This plot is not reflective of all odds given on all sports by Draft Kings this year. The plot was created using data from moneylines for a couple hundred MLB games in 2024. At least for MLB moneylines, Draft Kings knows what they are doing and they’re very good at it. It is important to know your opponent if you are entering a competition and sports gambling is just that. Remember who you are up against. Draft Kings and other sportsbooks make money by being better than you at making predictions about sports. The data shown here is just one example of how good they are at these predictions.
Gamble smart and gamble safely. Don’t take risks that you are unfamiliar with and remember to learn about the success of the sportsbook before betting. It is often smart to look at more detailed bets, like player props, that are harder to predict, but do so with caution.
