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OT: Is Denver really the better Superbowl bet?

Posted By: leobueno
Date: Tuesday, 3 January 2012, at 9:59 p.m.

There are 12 teams left competing for the NFL championship (Superbowl of American Football). Ladbrokes lists the fractional odds of each team winning the SuperBowl (from Green Bay at 2.62 to Denver at 101).

http://sports.ladbrokes.com/en-gb/American-Football/NFLAmerican-Football/NFL-t210002490#

From the odds, we can calculate the implied win probability, 1/odds (e.g., Green Bay .38168). If you bet $1 on each team, you get the expected return shown on the right columm in the table below(Green Bay = $1.62 * .38168 = $0.618). This appers to show that the underdog Denver is a better bet, returning $0.99 than Green Bay's $.62.

Note that the cummulative odds exceed 1, so that if you bet $1 on all the teams, your return will be less than the $12 you bet. I think that's where the bookmaker makes its money.

I was under the impression that traditionally bettors tend to underbet the favorite and overbet the underdog. Yet, assuming that the relative win probabilities correlate to the odds, in this case it looks like the underdog is the better bet.

Where did I go wrong?

2.62 38.168% 1 1.62 0.618 Green Bay

4.50 22.222% 1 3.50 0.778

6.00 16.667% 1 5.00 0.833

8.00 12.500% 1 7.00 0.875

13.00 7.692% 1 12.00 0.923

15.00 6.667% 1 14.00 0.933

26.00 3.846% 1 25.00 0.962

41.00 2.439% 1 40.00 0.976

67.00 1.493% 1 66.00 0.985

67.00 1.493% 1 66.00 0.985

81.00 1.235% 1 80.00 0.988

101.00 0.990% 1 100.00 0.990 Denver

Total 115.411% 12 10.84589278

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