Finding the Right Edge Threshold for Soft Markets
Swept 7 edge thresholds across 14 expansion leagues using BetExplorer AH odds. 7% + exclude -0.25 line maximizes OOS profit: +166u vs +136u current (+22% more). Deployed for all Tier 2/3 leagues.
Finding the Right Edge Threshold for Soft Markets
We expanded from 26 to 44 leagues by reverse-engineering BetExplorer's internal API for Asian Handicap odds. The backtest showed +15.4% CLV across 27,000 bets. But only 3 live picks appeared. The problem: we were filtering at 10% minimum edge — a threshold tuned for Pinnacle's sharp lines, not BetExplorer's softer books.
The Question
What's the optimal edge threshold for expansion leagues betting against BetExplorer odds? Too high = not enough bets. Too low = diluted edge. And does the -0.25 AH line exclusion (which helped in initial testing) hold up on a proper holdout?
What We Found
Swept 7 thresholds (5% to 12%) with and without -0.25 exclusion. IS/OOS split at August 2025. The answer is clear:
7% + exclude -0.25 line maximizes OOS profit at +166.3 units (+23.2% ROI, 718 bets).
The current production config (10% incl) produces +135.9 units (+22.1% ROI, 615 bets). Switching to 7% excl gives 22% more profit from 17% more volume.
The Nuance
The threshold sweep reveals a clean tradeoff:
| Threshold | N (OOS) | ROI (OOS) | P&L (OOS) |
|---|---|---|---|
| 5% excl | 892 | +18.2% | +162.7u |
| 6% excl | 812 | +19.8% | +160.5u |
| **7% excl** | **718** | **+23.2%** | **+166.3u** |
| 8% excl | 627 | +24.4% | +153.1u |
| 10% incl | 615 | +22.1% | +135.9u |
| 12% excl | 400 | +31.5% | +126.2u |
ROI increases monotonically with threshold (higher bar = stronger bets). But P&L peaks at 7% then declines because you're cutting too many profitable bets. The -0.25 line exclusion adds 3-5pp ROI at every threshold — that quarter-line has maximum settlement variance because half the bet pushes on a draw.
Per-league: 12/14 leagues show positive OOS ROI. The two exceptions are arg-primera (-1.5% on 16 bets) and uruguayan-segunda (-7.4% on 10 bets) — pure noise at that sample size.
What This Means
Deployed: Tier 2/3 defaults changed from minEdge: 0.10 to minEdge: 0.07 with excludeAHLines: [-0.25]. This immediately increases bet volume for all expansion leagues.
The mechanism: BetExplorer odds come from soft books (bet365, BetMGM, Stake). Our model has 16% CLV against these books vs 6.5% against Pinnacle. A 7% threshold still leaves substantial margin after slippage, while 10% was needlessly conservative for non-Pinnacle markets.
What's Next
- Monitor first 50 live expansion bets at the new threshold
- If live CLV matches backtest expectations (+16%): keep
- If live CLV drops below +8%: investigate model-market mismatch
- TODO #1 from the roadmap: test the -0.25 exclusion on the original 26 Pinnacle leagues