All photos by Eclipse Sportswire

Back in the heyday of online poker and sports betting (circa 2006), I heard about a new online sportsbook and poker room that was offering a “can’t lose” promotion for a pre-season NFL game.

The deal was this: open up a new account and you could place a bet on the Pittsburgh Steelers-Miami Dolphins preseason game for up to $1,000. If you won, you collected your winnings. If you lost, you would have your bet refunded to you. The only catch was that you had to bet the Steelers.

The idea behind the promotion was that if the Steelers didn’t cover, the site would lose nothing and have tons of new accounts opened with thousands of dollars deposited on their site. If the Steelers covered, the site would have to pay out lots of money, but they’d again have lots of new accounts opened up and this time they’d be flush with newfound money to gamble with.

In those days, I was pretty degenerate and I’d have skipped paying the rent to get in on a deal like this. I opened an account for a thousand bucks and made the bet. I told my friends about it and they did the same thing. But then they all hedged.

By placing, say, $500 to win on the Dolphins, my friends locked up a guaranteed profit. If the Steelers covered the spread they’d win the $1,000 from the promotion and lose the $500 on the Dolphins for a net profit of $500. If the Dolphins beat the spread they’d win $500. Those who kinda liked the Steelers could bet something like, say, $200 on the Dolphins for either a $200 or $800 win. This was known as hedging - betting both ends of a bet in such a way to lessen the risk on either bet.

There are plenty of ways to hedge in horse racing, where there are multiple betting entries in any given contest. The most common way that gamblers hedge their bets is to bet on a horse to win, place and show, or “across the board.” Another common way is to bet on multiple horses to win the same race. You can only win one of the bets, and the losing bets will take away from any potential winnings, but you have more chances at winning *something*.

THINKING THINGS THROUGH AT THE TRACK CAN PAY DIVIDENDS

What made the Steelers hedge different than these types of common hedges is that in that instance the bettor locked up a guaranteed win. There was no way to lose money. By not hedging in that situation, sure you stood to win a thousand dollars, but in taking that chance you gave up a $500 guarantee.

These situations do occur in horse racing. Where I find myself in a position to hedge this way at the track is when I’ve got a live ticket in a multi-race wager heading in to the final leg. Once the “will-pays” go up on the screen and you see what you stand to win if the horse (or horses) you picked come in, you can often hedge by making substantial wagers on the horses you didn’t cover to make sure that no matter who wins you’ll end up with something. It’s like taking out an insurance policy on your bet. You give away some portion of what you potentially could have won to guarantee that you will win some lesser amount.

I found myself in just such a position at the Southwest Stakes at Oaklawn Park in 2009 when I had a live Pick 4 ticket after singling Old Fashioned in the feature race. I had picked a number of horses in the fourth and final leg of the race, each of whom would have paid out thousands and thousands of dollars. I did the math as quickly as I could to see what it would take to hedge. I then ran around borrowing money from everybody I knew at the track so I could make enough big win bets to make sure I’d have a good payoff at the end of the race. The good news was that the Pick 4 bets I had were worth so much that I could afford to bet hundreds of dollars on the other horses I hadn’t covered. The whole episode was frantic. I had maybe fewer than 20 minutes between the will-pays going up and post time to figure out what to bet and to beg the money from friends.

When all was said and done, I was hedged - I’d cash no matter who won the race. One or two of the horses would pay me five figures. A few others would pay in the $3,000 to $5,000 range. A couple of more were worth $1,000, and there was one horse that would net me $400. You’d think in a situation like that I’d just kick back and enjoy the race. Instead it was one of the most stressful races of my life. As you’d probably guess, the mule that paid $400 ran the race of his life and won. I have never been so disgusted to cash a ticket.

NOT DAVE HILL ON SOUTHWEST DAY IN 2009

You can find yourself in this situation when making lots of Daily Double bets as well. Hit the first leg, then cover the spots you didn’t have on your double with win bets in the second leg. The key is to make sure that you don’t over-hedge - make so many bets and take out so much risk that you don’t stand to win enough money, or break even, or worse yet - you screw up and bet so much you might even lose something! (Don’t do this. Use a calculator, OK?)

In the end, I decided not to bet the Dolphins. I liked the Steelers and I wanted a thousand dollars. Since I’m broke now, I can see how that was a stupid play. But when the Steelers covered, I felt like a genius. Hedging is for cowards, I told my friends. The next week, I lost it all in the site’s online poker room.

Hedging is often safe, smart, and lucrative. It’s what makes the guys on Wall Street rich, after all. What it isn’t, however, is gambling. If what you like about this game is taking risks, don’t sweat the hedge. If what you like is cashing tickets, think about it.