This is the brother:
first of all - league average is irrelevant information to the question. What you are trying to determine is what is the probability that a team that wins 60% of the time will beat a team that wins 40% of the time.
to determine this, you need to figure out the probability of all theoretical outcomes.
theoritical outcome 1: team 1 (60%) wins and team 2 (40%) loses
.6 * .6 = .36
theoretical outcome 2: team 1 loses and team 2 wins
.4 * .4 = .16
Theoretical outcome 3: team 1 wins and team 2 wins
.6 * .4 = .24
theoretical outcome 4 : team 1 loses and team 2 loses
.4 * .6 = .24
To check your math - sum all the results = .36 + .16 + .24 + .24 = 1.00 ; or 100% of all theoretical outcomes.
however we know 2 of those outcomes (3 and 4) are impossible in the real world - so we are left with .36 and .16 as valid outcomes.
so if the home team will win 36 out of 52 time (36 + 16); that means that the home team has a 69.23% probability of winning that game.
now to help those people who are struggling with the "common sense" portions of this: a team that wins 60% of the time is not going to stay at the league average win rate or even their own average win rate against a team that loses over 50% of the time. The probability is their losses will come against superior competition - i.e. To get to 60% they are beating the teams they are supposed to beat (sub 50%) and losing to the teams they are supposed to lose to (teams above .500). Here is the other thing - ask yourself how you would figure this out for any other win percentages - if your conclusion is that you would use my methodology, then why would you stop using it because two teams happen to be at the league average - trust the math.