Sports Betting 101: What is a Power Rating and How to Create Power Ratings

April 17, 2020 10:12 PM

Power Ratings are numerical values assigned to each team in each sport, with the best teams at the top and worst teams at the bottom. It is a way to rank and rate all of the different teams based on their overall strength and then compare each team to one another. Power Ratings are subjective and professional bettors can have differing opinions. They also use different formulas and styles, with old school pros leaning more on "feel" and the eye test while new school bettors lean more heavily on data, analytics and and advanced algorithms. 

No matter the style, the thought process is the same. The goal is to have a starting point to go off of and then constantly adjust the ratings based on how each team is performing throughout the season. There are typically bigger adjustments at the start of every season, then fewer adjustments as the season progresses.

Pros will lean heavily on specific statistical categories when setting their power ratings. In football, this would include offensive vs defensive statistics, yards per play, turnover differential, point differential (especially first half point differential), 3rd down conversion rate and more. Power ratings also take into account coaching, positional rankings, depth and of course, the most important player on the field, the quarterback. 

If you're new to power ratings, a good jumping off point would be to lean on the most respected power rating systems already out there. This includes Jeff Sagarin in college football and Ken Pomeroy for College Basketball. A good sport to start with is the NFL because it's the most popular sport and there are only 32 teams, which means there is so much information and coverage to lean on.

If you're looking to create your own NFL power ratings, a good launching pad is just ranking the teams from 1 to 32 in terms of win totals. For example, the Chiefs have the highest win total of any team this upcoming season at 11.5. As a result, Kansas City would be the #1 team in the power ratings. The Jaguars have the lowest win total of any team at 5, which means they would be ranked last at 32 overall. 

Power ratings are especially important when it comes to college sports because there are over 130 different teams to rank and rate. Typically the top 30 and bottom 30 will be the easiest, but the middle 70 can be tougher to judge. 

Many sharp bettors will set power ratings where the best and top teams in the country would be a 100, with the worst teams around 50. For example, in college football Clemson might be a 98 while Alabama and LSU are a 97 and 96. Meanwhile, the worst team in the nation, Massachusetts, might be a 45. 

Once the power ratings have been developed, pros will then compare any two teams, make adjustments and come up with a number of what the spread should be. In other words, the power ratings help bettors set their own lines. 

For example, let's say Clemson is playing Michigan. One sharp bettors has Clemson's power rating at 98 while Michigan is 90. Clemson is also at home, which typically means you would add 3-points for home field advantage. Plus there are some injuries to Michigan and Clemson has a specific edge in terms of defensive line vs offensive line. As a result, the spread would be Clemson -8 to start (98 vs 90), then maybe it would be tweaked up to Clemson -12 as a result of home field and adjustments. Power ratings aren't the end all, be all for pro bettors but they are a huge piece of the puzzle and a great starting off point in terms of handicapping any matchup.

Once the oddsmakers release a line, professional bettors will consult their own numbers and look for actionable discrepancies. If the oddsmakers release a line that is far off from the line that pros think it should be, professional bettors will bet the game immediately once the lines are available. For example, in the hypothetical Clemson vs Michigan game mentioned above, a professional bettor might have their power ratings showing Clemson as a 12-point favorite. 

Let's say the oddsmakers open Clemson as a 10-point favorite. Pros would immediately bet Clemson -10 as soon as the odds are released because they have the game pegged at 12. As a result, they see an edge on Clemson of 2 points, which means it's a smart bet to jump on. On the flip side, maybe the oddsmakers open Clemson as a 14-point favorite. Since the pros have the game pegged at 12-points, they would instead jump on Michigan 14 because they are predicting a 12-point game, which means getting 14 points with the Wolverines would constitute a smart bet. 

A common phrase to describe pro bettors is that they bet numbers, not teams. They view betting through the lens of value. If value is there, they get down. If it isn't there, they lay off. 

At their core, professional bettors are mathematicians at heart. Their No. 1 goal isn't just to pick the right side, but to also get the best possible odds on a game. While a public bettor might only bet through one sportsbook, professional bettors bet through multiple sportsbooks, up to a dozen or more. This is so that they have access to a wide range of different lines and can shop for the best line. This is also referred to as having multiple "outs." 

The best way to ensure you are capitalizing on the market and getting the best number is to have access to a live odds page. A live odds page displays every single game on the board, along with all the different lines from various sportsbooks. Whether you are a pro bettor, a beginning or somewhere in between, a live odds page is critical to monitoring the market and shopping for the best line. 

In the end, creating your own power ratings might feel like a daunting task. But that shouldn't stop you from giving it a shot. In doing so, you will find yourself studying the teams in much greater depth, which will pay dividends down the road when you start handicapping specific matchups. Over the years, if you stick with it, your power ratings will get better and better with more experience.

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