Suppose you bet Tampa Bay +3 in an NFL game against New Orleans. In the game, Tampa Bay wins outright by 10 points over New Orleans.
You’re a genius, right? You take the winnings over the bar and do your best Beth Harmon imitation.
Well, you might be a genius, but not because you won. And no, this isn’t a lecture on small sample size. While winning money is great, there’s a better way to evaluate your bets: closing line value (CLV).
In this game, the markets closed with New Orleans as a 2.5 point favorite. Since the point spread decreased from 3 to 2.5 and you liked the underdog Tampa Bay, you got closing line value.
To understand the importance of CLV, I’ll use an explanation from Spanky, a professional sports bettor. In an episode of his podcast Be Better Bettors, he explains that sportsbooks move the spread based on sharp players, not the size of the bet.
Floyd Mayweather could put $300k on a spread, and a bookmaker won’t flinch. A quant in the basement of his mother’s home in Pittsburgh puts $5k on the other side, and the spread moves in that direction.
When the markets move in the direction of your bet, this means the sharp players in the market agree with you. This means long term winning.
Spanky suggests getting closing line value on 80% or more of your bets. A professional bettor I asked said the market moved his direction on about 90% of college basketball totals during the 2020-21 season.
Looking at CLV also makes sense from a mathematical perspective. Assuming the outcome of games are independent, the variance in outcomes is smaller with a rate close to 1 than near a half.
For example, suppose you make 50 bets. If you hit a win rate of 53%, the uncertainty in this win rate is 7.1%. If you get CLV on 90% of your bets, the uncertainty in CLV percentage is 4.2%. There is less uncertainty in CLV rate than win rate.
There’s a ton of nuance to this idea that closing line value leads to long term profits. It depends on factors such as:
- market strength – CLV is more important in a strong market like NFL spreads than a weaker market like golf
- kind of bettor – some bettors make plays based on information not available to everyone, which potentially implies a lack of CLV
- timing of bet – the market might go too far right before a game starts, you bet the other side, and the market doesn’t react
But let’s suppose you’re a newcomer with no inside information. For saturated markets like NFL and college football, closing line value is a better metric than winning percentage to evaluate your bets.
“And when you beat the line, that means you won. That’s better than winning money. That’s better than sex.”
Whoa Spanky, let’s not go too far on that last one.
For more resources on CLV:
- Podcast episode of Be Better Bettors. Listen at 5:26.
- Podcast episode of Bet the Process with professional bettors Rufus Peabody and Rob Pizzola. Listen from 13:37 to 28:58.
- Podcast episode of The Football Analytics Show with Spanky and how he bets: Listen at 3:08.
Data driven betting information
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