Since Mito Pereira’s meltdown in the PGA Championship at Southern Hills Country Club, there’s been a fascinating debate taking place in golf betting circles.
Hedge or no hedge?
Merriam-Webster defines a hedge as “protecting oneself from losing or failing by a counterbalancing action.” In sports betting speak, a hedge allows you to basically guarantee a profit thanks to an advantageous wager that was previously placed.
Professional bettor Rufus Peabody placed a $500 bet on Pereira to win his first golf major at 300-1 odds at Circa Sports in Las Vegas. The payout would’ve been $150,000, life-changing money for most of us. However, Peabody decided against a hedge for a couple reasons.
No. 1, he has the bankroll to not need to hedge and he hates making negative expected value (EV) wagers. He can also swallow big losses and handle the ups and downs that come with his extremely challenging career. No. 2, it was extremely unlikely he could get enough money down heading into Sunday. It’s no secret that most American sportsbooks don’t take large bets from winning players and Peabody would’ve needed to bet tens of thousands of dollars to make a hedge worth his while.
Earlier this week, Peabody explained his in-depth thoughts on hedging.
All that said, Peabody plays in a different air space than we do. It’s just the truth.
Odds are good if you’re reading this column, you don’t bet for a living and you didn’t have a $500 bet on a golfer at 300-1 odds, right? And while I do understand the in-depth analytics and positive EV calculus that Peabody lives by, the majority of bettors want to have a little fun and make a little money.
A “Chicken Dinner” listener reached out with a question about his $75 bet on Pereira at 150-1 odds and we discussed hedge possibilities for somebody holding an $11,000 payout in pocket.
After three rounds of golf, BetMGM was dealing the following prices to win the PGA Championship: Matt Fitzpatrick (+400), Will Zalatoris (+500), Cameron Young (+800), Abraham Ancer (+2500) and Justin Thomas (+3300). You could’ve literally picked whoever you wanted.
Hedge possibilities via BetMGM:
$75 Fitzpatrick to win $300
$75 Zalatoris to win $375
$75 Young to win $600
$75 Ancer to win $1,200
$75 Thomas to win $2,475
And if I can play Dr. Hindsight for a minute, a hedge on all five of those golfers would’ve cost you $375. That’s a good chunk of change, but now you have the top six golfers in the field and the only outcome you lose to is Fitzpatrick. I would almost never tell you to hedge five golfers after three rounds, but no hedge is created equal. And remember, this listener had a $75 bet to win over $11,000 on a golfer who had never sniffed a No. 1 finish at a major golf championship.
Results on five-way hedge:
Pereira wins: $10,875
Fitzpatrick wins: -$75
Young wins: $225
Ancer wins: $825
Thomas wins: $2,475
This “hedge five golfers” strategy would almost certainly get you laughed out of a room full of professional bettors, but who are they to tell you what to do with your money?
At the end of the day, it’s up to you.