Our first purpose here is to establish who might be smarter—the small number of Las Vegas oddsmakers with advanced data science degrees who establish opening odds using very sophisticated algorithms where millions of dollars are at stake for the casinos they work for, or the thousands of gamblers, professionals and amateurs with skin in the game, who then wager their hard-earned money and, in the process, influence the closing odds.
For instance, on October 17, 2018, the Memphis Grizzlies played at the Indiana Pacers. The opening total from Las Vegas oddsmakers—that is, the estimated number of points to be scored by the Grizzlies and Pacers combined—was 209. Wagers were then placed on what is otherwise known as the over/under until the betting line closed. Money wagered on the over comes from gamblers who think the Grizzlies and Pacers will score more than 209 points; money wagered on the under comes from gamblers who think the two teams will combine for fewer than 209 points. It doesn’t matter who wins, who loses, or what the final margin is; all that matters is whether or not the combined point total is greater than or less than 209.