Tiger Woods has played just two tournaments this year, shooting +13 and finishing 47th at the Masters, and withdrawing from the PGA Championship after three rounds that left him 12 over par.
Woods hasn’t finished in the top 30 of a PGA Tour event since before the pandemic, and yet, every online sportsbook has him between 60-to-1 and 80-to-1 odds to win this weekend’s British Open, suggesting that he is one of the 30 golfers with the best chances to win.
Similarly, before the Masters, Woods had 40-to-1 odds on DraftKings to don the green jacket despite not having played in 14 months. Even though golf betting experts pegged Woods’ true odds at close to 200-to-1, books adjusted their odds to align with the behavior of bettors who were throwing money on Tiger.
The British Open draws fewer casual bettors than the Masters. Although DraftKings bettors wagered more on Woods than any golfer as of Tuesday, he ranked just third on BetMGM and ninth on PointsBet. Still, that’s a lot of people placing a bet that experts agree is bad value.
Woods’ odds are an example of how futures bets, wagers decided by longer-term outcomes like an entire season or tournament as opposed to one game or round, are very unfavorable to customers. “It’s one of the best kept secrets, or lack thereof, in the industry,” gaming analyst Todd Fuhrman said. “The books will keep a much greater percentage of every futures bet placed than traditional sides or totals.”
The percentage Fuhrman is referring to is the “juice” or “vig,” essentially the average percentage of incoming wagers that the casino keeps as profit due to odds that are juiced up from the real-life chances of the outcomes. Take an over/under points total bet for an NFL game, for instance. The true odds of the score going over or under 40.5 may be 50/50, but bettors get -110 odds on both sides instead of even odds (that is, a winning $10 bet will pay $9.09 rather than $10), and the book’s vig is approximately 5%.
For futures markets, the vig is usually around 20%.
Logistically, there are several reasons why. First, a golf tournament, for example, has more than 100 potential outcomes on which the sportsbooks can juice up the odds, as opposed to two for a single football game.
In addition, sportsbooks aren’t offering a price on the inverse of any outcome (i.e. Tiger Woods not winning), which allows them to stray from the true odds in a way that they could not if they had to price both sides.
Beyond that, it simply doesn’t make sense for sportsbooks to offer true odds on longshots due to the liability created. “The downside of that one cataclysmic event where Leicester City happens to win the English Premier League far outweighs the upside of jacking up the odds. There are risk management operators who lose jobs over that,” Fuhrman said. “The incremental money that they’d get on [the Orlando Magic to win the NBA title] if they made those 5,000-to-1 or 50,000-to-1 just doesn’t outweigh the potential downside.”
Folks betting on the Magic to win the title, likely die-hard fans of the team, aren’t looking for true odds anyway. “The clients who are willing to bet [longshots] aren’t particularly price sensitive,” PointsBet sports trading manager Sam Garriock said. “Taking on a larger price [as a sportsbook] doesn’t really position yourself on the risk return curve as you would expect it to. You’re basically just taking on unnecessary risk.”
Over the course of a long season, sportsbooks might manage risk by adjusting their odds to dissuade bets on certain teams. In golf, however, outcomes are decided over four days, so there is less time to navigate liability, which could drive the vig even higher as operators play it safe.
Despite unfavorable math for the customer, there’s an undeniable appeal to betting futures. “It comes back to the age-old sports betting axiom which is that most people would rather put up a little bit of money to make a lot,” Fuhrman said. “[Futures] are kind of the sports betting equivalent of a lottery ticket.“
For oddsmakers, the behavioral factor is paramount—odds are always dictated by what people are willing to bet. This is particularly apparent in the case of Tiger Woods. Rather than determining a probability for an outcome in a vacuum and then adding a predetermined amount of vig, sportsbooks aim to maximize profit. “We will often take positions on particular teams [or players] for the purpose of us being very clearly the [best price on the market],” Garriock said. “It’s about finding the position relative to your competitors that’s going to drive action in the areas that you want the action to go to.”
More competition in the betting operator space recently, in addition to a better informed public, has actually made futures odds more friendly for bettors, despite still largely being a losing proposition. “Over the years, customers have gotten more sophisticated, there’s more market competition, and some books have gotten significantly better with their offerings, but if you’re talking about a weekly golf market, the books are still going to hold anywhere from 18 to 20%on the absolute low end,” Fuhrman said.
Although futures markets are complex and fun to analyze, the liabilities sportsbooks take on from them is usually in the same order of magnitude as just a single big NFL game. “It’s probably less than 1% of our entire handle, but that being said, you still rack up some very large liabilities,” Garriock said, “so for that reason it’s paid a lot of attention.”
