This is going to be fun!? Let’s break down what we’re doing here.
Here’s an example of the chart:
First up is the name of the two teams:
Singularity vs pro100, with me so far?
Next up is the freshest line I can grab. As you know the lines like to move based on the money coming in. In this case, Singularity is +150 and pro100 is -200. If you’re not familiar with Moneylines it’s telling us pro100 is the favorite and you’d have to put up $200 to win $100, of you’d win $50 if you put up $100.
With my dying breath I’ll keep shouting about how important Implied Probability is to a gambler. If you bet on a team that is -200 they must win 66.67% of the time or you can never hope to make a profit. So we lay it out for each side.
I’m treating e-sports exactly like I’d treat a regular sports team. My assumption here is you’re going to win if you inflict more damage on to the opposing team than they impose on you. So I’ve weighted their stats and it spits out a prediction of win probability for both sides. In this case, with a Degen Diff of 50.14% pro100 should win, but it is razor thin.
The potential downside with Degen Differential is that it loves underdogs, it really loves them. So the question with the Degen Diff is this: are the favorites vastly overvalued by the sports books or are am I under valuing them? More on this below.
Comparing the Implied Win Probability vs Degen Differential should you bet either side? In this case, we can’t bet pro100. If the Degen Diff is right and pro100 has a 50.14% chance to win we can’t back that side at all. However, there is some value on playing Singularity.
Flat betting is not the way to go, but Kelly Criterion is moving the needle so instead of saying which side to back we’ll display the bet size.
I’m kind of suspecting that the Degen Differential is probably overvaluing the underdogs and making matches closer than reality so here’s where I try and compensate for that. The Degen Modded adds more weight to the favorites to try and reflect that some teams are just plain better. Taking a lot of favorites is never a great idea and I suspect that Degen Modded won’t do that a whole hell of a lot even with the weights.
If the Degen Modded is closer to reality than the Degen Diff the Kelly Criterion should be perfect.
For those of you that don’t know what it is, The Kelly weights risk vs reward to determine how exposed you should be for each play. In this case, using the Degen Modded, we can’t bet either side.
For our purposes, I’m setting aside $100 bankroll and I’m using a very conservative Quarter Kelly. As our bankroll fluctuates up and down our risk will do the same.
With a bankroll this small and this tight there might be instances where we can’t even wager $1. If your book doesn’t let you wager such a small amount skip it.
There we go! We have a couple different methods we’re going to explore and we’ll see if we can find any value in CS:GO.