Recently, Vegas announced its opening odds for the 2011 Super Bowl champs.
The Colts are the best bet at 13/2, while the Saints are at 10/1. Despite an early exit from the postseason, Vegas has the Eagles at 16/1, ninth-best in the NFL.
I was perplexed by the business of creating odds for teams before free agency, so I decided to contact MGM Mirage Sportsbook director Jay Rood, who was nice enough to explain how oddsmakers go about their business. He also offered his take on how the Eagles will fare next season.
Q: When generating a line such as a point spread, what factors do you take into account? How much do you use statistical data vs. intangibles/emotional factors?
Jay Rood: Statistics determine the point spread, and intangibles and an overall business model are the influence as to which way we shade the number.
Q: Your goal is to create lines (spread, money line, over-under, etc.) that split bettors evenly, correct? How do you know how much to change your odds if the betting is uneven?
Jay Rood: Correct. However, we don’t know usually until they start betting the other side. But, you must always be mindful that every line move exposes us to a risk by creating a potential "middle."
Q: How is the profit for the house, or those who accept the bets, determined?
Jay Rood: The THEORETICAL profit is built into the line (laying 11 to win 10 (-110)), and the risk management is what my management team and I control. We of course try to put the company in the best possible position to profit.
Q: Do you ever find that certain teams are irrationally perceived and gambled on such that their lines are skewed to reflect this emotional favoritism (for example, the Cowboys)? Would a rational gambler be best served by trying to find the teams whose lines are most skewed by emotion?
Jay Rood: This does happen but not to the extent you would think. You have to remember that the professional gambler looks for that exact scenario often times and will bring any imbalance in our number back to the true value.
Q: Over the past decade (2000-2009), which sporting events were some of the biggest windfalls and worst hits for the industry?
Jay Rood: One of the worst scenarios was the NY Giants victory over the Patriots (Super Bowl XLII). When there is an imbalance of power in pro football, such as when five or six really good teams continue to cover week after week, it's always a challenge because we have to try to minimize losses on parlays involving those few teams. Windfalls are much less frequent, and I would say that from our (MGM Mirage) perspective, we generally do well on big fight nights (Pacquiao or Mayweather more recently) simply due to all of the gaming and non-gaming revenue that those events generate.
Q: Have you seen a decline in sports gambling during the current recession? How do you think the economic climate affects your industry?
Jay Rood: There was indeed a slight decline in the volume last year, but we're making a small turnaround currently and are hoping that it will continue for all involved.
Q: I read that the line for the Colts-Saints Super Bowl shifted 1.5 points or so in the Colts' favor in the weeks leading up to the game, meaning more people than expected were betting on the Colts to cover the spread. As a result, did you profit from the Saints' Super Bowl victory?
Jay Rood: We were able to make a profit that was within our target range while working all of our scenarios to a level with which we felt comfortable.
Q: Vegas recently released their lines for Super Bowl winners in 2011. How do you generate lines on events like this before any of the offseason team personnel changes have occurred?
Jay Rood: In pro football, it is a matter of knowing that improvement is a slow process and that many of the teams will fall close to the previous years' results. However, there are always exceptions like Arizona losing their starting QB (Kurt Warner), which now throws a wrinkle into the mix because that has a significant impact on the entire NFC West and could affect their ability to make the playoffs.
Q: The Colts have the best odds to win the Super Bowl next year at 13/2. However, the Saints sit behind the Colts, Chargers, and are tied with the Patriots at 10/1 despite just beating the Colts in the Super Bowl. What's the rationale?
Jay Rood: Free agency (17 or so players) and the popularity of the other teams ahead of them have definitely affected the Saints' odds. It is always difficult to predict what teams will pick up what players, but knowing the major players are sticking around helps us set the odds initially.
Q: The Eagles are currently 16/1 to win the Super Bowl, ninth-best of any NFL team. What factors place them in that position, ahead of teams like the Baltimore Ravens and New York Jets, who advanced further in the playoffs?
Jay Rood: Experience vs. youth, primarily at the QB position, is what determines this scenario. The Eagles have been a very steady team over the years and have proved that they are capable of being in the playoffs even in years they've faced challenges.
Q: If the Eagles traded Donovan McNabb and named Kevin Kolb their starting QB, how do you think that would affect their odds?
Jay Rood:They would float up to about 20-1 and would be closely watched in their first few games of the season to see how Kolb adjusts as a starter.
Q: Currently, the NFL is heading towards an uncapped year in 2010. How much are your current odds based on the assumption that 2010 will be uncapped? Assuming the improbable happens and the Collective Bargaining Agreement and salary cap are renewed in the next month, how would that affect your odds for teams to win the 2011 Super Bowl?
Jay Rood: Only player movement will cause the odds to adjust.
Q: If you had to choose now, who would you pick to win the Super Bowl next year? How would you predict the Eagles' season ends?
Jay Rood: Next year I could see the Ravens and the Packers having good years barring any big injuries. The Eagles will have another solid year and will be in the mix for the division right to the end as they usually are.
Q: Last question. Do you believe in jinxes?
Jay Rood: No. I do not believe in jinxes.
There you have it. Contrary to what you might hear from some Eagles fans, replacing McNabb with Kolb gives the Birds worse odds of winning a Super Bowl next year.
Ben Singer is a graduate of Brown University and an intern at Philly.com Sports. You can read his take on the "Contract year phenomenon" on footballoutsiders.com.