Odds That Tiger Wins A Major In 2011

Will Tiger win a major in 2011? The smart money seems to say no. Below is the average of the money lines for several online sports bookie sites:

No Major Wins For Tiger: -166
One Major Win: +151
Two Major Wins: +667
Three Major Wins: +2430
Four Major Wins: +4700

The lines are based on a $100 bet. The negative number indicates that you’d have to bet $166 to win $100. That’s because “no majors” is the most anticipated outcome. On the other hand, a $100 bet on one major for Tiger in 2011 would earn you $151. If you bet on Tiger to win the Grand Slam, a bet of $100 would pay out $4,700.

Betting lines are designed to equalize the bets that a bookie collects. If a bookie gives 3 points, it doesn’t mean that he thinks a team will win by 3. It means that giving one team three points is necessary to encourage people to bet equally on both teams. In the case above, book makers need to offer +4700 to encourage people to bet on the Grand Slam. The betting line thus changes as money is placed on the various bets. A -166 on No Majors means that a high percentage of the betters think that Tiger won’t’ win a Major this year.

If all the “action” on a bet was on No Majors, and Tiger failed to come through, then the bookie would be out an enormous sum. To make a profit, he has to spread the money evenly. Theoretically, the losses will cover the wins, and the bookie makes money on the vigorish.

As I’ve said before, what makes these numbers interesting to me is that they represent a crowd-sourced information source. The numbers for online betting sites represent the best information held by tens of thousands (millions, perhaps) of bettors, none of whom have total information, but all of whom have partial. The sum of all those partial bits of information, however, can produce a result that’s better than that chosen by an “expert.”  (For more on this, I recommend The Wisdom of Crowds).