Sports Betting 101: What is Contrarian Betting

April 9, 2020 11:00 AM

To make sports betting a successful and sustainable endeavor, you need to pick a strategy and stick with it. If you just chase what's hot, bet against whatever is cold and don't have a solid and consistent overarching philosophy or plan, you might as well be flipping a coin. You are blowing in the wind, rudderless in a sea of unpredictability. You are also constantly playing catch up and betting in a reactionary manner, not a predictive fashion. Without a smart blueprint or plan of attack, you will never see the results you are hoping for. 

There are many different betting philosophies, but one of the best ways to win over the long haul is to embrace contrarian betting. 

Merriam-Webster dictionary describes a contrarian as "a person who takes a contrary position or attitude." In other words, if everyone else is doing, saying or thinking one thing, a contrarians will do the opposite. Contrarians think differently than the masses. They challenge pre-conceived notions and reject conventional wisdom. They refuse to conform and follow the crowd. Contrarians take unpopular opinions and aren't afraid to buck public sentiment. 

In the betting world, being a contrarian means betting against the average Joes who pick games based on gut instinct, bias and rarely win. Think of it this way: if you walk into a bar and see a row of drunk guys watching a game, you want to be on the opposite side of whoever they are rooting for. 

Some might say being a contrarian is just blindly going against what everyone else is doing. But in betting, there is a method to the madness. By going contrarian, bettors can extract additional value by capitalizing on public bias, taking advantage of shaded and inflated lines and getting better numbers in the form of additional points or sweetened payouts. Best of all, contrarian bettors place themselves on the side of the house. And in the end, the house always wins.

Contrarian betting, also known as betting against the public, fading the public or simply "going contrarian," is a sound betting strategy for one simple reason: more often than not, the public loses. How do we know this? Because if Average Joes were successful, they would all quit their day jobs and become full-time sports bettors. But they don't. Year after year, Vegas and the sportsbooks make unfathomable amounts of money. And the vast majority of the profits come directly from the pockets of Average Joes. 

As a result, the unpopular team getting the minority of bets provides much more value than the popular team getting the majority of bets. 

With that being said, it's a misconception that the public never wins. Make no mistake about it, they do win from time to time. Betting goes in cycles, with a series of ups and downs. There will be days, weeks, or even months where public bettors do well and turn a profit. There are NFL Sundays when the popular favorites sweep the board and cover nearly every game. However, over the course of the long haul, Average Joe bettors end up losing in the end. This is why you want to bet against them, not with them. 

In the dog-eat-dog world of Wall Street, contrarian investors are known to buy stock when everyone else is selling and sell stock when everyone else is buying. They believe that anytime collective narrative takes hold and public opinion sways heavily in one direction or the other, it leads to the overvaluing or undervaluing of a stock. This creates market inefficiencies that contrarian investors are then able to exploit. 

Warren Buffett is arguably the most successful contrarian investor of all time. He defined contrarian investing in these terms: "two super contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

Before delving deeper into why betting against the public is a smart strategy, we first must define who the public is. 

Public bettors, also known as simply "the public," are hobbyists and fans at their core. They bet largely for fun and view betting as a form of entertainment. By and large, the public ignores betting analytics and data. They might spend 5 minutes or less deciding who to bet on. Instead of analyzing matchups, dissecting line movement and studying historical data, they bet almost solely based on gut instinct and emotion. They bet with their heart, not their head. They love betting on their favorite teams and never against them. In the betting community, public bettors are popularly referred to as Average Joes, novice bettors, casual bettors or recreational bettors. Nearly all public bettors have day jobs and bet on the side when return home after work. They love betting on Saturdays and Sundays, especially, which has earned them the nickname "weekend warriors." 

Although public bettors bet relatively small amounts on games, typically $5, $10, $20 or $50 bucks a game, they make up the overwhelming majority of the sports betting market as a whole. 

Because public bettors bet based on bias, emotion and gut instinct, this means they gravitate toward certain teams and specific bet types: most notably favors, home teams and overs. 

The public loves betting on favorites because it's human nature to want to root for winners. Think about it: if an Average Joes is going to put his hard-earned money down on a game, also known gas "getting down," he wants to bet on the "better" team. They have the superior players, betting coaching and the sportsbooks are telling you based on the line that they are expected to win the game. It's much easier to rationalize betting on a favorite and losing. After all, upsets happen and teams have bad nights. But a public bettor cannot stomach betting on an underdog and losing, because from the outset they were expected to lose. It turns into a catch-22 "I told you so you" dilemma that public bettors can't help but avoid. 

Public bettors are also biased toward home teams. They've attended home games in person and know how crazy and polarizing the atmosphere. They also watch games on TV and see home fans cheering on their beloved teams and booing and harassing the opposing team. They imagine how difficult it would be for opposing players to deal with such antagonism and scrutiny. On the flip side, they can also see what a benefit the love and support of the friendly home crowd can be, boosting the performance of the home players. Many players talk about "feeding off the energy" of the home fans. 

This leads to public bettors placing far too heavy emphasis on home field advantage. Simply put, they overvalue its affect on the game. They also fail to realize that, while home field advantage is real, the oddsmakers account for this and build it into the line. 

Casual bettors will almost always take a team playing in front of their supportive home crowd over a team who has to travel on the road into a hostile environment. 

Just as the public loves betting favorites and home teams, especially home favorites, they also have a psychological bias toward betting overs. If an Average Joe is betting a total, he wants to see a high-scoring, back-and-forth entertaining game with lots of action and lots of points, cashing this over ticket in the end. In a football game, it's fun to root for first downs, big plays and touchdowns, not long drives that fail to result in points, missed kicks, punts and field-position games. In basketball, casual bettors want to see dunks and three-pointers, not bricks, blocks and shot-clock violations. Baseball bettors want to sit down and watch a game with hits, base-runners and home runs, not strikeouts, double-plays and 1-2-3 innings. 

The public bettors' thought process and decision making process for picking games is the complete opposite of sharps, wiseguys and professional bettors. Average Joes select games based on criteria that isn't nearly as important as they think. This means almost always picking the team with the better won-loss record (or in college, the team with the higher ranking). 

Public bettors also put too much weight into recent performance. If a team looked great in their last game and is on a winning streak, public bettors will automatically want to bet on them the next game. Conversely, if a team looked terrible their last game and has lost several games in a row, casual bettors will want to bet against the. This is called recency bias.

The public also loves betting games based on players. If one team has more star players or All-Stars than the other, they will bet that team no questions asked. They are also biased toward teams with rich histories and successful, championship winning franchises. Public bettors also lean on whichever team has the more famous head coach. They are also susceptible toward media bias and fall in love with teams that get a lot of media attention and hype. If a team is featured on sports shows all day, is on the cover of every magazine and talked about consistently on the radio, TV the internet, a public bettor will be swayed to bet on them. 

Public bettors have easily manipulated memories. if they bet on a team and that team wins or covers for them, winning them money, they will continue to bet on that team regardless of the specific matchup, line movement or head-to-head circumstances. Conversely, if they bet on a team and that that team loses, fails to cover and costs them money, they will never want to bet on that team against. In fact, they will look to bet against them or "fade" them simply out of spite. 

In the end, all of these biases meld together to form a herd mentality, known as public betting. By going against the prevailing public beliefs and opinions, contrarian bettors can exploit these biases and increase their chances of winning by capitalizing on market inefficiencies. 

 

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