Beating the bookies – how the online sports betting market is rigged(arxiv.org)
arxiv.org
Beating the bookies – how the online sports betting market is rigged
https://arxiv.org/abs/1710.02824
157 comments
I used to use the betfair platform until it they blocked themselves from being viewed in Canada for some strange reason right after they were purchased by ladbrokes I believe it was.
Anyways, after playing with them for a few years, I was horrified to learn about their 60% tax on consistent winners that they have dubbed a "premium charge".
Found some sort of edge to exploit and reap profits?
Betfair doesn't even care to talk to you to ask you what you are doing, they will just charge you 60% of your winnings once you go over a certain limit. [0]
[0] https://www.theguardian.com/sport/2011/jun/29/betfair-premiu...
Anyways, after playing with them for a few years, I was horrified to learn about their 60% tax on consistent winners that they have dubbed a "premium charge".
Found some sort of edge to exploit and reap profits?
Betfair doesn't even care to talk to you to ask you what you are doing, they will just charge you 60% of your winnings once you go over a certain limit. [0]
[0] https://www.theguardian.com/sport/2011/jun/29/betfair-premiu...
Betfair merged with Paddy Power, not Ladbrokes.
They probably stopped offering their service in Canada due to unclear licensing and operating regulations for their Exchange product. It has happened in a number of other jurisdictions too. What you need is a good friend or relative in the UK or Ireland, and a VPN.
However there are now other exchange betting options, with at least some degree of liquidity - Betdaq, Smarkets and Matchbook for example.
Professional punters still have ways of getting on, which circumvent the online restrictions. Once all their accounts have been limited or closed with the online bookmakers, the next step is usually a string of agents across multiple locations, working on commission, and placing bets on the punter's behalf. It's still possible to get on for farely large amounts like this.
If horse racing is your game, Hong Kong is where the money is at. Huge totalliser pools (park-mutual) where the size of an individual's bet is unlikely to move the market very much. Now that there is co-mingling with a number of other pools around the world, one doesn't have to be in HK to bet there.
I've recently started having a proper go at the Daily Fantasy Sport option, now that Draft Kings has opened up in the UK and a few other European locations. Moneyball in Australia is also quite good, albeit much smaller prize pools. However, this weekend they just launched a DFS horse racing product which looks pretty interesting.
They probably stopped offering their service in Canada due to unclear licensing and operating regulations for their Exchange product. It has happened in a number of other jurisdictions too. What you need is a good friend or relative in the UK or Ireland, and a VPN.
However there are now other exchange betting options, with at least some degree of liquidity - Betdaq, Smarkets and Matchbook for example.
Professional punters still have ways of getting on, which circumvent the online restrictions. Once all their accounts have been limited or closed with the online bookmakers, the next step is usually a string of agents across multiple locations, working on commission, and placing bets on the punter's behalf. It's still possible to get on for farely large amounts like this.
If horse racing is your game, Hong Kong is where the money is at. Huge totalliser pools (park-mutual) where the size of an individual's bet is unlikely to move the market very much. Now that there is co-mingling with a number of other pools around the world, one doesn't have to be in HK to bet there.
I've recently started having a proper go at the Daily Fantasy Sport option, now that Draft Kings has opened up in the UK and a few other European locations. Moneyball in Australia is also quite good, albeit much smaller prize pools. However, this weekend they just launched a DFS horse racing product which looks pretty interesting.
>However there are now other exchange betting options, with at least some degree of liquidity - Betdaq, Smarkets and Matchbook for example.
That's good to know.
But do they impose the same sort of "60% winners tax" that betfair does? Or anything close to that?
Because if so, I wouldn't even bother signing up.
I don't need to gamble that badly!
That's good to know.
But do they impose the same sort of "60% winners tax" that betfair does? Or anything close to that?
Because if so, I wouldn't even bother signing up.
I don't need to gamble that badly!
The so called "60% winners tax" doesn't kick in on Betfair, according to the linked article above, until you've reached a total lifetime profit of £250,000. Up until that point you'll still pay the normal 2%-5% commission in winnings.
How long do you estimate it will take you to clear £250k profit in Betfair? I'd say sign up and worry about it when it's likely to happen.
How long do you estimate it will take you to clear £250k profit in Betfair? I'd say sign up and worry about it when it's likely to happen.
Unfortunately the other betting exchanges have far far less liquidity than Betfair, and much of the bets on offer are from bots that are simply mirroring the odds on Betfair (with their own margin added on)
Basically, all the money goes on Betfair because that’s where all the money is. It’s a vicious circle, great for BF and very difficult for any competitors to break in to the market.
Basically, all the money goes on Betfair because that’s where all the money is. It’s a vicious circle, great for BF and very difficult for any competitors to break in to the market.
Betfair is for sure the most liquid. Smarkets and Matchbook are growing. I've not used Betdaq.
However, if people are worried about hitting the Premium Commission levels on Betfair, and the other exchanges are mirroring prices, then surely it's worthwhile spreading stakes around.
However, if people are worried about hitting the Premium Commission levels on Betfair, and the other exchanges are mirroring prices, then surely it's worthwhile spreading stakes around.
im actually curious how accurate the lines they show are, vs if you used their api. do you know? theres a lot of noise in them as far as i can tell- just wondering if its real or if they are jiggling the numbers around to make it look more appealing.
Site Vs API are identical. There may be some extra latency (order of milliseconds) on the site due to render time etc but they both use the same underlying data source.
interesting. have you used both? just curious how you know
Heavy user of both and I used to work there.
Do you mean the Betfair lines? I think their market is pretty accurate. More so than many traditional bookmakers, although a lot of them use Betfair to make their own markets now, so there's very little chance of arbitrage between them.
I've written an R library for the Betfair API[1], which I use every day to retrieve prices.
https://www.github.com/phillc73/abettor
I've written an R library for the Betfair API[1], which I use every day to retrieve prices.
https://www.github.com/phillc73/abettor
sorry i meant accurate in terms of what they show on the site vs what you can actually get when you try to trade. someone else answered that they are indeed accurate- has that been your experience?
The Betfair prices depend on market depth. It's data available through the API, so you can have a pretty good idea of what price you will be able to strike for any given bet size.
My experience with traditional bookmakers has been severely limited or closed accounts very quickly. I haven't used a traditional bookmaker for a few years now, betting solely on the exchanges and 90% of the time with Betfair. I do still have a Corals account, which was somewhat un-restricted through leveraging a contact within the company, but I think my max bet is only £200. As I haven't used it for while, I don't like the chances of it staying that way if I started pumping winning bets through it.
There have been various investigations conducted on Betfair prices, and they are usually a few ticks above traditional bookmaker odds. However, the over round on highly liquid Betfair markets is only 1%-2%, whereas a traditional bookmaker is generally significantly higher, more like 110%-120%, depending on the event.
One way to extract the best results from traditional bookmarkers, as far as horse racing is concerned, is to bet with Best Odds Guaranteed. In this scenario, you'll receive a winning payout at the highest price the selection reached, rather than the price at which you struck your bet. This works best in overnight markets, that is placing bets the night before the race. However, this route is also one of the quickest to restriction and closure.
My experience with traditional bookmakers has been severely limited or closed accounts very quickly. I haven't used a traditional bookmaker for a few years now, betting solely on the exchanges and 90% of the time with Betfair. I do still have a Corals account, which was somewhat un-restricted through leveraging a contact within the company, but I think my max bet is only £200. As I haven't used it for while, I don't like the chances of it staying that way if I started pumping winning bets through it.
There have been various investigations conducted on Betfair prices, and they are usually a few ticks above traditional bookmaker odds. However, the over round on highly liquid Betfair markets is only 1%-2%, whereas a traditional bookmaker is generally significantly higher, more like 110%-120%, depending on the event.
One way to extract the best results from traditional bookmarkers, as far as horse racing is concerned, is to bet with Best Odds Guaranteed. In this scenario, you'll receive a winning payout at the highest price the selection reached, rather than the price at which you struck your bet. This works best in overnight markets, that is placing bets the night before the race. However, this route is also one of the quickest to restriction and closure.
Minor nitpick re: horse racing: it's "totalisator" (usually abbreviated as "tote") and refers to the machine that keeps track of the pools and odds, and the term for the betting pool type is "parimutuel".
Fun fact: totalisators were originally mechanical computers that were used to price betting pools around the turn of the 20th century (http://www.computerhistory.org/atchm/racetrack-betting-mecha...).
Fun fact: totalisators were originally mechanical computers that were used to price betting pools around the turn of the 20th century (http://www.computerhistory.org/atchm/racetrack-betting-mecha...).
Thanks for the correction. I put that, and other spelling errors in that post, down to fat fingers on a mobile keyboard.
I'm confused, since betfair is an exchange aren't they just taking a cut of the action? Why would they add a heavy tax onto profits which would just drive heavy bettors away?
That's the scam.
They get you hooked thinking they are only taking 5% or whatever it was... and from pretty much everybody who bets there, they do only take 5%.
But all of the "smart money" gets taxed at 60% when they inevitably take all of the losers money who only paid 5%.
So in essence, they are doing exactly as you suggested... "they're just taking a cut of the action." But it's a 65% cut!
They get you hooked thinking they are only taking 5% or whatever it was... and from pretty much everybody who bets there, they do only take 5%.
But all of the "smart money" gets taxed at 60% when they inevitably take all of the losers money who only paid 5%.
So in essence, they are doing exactly as you suggested... "they're just taking a cut of the action." But it's a 65% cut!
It’s not quite as bad as that - see my other comment; the calculation of the charge doesn’t mean you pay 5%+60% commission on winning bets. That kind of fee would be impossible to sustain, no-one has that kind of profit margin on their betting. The commission % charge and the PC % charge don’t work in the same way.
On the flip side, a great many people pay far higher than 60% of their net profits to Betfair... most will have paid over 100%...
On the flip side, a great many people pay far higher than 60% of their net profits to Betfair... most will have paid over 100%...
They do it because they can, and for many gamblers, Betfair is the only place they can realistically keep betting at. Other bookies will restrict winning gamblers’ stakes or refuse their bets, and other betting exchanges have far less liquidity than Betfair. So, successful punters on Betfair just have to grin and bear it...
n.b. The 20-60% ‘premium charge’ that Betfair inflict on long-term winners is different to their standard 2%-5% commission that they charge everyone for any net profit on a market. The premium charge is calculated weekly over a customer’s profit & loss. So its effect is not the same as if the commission was as high as 60% per bet. Like a tax, the PC won’t make a profitable gambler unprofitable, it ‘just’ means Betfair get to keep more of your profits.
It’s also worth pointing out that the standard commission (2-5%) can add up to far more than 60% of your winnings anyway. As no-one wins every bet they place, the commission will become a larger percentage of your net profit. For example, Betfair charge me 2% commission and I ‘qualify’ for their premium charge of 40% - but my betting patterns already result in over 40% of my gross profit going to Betfair :(
n.b. The 20-60% ‘premium charge’ that Betfair inflict on long-term winners is different to their standard 2%-5% commission that they charge everyone for any net profit on a market. The premium charge is calculated weekly over a customer’s profit & loss. So its effect is not the same as if the commission was as high as 60% per bet. Like a tax, the PC won’t make a profitable gambler unprofitable, it ‘just’ means Betfair get to keep more of your profits.
It’s also worth pointing out that the standard commission (2-5%) can add up to far more than 60% of your winnings anyway. As no-one wins every bet they place, the commission will become a larger percentage of your net profit. For example, Betfair charge me 2% commission and I ‘qualify’ for their premium charge of 40% - but my betting patterns already result in over 40% of my gross profit going to Betfair :(
the casinos simply ask you to leave if you win too much.
I was actually backed off from the first place I went to after I learned how to count cards while I was losing. If the pit boss or dealers know how to count themselves and identify you as a counter, they want no part of it. In most cases, they'll either "flat bet" you (tell you that your initial bet is your maximum), or they'll tell you that you cannot play blackjack there. Actual barrings usually don't occur until the second or third offense.
I was actually backed off from the first place I went to after I learned how to count cards while I was losing. If the pit boss or dealers know how to count themselves and identify you as a counter, they want no part of it. In most cases, they'll either "flat bet" you (tell you that your initial bet is your maximum), or they'll tell you that you cannot play blackjack there. Actual barrings usually don't occur until the second or third offense.
That's only if you vary your bet size. That's a definite tell.
How do you profit from card counting without varying your bet size?
I guess you could always count from the sidelines and bet only in advantage spots. Not very practical I suppose but card counting in general seems pretty implausible these days
One strategy I know of is to have multiple people. One person sits at the table and always bets low, the other always bets high but only sits down if the person at the table signals to them that the odds are good (They can be off doing other stuff while the low-better is doing the counting, so they're not just standing around waiting).
You're still right though, the odds aren't that great and once they get a hint you're doing something weird you'll get thrown out.
You're still right though, the odds aren't that great and once they get a hint you're doing something weird you'll get thrown out.
Have someone else sit at your table when the count is good and bet high
Probably more polite than when organized crime was involved in Las Vegas casinos.
There's card-counting software called Casino Verites (IIRC).
There's card-counting software called Casino Verites (IIRC).
the situation is certainly more polite these days, but is organized crime really not involved anymore?
Most of the casinos are publicly traded, so for them to be involved someone would have to be lying on the financial statements submitted to the SEC. SOX would make that illegal at best and I believe reward anyone who blew the whistle on it with a substantial reward.
So if they are involved it would be more likely related to contracted services and such where you could pad the actual cost by a large amount and no one is going to look too closely.
So if they are involved it would be more likely related to contracted services and such where you could pad the actual cost by a large amount and no one is going to look too closely.
That's why it's done in teams.
I my experience as a card counter they'd just swap in a new dealer who would count themselves and just shuffle whenever the count got really good. Ridiculously unfair and probably illegal but what are you going to do, complain?
Why would that be illegal?
Casino licenses are contingent upon offering a fair game at stated odds. The odds are allowed to benefit the house, of course, since that's how running a casino becomes a sustainable, profitable enterprise, but the stated odds cannot be dynamically changed in the middle of the game to benefit the house.
Published blackjack odds depend on "dumb" reshuffles. If the house is "smartly" reshuffling the deck to reduce house payouts, then the published odds do not match the real odds, which is illegal.
Published blackjack odds depend on "dumb" reshuffles. If the house is "smartly" reshuffling the deck to reduce house payouts, then the published odds do not match the real odds, which is illegal.
Correct me if I'm wrong, but I think that not being allowed to count means that you should treat odds as if the cards were extracted from an infinite stack with a given statistical distribution of cards. Reshuffling when you only extracted a low number of cards from a finite stack basically approximates the infinite stack, so, the odds should be exactly as expected.
Except that the stack isn't infinite. There's a statistical difference between playing off a physical deck and playing off a random number generator, and in a physical deck, the dealing of various cards increases the relative odds that the other cards will come up later in the deck. It's the statistical foundation upon which card counting works.
Imagining that the physical deck is a virtual deck does not make it so. In an RNG-populated/virtual deck, there is a small but still real chance that, for instance, 20 aces could be dealt in a row, which is why game programmers use techniques like shuffle bags to prevent that from happening. An "infinite" physical deck, that was actually "infinite", would suffer from the same problem, and would need a physical solution, which would affect the odds which the casino is legally obligated to publish and adhere to.
Imagining that the physical deck is a virtual deck does not make it so. In an RNG-populated/virtual deck, there is a small but still real chance that, for instance, 20 aces could be dealt in a row, which is why game programmers use techniques like shuffle bags to prevent that from happening. An "infinite" physical deck, that was actually "infinite", would suffer from the same problem, and would need a physical solution, which would affect the odds which the casino is legally obligated to publish and adhere to.
> It's the statistical foundation upon which card counting works.
Exactly, so, if counting cards if forbidden (I'm not arguing if that is right or not), then having that statistical foundation isn't useful. As a different comment suggested, reshuffling at a fixed point (say, after one third of the cards have been dealt) should solve the problem in practice, also preventing the house to use counting in a meaningful way.
Exactly, so, if counting cards if forbidden (I'm not arguing if that is right or not), then having that statistical foundation isn't useful. As a different comment suggested, reshuffling at a fixed point (say, after one third of the cards have been dealt) should solve the problem in practice, also preventing the house to use counting in a meaningful way.
That would be true if the casino always reshuffled after a certain number of cards came out.
But a dishonest casino could do the same card counting that players can do, and reshuffle when the count favours the players.
But a dishonest casino could do the same card counting that players can do, and reshuffle when the count favours the players.
I agree that having a fixed number of cards between reshuffles would be the fairest solution.
And when the dealer messes up the count you can have one hell of an exit!
Very loudly:
"Aha! You should have shuffled the cards! Messed up the count didn't you!"
Sunglasses on and just walk away.
Very loudly:
"Aha! You should have shuffled the cards! Messed up the count didn't you!"
Sunglasses on and just walk away.
card counting is about a few percentage points advantage wrung out over hundreds of hands, you would never get a jackpot moment like that if you are doing it correctly.
I've worked for an online bookie. I've also worked for an outfit that bets (on horses mainly).
The online bookie will indeed ban or limit winning accounts or anyone they suspect of cheating or betting smartly. Anyone betting large amounts dumbly gets taken out to nice dinners etc.
The company that bets on horses bets using exchanges, because bookmakers would tend to kick them out. The abstract of this paper is pretty much 101 to those guys who do some advanced stuff I can't talk about to make predictions.
Good luck!
The online bookie will indeed ban or limit winning accounts or anyone they suspect of cheating or betting smartly. Anyone betting large amounts dumbly gets taken out to nice dinners etc.
The company that bets on horses bets using exchanges, because bookmakers would tend to kick them out. The abstract of this paper is pretty much 101 to those guys who do some advanced stuff I can't talk about to make predictions.
Good luck!
That's why I like group gambling games like poker. The casino wins from transaction fees, and players are competing against each other.
If the games weren't set for The House to make money, it would be a charity instead of a business.
I don't think your reasoning is correct.
The entire lure of gambling is that some players can make money. The house always plays that up.
But if the house always wins, that hope they're selling disappears.
The entire lure of gambling is that some players can make money. The house always plays that up.
But if the house always wins, that hope they're selling disappears.
I think it's more so there is a chance to come out ahead. E.g., everyone sitting on a pokie machine absolutely knows in the long run, the casino wins out. However they are hoping they are the 1/million that gets the jackpot and "beats" it. The same reason people buy lottery tickets I guess.
Other people simply like the social aspect of a lot of games (craps, poker, blackjack, roulette) and the excitement/thrill of seeing some big winners. You know in the long run you are losing X%, but still go to burn hours and have some fun.
Other people simply like the social aspect of a lot of games (craps, poker, blackjack, roulette) and the excitement/thrill of seeing some big winners. You know in the long run you are losing X%, but still go to burn hours and have some fun.
I would love to hear more about your story.
I have always thought about learning to count cards, instead of say learning a new language.
Can't you just go to another casino until they kick you out, and repeat?
Do you actually make money now that you can count?
I have always thought about learning to count cards, instead of say learning a new language.
Can't you just go to another casino until they kick you out, and repeat?
Do you actually make money now that you can count?
I went to high school in Las Vegas, so when I went to college everyone "assumed" I could count cards. After realizing it was a losing strategy to tell people that couldn't count, I looked up the basic strategy.
I wrote a computer program to simulate the game and the strategy and had the computer play hands until it was winning consistently. Generally it wasn't so much "counting cards" as it was "counting face cards and 10's, and changing your betting strategy based on that count."
Just thinking about the mechanics of a card deck, face cards, 13 card suits, etc. Turned out to be really useful in playing Bridge as well.
I wrote a computer program to simulate the game and the strategy and had the computer play hands until it was winning consistently. Generally it wasn't so much "counting cards" as it was "counting face cards and 10's, and changing your betting strategy based on that count."
Just thinking about the mechanics of a card deck, face cards, 13 card suits, etc. Turned out to be really useful in playing Bridge as well.
One main difference is that the vast majority of sports betting occurs outside of casinos and "legality". The other huge difference is that the entity making the picks doesn't necessarily have to be the person placing the bets. There is a well established term in sports betting for one who places a bet for someone else, "beard". Fortunately for the bookies/casinos and the few winning bettors, there are always plenty of losing bettors to keep the system afloat and profitable for everyone with an edge.
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That's because you get greedy, if you walk away every time with a 500-1000 dollar, they wont notice.
Ah that's the rub though isn't it. I'm up $500. Do I try to build it to $1000 and then walk away? Do I walk away now? No gambler knows exactly the right time to quit while ahead and the casinos count on that.
There has to be more to this story. I would like to hear the bookmakers side of this. Perhaps the researchers were scripting or triggered some other kind of security tripwire.
Winning $900 split across several different bookmakers is absolutely nothing in the sports betting industry.
William Hill, one of the companies that the researchers claim restricted them is a multi billion dollar company. They aren't sweating small time bets like this.
EDIT: I noticed that the screenshots they used as proof their bets were restricted are for bets on very minor football leagues (Australian semi pro football), its common for betting limits to be lower for games that don't see a lot of betting action & is not proof enough to me that the bookmakers lowered their limits globally
Winning $900 split across several different bookmakers is absolutely nothing in the sports betting industry.
William Hill, one of the companies that the researchers claim restricted them is a multi billion dollar company. They aren't sweating small time bets like this.
EDIT: I noticed that the screenshots they used as proof their bets were restricted are for bets on very minor football leagues (Australian semi pro football), its common for betting limits to be lower for games that don't see a lot of betting action & is not proof enough to me that the bookmakers lowered their limits globally
Bookies will limit you no matter what your stakes are. You can get your account closed by placing £10 bets, and even if those bets don’t win!
Bookmakers are on the lookout for exactly the kind of betting behaviour described in the paper: people only betting on the top price, and shopping around for the best odds. If they see that you are only grabbing mis-priced offers, you are unlikely to be a profitable customer to them.
The bet size doesn’t really come into it. Just look at it from their point of view; why keep a customer who is costing you money, however little it is.
Bookmakers are on the lookout for exactly the kind of betting behaviour described in the paper: people only betting on the top price, and shopping around for the best odds. If they see that you are only grabbing mis-priced offers, you are unlikely to be a profitable customer to them.
The bet size doesn’t really come into it. Just look at it from their point of view; why keep a customer who is costing you money, however little it is.
My guess is that it’s the manner by which they were winning. Thirty $50 bets per week over five months is over 500 bets. That’s not the long run but winning at an 8.5% ROI over that many bets is probably enough for the house to realize they’re somehow a winning player even if the stakes aren’t huge.
Sportsbooks in general don't mind winning players though, especially big ones. They make money off the vig and move odds to get equal money on each side of the bet so that they'll make money either way.
As someone who has worked in the sports betting industry, it depends a lot on the bookmaker. UK retail bookies hate anyone with any savvy, and will ban their accounts fast. Ditto "weird" betting that looks like it might be machine-run. Their business is taking old folks pensions from them.
OTOH, exchanges love all kinds of gamblers and won't ban you for winning any amount. "Smart money" Asian bookies will bet against anyone because their job is to have a better model than you. (Of course, there is a max bet on any offer, and the odds will move if you hit them hard enough.)
Also, everything in the abstract of this article is either old old news (strategy-wise) or plain wrong in light of the actual business of sports betting. "Implied odds" has been around forever, and real companies make real, consistent returns from arbitrage and "statistical arbitrage" on implied PDFs and have for years.
OTOH, exchanges love all kinds of gamblers and won't ban you for winning any amount. "Smart money" Asian bookies will bet against anyone because their job is to have a better model than you. (Of course, there is a max bet on any offer, and the odds will move if you hit them hard enough.)
Also, everything in the abstract of this article is either old old news (strategy-wise) or plain wrong in light of the actual business of sports betting. "Implied odds" has been around forever, and real companies make real, consistent returns from arbitrage and "statistical arbitrage" on implied PDFs and have for years.
They hate “sharps”, winners who win through skill exploiting lines, they love those who win by chance. Sharps will continue to bleed them, the lucky fish often become whales whose luck fades over time.
In casino games the "luck" stays the same. One or two percentages (or more) lower than 50%.
You are confusing luck with expectation. Luck is the deviation from expectation. I've seen terrible poker players win a big tournament, or crush cash games for months on end, and quit their jobs because they mistakenly believe they are skilled at poker. Their positive deviation above their actual expectation (their "luck") soon evaporates, and they moan constantly because their results begin to actually match their expectation, or even worse, they get "unlucky" and their losses are greater even worse than their expectation.
> You are confusing luck with expectation. Luck is the deviation from expectation.
you're actually thinking of the square root of luck there.
you're actually thinking of the square root of luck there.
The books rarely balance up though, especially for markets with more than two outcomes. Football/soccer has win/lose/draw (and you can never get enough money on the draw, as hardly any amateur is going be watching a match cheering on a draw!)
Horse racing is even worse for the bookies, with multiple runners, their books will rarely balance, and the standard outcome is a loss if the favourite wins. Any outsider winning a race is a ‘turn up for the books’. (n.b. this is for UK style horse racing betting, where the bookies offer fixed odds. Pari-mutuel or pool betting doesn’t have the same problem)
Horse racing is even worse for the bookies, with multiple runners, their books will rarely balance, and the standard outcome is a loss if the favourite wins. Any outsider winning a race is a ‘turn up for the books’. (n.b. this is for UK style horse racing betting, where the bookies offer fixed odds. Pari-mutuel or pool betting doesn’t have the same problem)
The "vig" comes from "vygrysh" which is "winnings" in Russian (IIRC).
They're not a "winning player" in the usual sense. The casino wants players to bet on a certain outcome in some cases (in order to reduce risk, presumably) and therefore hands over the winning strategy on a silver platter.
I feel like the casinos just want those kinds of bets to be small. They don't want to over-correct in the other direction. By limiting these players that specifically make these kinds of bets, they reduce the risk of a big amount of money being bet in a short amount of time on the "winning" strategy.
I feel like the casinos just want those kinds of bets to be small. They don't want to over-correct in the other direction. By limiting these players that specifically make these kinds of bets, they reduce the risk of a big amount of money being bet in a short amount of time on the "winning" strategy.
I'd suspect it was less to do with the edge, which isn't especially huge especially over the short run, and more to do with the authors' unusual selection of bets entirely overlapping the bookies' ad hoc analysis of bets they've mispriced. Particularly since the bookies watch each others' odds (as do scripts sold to wannabe arbitrageurs on the internet). Having a subset of winning betters with an information advantage may even help bookies overall if they know who those people are, but they'll want to limit how much they pay out for that information. Especially if the limits are market specific, and the section of the paper highlighting betting limits shows a screenshot of an attempt to place bets on Australian youth association football...
But $900 is pocket money bookmakers are willing to give away: around the time this study collected it's first data points I made more from fewer bookmakers just from intentionally +ve expectation welcome bonuses (and that was after they'd responded to the first wave of people pocketing welcome bonuses by eliminating them... for people from Denmark)
But $900 is pocket money bookmakers are willing to give away: around the time this study collected it's first data points I made more from fewer bookmakers just from intentionally +ve expectation welcome bonuses (and that was after they'd responded to the first wave of people pocketing welcome bonuses by eliminating them... for people from Denmark)
proof their bets were restricted are for bets on very minor football leagues (Australian semi pro football)
That's... interesting.
http://www.abc.net.au/news/2014-09-22/soccer-clubs-obvious-m...
That's... interesting.
http://www.abc.net.au/news/2014-09-22/soccer-clubs-obvious-m...
It would be interesting to see where they are making their edge. I wouldn't be surprised if it's on a lot of these minor leagues with more uncertainty, as opposed to stuff like the EPL
I've been trying my luck at tennis betting ( https://matchstat.com/profile/soniman ) and the only strategy that seems to work consistently is finding injured players and betting against them. Good example of an injured player is a player that limps (Andy Murray at Wimbledon this year). The computers don't watch matches so injured players can be overvalued by the models. Also, any British tennis player tends to be overvalued because the books are based in the UK. For instance there is an overweight British player named Marcus Willis that last week was a 1.01 favorite to win at a tournament in Las Vegas; he lost, apparently due to dizziness aka being fat. There are some other patterns that can be exploited but the highest return strategy has to be betting against injured favorites. However, I think that would probably require more tennis watching than I want to do. Maybe I could hire somebody on Mechanical Turk to watch tennis for me and report on players who appear to be injured or take medical time outs.
Maybe you could find a sport where injuries are logged or can be inferred from other data? For instance if a racehorse performs far slower than its typical pace, its odds of losing the subsequent race might be higher.
The whole point is that computers can't use injuries as a data point. This strategy won't work in any sport that can have the injury factor calculated by a computer.
> A few weeks after we started trading with actual money some bookmakers began to severely limit our accounts, forcing us to stop our betting strategy.
Isn't this like literally one of the oldest tricks in the book? I remember reading Reminiscences of a Stock Operator, which talks in part about early 1900's bucket shops, and the same stuff was there even then. Similar stuff is also mentioned in market microstructure textbooks with market makers on one side and informed traders on the other side.
Is rigged even the right word here? It might be, but did the bookmakers have a responsibility to keep accepting their bets? Is it different from claiming that casinos are rigged?
Isn't this like literally one of the oldest tricks in the book? I remember reading Reminiscences of a Stock Operator, which talks in part about early 1900's bucket shops, and the same stuff was there even then. Similar stuff is also mentioned in market microstructure textbooks with market makers on one side and informed traders on the other side.
Is rigged even the right word here? It might be, but did the bookmakers have a responsibility to keep accepting their bets? Is it different from claiming that casinos are rigged?
Same here. If you have a strategy that wins you money overall, bookmakers either send you a nice email saying your account is closed as they do not welcome professional players or they just severely limit your stakes (think $20 a bet).
(Will Hill, Interwetten, Betway are exactly the type of bookies that will close your account as soon as they catch on)
Yes, the odds can be exploited and there is a whole bunch of services offering picks, but eventually the sportsbooks catch on and close your account. The sportsbooks that welcome professional players are few and far between and their odds are on point.
(Will Hill, Interwetten, Betway are exactly the type of bookies that will close your account as soon as they catch on)
Yes, the odds can be exploited and there is a whole bunch of services offering picks, but eventually the sportsbooks catch on and close your account. The sportsbooks that welcome professional players are few and far between and their odds are on point.
Correct -- the market maker (or casino) is under no obligation to take your action. And, why should they be? The penalty for refusing action is that you take your business elsewhere.
I always thought bookies just kept moving the lines until they were making money at the snap of the ball. Their initial line isn't as important as adjusting the line so that there is equal money on both sides of the line and therefore the bookie is guaranteed money due to the small fee they build into the bets. Their profits don't depend on accurately predicting the game's score, just moving the line strategically as more bets come in.
Easier said than done.
Suppose your book is balanced, and you have $25,000 on each side. Then a new bet comes in, size $250,000, on one side of your book -- what to do?
Or, more simply, when you set your initial line, what do you do when a known sharp immediately wants action on one side?
Suppose your book is balanced, and you have $25,000 on each side. Then a new bet comes in, size $250,000, on one side of your book -- what to do?
Or, more simply, when you set your initial line, what do you do when a known sharp immediately wants action on one side?
You limit the pot according to what you can afford to loose betting against the sharp. If your odds are alright, the small edge that the odds give the house will play out over the long run. That means astronomic sums of money are needed if you want to allow unlimited bets. Few people would be regularly betting that much. Picking misplaced odds or whatever is exploited is based on luck in the end.
You open things up to select sharps earlier than the general public, with limits. They get the benefit of potentially better lines and you get the information benefit of what the pros think the fair price for any bet is, allowing you to adjust the line before allowing bets from the general public. That's how a lot of the offshore sportsbooks handle it, but it may not actually be legal to do so in Vegas. I don't actually know.
One other factor is sometimes you actually are willing to take principal risk -- like when there are hoards of people willing to place bad bets on the local team -- you're willing to run an unbalanced book.
Yes, of course you can beat the "popular" bookmakers.
Once you start beating them ( being profitable in value prices ) they will simply close/ban your account. Nowadays, it happens extremely fast ( in a day or a few hours, depending on your moves ). It's a well known tactic, and in practice, you cannot do anything about it ( other than keep opening new accounts in new names ).
Try beating a betting exchange.
Once you start beating them ( being profitable in value prices ) they will simply close/ban your account. Nowadays, it happens extremely fast ( in a day or a few hours, depending on your moves ). It's a well known tactic, and in practice, you cannot do anything about it ( other than keep opening new accounts in new names ).
Try beating a betting exchange.
They did have betfair in the list - I wonder if they placed any bets there.
"Retail" bookmakers are only interested in mugs. If your betting patterns indicate someone who is wise to the market, you will be limited or shown the door. Be prepared to have arbitrage positions pulled out from under you. The game is rigged insofar as the book decides if it wants to entertain your position.
If you want to make money you have to bet against, and be able to beat the books that know what they are doing - The high limit, low margin books like Pinnacle, SBO, IBC et al will happily take you on.
If you want to make money you have to bet against, and be able to beat the books that know what they are doing - The high limit, low margin books like Pinnacle, SBO, IBC et al will happily take you on.
Not mentioned in the abstract is that they also used real money:
> During that period we obtained an accuracy of 47.% [sic] and a profit of $957.50 across 265 bets, equivalent to a 8.5% return (Table 1, Figure 3).
For some reason the "ok but how much did you ACTUALLY MAKE?" is always my favorite part of this kind of business or economics literature.
> During that period we obtained an accuracy of 47.% [sic] and a profit of $957.50 across 265 bets, equivalent to a 8.5% return (Table 1, Figure 3).
For some reason the "ok but how much did you ACTUALLY MAKE?" is always my favorite part of this kind of business or economics literature.
> A strategy intended to beat the bookmakers at predicting the outcome of sports games requires a more accurate model than the ones bookmakers have developed over many years of data collection and analysis.
I disagree with this assumption and I think they have painted themselves into a corner because of it. To illustrate, imagine charting win rates against bins of price-implied-chances. $3 horses win roughly 33% of the time, $4 horses 25% for example. It resembles a noisy 1:1 linear relationship. Do the same for your selections and your line will be noisier, but crucially you're not taking bets where the price is worse than your estimate. This can leave a window of profitibility when you subtract the two, even when you are less 'accurate' as measured by win rate or KLD or other measures.
The goal is profitibility, not accuracy. The problem with including the odds you are betting against as a feature for your ensemble is that it dampens that window. If you're right about your selections, you'll bet less and win less. * If you're concerned about the volitility that comes with being less accurate, there are better ways to address that.
I've been doing this for a couple of years and in many ways it's a dream side-project. Location independent, no customers, automatable, and in some jurisdictions tax-free. It can be a little lonely at times though. I would love to chat with anyone else applying tech/math to beat the bookies. Sorry for the throwaway, I'll put a contact in my profile.
I disagree with this assumption and I think they have painted themselves into a corner because of it. To illustrate, imagine charting win rates against bins of price-implied-chances. $3 horses win roughly 33% of the time, $4 horses 25% for example. It resembles a noisy 1:1 linear relationship. Do the same for your selections and your line will be noisier, but crucially you're not taking bets where the price is worse than your estimate. This can leave a window of profitibility when you subtract the two, even when you are less 'accurate' as measured by win rate or KLD or other measures.
The goal is profitibility, not accuracy. The problem with including the odds you are betting against as a feature for your ensemble is that it dampens that window. If you're right about your selections, you'll bet less and win less. * If you're concerned about the volitility that comes with being less accurate, there are better ways to address that.
I've been doing this for a couple of years and in many ways it's a dream side-project. Location independent, no customers, automatable, and in some jurisdictions tax-free. It can be a little lonely at times though. I would love to chat with anyone else applying tech/math to beat the bookies. Sorry for the throwaway, I'll put a contact in my profile.
> I would love to chat with anyone else applying tech/math to beat the bookies. Sorry for the throwaway, I'll put a contact in my profile.
How's that contact information coming along? :-)
How's that contact information coming along? :-)
What the authors are doing is “chasing steam” and most books will ban or limit you if you try this. This should come as no surprise to people with experience in the industry. The books aren’t limiting/banning them for winning - it’s the way in which they were winning. They are betting slow moving books’ lines. Their strategy only works at poorly managed books as long as they can bet quickly. I doubt they made any bets at a sharp friendly book like pinnacle.
If anyone would like to collaborate with some model building get in touch. I already have a large db of most of the stats you’d ever need and some okay but not amazing models for most major sports.
If anyone would like to collaborate with some model building get in touch. I already have a large db of most of the stats you’d ever need and some okay but not amazing models for most major sports.
How would I go about contacting you?
Contact info is in profile but andr3w321 at gmail
People say their contact details are in their profile, but I never see contact details in any profile I view. Am I missing something?
If you view your own profile you can see your email, but some people don't realise it doesn't show up in your public profile.
A couple of suggestions to improve on this method.
The authors' regression left an intercept or 'adjustment term' of 3.4% - 5.7%. For a perfect bookmaker, this intercept term would be equal to the overround. The number calculated unfortunately averages that overround between different bookmakers and at different times (overrounds often decrease over time). It might be more effective to adjust for the actual overround of each market sampled, i.e. divide each price by the sum of the inverse of the prospects.
They appear to use a flat betting strategy, and the threshold to bet or not was selected based on profitibility. I was simplifying in another comment when I said profitibility should be the goal. In reality it's utility you should be optimizing for. Nobody wants a ultimately profitable system that reads like an EKG, they want a high sharpe ratio. The paper's results are actually very good here, but the trend could be lifted and stabilized further by betting proportionally to expectation, or by explicitly optimizing for such.
The authors' regression left an intercept or 'adjustment term' of 3.4% - 5.7%. For a perfect bookmaker, this intercept term would be equal to the overround. The number calculated unfortunately averages that overround between different bookmakers and at different times (overrounds often decrease over time). It might be more effective to adjust for the actual overround of each market sampled, i.e. divide each price by the sum of the inverse of the prospects.
They appear to use a flat betting strategy, and the threshold to bet or not was selected based on profitibility. I was simplifying in another comment when I said profitibility should be the goal. In reality it's utility you should be optimizing for. Nobody wants a ultimately profitable system that reads like an EKG, they want a high sharpe ratio. The paper's results are actually very good here, but the trend could be lifted and stabilized further by betting proportionally to expectation, or by explicitly optimizing for such.
This comment is an example of the adage that successful sports betters could probably be making money in lots of other ways :)
Interesting. Are you refering to kelly criterion?
There needs to be some degree of risk aversion given the uncertainties in estimating your edge. I am thinking more along the lines of a CRRA utility function - something a little less aggressive than kelly.
in your opinion, is there any practical benefit over just using half kelly?
Raises an interesting point regarding a staking strategy. Given the bookmakers are going to cut you off, it potentially could be better to just go as hard as you can & live with the risk.
Alternatively, an interesting tweak would be to see what the best historical edge has been, and wait for the best opportunities to surface & only bet on those. Effectively you limit yourself by saying "I can only place N bets per bookmaker, what should my strategy be?"
Alternatively, an interesting tweak would be to see what the best historical edge has been, and wait for the best opportunities to surface & only bet on those. Effectively you limit yourself by saying "I can only place N bets per bookmaker, what should my strategy be?"
Link to the code used from the PDF:
https://github.com/Lisandro79/BeatTheBookie
https://github.com/Lisandro79/BeatTheBookie
They claim the market is inefficient. I worked for a company that to some extend fixed that. Can't remember all the details (I worked on a different part), but something like this:
Most big betting companies were customers. They all continuously sent their updated odds to us, and we would broadcast to the other companies. They would react to the change based on certain rules and send new updated odds back to us. This would then converge.
The inefficacy comes from promotions, company X always wanting to have odds .1 better than company Y etc.
Edit: Not sure how it works now, but: https://www.betradar.com/ and https://mts.betradar.com/
Most big betting companies were customers. They all continuously sent their updated odds to us, and we would broadcast to the other companies. They would react to the change based on certain rules and send new updated odds back to us. This would then converge.
The inefficacy comes from promotions, company X always wanting to have odds .1 better than company Y etc.
Edit: Not sure how it works now, but: https://www.betradar.com/ and https://mts.betradar.com/
Haha, this exactly describes arbitrage. My old company was "sent ... updated odds" (well, we scraped their sites often...) and "we would broadcast to the other companies" by betting on those other companies' sites when the lines crossed, and "This would then converge" because one of the bookies in the arb would move the odds after we hit them (or after we hit them a second or third time...)
Yeah, but with the difference that they pay a flat fee for the arbitrage through a third party, not leaving money on the table for others.
Just like the rake or the edge the house advantage of making the rules has always been the reality of betting. Online or offline. Forever. Get too successful and you’re no longer invited to bet.
Asymmetry of information has never been the bookmaker’s most powerful weapon. The book is.
Those who are successful at it accept this reality. They grumble and make peace with it - paying the super taxes and liquidising markets where they’re asked to.
Ultimately however, while it’s interesting to see how they do some of this (and there are plenty of practices not covered in the paper, I assure you) it’s a bit like complaining the DM won’t let you do something in dungeons and dragons - you’re dicing with the god of your domain so the rules can change at any minute.
Asymmetry of information has never been the bookmaker’s most powerful weapon. The book is.
Those who are successful at it accept this reality. They grumble and make peace with it - paying the super taxes and liquidising markets where they’re asked to.
Ultimately however, while it’s interesting to see how they do some of this (and there are plenty of practices not covered in the paper, I assure you) it’s a bit like complaining the DM won’t let you do something in dungeons and dragons - you’re dicing with the god of your domain so the rules can change at any minute.
I used to work for a popular UK online bookmaker. The thing that a lot of these comments are missing is that bookies aren’t going to sell a product at a loss. They’re also not even selling the product you think they are (something akin to an investment).
Bookmakers sell excitement / entertainment - the thrill of the potential win is the product, and costs approximately 10% of what you can afford to stake.
Bookmakers sell excitement / entertainment - the thrill of the potential win is the product, and costs approximately 10% of what you can afford to stake.
The most interesting thing was left out: how did they find this data? Both historical and realtime is pretty hard to find. Ten years of odds from a dozen bookies looks like a massive task.
Next: how do you mask this behavior to not be obvious. Once you have a betting stratetgy the real difficulty is turning it into one that isn't obvious.
Next: how do you mask this behavior to not be obvious. Once you have a betting stratetgy the real difficulty is turning it into one that isn't obvious.
I don't see why we cannot have completely distributed betting platform using para-mutual betting strategy that collects and distributes bets and winnings on the basis of publicly reported sports results with no take-out.
I prefer para-mutual rather than a house deciding the odds. It is a more free-market approach. It has been used in horse racing, but the takeout has been too large which makes it hard to be profitable.
I prefer para-mutual rather than a house deciding the odds. It is a more free-market approach. It has been used in horse racing, but the takeout has been too large which makes it hard to be profitable.
Yes -- customers don't like it because it's too hard to win.
Said another way, customers will choose to place bets with market makers, instead of some paramutual operation.
Said another way, customers will choose to place bets with market makers, instead of some paramutual operation.
Why is it harder to win?
In paramutuel betting the prices are not fixed, so you cannot leverage differences between the odds on offer and your estimate of the prospect's chances. The final odds you receive are equal to the total stakes placed on that prospect divided by (sum of all stakes less the operator's take). You can't formulate an optimal staking plan with unknown odds, and you're forced to compete on win rates rather than price ineffeciencies.
I don't think your reasoning is correct.
A bookmaker setting the odds presumably would hire the most accurate handicapper analytics team to set the odds appropriately, then take their cut. In paramutual betting, you need only be better than the average bet..and there are a lot of stupid betters. You know the odds pretty well by posttime.
A bookmaker setting the odds presumably would hire the most accurate handicapper analytics team to set the odds appropriately, then take their cut. In paramutual betting, you need only be better than the average bet..and there are a lot of stupid betters. You know the odds pretty well by posttime.
My reasoning is that the 'invisible hand' of many less informed bettors leads to market efficiency in aggregate, particularly in highly liquid markets. Greater liquidity in parimutuel markets makes for odds that are less of a moving target, but it leaves fewer mispriced prospects to capitalise on. So not only do you have to beat a fairly efficient market, but you have to beat it on average by a margin equal to the parimutuel operator's take. In less liquid markets the unknown odds are more of a problem. That's not to say it profits can't be made, just that it's harder imho. With fixed pricing, even though the numbers don't 'add up to one' there either, you can lock in a positive expectation long before price consensus is reached.
I can see what you are saying. I would say however that most $$ players in the stock market have analytic teams, etc. If instead, a substantial portion of the players in the stock market placed their bets on randomly chosen stocks, the aggregate would be much less efficient and that could be exploited.
I've sat and watched people betting on horses for a long time. The majority choose based on the name or color of the horse (sentimentalist), the going favorite (risk averse), the longest odd (big paydayists). Many others play on weaker signals (owner, jockey). A few bet on the advice of experts in the daily form, and these probably do make the market more efficient. In aggregate, from my own experience at Golden Gate Fields where the take-out is 14%, my average ROI was around -6 to -10%. This suggests that I was beating the market, but the takeout was killing me.
So I've imagined that in a decentralized paramutual pool with minuscule or zero takeout, and given a common population of betters, I'd make a steady profit.
I should add that another advantage of paramutual over bookmaker odds is the pool maintainers do not care if you are a winner or a loser, and won't freeze your accounts on you.
I've sat and watched people betting on horses for a long time. The majority choose based on the name or color of the horse (sentimentalist), the going favorite (risk averse), the longest odd (big paydayists). Many others play on weaker signals (owner, jockey). A few bet on the advice of experts in the daily form, and these probably do make the market more efficient. In aggregate, from my own experience at Golden Gate Fields where the take-out is 14%, my average ROI was around -6 to -10%. This suggests that I was beating the market, but the takeout was killing me.
So I've imagined that in a decentralized paramutual pool with minuscule or zero takeout, and given a common population of betters, I'd make a steady profit.
I should add that another advantage of paramutual over bookmaker odds is the pool maintainers do not care if you are a winner or a loser, and won't freeze your accounts on you.
It's closer to 22.5% in total. [1] But it also depends on specifics like race, location, type of bet [2]. Looks like a conventional win, place, or show bet has the least taken out of it
[1] http://www.calfairs.net/files/publications/14.pdf -- check slide 5
[2] https://www.scribd.com/document/84887435/CA-Authority-of-Rac... -- An Example for Northern CA breeds on page 10
[1] http://www.calfairs.net/files/publications/14.pdf -- check slide 5
[2] https://www.scribd.com/document/84887435/CA-Authority-of-Rac... -- An Example for Northern CA breeds on page 10
I always focused on Win Place or Show betting becsuse if the lower take.
Do you think there's an opportunity to run a "free" service with no take, but selling services to large/automated clients and/or selling data?
There are very high regulatory costs if you're going to run a book/tote and pay out people's bets. But yes, your data could be worth more than your bookmaking margins. If it's worth buying, it's worth using yourself. I like the idea of a private prediction market, something between kaggle and that investment fund that uses homomorphic encryption, the name escapes me. 'Invest' on betting markets, return a share of profits to contributors.
Sports betting and/or prediction markets are such an obvious application of cryptocurrencies/smart contracts that I'm kind of shocked it isn't already a huge part of the darknet (or maybe it is and I just don't know about it). It doesn't even have to be good, as long as it's anonymous, decentralized, and eliminates counter-party risk. Something like that could be adopted at a glacial pace and still be unstoppable in the long term.
I thought about as soon as I heard of the technologies. There is the one part, validating results of sports events to initiate payouts, the setting up of new events, that would seem to make it more difficult without some sort of scraping, or intervening party.
They could have reduced a lot of the work (calculating the mean across 32 bookmakers and applying a constant for the margin) by just taking the price from a highly liquid exchange like betfair, which is pretty close to a 100% efficient de-marginated line.
Although it still wouldn't have prevented their accounts from being limited.
Although it still wouldn't have prevented their accounts from being limited.
Shouldn't the goal of a bookie simply be to balance his book and have no position on the actual odds of the match? Of course it makes sense to deny action to known sharps, this should come as no surprise.
I don't totally understand why the bookmakers would limit their accounts.
The bookmaker wants to balance his book for each game to make sure he makes a profit no matter what the outcome is. To balance their books they might give better odds for an outcome than what a statistical model might suggest.
But what difference does it make if the bettor who helps them balance their books is a consistent winner or not?
Do they prefer to give these "good" odds to people who are losing money long term?
The bookmaker wants to balance his book for each game to make sure he makes a profit no matter what the outcome is. To balance their books they might give better odds for an outcome than what a statistical model might suggest.
But what difference does it make if the bettor who helps them balance their books is a consistent winner or not?
Do they prefer to give these "good" odds to people who are losing money long term?
Probably the bookmakers are actually OK with the betting activity that is described in the paper, but they have limits on successful accounts as a safety mechanism to prevent themselves from losing too much money in the event that somebody comes up with an unforeseen method of winning lots of money.
Makes sense.
But then they are depriving themselves of liquidity provided by these professional gamblers. They might have to increase the odds even more so that an average joe will bet on an unpopular team where as the professional bettor would have taken it at a lower price recognizing the statistical edge.
The aim of the bookie is to have a guaranteed profit on each and every game. Whereas the professional gambler tries to make a guaranteed profit over multiple games. Seems to me that they can benefit each other rather than be against each other.
But then they are depriving themselves of liquidity provided by these professional gamblers. They might have to increase the odds even more so that an average joe will bet on an unpopular team where as the professional bettor would have taken it at a lower price recognizing the statistical edge.
The aim of the bookie is to have a guaranteed profit on each and every game. Whereas the professional gambler tries to make a guaranteed profit over multiple games. Seems to me that they can benefit each other rather than be against each other.
What you are saying makes total sense and seems reasonable but the reality is the books don't need the sharp action and don't really care about having a perfectly even balance. They will make more money just letting squares fire away at 1.9 or -110 odds and print money. Someone above said it perfectly, having the balanced action via sharp players will reduce variance but will eat into profits, and the books have the capital required to ride out any variance (entire seasons where squares win at a higher than expected rate for example).
edit: the books (at least the ones that open with respected lines, not the ones that copy the big books' lines) DO want sharp action when they are trying to set the right line. They will have a private group of handicappers that get to take shots at the new lines before they are publicly listed for smaller bet sizes, then they open the lines publicly for very small bet sizes. By the time the full bet limits are allowed and the square punter is picking a game 30 minutes before it begins, the books have no more fears.
on the topic of this paper, the arb'ing or picking off "off" lines is kind of a crowded space and opportunities don't last for long. I wouldn't get into it with high expectations of profit.
edit 2: source: i've been heavily involved in the industry on the betting / modeling side for years in the past.
edit: the books (at least the ones that open with respected lines, not the ones that copy the big books' lines) DO want sharp action when they are trying to set the right line. They will have a private group of handicappers that get to take shots at the new lines before they are publicly listed for smaller bet sizes, then they open the lines publicly for very small bet sizes. By the time the full bet limits are allowed and the square punter is picking a game 30 minutes before it begins, the books have no more fears.
on the topic of this paper, the arb'ing or picking off "off" lines is kind of a crowded space and opportunities don't last for long. I wouldn't get into it with high expectations of profit.
edit 2: source: i've been heavily involved in the industry on the betting / modeling side for years in the past.
Because people who bet sharply on lines reduce the long term profitability of the bookies. While they reduce the variance, they take directly from the profits.
Defeats the point of being a bookie when better bettors imbalance the book in one direction and win.
Defeats the point of being a bookie when better bettors imbalance the book in one direction and win.
If they imbalance the book yes. But in this case the authors got the statistical edge because the bookie is trying to balance the book.
What difference does it make if the $10k the bookie needs at 4/1 to balance the book comes from professional better Bob or from long term loser Joe?
As soon as the book gets imbalanced again they would have to change the lines again.
Because Bob bets when it is profitable - when the line is wrong. Taken as aggregate, Joes bet on both outcomes, the unprofitable ones and profitable ones.
> The bookmaker wants to balance his book for each game to make sure he makes a profit no matter what the outcome is.
This part is not really true. Bookies will very often have an unbalanced book and will be happy to keep taking action on the side that increases their exposure, if the price is right.
This part is not really true. Bookies will very often have an unbalanced book and will be happy to keep taking action on the side that increases their exposure, if the price is right.
That's fine.
Although the strategy works here because the bookie moves the line to make it more attractive to bet on it. If he does not care about balancing the book, why move the line? He could just keep increasing his exposure
Although the strategy works here because the bookie moves the line to make it more attractive to bet on it. If he does not care about balancing the book, why move the line? He could just keep increasing his exposure
It’s really simple: For a bookie, if a customer is winning money, then you are losing money. Doesn’t matter if they are helping balance your books or not. So why take their bets?
Likewise, bookmakers will happily take bets from guessers all day long. If they are lucky enough to get a ‘whale’ placing huge (but dumb) bets, they can easily lay off those bets elsewhere to manage their risk. They don’t need skilful gamblers to help balance their books.
Likewise, bookmakers will happily take bets from guessers all day long. If they are lucky enough to get a ‘whale’ placing huge (but dumb) bets, they can easily lay off those bets elsewhere to manage their risk. They don’t need skilful gamblers to help balance their books.
Don't try to overthink it: imagine the bookies having a dashboard that shows everybody's win rate (or alternatively, how much the bookie is losing) and then they ban or limit the top performers.
Instant and legal profit for them.
Instant and legal profit for them.
Shouldn't they try to maximize their profits overall and minimize their risk at the same time rather than try to maximize profit for each of their clients individually?
For anyone interested in running data analysis I have probably the biggest and most comprehensive dataset in the world, bigger that what this team had available.
Personally I've come to find poker is the only reliable way to "beat the house". But that's because you're not beating the house, but other players - the house gets their rake.
If you play a tight-aggressive game in venues the pros avoid (anyplace with less than $2/hour comps in Vegas) you can do decently. Not get rich, but make a few hundred in an afternoon.
If you play a tight-aggressive game in venues the pros avoid (anyplace with less than $2/hour comps in Vegas) you can do decently. Not get rich, but make a few hundred in an afternoon.
Courtesy of slashdot:
https://science.slashdot.org/story/17/10/21/1744218/data-sci...
https://science.slashdot.org/story/17/10/21/1744218/data-sci...
TL;DR: Researchers made $950 (8.5%) but say it wasn't worth the effort [1].
[1]: https://github.com/Lisandro79/BeatTheBookie
[1]: https://github.com/Lisandro79/BeatTheBookie
They really should have automated the bet placement from the outset, which would have made it worth the effort. Could probably make a few thousand $ before getting cut off, per person. Definitely a worthwhile venture, considering you could probably then sell off the software after using it for some more profits.
Sites like https://www.oddsmonkey.com/ are kind of on this track already.
Sites like https://www.oddsmonkey.com/ are kind of on this track already.
I've qualified my comment - thanks.
Wanted to post this a few days ago, but life got away on me.
I worked for a monopoly bookmaker and spent a fair amount of time looking at how they work. Our turnover was $2.6bil/yr with $150mil profit in a country with less than 10 million people.
So, Some things to give you guys a bit more context. 1. There are two types of bets. Fixed Odds and Tote. - Tote is a pool based betting system where the odds can change after you have placed your bet. The odds are calculated automatically based on the distribution of bets on the options available. Typically the house will keep 50%+ of the total pool as profit and distribute the remainder among the winning punters. This is a very high profit betting system that the book keepers are trying to keep alive. It's dying off at a pretty rapid rate though. - Fixed Odds Betting (FOB) is where you get payment on the odds you lock in at the time of placing your bet. Most betting now is FOB.
For the sake of responding to various points other respondents have made I will focus only on Fixed Odds; especially as Tote is only used for horse/dog racing.
2. How do the odds work? For us, we had university students who'd manage the books. They had software that showed them how much risk/leverage they had and what the guaranteed profit was. They can set "bet limits" and manually approve (or deny) any bet that was greater than the bet limit. Most of the time they would have open websites from other bookies and copy the odds from theirs as they change. It's quite popular for bookies to just copy each other manually.
For Live/In-Play betting the book keepers will watch the event and manipulate the odds as things occurred. Either using their own knowledge or copying from other gambling sites. Again, the process is completely manual at the back end.
There is a move for organisations around the world to consolidate on their sources of odds (e.g. using a common back-end odds distribution platform); but ultimately there is still a large manual component to changing the odds, especially during live play.
3. How do they make money? On Tote, they take 50%+ of the total pool before creating dividends.
For Fixed Odds, they balance the books. They change the odds to always ensure it's in the houses favour. We always aimed for 10-15% profit on events with fixed odds bets. Home players/athletes will always have much lower odds because of people's tendency to bet with the heart.
They deny bets. The bookie doesn't have to take your bet. For large bets they will often push back an offer to you at a lower rate than advertised to ensure their books stay balanced. For live/in-play bets they'll delay your bet until that odd is no longer available ensuring your bet is not accepted.
They have A LOT of different betting options where only a few will actually win. People tend to bet with their hearts and the number of options are setup to basically ensuring the bookie is profitable.
If you win too much, they shut down your account. They have no obligation to deal with you. Their goal is to make money and they see your gambling as a way you "enhance your enjoyment of the event", not an attempt to make money. So there isn't a large tolerance for people who do make money.
4. How do I (the punter) make money? Surprisingly, you can consistently make money gambling.
Don't bet on Dogs/Horses. Even the top 1% of punters barely break even. They're profitable because of the kick-backs the bookies give them for having high turnover (>$1mil/yr).
Find a sport you know a lot about that supports in-play betting. It's going to be you vs a person. So if you have indepth knowledge of the sport you'll be able to see changes in flow and make winning bets before the bookie notices.
FWIW, I bet on League of Legends. During the LOL Worlds I can make 2500% with >90% win rate. Now, I'm only winning a few $k total so nothing significant.
That's all I can think of at the moment. Happy to answer any questions you have.
I worked for a monopoly bookmaker and spent a fair amount of time looking at how they work. Our turnover was $2.6bil/yr with $150mil profit in a country with less than 10 million people.
So, Some things to give you guys a bit more context. 1. There are two types of bets. Fixed Odds and Tote. - Tote is a pool based betting system where the odds can change after you have placed your bet. The odds are calculated automatically based on the distribution of bets on the options available. Typically the house will keep 50%+ of the total pool as profit and distribute the remainder among the winning punters. This is a very high profit betting system that the book keepers are trying to keep alive. It's dying off at a pretty rapid rate though. - Fixed Odds Betting (FOB) is where you get payment on the odds you lock in at the time of placing your bet. Most betting now is FOB.
For the sake of responding to various points other respondents have made I will focus only on Fixed Odds; especially as Tote is only used for horse/dog racing.
2. How do the odds work? For us, we had university students who'd manage the books. They had software that showed them how much risk/leverage they had and what the guaranteed profit was. They can set "bet limits" and manually approve (or deny) any bet that was greater than the bet limit. Most of the time they would have open websites from other bookies and copy the odds from theirs as they change. It's quite popular for bookies to just copy each other manually.
For Live/In-Play betting the book keepers will watch the event and manipulate the odds as things occurred. Either using their own knowledge or copying from other gambling sites. Again, the process is completely manual at the back end.
There is a move for organisations around the world to consolidate on their sources of odds (e.g. using a common back-end odds distribution platform); but ultimately there is still a large manual component to changing the odds, especially during live play.
3. How do they make money? On Tote, they take 50%+ of the total pool before creating dividends.
For Fixed Odds, they balance the books. They change the odds to always ensure it's in the houses favour. We always aimed for 10-15% profit on events with fixed odds bets. Home players/athletes will always have much lower odds because of people's tendency to bet with the heart.
They deny bets. The bookie doesn't have to take your bet. For large bets they will often push back an offer to you at a lower rate than advertised to ensure their books stay balanced. For live/in-play bets they'll delay your bet until that odd is no longer available ensuring your bet is not accepted.
They have A LOT of different betting options where only a few will actually win. People tend to bet with their hearts and the number of options are setup to basically ensuring the bookie is profitable.
If you win too much, they shut down your account. They have no obligation to deal with you. Their goal is to make money and they see your gambling as a way you "enhance your enjoyment of the event", not an attempt to make money. So there isn't a large tolerance for people who do make money.
4. How do I (the punter) make money? Surprisingly, you can consistently make money gambling.
Don't bet on Dogs/Horses. Even the top 1% of punters barely break even. They're profitable because of the kick-backs the bookies give them for having high turnover (>$1mil/yr).
Find a sport you know a lot about that supports in-play betting. It's going to be you vs a person. So if you have indepth knowledge of the sport you'll be able to see changes in flow and make winning bets before the bookie notices.
FWIW, I bet on League of Legends. During the LOL Worlds I can make 2500% with >90% win rate. Now, I'm only winning a few $k total so nothing significant.
That's all I can think of at the moment. Happy to answer any questions you have.
How long do you think the authors would have waited to publish this paper if their accounts were not restricted and they would continue to profit? My guess would be a long time.
"Of course the game is rigged. Don't let that stop you—if you don't play, you can't win." -- Robert A. Heinlein, "Time Enough for Love"
A bookmaker's tissue prices (the initial market prices they offer up), are not intended to be a measure of probability. They are meant to be a measure of expected Weight of Money (WoM).
A bookmaker's job is not to accurately reflect odds of occurrence, but to ensure a balanced book of liabilities. There are many books covering this going back hundreds of years and is the principle discovery of those who gathered at Tattersalls coffee shop on the Strand and invented modern bookmaking (via horse racing), and for whom there is named an enclosure on all 55 British racecourses to this day.
The tissue has to be "over-round", (i.e. the probabilities they represent have to add up to over 1.0, or 100%) because sometimes a market will look at the prices, see that the odds are very much in the favour of a selection and act accordingly. As such, the WoM causes a market to move.
This is not news. If you have a reasonable idea of true odds and you are being offered different odds, Kelly (who worked with Shannon - the creator of Information Theory), established the optimal stake to bet at each stage. A substantial amount of research has been done on Kelly Criterion and its application because it underpins many a hedge fund strategy: it works for fixed odds games, fiscal markets and bookmaker markets just as well.
There are trading opportunities here, and there is a wide community of people who look to exploit inevitable market moves using exactly this technique: establish average industry odds, look to where betting exchanges are and bet accordingly, moving out of the market when a profit comes to you.
The bookmakers don't care - you've helping get turnover up, and they know increasing turnover through the market is the best way to get balanced liabilities.
On a horse race, they might offer prices that give up an over-round of 110%-130% most days, but on Premier League Football which has a much, much higher turnover, and WoM is far more predictable (due to team loyalties coming into play), over-rounds can be as low as 102%.
These markets are therefore more likely to provide value to the authors' methods, however I note they are making the majority of their bets between 5 and 1 hours before a game, and therefore to some extent are able to factor in team selection and some of their results might be the result of a market inefficiency: team line-ups aren't announced until 60 minutes before kick-off.
Now, here's two major downsides:
1. Bookmakers will eventually end up closing their accounts, because winners are never welcome long-term.
2. There is a reason why successful gamblers don't publish. Even Thorpe who invented card counting and blackjack basic strategy realised publishing (which was his academic need) ultimately caused him to need to do something else: he ended up privately and quietly running a hedge fund.
These guys are probably finished within 2 weeks of this paper going around, and what's more because now a whole ton of people will go to implement this method, bookmakers will adapt and simply move from tissue to industry average as quickly as possible, whilst limiting even more players to reduce liability exposure (as has been the style in recent years).
EDIT: I only skim-read the paper when I wrote the above. Now I've read it a little more closely I am even more convinced there is nothing to note here, and also, their accounts have already been limited or closed.
A bookmaker's job is not to accurately reflect odds of occurrence, but to ensure a balanced book of liabilities. There are many books covering this going back hundreds of years and is the principle discovery of those who gathered at Tattersalls coffee shop on the Strand and invented modern bookmaking (via horse racing), and for whom there is named an enclosure on all 55 British racecourses to this day.
The tissue has to be "over-round", (i.e. the probabilities they represent have to add up to over 1.0, or 100%) because sometimes a market will look at the prices, see that the odds are very much in the favour of a selection and act accordingly. As such, the WoM causes a market to move.
This is not news. If you have a reasonable idea of true odds and you are being offered different odds, Kelly (who worked with Shannon - the creator of Information Theory), established the optimal stake to bet at each stage. A substantial amount of research has been done on Kelly Criterion and its application because it underpins many a hedge fund strategy: it works for fixed odds games, fiscal markets and bookmaker markets just as well.
There are trading opportunities here, and there is a wide community of people who look to exploit inevitable market moves using exactly this technique: establish average industry odds, look to where betting exchanges are and bet accordingly, moving out of the market when a profit comes to you.
The bookmakers don't care - you've helping get turnover up, and they know increasing turnover through the market is the best way to get balanced liabilities.
On a horse race, they might offer prices that give up an over-round of 110%-130% most days, but on Premier League Football which has a much, much higher turnover, and WoM is far more predictable (due to team loyalties coming into play), over-rounds can be as low as 102%.
These markets are therefore more likely to provide value to the authors' methods, however I note they are making the majority of their bets between 5 and 1 hours before a game, and therefore to some extent are able to factor in team selection and some of their results might be the result of a market inefficiency: team line-ups aren't announced until 60 minutes before kick-off.
Now, here's two major downsides:
1. Bookmakers will eventually end up closing their accounts, because winners are never welcome long-term.
2. There is a reason why successful gamblers don't publish. Even Thorpe who invented card counting and blackjack basic strategy realised publishing (which was his academic need) ultimately caused him to need to do something else: he ended up privately and quietly running a hedge fund.
These guys are probably finished within 2 weeks of this paper going around, and what's more because now a whole ton of people will go to implement this method, bookmakers will adapt and simply move from tissue to industry average as quickly as possible, whilst limiting even more players to reduce liability exposure (as has been the style in recent years).
EDIT: I only skim-read the paper when I wrote the above. Now I've read it a little more closely I am even more convinced there is nothing to note here, and also, their accounts have already been limited or closed.
Interesting.
You say: "The bookmakers don't care - you've helping get turnover up, and they know increasing turnover through the market is the best way to get balanced liabilities."
And then: "1. Bookmakers will eventually end up closing their accounts, because winners are never welcome long-term."
Is there any rational behind bookmakers not welcoming long-term winners?
It seems like a bookie is very similar to a market maker on the stock exchange. Why would a market maker care if an investor makes money as long as he can flatten his positions every hour or so and make profit with the spread.
Isn't it accurate to say that bettors are competing against each other and the bookie is just taking a fee for making the market?
You say: "The bookmakers don't care - you've helping get turnover up, and they know increasing turnover through the market is the best way to get balanced liabilities."
And then: "1. Bookmakers will eventually end up closing their accounts, because winners are never welcome long-term."
Is there any rational behind bookmakers not welcoming long-term winners?
It seems like a bookie is very similar to a market maker on the stock exchange. Why would a market maker care if an investor makes money as long as he can flatten his positions every hour or so and make profit with the spread.
Isn't it accurate to say that bettors are competing against each other and the bookie is just taking a fee for making the market?
Over the short-term people adding WoM and bringing the book into line with other bookmakers is welcome, because it means the market is becoming more efficient.
At the micro level then, turnover is welcome. But as the old adage goes "turnover is vanity, profit is sanity"
At the macro level somebody has to say "how do we maximise profits or at least minimise losses?" and picking off accounts that are costing you money is an easy step to take.
The ideal client for a bookmaker is an idiot with a strong view. They don't want people who will consistently win, because it's taking up WoM for other customers who could be invited with those more generous odds and who _don't_ consistently win.
At the micro level then, turnover is welcome. But as the old adage goes "turnover is vanity, profit is sanity"
At the macro level somebody has to say "how do we maximise profits or at least minimise losses?" and picking off accounts that are costing you money is an easy step to take.
The ideal client for a bookmaker is an idiot with a strong view. They don't want people who will consistently win, because it's taking up WoM for other customers who could be invited with those more generous odds and who _don't_ consistently win.
I am confused. If the betting is rigged, then how were the authors able to beat it consistently? What did I miss?
"Rigged" is the wrong word. What it essentially says is that all of the data that a professional could reasonably analyze is already baked into the odds that bookies initially set, and if those odds stayed the same until bets were no longer being taken on the event, sports betting would be consistently unprofitable because of the 10% "juice" that most bookmakers charge. However, the odds do not stay the same. Once they are posted and bets begin to come in, the market takes hold and begins swaying the odds one way or another, because bookies change the odds in order to try to balance their books such that they have little to no actual risk. It is in the swinging of the odds by the market, which has many unsophisticated participants - people betting on a team simply because they live in that city etc. - where money can be made, because there is an incredibly large amount of "dumb money" in the sports betting market.
No, rigged is exactly the right word. From the paper:
> Our strategy proved profitable in a 10-year historical simulation using closing odds, a 6-month historical simulation using minute to minute odds,
> and a 5-month period during which we staked real money with the bookmakers.
>
> Our results demonstrate that the football betting market is inefficient ‒ bookmakers can be consistently beaten across thousands of games in both simulated environments and real-life betting.
> We provide a detailed description of our betting experience to illustrate how the sports gambling industry compensates these market inefficiencies with discriminatory practices against successful clients.
> Our strategy proved profitable in a 10-year historical simulation using closing odds, a 6-month historical simulation using minute to minute odds,
> and a 5-month period during which we staked real money with the bookmakers.
>
> Our results demonstrate that the football betting market is inefficient ‒ bookmakers can be consistently beaten across thousands of games in both simulated environments and real-life betting.
> We provide a detailed description of our betting experience to illustrate how the sports gambling industry compensates these market inefficiencies with discriminatory practices against successful clients.
The fact that they limit the accounts of successful bettors doesn't mean that it is "rigged". It simply means that they reserve the right to do business with whom they choose.
They are artificially manipulating the market. That's about as textbook rigging as putting three masts on a ship.
If you consistently lose money whenever you transact with someone then you're going to stop doing business with or try to limit how much you lose. They're not rigging the actual game in any way. But if they're not throttling you it's a pretty good indication that you're not coming out ahead.
If there was an obscure way to play craps that made the house advantage negative they would either change the rules or ban the practice. You could call it rigging but by that token every game is rigged, that's the whole point, you're playing in the hope of beating the odds. The rules and odds are completely transparent, 'rigging' would be like using weighted dice.
If there was an obscure way to play craps that made the house advantage negative they would either change the rules or ban the practice. You could call it rigging but by that token every game is rigged, that's the whole point, you're playing in the hope of beating the odds. The rules and odds are completely transparent, 'rigging' would be like using weighted dice.
Limiting those who stand a chance of pulling off the type of big wins they advertise heavily on television is rigging the market. It's manipulation, pure and simple. What they're selling is a bullshit dream that if you ever come close to they will bar you. This type of activity is the definition of predatory. It's straight up rigging.
It’s not rigging. If you place a bet and it wins, they will pay you. It would only be rigged if a bookmaker decided whether or not to take your bet after the event.
That if you keep winning they restrict your account.
> They kept this up for five months, placing $50 bets around 30 times a week. And they were winning. After five months the team had made a profit of $957.50 -- a return of 8.5 per cent. But their streak was cut short. Following a series of several small wins, the trio were surprised to find that their accounts had been limited, restricting how much they could bet to as little as $1.25.
> They kept this up for five months, placing $50 bets around 30 times a week. And they were winning. After five months the team had made a profit of $957.50 -- a return of 8.5 per cent. But their streak was cut short. Following a series of several small wins, the trio were surprised to find that their accounts had been limited, restricting how much they could bet to as little as $1.25.
Nobody is in the business of giving money away.
So the bookmaker put controls on how and how much you can bet. There’s a reason why this stuff was illegal for a long time — gambling is always a vicious cycle for the player.
So the bookmaker put controls on how and how much you can bet. There’s a reason why this stuff was illegal for a long time — gambling is always a vicious cycle for the player.
One of the most depressing things I realized when I learned to count cards, and confer upon myself a small but meaningful advantage in the game of Blackjack, was that the casinos simply ask you to leave if you win too much. That put an upper limit on the rate at which one could win. The folks who figure out slot machines have a much better time of it because it takes longer for the casinos to figure out they are losing money.