Vegas Bargain Rating
I have been studying Vegas implied odds in daily fantasy golf for a while now. What I’ve found is that, because of the correlation between DraftKings salaries and Vegas implied odds to win a tournament, using an extreme stars-and-scrubs lineup approach is optimal for Golf DFS contests.
Because the correlation between Vegas odds and DK salaries is very strong, we can predict what a player’s salary should be based solely on Vegas odds. Measuring the difference between that number and a player’s actual salary, we can find inefficiencies in pricing and create essentially a ‘Vegas Bargain Rating’ (VBR), which can show us the discount or premium available on any given golfer’s Upside.
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The 2016 BMW International Open
This is only the second week I’ve published VBRs for a Euro Tour event, so I still can’t say how correlated Vegas odds and DraftKings pricing will usually be for these events. What I can say, though, is that the overall correlation at the BMW International Open is relatively low.
For reference, the R^2 value is typically around .78 to .80. We’re actually seeing two outliers this week in our PGA and Euro events: The PGA correlation is nearly .90, the highest it has been since I’ve started tracking it, whereas the Euro correlation is .74, lower than usual. What does all of this mean?
In general, the pricing variance that isn’t explained by Vegas is explained primarily by some combination of recent form, course history, and public opinion. My theory is that for a course with less history, like Congressional (where the PGA is playing this week), we will see DraftKings rely on Vegas a little more for its pricing. For a smaller tournament like the BMW International Open, where we have limited course history and little public opinion, perhaps we just have more room for error.
This is not to say that Vegas isn’t important. The correlation is still incredibly high — higher than just about anything you’ll see in MLB DFS, in fact. However, the nuances are important because DFS tournaments are hard to win. When you have a 200,000-person tournament (as we did for the U.S. Open), the room for error is minuscule.
The 2016 BMW International Open VBRs
Getting to the specific VBR numbers for this week, we have three golfers who tower above the rest: Sergio Garcia, Henrik Stenson, and Danny Willett. Compared to the rest of the field and their Vegas odds to win the tournament, those three golfers are incredibly underpriced. Our ‘predicted salary’ based on Vegas odds puts those three in the $14,000 to $15,000 range relative to the field. Stars-and-scrubs seems like the way to go.
However, the issue with pricing — as highlighted here by VBR — is that the next tier of golfers (in the $8,000 to $9,000 range) are very overpriced relative to their odds. That wouldn’t be an issue if the top three were priced so that we could roster all three of them along with three minimum-salary guys. However, because of the salary cap, we can roster only two of those three. So what do we do with the four remaining spots: Go with a guy who is in the $8,000 to $9,000 range? Or balance out the roster?
Joost Luiten is the next best Vegas ‘value’ among the top golfers and he does allow you to fit Stenson, Garcia, and three minimum-range guys. That is the uber stars-and-scrubs option, which is the riskiest but probably also the most unique in terms of lineup overlap.
Part of the benefit of going super stars-and-scrubs is that you roster not only top golfers but also guys on the other end of the spectrum who are barely owned. Of course, these ignored golfers are less talented and thus very risky. However, we know that golf is volatile and this strategy is one way to embrace volatility in tournaments without simply fading the chalk.
Good luck this week. Here are the VBRs for the BMW International Open:
