Future bets – a bet on whether a team is going to win a league or event that is usually going to be held well in the future – are something that books absolutely love to post and take action on. There’s a pretty simple reason for that – they are mostly horrible bets, so the books make a killing on them. They are exposed to some risk if a longshot comes through at a huge price, but that doesn’t often happen. Most of the time they get to collect a large amount of money, use it as they want for months until the outcome of the bet is determined, and then pay out far less than they brought in. It really couldn’t be better for them.
In most circumstances sharp bettors will stay away from futures and leave them to amateurs and tourists to Vegas. There are some circumstances, though, where they can make sense. Here’s a look at four reasons you might want to consider betting futures, and three things you need to remember if you do so:
When You Might Want To Bet Futures
When you have a strong feeling on a longshot – The number that always sticks out in my mind is the 1999 Super Bowl. The Rams were convincing winners that season, but before the year started and before we really knew who Kurt Warner was you could have bet on them at 200/1. The Saints paid off at pretty big futures prices as well. Teams that are at big odds in the futures are usually up there for a good reason, but if you have a strong feeling that a team is way undervalued, and you can justify your opinion with sound logic, then a future bet could be a way to lock in some value.
To get ahead of a potential big move – If you believe, for example, that Jay-Z is going to be able to convince his buddy LeBron James to join the Nets this summer as a free agent then you might want to jump on Nets’ futures now because the price will be a heck of a lot higher than it will be if you’re right and LeBron moves to Newark.
To kickstart your thinking for the season – I’ve talked to a few guys who like to study futures odds as a way to start their preparations for the upcoming season. The odds give them a basic indication of what oddsmakers think of the coming season, and by doing their own research they can find the situations where they agree with the oddsmakers, and those where they differ significantly. The areas where they differ need to be researched more, but they could represent a nice value.
For fun – There’s nothing wrong with putting a few bucks down to give yourself a rooting interest for the season, or to back your favorite boyhood squad. If you are doing this with a significant portion of your bankroll then you might be an idiot, but if the amounts are small then fun is as good a reason as any.
Things To Remember When Betting Futures
The risk is massive and almost impossible to calculate – Let’s say you are going to bet on NFL futures right now. You need to factor in several things that you can’t really know about with any certainty – who is going to start in any open positions, how are the rookies and the free agents going to fit in, how are any new coaches going to work out, how are the teams your team is playing looking, who is going to get hurt on your team and for how long, and on and on and on and on. Any amount of uncertainty increases the risk on a bet, and therefore increases the amount of return you require to compensate for that risk. Because of the complexity of risk assessment it is incredibly easy to overestimate your edge in futures bets.
Money is tied up for a long time – When you make a futures bet you commit your money until the bet is resolved – often weeks or months. If that money were in your bankroll you could bet it several times over, and as long as you are a long term winning bettor you would have an expectation to produce profit with those bets. Since the money is tied up, though, it is exposed to risk while not earning any return. That means that there is an opportunity cost involved in future bets – you need to consider not just the return on the bet you are making, but also the lost potential return from the bets you could make if you weren’t invested in the futures bet. This opportunity cost means that you need to have an even higher payoff on your futures bet to make it worthwhile.
Shop around – The market for futures isn’t as fluid as it is for specific games and other popular short term events, so it is easy to find futures prices at different sports books that differ dramatically. If you have convinced yourself that you want to make a futures bet then you might as well make one that offers the best possible return.