Podcast Summary: The Favorites - Death of the Underdog

Podcast Information:

• Title: The Favorites - Death of the Underdog
• Podcast: The Herd with Colin Cowherd
• Hosts: Chad Millman, Simon Hunter, and Evan Abrams
• Release Date: May 14, 2025
• Description: A deep dive into the evolving landscape of sports betting, focusing on the declining performance of underdogs and the implications for bettors.

Introduction

In the episode titled "The Favorites - Death of the Underdog," hosts Chad Millman and Simon Hunter are joined by Evan Abrams, the Director of Research and Media at the Action Network. The discussion centers around the changing dynamics of sports betting, particularly the diminishing returns of betting on underdogs in the NFL since the repeal of PASPA in 2018.

Key Discussion Points

1. Impact of PASPA Repeal on Sports Betting

• Chad Millman (00:38): Introduces the primary focus of the episode—how the repeal of PASPA has altered betting trends.
• Evan Abrams (10:32): Explains the three-fold impact:
  1. Legalization of Sports Betting: Beginning in late 2018, widespread legalization changed the betting landscape.
  2. Initial Boost for Underdogs: Early in the PASPA era, certain underdogs saw increased ATS (Against The Spread) win percentages.
  3. Recent Decline: Over the past two and a half years, favorites have begun covering larger spreads more consistently, reducing the ROI for traditional underdog strategies.

2. Decline in Underdog Performance

• Evan Abrams (15:16): Presents data showing that systems historically based on betting underdogs after bad losses have yielded negative ROI in the past two years:

  • System 1: Bad underdogs off a bad loss
    • Historical ROI (since 2003): +7%
    • Recent ROI (last two seasons): -10.3%
  • System 2: Fading the bounce back of bad teams against good teams off big losses
    • Historical ROI (since 2003): +6%
    • Recent ROI (last four seasons): -14.7%
  • System 3: Betting good teams off huge losses
    • Historical ROI (since 2003): +16%
    • Recent ROI (since 2020): +13.16%
    • Last Season ROI: -4%

• Chad Millman (16:43): Expresses alarm at the steep decline in returns, highlighting that these traditional betting strategies are no longer profitable.

3. Factors Contributing to the Decline

• Chad Millman (29:37): Suggests that the influx of professional bettors using advanced models has made it harder to find profitable edges.
• Simon Hunter (56:35): Attributes the changes to factors such as:
  • Fourth Down Strategies: Increased aggressiveness in fourth-down decisions influenced by mobile quarterbacks.
  • Kickoff Rule Changes: Shortened fields impacting game dynamics.
  • Advanced Analytics: Bookmakers are leveraging AI and sophisticated models to set more accurate lines.

4. Adjusting Betting Strategies

• Simon Hunter (37:41): Emphasizes the necessity to adapt betting models by considering quarterback performance, coaching strategies, and rule changes rather than relying solely on historical underdog performance.
• Evan Abrams (40:54): Highlights that even moneyline favorites have shown positive ROI in back-to-back years (2023 and 2024), a first in the dataset, indicating a shift in how favorites are performing relative to betting lines.

Notable Quotes

• Chad Millman (16:43):

  "That's fucking insane because that's like that is the A1 example that anybody who has done this for any length of time looks at. Give me the bad team coming off a bad loss. It's going to be a great discount on price."

• Simon Hunter (22:21):

  "We're in a really weird period here of, okay, favorites are doing really well. The public is obviously doing really well. The books are trying to go against it, but the books are spending an absurd amount of money right now trying to get ahead of AI models."

• Evan Abrams (25:53):

  "Since 2003, betting these spots has a positive ROI of just under 7% blanket. But last two seasons, 21, 24 and 1 ATS minus 10.3% ROI. It is the worst two year stretch that we've tracked in that span."

• Chad Millman (44:17):

  "Anxiety, it is the most powerful tool to improving honestly because if you use it properly then you're going to do the work you need to do to get yourself prepared and put yourself in a better position to succeed."

Insights and Conclusions

1. Erosion of Traditional Betting Edges: The repeal of PASPA has democratized sports betting, leading to an increase in sophisticated bettors using advanced analytics and AI models. This shift has made it harder for traditional strategies, especially those relying on underdogs, to remain profitable.

2. Bookmakers' Enhanced Pricing Strategies: With the influx of money and the rise of professional betting, bookmakers have become more adept at setting accurate lines, reducing the potential for bettors to find value in mispriced underdogs.

3. Rule Changes and Their Impact: Recent NFL rule changes, such as those affecting kickoffs and fourth-down strategies, have significantly altered game dynamics, impacting betting outcomes. These changes necessitate a reevaluation of existing betting models to account for new patterns in team performance.

4. Need for Adaptive Models: Bettors like Chad Millman and Simon Hunter acknowledge the necessity to continuously adapt and refine their betting models. Relying solely on historical data without considering recent shifts can lead to substantial losses.

5. Positive ROI for Favorites: Interestingly, favorites on the moneyline have shown positive ROI in consecutive years, suggesting that traditional perceptions of favorites being less profitable may be reversing.

6. Psychological Impact of Betting Trends: The hosts discuss the psychological challenges of adapting to these trends, emphasizing the importance of anxiety as a motivator to refine strategies rather than a source of paralysis.

Final Thoughts

"The Favorites - Death of the Underdog" serves as a critical examination of the current state of sports betting, highlighting the challenges faced by bettors in a landscape dominated by advanced analytics and changing game dynamics. The episode underscores the importance of adaptability and continuous learning for those looking to maintain profitability in an evolving market.

For bettors and enthusiasts alike, this discussion offers valuable insights into the necessity of reassessing traditional strategies and embracing a more nuanced approach to sports betting in the modern era.