To Hedge Or Not To Hedge? For Chiefs Or 49ers Futures Ticket Holders, That Is The Question

"If you had an infinite bankroll, there would usually be no reason to hedge," one veteran gambler says of the risk-averse practice.
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In Sunday’s Super Bowl, neither team is a long shot. If you look hard enough, you might find the 49ers as high as +112 on the moneyline. That’s about the best you’ll do.

But there were opportunities at various points over the last several months to bet on either the 49ers or the Chiefs at longshot odds. At the nadir of the Chiefs’ midseason swoon, right around when Patrick Mahomes suffered a knee injury in the midst of a 1-3 stretch, Kansas City’s Super Bowl odds were as high as +1400. And before the season began, San Francisco’s title odds could be found at a peak of +4500.

So let’s say you were lucky and/or smart enough to bet one of those teams at a high return. What do you do now?

Suppose you bet $100 on the Niners at the optimal time. You now stand to get back $4,600 … or nothing. So should you hedge? Should you bet $500 on the Chiefs moneyline to lock in at least a small profit? Should you bet $2,500 on Kansas City and roughly even yourself out so that you no longer care which team wins?

The hedge bet is a form of insurance. It’s the peace-of-mind play. But if you ask serious bettors, they’ll all tell you it’s rarely the mathematically correct play.

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“I’m not really a hedger, for the simple reason that every bet you make has its own juice built in,” explains veteran gambler Blair Rodman, a World Series of Poker bracelet winner and poker strategy author who’s currently working on a book on sports betting. “I get that some people want to hedge because of bankroll considerations. But if you had an infinite bankroll, there would usually be no reason to hedge.”

“Anytime you’re thinking about hedging a bet, you’re talking about making a big — for you — bet on the other side, and you’re eating a big — for you — vig,” echoes Ed Miller, co-author of the critically acclaimed The Logic of Sports Betting. “People don’t think about it that way. They think, I’m locking in a winner. But that hedge bet is an independent bet. And every independent bet you make, there’s an EV associated with it. Chances are that whatever hedge bet you make, you’re going to be eating roughly the full hold on it, and that’s a lot.”

Astros, Blues, hedging in the news

The past eight months in sports betting have featured two major news stories centered around hedge betting — one in which a modestly bankrolled gambler refused to hedge, and one in which a comfortably bankrolled businessman did nothing but hedge.

In the spring, St. Louis Blues fan Scott Berry was holding a $100,000 ticket on his favorite hockey team to win the Stanley Cup. Despite myriad opportunities to sell the ticket or place a hefty hedge bet, he rode it out and collected the full payout when the Blues defeated the Bruins in seven games. Some thought Berry was being foolish. Others thought he was being smart. Either way, he was behaving like a true gambler.

The story of “Mattress Mack,” discussed in detail at the time by his betting handler Anthony Curtis on the Gamble On podcast, was very much the opposite. Houston-area businessman James McIngvale stood to lose a bundle on a rebate promotion at his furniture stores if the Astros won the World Series, so he bet eight figures at assorted sportsbooks on his (soon-to-be controversial) baseball team to balance out his position. While Mattress Mack got himself and his business valuable publicity, his hedge bets were technically a big loser in the end.

Rodman recalled a similar sports-bet-to-hedge-real-life-liability situation in the form of a ticket broker in New York who secured mass quantities of Yankees World Series tickets and hedged by betting against the Yanks on the road there.

Those are unique circumstances. When it comes to hedging a futures bet or a parlay, the math usually says not to do it. But the math doesn’t take into account intangibles.

“Hedging might be worth it for your state of mind,” Rodman acknowledges. “If you lose, and you’re the sort of person who might start chasing losses and get yourself into some kind of trouble, there’s value in hedging. It always feels good to put some money in your account.

“I don’t do it very often, but it’s a personal decision for people. Whatever makes you feel better at the end of the day.”

Gamblers don’t hedge

If you’re playing blackjack and the dealer is showing an ace, you can take insurance, but it’s always a negative-EV option. It’s awfully counter-intuitive to sit at the table looking to gamble and then sacrifice value to avoid gambling. But people do it all the time.

In a sense, hedging your sports bets is antithetical to the spirit of gambling.

“I’ve always thought there was an irony to hedging,” Miller says. “You’re paying for the privilege of action — that’s what sports betting is. You’re expecting to lose the hold, or close to it, on your bets. And for that price that you’re paying, you get action. You get fun, you get a sweat.

“I just think it’s funny,” he adds with a laugh, “that people buy too much action and they don’t want it anymore.”

What Miller means by “buying too much action” is that the bettor is putting himself in a position where the potential payout is substantial enough to affect his decision-making and could lead to his being overly conservative.

“Really, the time to address hedging is before you make the original bet,” Miller explains. “In most cases where people are thinking about hedging, the problem is that they’re betting more money than they mean to bet. They get to the end and they’re like, ‘Wow, I really don’t want to have $10,000 riding on the Super Bowl.’ Well, guess what — that was entirely predictable when you placed the bet. If you have $10,000 riding on whether the 49ers win the Super Bowl and you don’t want to, well, maybe you should have bet less on that 49ers future if you didn’t want to make a $5,000 bet on the Super Bowl.”

In-game betting changes the equation

Rodman is currently holding a 14/1 ticket on the 49ers and is weighing his options, but he says he’s “probably not going to hedge, because I don’t have any middle, really.” San Francisco is a small underdog in the Super Bowl, so if Rodman bet the Chiefs at -1½, he’d actually leave himself exposed to losing both bets if Kansas City wins the game by exactly 1 point.

But an opportunity might still present itself thanks to in-game betting.

“Live betting has made hedging much more attractive,” Rodman says. “I have the 49ers. Say they come out and score first. Now the Chiefs are getting +3 or +4 on the live line — well, there it is. There’s your middle. So, live betting is much more conducive to hedging, for me. It’s much more attractive in a lot of cases.”

As Miller warns, however, the vig tends to be even higher with in-game bets than with pre-game bets. Rodman might get that middle he wants, but he’s unlikely to find a fair price on it.

Hedging gets especially ugly if you’re in the position of considering doing it several games from the finish line.

“Let’s say you’ve got a 50/1 shot to win the Super Bowl that you bet before the season, and now they make it to the playoffs,” Rodman suggests. “Now what do you do? They’re probably going to be a pretty big ’dog in every game. And if you start laying the other side, laying the favored opponent at, say, 5/1, well, if your team gets through, by the time they get to the Super Bowl you’re not going to have any equity left.”

Hedging takes many forms

With sites like Prop Swap or the “cash out” option now offered by many online sportsbooks, there are more methods than ever for locking in a profit. But if you’ve ever taken a close look at the offers on Prop Swap or the dollar amounts the house proposes for you to cash out, you know that you’re almost always paying an unfavorable rake in order to sell your bet.

Hedging on the final leg of a multi-team teaser sometimes makes sense because, having moved the spread several points in order to make the teaser bet, you’ll have an opportunity to “middle” and win both bets.

But the same doesn’t hold true for a parlay.

“I know you hate to go that far on a parlay and get nothing,” Rodman says. “But mathematically, it doesn’t make sense to hedge the last leg of the parlay unless you like the other side — which you probably don’t, considering you just bet the other side in the parlay.”

Essentially, for the hedge to make sense, the situation needs to have changed. There needs to have been an injury or some other significant news that causes you to feel like you were once on the right side of the game but aren’t anymore.

Still, if you can’t take the sweat, a hedge might hold enough emotional value to make up for the mathematical sacrifice.

“If the bet is more gamble than you want, by all means, go hedge it,” Miller says. “Just realize that the more you hedge, the more you’re costing yourself. But do it if you have to — and try not to put yourself in that position again next time.”

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