This will be the year. The offense is really coming together. The defense looks the sharpest its ever been. We have all our key starters back. And those new comers, man, there are some guys who can flat out fly.
The problem with football in early August is that every team is undefeated. Optimism supersedes experience as fans are overzealous about the season to come. While I certainly don’t fault you for being a summer optimist, there will be plenty of time for fall pessimism, someone is taking note of your optimism and exploiting it.
Listed above are the national championship odds for college football posted by William Hill (as of June 27th). Now is it just me, or do those payout numbers seem a little low? To investigate this, we can look at what is called the implied win probability. If there was no house edge, then a team that pays 4:1 should win at a rate of 1:4, or once every 5 seasons. Hence, the implied win probability for a team that pays 4:1 is 1/(4+1) or 20 percent.
For a regular season contest it is standard for the odds to be listed at -110. This means for a contest between two equal teams, the payout will be 10:11 (you win $100 but have to bet $110 to get it). Using our implied win prob formula, we see that the implied win prob for each team is 11/(11+10) or 52.4 percent. Summing over the win probs for both teams, we get 104.8 percent. The amount over 100 (the 4.8 percent) represents the houses edge or what is called the vig.
Looking back to our national championship odds, we can do the same calculations. By summing over the implied win probs for the national championship futures, we are able to calculate the vig. The result is nothing short of astounding. The sum of the implied odds to win the national title is 146 percent. Yep, the house edge is 46 percent. That’s almost 10x the edge that the house has on a standard bet. So when it comes to playing national championship futures, you should just follow the NCAA’s advice:
Futures are a terrible play. But what if you have a dark horse team that is destined for a break out year? Well, a win total wager is a much smarter play. The week of August 22nd we will discuss win totals in detail along with releasing our win total estimates for all 128 college FBS teams. In the first week of September, we will release our win total estimates for all 32 NFL squads.