Call it “Overreaction 2018.” Betting markets installed the Lakers as second-favorite in the NBA’s Western Conference after the franchise signed LeBron James to…
Call it “Overreaction 2018.”
Betting markets installed the Lakers as second-favorite in the NBA’s Western Conference after the franchise signed LeBron James to a four-year, $154 million contract Sunday evening.
As the dust settled the next morning, here were the odds from William Hill:
TEAM ODDS WIN EQ.
Golden State 11/10 48%
LA Lakers 7/2 22%
Boston 9/2 18%
Houston 11/2 15%
Philadelphia 17/2 11%
Note that sports books build a universe larger than 100 percent to create a house edge. That’s why the first three teams listed add up to 88 percent by themselves, and the five top favorites add up to 114 percent.
Not quite as extreme as “The Decision” prior to the 2010-11 season. Then, pundits thought the Heat would make a run at 70 wins with James, Dwyane Wade, and Chris Bosh (turned out to be 58 wins, and a championship-round loss to the Dallas Mavericks). But, still an over-the-top reaction considering:
From an odds-making perspective, the line can be defended on the grounds that sports books in Nevada typically have additional risk because of the proximity to Los Angeles sports fans. Books don’t want the exposure associated with one-sided action. There’s also an assumption that at least one other shoe (from the foot of Kawhi Leonard) will drop soon. Might as well get ahead of the news to come. (Plus, if bettors want to pay $10 for a gallon of milk, why get in their way?)
From a betting perspective, there’s just no value here. Golden State is a juggernaut of historical proportions. The Warriors didn’t get any worse. Barring surprising news out of Houston, the Rockets won’t get any worse either. LA has to win the West to even have a shot at winning the NBA Finals.
And, betting on LeBron James is often a money loser in the markets because the superstar of our era generates betting interest that warps pricing. Here are the regular season ATS records of his teams since “The Decision.”
Records against the spread
2010-11: 40-41-1 with Miami
2011-12: 32-34 with Miami (shortened season)
2012-13: 46-36 with Miami
2013-14: 37-43-2 with Miami
2014-15: 39-43 with Cleveland
2015-16: 37-42-3 with Cleveland
2016-17: 36-43-3 with Cleveland
2017-18: 32-49-1 with Cleveland
One winning season versus the market. And, a reality that those records hide the dramatic effect of the market’s 10 percent vigorish on lost bets. A record of 40-41 against the spread equals 40 and 45.1 for your wallet. Since that 46-36 record in 2012-13 (which is 46 and 39.6 with vig), LeBron’s teams have dropped 10.3,8.3,9.2,11.3, and 21.9 betting units in the regular season.
If you’re betting on the Lakers to make a championship run, you’re getting nailed with proximity bias wherever you live because of Nevada’s influence on global markets, and you’re paying a premium on a superstar whose game-to-game impact has been overpriced for years because the public loves betting on him.
LeBron on the Lakers is a great story. It probably won’t represent a great investment for bettors. Let’s see how the dust settles with future personnel moves. Odds are, smart investors will be looking for reasons to fade the Lakers in the 2018-19 season.
