Written by Miikka Paakkinen in the ScoreMetrics Lab
Wagering money on MMA fights isn’t nearly as popular as in the traditional major sports like football, basketball, baseball and ice hockey. And having a solid sports investment system in place for mixed martial arts is probably even more rare.
But the UFC has grown to become a global phenomenon and the sports investment market for fights is lively these days. This article covers the basics of where the public money flows to in UFC matchups and what smart investors should think about that.
We’ll also have a look at Conor McGregor’s odds history, and check out the odds for the upcoming UFC 247 event which will take place this Saturday (the 8th of February 2020) at Toyota Center in Houston.
As is the case with pretty much all sports gambling markets, the public likes to wager money on their favorites. This is even heightened in UFC fights where most of the action is on which fighter wins. For comparison, in other majors sports it is common that investments flow into the spread, the Over/Under and the moneyline.
One can put money down on individual round results, round count Over/Unders or the method of the result, but that’s pretty much it and the outright winner is by far the most popular wager in UFC matches.
So, we’ve established that most of the money in the market goes to the favorite fighters of people winning their matches. What does this mean for us as sports investors?
Well, in big fights with famous fighters it means that most of the money goes to the most famous fighter. This leads to the odds for the favorite to shrink while the underdog’s odds become more attractive, and this in turn leads to potential investment opportunities. So, look for matchups where the majority of the money goes one way and analyze whether the odds are in line with reality, and go for a contrarian approach if you find value.
This tendency for the money going to the more popular fighter can also lead to situations where the underdog of a matchup is maybe less popular the favorite but is actually the better athlete of the two.
One more thing to consider regarding where the money moves: in low profile matchups with fighters that are unknown to most fans, it might be a sign for a good move if a lot of money starts going one way, as that could be caused by the smart investors finding an edge.
Investing in the big ones
Conor McGregor is without a doubt one of the biggest draws in the history of the sport. “The Notorious” made a triumphant comeback to the octagon after a 15-month absence and knocked out Donald Cerrone in the first round earlier in January this year. Fans are eagerly waiting to hear who he’ll fight against next.
But how has McGregor fared as an investment? Let’s have a look at his fight and odds history:
|W||Donald Cerrone||UFC 246: McGregor vs Cerrone||-310||TKO (Punches)||1||0.40|
|L||Khabib Nurmagomedov||UFC 229: Khabib vs McGregor||130||Submission (Neck Crank)||4||3.03|
|L||Floyd Mayweather||Mayweather vs McGregor (Boxing)||265||TKO||10||1.05|
|W||Eddie Alvarez||UFC 205: McGregor vs Alvarez||-195||TKO (Punches)||2||3.04|
|W||Nate Diaz||UFC 202: Diaz vs McGregor II||-155||Decision (Majority)||5||5.00|
|L||Nate Diaz||UFC 196: McGregor vs Diaz||-400||Submission (RNC)||2||4.12|
|W||Jose Aldo||UFC 194: Aldo vs McGregor||-105||KO (Punches)||1||0.13|
|W||Chad Mendes||UFC 189: Mendes vs McGregor||-210||TKO (Punches)||2||4.57|
|W||Dennis Siver||Fight Night: McGregor vs Siver||-950||TKO (Punches)||2||1.54|
|W||Dustin Poirier||UFC 178: Johnson vs Cariaso||-225||KO (Punches)||1||1.46|
|W||Diego Brandao||Fight Night: McGregor vs Brandao||-690||TKO (Punches)||1||4.05|
|W||Max Holloway||Fight Night: Shogun vs Sonnen||-240||Decision (Unanimous)||3||5.00|
|W||Marcus Brimage||UFC on Fuel TV: Mousasi vs Latifi||-155||KO (Punches)||1||1.07|
|W||Ivan Buchinger||CWFC 51||-135||KO (Punch)||1||3.40|
|W||Dave Hill||CWFC 47||-235||Submission (Choke)||2||4.10|
|W||Steve O’Keefe||CWFC 45||-200||KO (Elbows)||1||1.35|
An investment of $100 in each of his fights listed here would have amounted to a total of $1600 invested and a return of $1934. At 21% ROI, it’s not too bad for a fighter favored so heavily. But that’s also just 16 investment opportunities starting from 2012, so we can’t exactly create a system out of this, and the returns are not great either.
UFC 247 odds
Let’s look at what the oddsmakers are offering us for the weekend.
UFC 247 Odds For The Undercard:
Trevin Giles (-150) vs. Antonio Arroyo (+130)
Andrea Lee (-350) vs. Lauren Murphy (+265)
Alex Morono (-275) vs. Kalinn Williams (+215)
Miles Johns (-130) vs. Mario Bautista (EVEN)
Domingo Pilarte (-135) vs. Journey Newson (+105)
Andre Ewell (-125) vs. Jonathan Martinez (-105)
Austin Lingo (-225) vs. Youssef Zalal (+175)
The undercard part is where you find the lower profile fights. As we mentioned earlier, it might be worth following where the money flows in these matchups.
UFC 247 Odds For The Main Card:
Jon Jones (-500) vs. Dominick Reyes (+350)
Valentina Shevchenko (-1400) vs. Katlyn Chookagian (+750)
Juan Adams (-230) vs. Justin Tafa (+180)
Mirsad Bektic (-145) vs. Dan Ige (+115)
Derrick Lewis (-260) vs. Ilir Latifi (+200)
Jon Jones heads into the main event as the clear favorite. Is this one of those cases where the odds are affected heavily by a popularity contest, or is the talent gap reflected realistically by the odds? Jones’ 25-1-0 career record certainly underlines his dominance. But at 12-0-0, Reyes has been solid as well.
We’ll let you do the analysis.
Please do note that anything we mentioned in the article isn’t a recommendation for investments. To make it into a ScoreMetrics sports investment system, an investment hypothesis first needs to go through rigorous analysis and backtesting. Today we’re just scratching the surface of the MMA market.
But who knows, maybe we’ll have a UFC system in place in the future.
To learn how to build sports investment systems yourself, make sure to check out John Todora’s new book, “Zero Correlation Investing – The Score Metrics Secret”. It’s currently on sale for a limited time, so right now’s a good time to act!
The ScoreMetrics Lab is the engine that runs the Sports Trading System operation, consisting of a team of researchers and writers who are constantly testing and retesting algorithms. They work hand in hand with our Head Trader and Creator of ScoreMetrics, John Todora to help find new breakthroughs and develop new systems.