Thursday, 19 October 2017

Technically Speaking

The debate over what is fundamental analysis, and what is technical analysis, when it comes to analysis for sports betting continues. 

On September 28th, James noted (erroneously) that it is...
This tweet contained two errors, the first is that none of my systems discussed on the blog rely in any way on fundamental data, the second is the implication that fundamental analysis is based on public data.

James commented today that:
Once again, I didn't say fundamental data is, and only is, public data.
That is certainly what a reasonable person might infer from the tweet. James blames Twitter's 140 character limit for the confusion, writing: 
Tweet size limit prevented me from typing "using public data", which your systems do use (i.e. public price and fundamental data). 
Incorrect. My systems use price date, which is public and technical. They do not use fundamental data which comprises such elements as "injury reports, previous results, days of rest, time zones, individual match ups and so on".

"Using public data" does not make any of my systems fundamental analysis based.

Fundamental data can be public or private.

Technical data can be public or private. 

By James' own definition:
a technical trader pays no attention to the past performances of entrants, only considering price movements, market behaviour and structure.
How much more technical could the simple systems discussed in this blog be?

The clarification needed is for James to explain how my systems are fundamental. So far, I've not seen an explanation that supports this claim.

Black Monday

Hard to believe that Black Monday was thirty years ago today. Many readers probably weren't even born, others too young to remember it, but I remember it well. 

The previous Friday I had been unable to get to work in London as the Great Storm of 1987 knocked down an estimated 15 million trees, including some that blocked the Caterham line. 

Cassini managed to sleep through it all, although I was aware that the power had gone out. It was still out when I woke up, so my bath was a cold one, and with no radio or news, I set off to work as usual. I couldn't understand why the road to the station was so deserted.

The Stock Exchange in London was closed and that day the Dow Jones in the US fell by another 4.6% to end the week down 9.5%. It had already been a troubled month with the previous week down another 6%.


So it was after an unplanned long weekend that I headed to the City on the Monday, to hear that the markets were down. 

Not a huge surprise, as the UK had some catching up to do, but the scale of the losses was memorable with the FTSE ending the day down 11%. 

Fortunately I was single at the time, and relatively poor, but several thousand pounds were lost on paper. No spreadsheets in those days, so the exact amount has long since been forgotten. 

What I do remember doing was calling my broker late in the day and buying more at what I thought was the market bottom. Wrong. The FTSE 100 dropped another 12.2% on the Tuesday, but a valuable lesson learned.

Time heals and 30 years on, the DJIA is above 23,000. 

The FTSE 100 which touched 1,598 in October 1987 is lagging behind, but is now above 7,500.


Wednesday, 18 October 2017

Bookshops and Indeterminacy

While I was finishing off this morning’s post and confirming the date and venue of Haralabos Voulgaris' observations regarding the changes in the way NBA teams are now playing basketball, I came across this example of fundamental versus technical analysis, a topic discussed here recently following a mistaken tweet that confused fundamental analysis with data that is public.
The excellent book "The Perfect Bet" by Adam Kucharski gives an example of someone interested in buying a book shop. He gives two ways in which a prospective buyer might go about making his decision on which one to buy. One is to go into each store you short list, and check the inventory, interview management and examine the accounts. The second is to sit outside, and count how many customers enter, and how many books they leave with. The former is a “fundamental” approach, the latter is “technical”.

Twitter user Overs Specialist tweeted today that:

I can’t think of anything more ‘determinate’ than a system that says “If the price is this, bet”.

The entry point couldn’t be clearer, and there is no exit point other than that the event concludes, and the bet wins or loses. 

These systems are not trading systems, and the biggest benefit of a simplistic technical approach is the time saving.

What “when a market penetrates your line, you’re out” means, I have no idea.

I think the suggestion is to invest additional time predicting how the markets will move from the open, and good luck with that, but not only are you now looking at spending a lot more time, but as I keep saying, you’re competing with others far more knowledgeable than yourself, especially when we’re talking about football which is Overs Specialist speciality.
How exactly an edge is to be obtained betting on matches in South America, Poland, Montenegro etc. remains an unsolved mystery. A cynic might be of the opinion that football experts in South America, Poland, Montenegro might be better placed, but maybe Overs Specialist has contacts around the globe as do the likes of SmartOdds and StarLizard. 

Rockets Ride Randomness

Seven Away wins in League Two last night will have been appreciated by some readers, taking the profits for the season so far up to at least 10.26 points and an ROI commensurate with previous seasons.

Quite a contrast to League One where eight of the twelve matches were Draws, and the other four all Home wins.

Meanwhile in India, one of Crystal Palace's many stars of the future - Nya Kirby - saw England through to the U-17 World Cup quarter-finals (v USA), scoring the decisive penalty in the shoot-out after what appears to have been a thrilling game based on the AP updates:
Edge of the seat stuff, but the attendance of 53,000 was impressive.

In the NBA, the Over 215.5 System, henceforth to be known as the Beast (I'm sure some of you can work out why) got off to a winning start as the Golden State Warriors, after leading by 17 points and trading at 1.03, lost to the Houston Rockets 121-122 in a game where the Total was set at 228.5. 

These two teams were the top scoring last season, and I doubt that they will all be this easy. 

The Houston Rockets took the most three point shots last season, an average of 40.3 and last night shot 41. The Warriors 30 shots was very close to their average last season of 31.2.

Last night's game saw 71 three-point shots, with 83 points scored.

Line ups change of course, but fortunately player statistics are readily available. For example, Kyrie Irving played for the Boston Celtics against his former team (Cleveland Cavaliers) last night. His loss was one good reason why the Cavaliers took fewer three point shots. No surprise that his game was comfortably under.

For the record, last season, the average number of three point shots per game was 54, with 58 points resulting from them. 

As legendary NBA bettor Haralabos Voulgaris explained at the MIT Sloan Sports Analytics Conference in 2013, the nature of scoring in basketball is evolving, and because randomness plays a bigger role in three point shots, it's becoming harder to predict which team will score more points.

Tuesday, 17 October 2017

Total Moves

We ended with up with a bumper crop of 14 selections in total this weekend for the Small Football Road 'Dogs and with a 9-5 record no one should be complaining. 

Ten of these matches were either Conference or Division games, and these ended with a 6-4 record. 

The baseball play-offs are not doing so well, with UMPO down 10.58 points with a 5-17 record. The PO Overs ended up 11-5-1 (+5.47) to offset some of the damage.

With the two Championship Series now in progress, the value on Totals moves (slightly) to the Unders:
The NBA is back tonight with last season's finalists both opening the new season at home.  Both the Cleveland Cavaliers and the Golden State Warriors are odds-on to win their respective Conferences and repeat in the final for the fourth consecutive year.

With the increase in scoring I mentioned here last month the Blunders system made it's first loss since 2010, although 2015-16 showed warning signs of a decline.
A good example of how a fundamental change in the way teams play the game changes / eliminates the profitability of a system.

As I mentioned in that September post, I'll be looking at backing Overs in the 216+ range, which should average over two bets a day. 

In 2014-15 there would have been 36 selections, in 2015-16 117, and last season 362!  That's quite an increase.
  

Sunday, 15 October 2017

Madoff With Our Money

Nick followed up with some more details on how the minimum bet rule works in Australia:

Dear Sir,
A follow up to my previous comments.

Australian internet bookmakers are not allowed to close an account simply due to someone backing winners. They can if you have breached terms and conditions. They also have to re open accounts that had been previously closed by them.
There is no provision for minimum bets on sport. Given the world wide liquidity on sport and the small price fluctuations (especially compared to racing), then barring or severely restricting punters on sport makes no sense at all.
To be able to win betting (trading) on racing and sport involves knowledge, bankroll and discipline and the amount of people who have all these traits (and you need all of them) is very small. There are lots of people who have knowledge and bankroll but no discipline and they just add the pool of losing punters.
If a "problem gambler" and by that i mean a person who has excluded themselves from betting is seen to be betting then it is an offence under legislation.

Without wishing to appear cynical.........but why not, it's not in a bookmakers interest to stop people from losing money.
I know of an employee of Centrebet who advised the powers that be of a client who appeared to a possible addict. They assured him that they were aware of this client and that everything was above board and ok.....
Finance chief 'swindled $7m' to fund gambling addiction: police
Enough for now.....again
Cheers Nick
I have to admit Australia seems to be heading in the right direction on this issue. While I've argued previously that you can't force a business to transact with someone they don't want to, since bookmakers require a licence, it wouldn't be too difficult to make this a condition of the licence. 

I'm warming to the idea. This might actually push the dinosaur bookies into the 21st century, and make them concentrate on producing sharper lines.

As someone who has had accounts closed years ago for betting on sports, which was frankly ridiculous, I have my doubts that in practice this would work quite as well as advertised, and it's hard to see the UK's Gambling Commission taking such a step any time soon, but gambling laws change. It was only in 1960 that off-course bookmakers were legalised, and only 12 years ago that the new Gambling Act was passed in 2005. 

As for Nick's closing story, it's no surprise that bookmakers wouldn't try too hard to stop a problem gambler from handing over his money. 
From Judas Iscariot, who betrayed Jesus for 30 pieces of silver, to Bernard L. Madoff to the standard member of Congress fighting tirelessly to further the interests of campaign donors, human history is full of examples of money’s ability to weaken even the firmest ethical backbone.
Perhaps the best piece of Nick's response were his comments on the skills required to be successful long-term, which can't be emphasised enough:
To be able to win betting (trading) on racing and sport involves knowledge, bankroll and discipline and the amount of people who have all these traits (and you need all of them) is very small. There are lots of people who have knowledge and bankroll but no discipline and they just add [to] the pool of losing punters.
Under the category of 'bankroll', and related to the original topic, I would include "access to the betting markets". You may well have funds available, but if you can't find a market maker willing to work with you, it's a problem.

One other comment on these skills is that if you possess them, you are wasting an opportunity to capitalise on them if you use them for betting full-time.

Saturday, 14 October 2017

Minimum Bet Rules

One of the best comments in terms of new information, discussion points and all clearly explained, comes from Australia's Nick responding to my post on the ability for punters to all "get on". Nick writes:

Dear Sir,

In Australia we have an on course bookmaker minimum bet rule that applies at all tracks. The bookmaker must bet the odds to win $1000 ( some tracks will be higher) at the price displayed on his/her board.
There are no ifs, buts or maybes. At the price displayed anyone can come and have a bet to win at least the minimum amount.

A bookmaker by definition tries to make "an over round book" laying horses so as to make a profit regardless of which horse wins.
This is not always possible but taking a long term approach and making "book" as often as possible is the business principle.
The minimum bet rule has now been made a rule with the off course (internet) bookmakers as well (as it should ).
You may ask why a bookmaker should "have" to accept a bet.

A punter bets to win. a bookmaker accepts bets with an inbuilt margin so as to balance a ledger and have a profit.

The minimum bet rules allow the bookmaker plenty of scope to balance his/her book. In fact the amount of money that is eroded by long term winning punters is very small when compared to the final bottom line.
Winning punters can be equated to "loss leaders" that many other businesses have.

Pinnacle have displayed the capacity for a bookmaker to welcome winners. Given that they are very much predominately a sports (low margin) rather than race (high margin) bookmaker is a sad indictment to those bookmakers who have large racing offerings.
It can also be seen that bookmakers banning/restricting punters whilst targeting (they'll deny deny deny) problem gamblers is nothing short of predatory.
Comparisons have been made to casinos banning advantage players (predominantly blackjack). In days gone by i was an advantage (card counter) blackjack player. I was banned.

Casinos have addressed the problem of card counters by now utilising continuous shuffle machines which negate the advantage that a card counter can have.
Casinos had the problem of not being able to "balance their book" against teams of card counters which could conceivably bankrupt them if not addressed, unlike bookmakers who can change their price as money is bet on a horse.
Enough for now
Cheers Nick
Excellent comments! I do have a few follow up questions, not necessarily for Nick, but for anyone.

Does anyone in the UK have a problem getting a bet on at the racecourse, or is it only shops and Internet where restrictions are applied?

Does the "minimum bet" rule in Australia apply only to horse racing or is there a minimum for sports betting? If so, what is the minimum, or does it vary from sport to sport, league to league? I'd imagine that any minimum would be higher for an English Premier League game than say a National Premier Leagues South Australia match.


Is there anything to stop an Australian on-line book from closing an account or declining to re-open a previously closed account? It seems a rather Pyrrhic victory to force a book to take a minimum bet only to find your account subsequently closed.

What happens if a known problem gambler wants the "minimum bet"? Are there exceptions in the small print of the rule? Nick says there are no "ifs, buts or maybes" - really? Pubs don't have to serve anyone, and are negligent if they serve someone who is clearly drunk.   

How is this rule working out in practice? 

I totally agree with Nick that it would make more sense for traditional bookies to follow Pinnacle's example and allow winners, but where perhaps we differ is that in my opinion it is, or should be, ultimately their decision. 

From a UK perspective, I'd say that it would appear that for many bookmakers, their interest in bookmaking, whether traditional or modern, is somewhat less than their interest in installing FOBTs in low income high streets.

As for targeting problem gamblers, I'm totally with Nick here. Unfortunately the Gambling Commission in the UK are very weak on this, and other things, giving out pointless slaps on the hand rather then hitting them where it hurts.

As for adjusting prices to balance their books, certainly a bookmaker should be able to easily do this in a liquid market to manage their risk, and like I said in the original post, it's really rather silly of them not to take a bet on an EPL match or any high volume event.

Without knowing what sports the minimum bet rule applies to in Australia, it's difficult to add much more, but so long as the minimum bet is set at a level proportionate to the expected volume for the event, the idea has some merit.

But as I said above, it's of little use if your account can be closed. 

Friday, 13 October 2017

Silly Chile

Sometimes it's best to just keep quiet.

While most of the interest in the South American World Cup Qualifying campaign focused on Argentina, there's an interesting back-story surrounding Peru, Chile and Bolivia. 

Back in September of 2016, Bolivia hosted Peru and won 2:0, and five days later, travelled to Chile and drew 0:0. 

Chile then filed a complaint about Bolivia's Nelson Cabrera, which was subsequently upheld. Since Cabrera had also played in the earlier game against Peru, the two results were scratched and Peru and Chile were both awarded 3:0 wins. 

At the time, Peru were struggling with four points from the first six games, while Chile were soaring with 10 points. 

A little over a year later, and that additional three points for Peru proved crucial. 

Both Chile and Peru finished on 26 points, with Peru having the better goal difference, and in the play-off (v New Zealand) spot. 

Chile finished sixth and the reigning Copa America champions and Confederations Cup runners-up were out, despite beating Peru twice. 

To add salt into Chile's wounds, Peru's late equaliser against Colombia was a direct free kick touched by goalkeeper David Ospina on the way in for an own goal, (he should have let it go in), and after that the Peruvian and Colombian players could be seen talking with each other. Probably not a long-shot to suggest the Chile score (losing 0:2 at Brazil) was the topic of conversation, and that the 1:1 score suited both Colombia (through automatically) as well as Peru. 

The game finished 1:1.    

Why Can't We All Get On?

Another comment from Tony Stephens, this one suggesting that regulators could take a leaf from Australia’s books:
In Australia I don't believe they just accepted a licensed bookmaker picking and choosing who they take bets from. As I understand it there is a minimum liability that must be accepted. Without researching it too much I would say someone had a look at their original model and then changed it for some reason. Why should we just accept the current model in the UK? 

I’m not Australian, but I don’t believe anything good has come out of that country since the stump-jump plough in 1876. 

Maybe Tony Popovich and Mile Jedinak are exceptions.

Taking a lead on gambling from a country where there are an estimated 400 gambling related suicides a year might not be the best idea though. 

I’m not familiar with if or how such an arrangement has been implemented there, but the idea of a private entity being told how to run their business is troubling.

Who is this ‘someone’ who had a look at the bookmaker’s original model and then changed it? The business model is proprietary – it belongs to the business. If they want to change their model, great, but businesses are in business for the benefit of their owners and shareholders, not for the customer. They are not charities, and they certainly don't exist for a customer to exploit. 

It is for management to decide who they enter into transactions with. There should be laws preventing businesses from discriminating against customers based on race, colour, gender, language, disability, religion, sexual orientation etc. but not laws or rules forcing an enterprise into entering loss-making deals.

Tony asks - why should we accept the right of a business to choose how they do business? 


Well, because it is THEIR business. We can accept it or ignore it.

This may come as a surprise, but the right to bet is NOT a fundamental human right. I checked with the UN.

In some jurisdictions, betting is illegal. Maybe we should simply be grateful we have other options?


If you don't like a company's business model, don't do business with them.
Casinos have long been able to bar players who appear to have a positive expected value and incidentally, tell other casinos about him. A positive expected value to the customer means a negative expected value to the casino. That’s not a viable business model.

Why should the approach of bookmakers / sportsbooks be any different?

Should a bookmaker be mandated to accept a bet on the next Crystal Palace manager? What if the shop is in South Norwood, and the punter is Steve Parish and he wants to bet
£5 million?

This example highlights that many markets are vulnerable to insider information. A bookmaker has to be able to deal with this risk, and part of their risk management strategy is closing or limiting accounts.

I agree that the idea of not being able to bet a small sum on a highly liquid event is ridiculous and makes a sportsbook look silly, but ultimately it is, and should be, the bookmaker’s decision how much risk they want to take on.

Other leisure businesses such as pubs and restaurants have always had the right to refuse service. I don’t see why a bookmaker should be any different.

Punters might take a different view if bookmakers had the right to knock on your door and tell you that you had to take a position on the 2:30 at Fontwell.

If your accounts are closed or restricted, deal with it. 


If an insurance company doesn’t want to insure you because you’re a terrible driver, and quotes you an exorbitant premium, you shop around. 

If the all-you-can-eat buffet denies you service because you’re Joey Chestnut or Anita, bad luck. There are other eating options, and you’re not going to starve to death.

Think of having your account closed as a compliment. It means they think you might know what you are doing. And if your accounts are not closed or restricted after a few weeks? Ask yourself what that is saying about you.


For more on this topic, and on Ben Affleck before he was caught up in the Harvey Weinstein scandal, check out my thoughts on this from three and a half years ago.  

And in 2012 I wrote:
Las Vegas casinos don't add Blackjack tables to provide more opportunities to gamblers. They are there to generate another income stream, and as with successful sports bettors, successful Blackjack players will find it hard to play. I'm not saying that short-term, the bookies can't be beaten, just that bookies are bad losers, and winning money from them long-term is not realistic.
An edge with no place to use it is pretty much worthless. The ability to ‘get on’ is an essential piece of the puzzle. You might be the world's number one expert on synchronised swimming, but try making much money from it.
And in 2013:
I don’t have a problem with this. Bookmakers have every right to do business with whoever they want, and successful punters have to accept this. They are not utility companies denying us water. They are businesses there to make money, and if they identify accounts that are likely to be (for the bookie) losing accounts, then they will.
It would be nice for bookmakers to be a little more transparent on this topic, but they won’t be for obvious business reasons. When having an unrestricted account at a bookies is seen as the mark of a loser, why would they advertise along the lines of "Losers Welcome".
Having accounts closed is why I had nothing to do with betting for many years. There was no point knowing the combination to the safe if I couldn’t get through the front door.
It was only the arrival of Betfair that let me in again to play, and while Betfair do not (at least for the time being) close accounts, I have certainly run into their equivalent of having my account limited being hit first by the 20% Premium Charge, and currently the 50% Super Premium Charge. As a result, my activities are now much reduced. It’s hard to stay under the radar when you win consistently, and it would not be a surprise to see Betfair and other exchanges close accounts or raise their charges even higher. And if the front door closes again, I’ll move on with my life.
It would seem that this topic isn't a new one.  

Golden Abs

Scanning through the blogs on my blog roll, and I find out that someone is making some money from my systems. 


Geoff over at Fulltimebetting wrote a post titled Hidden Gold which included these lines:
The always excellent Green All Over blog consistently has little nuggets that can deliver gold but like Mr Cassini is always saying ” an edge shared is an edge halved”. His baseball systems have constantly delivered and the last time I looked they had produced approx 90 points profit so far this season.
To achieve this profit you would have had to spend some considerable time reading through his blog, found the suitable sites to find the bets and stats, and then checked daily to see if there were any qualifiers, and then, and only then, finally place the Bets .
And of course some days there wouldn't have been any qualifiers!
If you need to bet every day, you have a problem! 

The 2017 regular baseball season was about as perfect as they come. No big draw-downs, and I'm glad someone else was able to make money.

The point of Geoff's post, which you should read in full, is that there are no short cuts to success, nor are there any to six-pack abs apparently.
With 90 points in Geoff's bank, he's probably not too disappointed that the post-season isn't going quite so well. A win for the Overs last night in the Washington Nationals v Chicago Cubs game, but no play in the UMPO which still has some ground to make up to be profitable this year.
We did have another winner in the NFL Small Road Dog's system last night, with the Philadelphia Eagles getting 3 points at the Carolina Panthers and winning by five. Probably five more selections to come this weekend.    

Thursday, 12 October 2017

Staying Humble

My recent Gambling With Mathematics post mentioned that the top Video Poker machines at the Mandalay Bay pay out up to 99.17%. The source of that number in the New Yorker Magazine Article was Anthony Curtis, a former professional gambler who is now the owner and publisher of Las Vegas Advisor, and the blog has now corrected that 99.17% figure up to 99.58%. 


The first published comment on that most makes for scary reading, and if Mrs Cassini ever reads it, my sports investing days are at an end. Part of the comment by a Captain Jack reads:   
There is a natural progression towards sociopathic behavior that comes from making money in a casino environment. You’re making your money by beating inefficiencies in the casino…who in turn is making their revenue from the stupidity of the gambling masses. You begin to get a sense of superiority above your fellow casino patrons. You begin to lose empathy. You employ deception to get what you want. You become immune to taking risks. You become emotionally disconnected from the world around you. All of these are personality traits of sociopathic behavior.
Crikey. That's a little depressing. Perhaps what will save us from such a fate is that our advantage is not gained in a casino environment but in private, with the losing masses nowhere to be seen. Our senses of superiority are hopefully kept in check.

Another piece of good news is that Captain Jack's numbers did not go unchallenged:
Captain Jack’s speculation that 38-76% of advantage gamblers are sociopaths (his figures, not mine). I mean..come ON!
According to my wife's copy of Martha Stout's 2005 book "The Sociopath Next Door", an odd wedding gift for her from my in-laws, it is 4% of the population who are sociopaths. 

Disturbingly high still, but fortunately I am completely normal.

If you're interested in a far more serious article about mental health, check out this extraordinary, and quite frightening, article in Vanity Fair.

Wednesday, 11 October 2017

From Bar To Street To Bookie

Tony Stephens had some thoughts on the 'bashing the bookie' theme writing:

Initially I did think the same as Steve. However, you do see profit statements from the big bookies saying things along the lines of profits are down due to unfavourable sports results. Surely profits could only be down due to less turnover if they were properly bookmaking with balanced books. What I don't get with the "bookmakers" and what I think should be looked into is why customer A can't get £10 on selection 1 but customer B can have whatever they want at the same point in time.
When a bookmaker reports a large loss, it's usually worth far more to them in publicity than the loss itself. Some of you may recall the events of January 2014 which prompted a Press Release from William Hill:
Online Sportsbook has continued to show strong wagering growth, up 48% in the first two weeks of 2014. However, football results in week 2 were highly unfavourable with an unusually high number of odds-on favourites winning. Driven by the impact of this on our otherwise very attractive accumulator business, we recorded a £13m loss in the week. There is no certainty that we can recoup this shortfall to internal expectations but based on previous experience of such customer-friendly outcomes, such as 'Dettori Day' in 1996, we anticipate a positive benefit from increased customer confidence, particularly with so much of the season ahead and with the 2014 World Cup to come.
In that one Press Release we learn that yes, a freak set of results, from events in-play simultaneously, meant that they were unable to balance their books, but note the expected "positive benefit" resulting from this beating. A £13m loss sounds like a lot of money, but no mention of how many million they profit in a typical week. 

As for Customer A and Customer B being treated differently, bookmaking is a business, and like any business, bookmakers can choose who they do business with. 

Similar to how pubs can choose to serve or not serve you, usually based on your past behaviour, it's the same with a bookmaker, and in the same way that local pub managers exchange information about certain customers, so do bookmakers.

It's just how it is, and I'm not sure who is supposed to look into it, or what they are supposed to do about it. The business has decided they don't want you as a customer, so you deal with it. Take it as a compliment. Open an account with a market maker who doesn't ban winners. They may want 60% of your winnings, but I think I've mentioned that topic before and I'd hate to repeat myself.

All The Best And Goodbye

Albufeira Steve commented on my previous post:

I don't normally disagree with you but... In an ideal world what you say is true but the days of bookmakers being able to make a balanced book online are well and truly over. Exchanges lowering margins to almost nothing and price comparison sites have seen to that. They can only take money online if they offer top price. They now have to rely on having efficient prices to make a profit. A casino model rather than a bookmaking one. With a bookmaking model it does not matter if sharp punters win as they will be paid by the losers, but with an efficient price model you can not allow sharp punters to take all your profits before prices become efficient, hence the staking restrictions and closing of accounts of those that try. Bookmaking is now much more of a battle between bookmaker and the sharp punter than it used to be, and the closure of accounts is testament to that.
I'm not sure Steve and I actually disagree on too much. I'm sure that sportsbooks don't always have a perfectly balanced book, and sometimes have some exposure, which is what I meant by saying that they avoid taking:
unnecessary risk by voluntarily going in-play with an unbalanced book.
However, by definition, online sports books with a centralised database are in a very good position to manage these risks by simply denying a bet that might tilt the book too much one way. Pinnacle manage this by having limits, and the problem of gamblers being limited or closed is one that is constantly being discussed. 

Exchanges have certainly made traditional bookmakers more competitive as has the arrival of the new business model typified by Pinnacle.

I do disagree with Steve on his statement that online books "can only take money online if they offer top price". 

Cheapest isn't always best, and not all punters have access to all prices. 

1.99 on an exchange looks good, but factor in 5%+ commission, and it's not so good.

It might be worth dropping a point or two just to avoid being seen as a best-price punter, and keep your accounts open for longer. 

There's also the question about trustworthiness and stability with some books, and a punter might well take a worse price with a book he trusts. 

Regardless, each bookmaker will be trying to balance their book for each event and punters seen as cherry-picking prices or arbing will soon find their betting options limited, i.e. take all the best prices, and it's goodbye. 

The old-school model books don't want customers who appear to know what they are doing, whether they are winners or not, and frequently taking best prices is a fast road to account closure. 

Fortunately the exchanges don't care and nor do the likes of Pinnacle, so while your options for entering a market might be somewhat limited, you are still in competition with other punters, not the market maker itself, because it is the weight of customers money in the market that ultimately determines the prices, not what some corporate odds-setters think they should be.

Tuesday, 10 October 2017

Short Of A Full Stack

The Tweet from Pinnacle reads:

“Learn how to beat the bookies in the Over/Under goals markets when betting on soccer”.

Admittedly, Pinnacle do have some pretty good articles, but this “beat / bash / clobber the bookies” narrative from people who know better, not only Pinnacle, is completely misleading and suggests the targets for such features are the less sophisticated reader.

Modern day sportsbooks operate in a similar way to actuaries, an actuary being defined as “a business professional in the insurance and assurance industries who deals with the measurement and management of risk and uncertainty”.

Actuaries must possess skills in mathematics, finance, analysis and have business knowledge and if you are serious about betting for a profit, you should have these skills too - ideally using them for your full-time career and for your part-time betting hobby.

“Bookmakers do not generally attempt to make money from the bets themselves but rather by acting as market makers and profiting from the event regardless of the outcome”.
While the “us” versus “them” theme may be something the bookies would like you to believe, make no mistake about it - gambling is not a contest between you and the bookmaker. 

It is a contest between you other gamblers, and to win in the long-term, you not only need to beat other punters, but you need to beat them by a big enough margin to cover the market maker’s costs.

Sportsbooks are not in the business of competing with the punter. They merely facilitate the ability (sometimes) for punters to invest their money in exchange for a fee , e.g. commission or vigorish. 

Bookmakers will adjust the odds or the lines based on the money coming in to the market. If their opening (soft) prices, typically only available to small limits and known sharp players, attract more money on one side than the other, the sportsbook will adjust the odds and attempt to reduce any liability. Limits will increase as the ‘true’ probabilities become firmer, and the event start time approaches.

This is a very logical and sensible business model. What would not be logical and sensible would be for a business to take unnecessary risk by voluntarily going in-play with an unbalanced book.

As a result, the implied probabilities derived from closing prices are typically a highly accurate measure of the true probabilities of an outcome. If they are not, then there is an opportunity for the sharp player.


Somewhat related to this is a pet peeve of mine, which is the habit of some sportsbooks to make public the “BetShare” for certain markets. Again, this is totally misleading in that it is useless information.

The “BetShare” simply gives the percentage of bettors (not money) per outcome. An extreme example to highlight the pointlessness of this is where 99 bettors each back an outcome with a £1, while one bettor lumps on £1,000.

It would be at best misleading to say that the BetShare for this market is 99% to 1%, and given that it is relatively rare for Pinnacle to publish BetShares, one might be excused for thinking they are looking to attract the less sophisticated follower into following the 99% and helping to balance the book.

Follow the prices if you want to see where the money is going. The outcome backed by the 1% will be the one with the shortening price in this example.

Bookmakers aren’t going to give away information with any value. If they’re promoting something, it’s for a reason. Don’t be fooled.

If you want to be profitable from betting, whether it’s in the Over / Under goals markets or whatever, you need an edge over other gamblers. The bookies prices simply reflect the opinions of the market’s participants.

As I’ve mentioned before, many participants are experts at what they are doing. Starlizard has about 200 employees — traders, software engineers and analysts — as well as paid informants around the world. They're looking for more:

“We are currently expanding and need a number of software developers and support staff with skills in C# / F# / Java / Python / Full Stack Development / DevOps"
How many people reading this think they have the skills to take on 200 highly educated individuals earning a decent salary paid from profits accrued from betting? A few Twitter accounts seem to think they do.

Of course individual sportsbooks will at different times have different liabilities to offset, and hence prices will often vary a little, and by taking advantage of the best prices, you’ll put yourself in a good position in the short-term, but as many of us know, if you look like you know what you’re doing, you’ll soon be banned or limited.

Will you find the edge you need to be profitable long-term from a Twitter account?

Ask yourself this - if someone finds a hidden trove of gold, how likely is it that they’ll leave it there, go home, and then tell everyone where this gold is hidden?

Based on what I read on Twitter, it’s apparent some people think this is quite normal behaviour, handing over their money to a complete stranger. That is delusional. The account selling tips almost certainly knows no more than you do.

In the rare instance that he may have exclusive inside information, he has either already backed the value out of it, and the information is thus worthless, or he hasn’t, which means he has no confidence in it, so why should you?

Gambling With Mathematics

The mass shooting in Las Vegas earlier this month was perpetrated by an individual who described himself in legal documents as "the biggest video poker player in the world". 

The documents were filed in a deposition for a (lost) lawsuit against the Cosmopolitan detail him betting (not losing) $1 million a night.

His younger brother Eric described the killer as a "gambler who used mathematics".

That he was wealthy, a multi-millionaire, appears to have been the result of his business acumen rather than his gambling, a hobby he took up with some intensity in retirement.

A recent article in The New Yorker Magazine had this quote:


If all this guy did was play video poker, he was not a ‘poker player.’ He’s just gambling.” He went on, “There’s a small chance that Paddock played the percentages very well and eked out a small edge, but it’s very doubtful. That takes a lot of skill and time, and only playing one particular kind of video-poker machine. To make money playing video poker, it takes a lot of luck.”
It also teases us with this:
“Video poker is well known for attracting people who have compulsive gambling problems,” he told me. “It’s almost the perfect gambling game. But it also has the property of being able to be beaten. So it attracts a lot of very intelligent people.”
In the early days of Video Poker, there's evidence that some machines paid up to 103%, but edges like that don't last for long and the top machines at Mandalay Bay reportedly pay out up to 99.17%.

The key for the killer was probably that from time to time, casinos offer promotions that can reduce that already miniscule house edge still further, and the comps casinos hand out can make the game a relatively cheap hobby, if not a big earner.
“If you get close to 100 percent — that’s where he gambled,” Eric Paddock said. “It’s not just the machine. It’s the comps, it’s the room. It’s the 50-year-old port that costs $500 a glass. You add all that stuff together and his net is better than 100 percent.”
The mention of APs (Advantage Players) reminded me of the "luckiest" woman in the world, Joan Ginther who won millions in the Texas State lottery, not once or twice like normal people, but on FOUR separate occasions. 

A pure coincidence of course that it turned out she was a former professor at, and had a PhD in statistics from, Stanford University.

Monday, 9 October 2017

Small Dogs and UMPO Weekend Update

Another profitable weekend overall for anyone following the Small 'Dogs. The College Puppies had a second consecutive losing weekend, while the grown-ups narrowly missed out on a clean sweep with four of the five selections winning straight up.

Not such good news from the MLB play-offs where favourites continued to dominate.
The above includes the final game this evening of the Boston Red Sox v Houston Astros series. Three more games tonight.

Flawed Process

Lambretta at the Thoughts of a football trader blog posted the following today:

Read an excellent post on twitter from a financial trader earlier.
There were a few elements to it but, much like the books it referred to, it focused upon process over profit.
We hear it constantly but how, even though we've read the books and tried to drum the concept into our heads, do we abide by this rule? Well, picture yourself as the crop farmer. Year in year out, season after season, the farmer goes through the process. He cannot control the outcome. All he can do is give himself the best chance of seeing a good crop. He does not dream of a bumper harvest, does not picture himself in a brand new tractor. What he does is follow the process, knowing that, based on thousands of years of farming knowledge, this process offers the best opportunity of having a good year. The weather can write off the entire crop, parasites can could ravage everything but he cannot do anything about these aspects. All he can do is give himself the best chance.
And so it is with us, too. Process, process, process.
Well, not exactly. In fact, quite the opposite.
The problem with this philosophy and specifically this example, is that while we all understand weather is by nature unpredictable and will vary from year to year, an event such as climate change means that the thousands of years of farming knowledge are now rendered all but irrelevant. 

The farmer's assumption that the underlying environment is unchanged is flawed. He can stick with his process all he likes but it's doomed to failure.

The process will no longer lead to long-term success. Farmer Giles needs to adapt.

While betting markets haven't been around for thousands of years, they too change, often overnight, and a punter must likewise adapt or fail. Strategies don't last for ever. 

Adopting the farmer's mentality of "well it used to work, so I'll just keep on doing it" is simply a recipe for disaster. 
"The definition of insanity is doing the same thing over and over again and expecting different results"
Whether or not Einstein actually came up with that quote - he probably didn't - it's certainly true. 

Traders must always be aware that change is inevitable, and must constantly watch the markets they are betting or trading in. 

Process, process, process yes, but the process has to evolve. 

Persisting Edges

Unknown writes:

I am a big fan of you blog and your systems and would like to thank you for sharing your knowledge but I have one question that keeps bugging me:
Why do your systems and edge based on relatively simple technical analysis still work if the market and players in it are so smart and efficient?
Buchdal's system based on favorite/longshot bias seems to be alive and well even after a decade of being practically in the open so why haven't the betting market adapted to it and killed its edge by now?
Really appreciate any help and your opinion and thank you in advance
Thanks for the compliment and the question.

There is no single market for sports betting, and my intent in mentioning some ideas here is to point readers towards those markets that are currently inefficient. 


The reason why some markets are inefficient can only be that the square money exceeds the sharp money. With sportsbooks risk averse, the lines for such matches are consequently incorrect.

Why these inefficiencies continue for sometimes many years is indeed very strange. Perhaps the liquidity isn't there to interest big players?

As relatively small as these markets might be compared to say the English Premier League, the markets I highlight should be more efficient, but clearly they are not.

Small Road 'Dogs in College Football should not be profitable in 14 of the last 17 seasons. In Conference games, they should not have an ROI of over 15% since 2005. 
Small Road 'Dogs in the NFL should not be profitable in 10 of the last 11 seasons. In Division games, they should not have an ROI of over 13% since 2005.

Home advantage is much talked about in sports, but in many, it is declining. Improved officiating and an increase in reviews have helped with this.

After years when backing Road favourites in College Football was throwing away your money, small Road Favourites were profitable in 2010 and four of the six season since, with an ROI of 7.5%. 

One can only assume that most money is unaware of the shift and continues to over-estimate home advantage. 

Backing hot favourites in MLB should not show a return of 8.9% for the last six seasons.

Here it's possible that after many years of a reverse-longshot bias in baseball, the majority of bettors are unaware that the tide has turned. Or perhaps they are worried the tide has crested and about to begin ebbing back to its long established norm. It well may, but at some point you have to make the move from watcher to swimmer. 

It's in the less popular sports are where inefficiencies are more likely to persist.

In my opinion, there's no point in the serious sports bettor looking at the Premier League and other top level football for value. It's delusional to think that in the long term you can beat the likes of Starlizard and its army of quants and informants.

So the systems I talk about here tend to be from the lower leagues of football, or from niche sports. At some point in the probably not too distant future, these edges will also be gone, but for now, enjoy them.

One exception is the Bundeslayga, which ironically is one example of a system that does appear to have lost its edge after several years of profit, but the surprise is not that the edge has gone, but that it lasted as long as it did.

Saturday, 7 October 2017

MLB Data Revolution

The basic UMPO System suffered losses in the first two games yesterday with American League East rivals Boston Red Sox and New York Yankees both beaten.

The New York Yankees had an 8:3 lead after five innings, but lost in 13 innings. 

When post season games go into extra innings, the value is on the underdog as you might expect in what is essentially a 50 / 50 situation. I've explained before that the favourite is decided by the starting pitchers, and it would be rare for a starting pitcher to still be playing in the tenth innings.  

The MLB database I use only goes back to the 2004 season, so the sample size for play-off extra innings games is naturally small, but of the 36 games to date with an odds-against underdog, the split is now 18:18.

The Chicago Cubs were the first UMPO winner of the season in the day's third game, before the hot favourite Los Angeles Dodgers took care of the Arizona Diamondbacks with no trouble, helped by a four run lead after the first innings.

We may well be into a new era for baseball. The basic UMPO is improved by ignoring bigger 'dogs, and my suspicion, backed up by the improved performance of shorties in the regular season, is that this will now be the case in the post season. More to come on this topic.   
The second was a revelation born of a statistic that only recently came into existence—the launch angle. Radar and camera measurements of the angle at which balls leave the bat have shown that the optimal swing angle looks more like an uppercut than many hitters preferred. Hitters, in turn, have started swinging for the fences in droves. Home runs this season reached a record level.
The record number of home runs this season, and three 100+ teams certainly hint at that, and this article from the Wall Street Journal looks at the (negative) impact on the game of the "data revolution".