A Complete Guide to Futures Bets
Futures bets have a lot of positives and negatives that sports bettors either love or hate.
The key to deciding whether or not making a futures bet is for you or not is first to understand what they are, how they work, how they’re paid out, and the pros and cons of making them.
If you’re impatient and want us to get to the information right away, we can go ahead and tell you that futures bets are probably not for you. The impatient or those that are not financially liquid may not be huge fans of these bets.
Let’s jump into the information and you’ll see exactly what we’re talking about.
By the end of this guide, you’ll know everything there is to know about futures bets, how to win with them, and whether or not they are for you.
What Is a Futures Bet?
A futures bet is any bet that the outcome will not be decided until the distant future. This doesn’t mean that you place a bet on a game that’s weeks away and suddenly it’s a futures bet. This is a bet that after the action closes, the bet will take an extended time frame to be decided.
This could be betting on the winner of the MLB World Series before the season starts or maybe the winner of the College Football Championship before the season starts or even the winner of a big tournament.
The key here is that the bet is not on the individual game or series, but is on the entire season leading up to the determination of the eventual champion. These bets typically stretch over weeks or months and are made up of lots of different games that need to be won in order for you to win your bet.
For example, let’s say you placed a futures bet on the Cowboys to win the Super Bowl. You would normally place this bet at the beginning of the season. In order to win your bet, the Cowboys would have to make the playoffs, make it to the Super Bowl, and then win that game.
Obviously, this is a challenge and tough to predict so far out.
Futures bets are typically made before the season, but a lot of sportsbooks will continue offering the bets as the season and playoffs continue. As a team starts to do better and the requirements to win become less, the payouts will also get lower.
Predicting that the Cowboys will win the Super Bowl before the season starts correctly will get you paid a lot more than picking them to win the Super Bowl at the beginning of the playoffs.
Here is an example:
Let’s take a look at the NFL and the common futures bets offered to make sure you fully understand every nuance about these bets.
First, sportsbooks will typically offer several different futures bet options on the NFL every year. These will usually include the following:
- The Winner of the Super Bowl
- The Winner of the AFC Championship
- The Winner of the NFC Championship
- The Winner of the AFC North
- The Winner of the AFC South
- The Winner of the AFC East
- The Winner of the AFC West
- The Winner of the NFC North
- The Winner of the NFC South
- The Winner of the NFC East
- The Winner of the NFC West
As you can see, there are a lot of different futures bets options with the NFL for you to choose from. This gives you a great bit of flexibility to profit from your predictions.
Maybe you aren’t sure who is going to win it all, but you’re convinced you know who will win the AFC South. Futures bets give you the ability to capitalize on this and make some money.
Logically, the further a team must go for you to win your bet, the better the payout is going to be.
For example, at the beginning of the 2017 NFL season, here were the odds for the Oakland Raiders to win at each step of the season.
- To Win the Super Bowl – 12/1
- To Win the AFC Championship – 7/1
- To Win the AFC West – 31/20
To further show this point, here’s the profit you would receive for each bet if you wagered $100.
|To Win the Super Bowl||12/1||$100||$1200|
|To Win the AFC Championship||7/1||$100||$700|
|To Win the AFC West||31/20||$100||$155|
As you can see, a Raiders Super Bowl win would get you a profit of $1200, almost double what you would get for correctly predicting they win the AFC Championship.
Converting Futures Bets to Implied Probabilities
Sometimes it can be tricky to decide if you are getting the potential payout you are happy with at the beginning of the season. One of the best tricks to put things in a “more digestible” format is to convert the potential payouts into implied probabilities.
In simplest terms, an implied probability is how likely something is to happen in percentage form.
- The Raiders are 31/20 to win the AFC West in 2017.
- The Raiders have a 39.22% chance to win the AFC West in 2017 according to these odds.
Unless you’re a math wizard, it’s probably a lot easier for you to see things in a percentage format. We recommend breaking all of the potential payouts down into implied probabilities before you make a big futures bet.
Let’s do this for the four teams in the AFC West using the 2017 pre-season odds.
- Oakland Raiders – 31/20
- Kansas City Chiefs – 47/20
- Denver Broncos – 17/5
- Los Angeles Chargers – 4/1
You can use an implied probability converter to calculate these out, or you can do the math by hand. We prefer the calculator, but for fun, we will walk you through the process. We prefer the calculator so much that we built our own.
The implied probability of fractional odds equals the denominator divided by (the denominator + the numerator). Multiply this number by 100 to get the percentage. For those that don’t remember fractions, the top number is the numerator, and the bottom number is the denominator.
- To calculate for the Oakland Raiders, we take 20/(20+31) = 20/51 = 0.39215 x 100 = 39.22%
- To calculate for the Kansas City Chiefs, we take 20/(20+47) = 20/67 = 0.2985 x 100 = 29.85%
- To calculate for the Denver Broncos, we take 5/(5+17) = 5/22 = 0.22727 x 100 = 22.73%
- To calculate for the Los Angeles Chargers, we take 1/(1+4) = 1/5 = 0.2 x 100 = 20.00%
|Kansas City Chiefs||47/20||29.85%|
|Los Angeles Chargers||4/1||20.00%|
Now, if you’re an overachiever and you’ve added up these probabilities, you’ve quickly become confused. You’ve found that they add up to 111.80%. This clearly “can’t be right” because it should only equal 100%.
Well, the difference here is the casino juice. The more likely something is to happen, the less the sportsbook is going to pay out on it. So, basically, the sportsbook has slightly overestimated the likelihood of each of these occurrences so they can pay slightly less than they actually should if it was a fair world where they made no money.
So, we need to take this one step further to find out the actual probabilities the sportsbook is saying for these teams to win the AFC West in 2017. To do this, we divide each implied probability by the total of all the probabilities added together, or 111.80%.
This will get us our “no vig probability” which just means the actual probability without the slight adjustments by the sportsbook to ensure they make money.
- To calculate for the Oakland Raiders, we take 39.22%/111.80% = 35.08%
- To calculate for the Kansas City Chiefs, we take 29.85%/111.80% = 26.70%
- To calculate for the Denver Broncos, we take 22.73%111.80% = 20.33%
- To calculate for the Los Angeles Chargers, we take 20.00%111.80% = 17.88%
|Team||Odds||Implied Probability||No Vig Probability|
|Kansas City Chiefs||47/20||29.85%||26.70%|
|Los Angeles Chargers||4/1||20.00%||17.88%|
These new probabilities add up to 100% (99.99% because we rounded a few of the numbers).
What Do We Do With These Numbers?
Have no fear, we didn’t just have you do a ton of math for no reason. First, you can use the implied probabilities to compare to what you think is going to happen in the season. If you think the Raiders have better than a 39.22% chance to win the AFC West, you should bet on them.
If you think that number sounds exactly right, there is no point in placing this bet as you will break-even in the long run. Basically, this sportsbook is paying you out as if there is a 39.22% chance of the Raiders winning.
If you think it’s MORE likely they will win, then you are getting paid at the higher and better “less likely” rate. Hopefully, we didn’t confuse you more, but we wanted to try and break this down a step further for people.
Let’s say that you do think that this sportsbook is spot on with their predictions. You can take the no vig probabilities and convert them back into odds and start line shopping for a sportsbook paying better than these probabilities. Yes, that was a mouthful, but let’s break it down.
Let’s say that you really think that the Raiders have a 35.08% chance to win the AFC West. If you were to bet at this sportsbook, you would lose money. The book is paying out as if the Raiders have a 39.22% chance of winning. Because the book says they are more likely to win, they are paying less for this bet.
- If you were to bet $100 at 31/20, you would get paid at moneyline odds of +155, or $155 in profit.
- If you were to bet $100 at what you actually think the odds are… (35.08% which converts to +185.06), you would receive $185.06 in profit.
Basically, based on how likely you think the Raiders are to win, you should be getting $185 in profit, but the sportsbook is only paying you $155. So what do you do with this? You can line shop.
Line shopping is when you look at several different sports books for a better line on the same bet. Different books don’t really care what is going on elsewhere and only care about having the same amount of money bet on both sides at their particular book. This leads to a lot of different odds at different sportsbooks.
If you found a sportsbook offering this bet at better than +185, you would bet it as you have found value.
If you think something is only 50% likely to happen, but the sportsbook is paying you as if it is 75% likely to happen, it’s a bad bet. You think it’s not very likely, but the sportsbook thinks it is and therefore doesn’t want to pay you much for picking it correctly.
If you think something is 80% likely to happen, but the sportsbook is paying you as if it is only 50% likely to happen, it’s a great bet. You think there is a really good chance you are going to win your bet, but the sportsbook thinks it’s unlikely and will be paying out extra to try and entice you to make that bet.
You most likely won’t be seeing percentage differences this big, but you will be able to find value. The tricky part is figuring out your system for calculating the percentage chance you think something is going to happen. Welcome to the fun of sports betting!
How Are Futures Bets Paid?
Thankfully we can take a break from all of the confusing math for at least a minute. Futures bets are paid out in a very simple manner. Whatever the odds are when you make your bet… that is what you will get paid for your wager.
If the odds are 7 to 1, you will be paid 7 to 1 if you win the bet. If the odds are +800, you will get paid out at +800 if you win the bet.
The one thing that is important to point out is that futures bets are never paid out until the final winner is determined. This means that you have to wait until the end of the regular season to cash in on your Divisional bet from our example above.
Even though a team might clinch the division, almost all sportsbooks will not pay you until the season is over.
The same goes for every other type of futures bet out there. The reason we are restating this is because we want you to start to be aware that whatever money you bet, you won’t see for weeks or months at a time.
While this isn’t a big deal if you’re winning big, it’s something you need to be aware of if you are betting a significant portion of your bankroll.
Futures Bet Tips and Strategies
We wanted to include a few of the more important concepts that you need to understand before you start making these bets. These concepts are important and can have a big impact on your end of the season bottom line.
Hedging your bets is by and far the most important aspect of futures bets that you need to be aware of.
To explain this concept, let’s start by looking at an example. At the beginning of the 2017 NFL Season, you place a $500 bet on the Jacksonville Jaguars to win the Super Bowl at odds of 80 to 1. We will neglect the fact that you are insane and move along.
Something magical happens, and the Jaguars make it to the Super Bowl against the Dallas Cowboys. If they win one more game, you will win $40,000 for your futures bet on the Jaguars.
There is a way to lock up some winnings though.
Let’s say the moneyline odds on the Super Bowl are the following:
- Jaguars +185
- Cowboys -200
You can place a bet on the Cowboys to guarantee a portion of your winnings. If you were to bet $20,000 on the Cowboys, this is what could happen.
- If the Cowboys win, you would win $10,000 for that bet and get $0 for your futures bet.
- If the Cowboys lose, you would win $40,000 for your futures bet, but lose $20,000 on your Cowboys bet.
If the Cowboys win, you make $10,000. If the Jaguars win, you make $20,000. No, it’s not $40,000, but it’s also not $0.
Hedging can also happen before the final game. You could bet some money on all the other three teams to win once they make it to the AFC and NFC Championship games. It does get a bit more confusing, and you will make less money, but you can still lock up a sizable chunk of change.
Don’t get greedy and end the season with $0. Know at which point you will be looking to hedge and be prepared for it. You will have to have that much cash to make the bet, but thankfully there is no real risk as you will win regardless of which team wins the game.
Betting Multiple Teams/Players
Don’t forget that you can bet multiple teams to win a complete season. If you bet $100 on three different teams that are 12 to 1, 10 to 1 and 8 to 1 to win, you are still going to profit if one of the three wins.
- If the first team wins, you will get paid $1200 minus your $300 initial bet which equals $900 in profit.
- If the second team wins, you will get paid $1000 minus your $300 initial bet which equals $700 in profit.
- If the third team wins, you will get paid $800 minus your $300 initial bet which equals $500 in profit.
This strategy is great if you have narrowed it down to two or three teams you think are going to win it all. You’re still in the game if one of your teams gets beat or knocked out of the season or competition.
Bet Mid Season
While most people place futures bets from day one, they are usually available throughout the entire season. The odds will adjust based on how the season is going and how the public is choosing to bet on the different teams.
This can create a lot of great opportunities when the betting public reacts way too aggressively to something.
Let’s say the favorite team to win the Super Bowl has their superstar quarterback break his leg. The betting public is going to start heavily betting other teams and moving away from supporting this team.
But let’s say you know that their backup is great and you think the rest of the team will rise to the occasion.
This is a great time to pick up a futures bet on that team at what will be a phenomenal price thanks to the ultra-sensitive betting public.
The Pros of Futures Bets
Potential for Big Profits
It doesn’t take long looking at the payouts for futures bets to realize that they are big and appealing. You can bet small amounts of money and get big payoffs if you’re able to predict the final outcome correctly. The only other spots that you’ll see this kind of odds are in individual bets for huge underdogs.
While the likelihood of each happening would be the same (12to 1 on an individual game is the same as 12 to 1 on a futures bet), they can seem much more attainable to most bettors.
Season Long of Fun and Entertainment
You can enjoy the crud out of these bets for the entire season. The bet is still live throughout the season and the playoffs until your team or person is knocked out of contention.
If you bet $20 on a 20 to 1 futures bet, you will get to watch a ton of games that all matter with the potential payout of $400 at the end of the entire season and playoffs.
For a lot of people, futures bets are seen as one of the most cost effective forms of entertainment that exist in the sports betting realm.
The Cons of Futures Bets
The biggest con by far of futures bets is that you can’t touch your money for the entire season or duration of your bet.
If you bet a large portion of your bankroll, you’re going to be without that money for a long time and won’t be able to place other bets throughout the season unless you come up with some more cash or rob a bank (we are not advising you to rob a bank).
It’s no secret that picking the ultimate winner at the beginning of the season or a tournament is tough.
The problem is that so much can happen throughout the season that’s out of your control.
There can be injuries, suspensions, coaching changes, superstars that fizzle… there are so many different factors that can affect the outcome of the season.
While these bets are tough, they are not impossible, and a lot of people use them as part of profitable long-term winning strategies. You just need to be aware that they’re not as simple as picking the best team from day one.
Hedging is a big part of futures betting especially if you have a bigger bet or have bet on a huge underdog that is coming through.
Before we talk about the issue here, we do want to say this would be a great problem to have. You’re only going to be worrying about hedging if you have a ticket that’s worth a lot of potential money.
When you decide it’s time to hedge, you are going to have to place a bet or bets on the other teams to lock up your profits. You may need to be able to get your hands on a large amount of cash to properly hedge.
This obviously creates issues if you don’t have ready access to large amounts of cash.
Again, this shouldn’t be a deterrent not to place futures bets. If the problem arises, you will be able to figure something out.