Won and done? Sportsbooks banning the smart money(espn.com)
espn.com
Won and done? Sportsbooks banning the smart money
http://www.espn.com/chalk/story/_/id/24425026/gambling-bookmakers-growing-us-legal-betting-market-allowed-ban-bettors
49 comments
> This has pretty much always been standard
As someone who has worked in the industry, I agree with one caveat:
> The basic idea with bookmaking without risk is that you want your books balanced
This is not the business model of every bookie. In the UK the standard retail bookies will set wide spreads and aggressively ban accounts that appear savvy (or appear to be automated.)
The big betting venue in Europe (at least back when I knew things) is an exchange, though. They take no outcome risk and make money either way, though typically more if the underdog wins.
In Asia some of the top bookies have yet another business model: they are really just institutional gamblers whose business is to know the outcome statistics better than anyone else. They employ shitloads of data scientists and they will take large bets from smart punters. They run gambling websites because it's better to gamble "on their own terms". When they want to bet against another large gambling shop, they move the odds so the spreads overlap the right way and wait for arbitrageurs to match-make.
As someone who has worked in the industry, I agree with one caveat:
> The basic idea with bookmaking without risk is that you want your books balanced
This is not the business model of every bookie. In the UK the standard retail bookies will set wide spreads and aggressively ban accounts that appear savvy (or appear to be automated.)
The big betting venue in Europe (at least back when I knew things) is an exchange, though. They take no outcome risk and make money either way, though typically more if the underdog wins.
In Asia some of the top bookies have yet another business model: they are really just institutional gamblers whose business is to know the outcome statistics better than anyone else. They employ shitloads of data scientists and they will take large bets from smart punters. They run gambling websites because it's better to gamble "on their own terms". When they want to bet against another large gambling shop, they move the odds so the spreads overlap the right way and wait for arbitrageurs to match-make.
> and aggressively ban accounts that appear savvy (or appear to be automated.)
Isn't this literally saying "We cheat, if you bet with us you are guaranteed to lose money?"
Why would anyone bet with a firm like that? By the very fact that they took your bet you know that your bet was a losing one.
It's something I've never understood - how they can publicly say that, and yet still have customers.
Isn't this literally saying "We cheat, if you bet with us you are guaranteed to lose money?"
Why would anyone bet with a firm like that? By the very fact that they took your bet you know that your bet was a losing one.
It's something I've never understood - how they can publicly say that, and yet still have customers.
I wouldn't consider it cheating. It's refusing to play against good players.
It doesn't sound like they'll cancel a bet that you make because it's good. It sounds like they'll see you make a good bet, then ban you any future bets, while still fulfilling that good bet.
It doesn't sound like they'll cancel a bet that you make because it's good. It sounds like they'll see you make a good bet, then ban you any future bets, while still fulfilling that good bet.
> Why would anyone bet with a firm like that?
Most customers are in the long run in the red (they are not in it for the money, just want to have fun), so this is not something they care about or will encounter.
Most customers are in the long run in the red (they are not in it for the money, just want to have fun), so this is not something they care about or will encounter.
> The big betting venue in Europe (at least back when I knew things) is an exchange, though. They take no outcome risk and make money either way, though typically more if the underdog wins.
Yes, they can't lose, but they still penalize big winners by taking a larger cut of their profit, compared to regular bettors.
Yes, they can't lose, but they still penalize big winners by taking a larger cut of their profit, compared to regular bettors.
Interesting. I admit that my knowledge comes more from the advantage player side in the US (and by proxy, some of the offshore shops in the Caribbean and such), so it's good to hear from someone who knows about how it works in other places. I'm definitely don't know the Asian side of it well at all.
This has pretty much always been standard, and barring some sort of change in regulation, very likely always will be.
Horse racing has been pari-mutuel for a century, ever since the invention of the totalizator. The odds change as bets are placed, the bettors are betting against each other, and the house takes a cut. The track operator takes no financial risk. Sports betting, for some reason, usually doesn't work that way. Except, for some reason, golf and jai alai, which have pari-mutuel betting.
It's surprising that the online betting world didn't go pari-mutuel. Probably nobody would trust the service to compute the odds honestly.
Horse racing has been pari-mutuel for a century, ever since the invention of the totalizator. The odds change as bets are placed, the bettors are betting against each other, and the house takes a cut. The track operator takes no financial risk. Sports betting, for some reason, usually doesn't work that way. Except, for some reason, golf and jai alai, which have pari-mutuel betting.
It's surprising that the online betting world didn't go pari-mutuel. Probably nobody would trust the service to compute the odds honestly.
A transparent bet exchange seems, at least at first blush, to be relatively straightforward. Heck, it is the sort of thing for which smart contracts were made.
Not in the UK; the Tote has always been a minority player. The action was divided between on-course and off-course bookmakers, then the Internet happened, then Betfair happened.
> laying down similar amounts of money on Whitman vs. Claremont/Mudd/Scripps.
As a former Stag, I'll take that bet!
As a former Stag, I'll take that bet!
Several years ago, I went to a data science Meetup where one of the speakers was working for a company which entire goal was to beat the bookies at soccer. They had people watching games, recording every detail, and a host of machine learning and statistical experts on payroll to make predictions.
No shit the bookies don't wanna take their bets.
No shit the bookies don't wanna take their bets.
In practice these outfits have accounts at large Asian sportsbooks (which don't bother to ban sharps) or at Pinnacle (which has traditionally welcomed them). Even setting aside the risk of being banned, successful syndicates are unlikely to bet at major Western sportsbooks because the vig (margins) are too high.
> No shit the bookies don't wanna take their bets.
Why doesn't the bookmaker watch how these guys bet then adjust the odds accordingly?
As long as the books are balanced, they'll make money.
And if the data science guys have better probabilities, then the new odds should make more money for the bookies on the other side.
Why doesn't the bookmaker watch how these guys bet then adjust the odds accordingly?
As long as the books are balanced, they'll make money.
And if the data science guys have better probabilities, then the new odds should make more money for the bookies on the other side.
This is exactly what happens at the sportsbooks that take sharp customers.
And moreover, if you attract the smart money... and see statistically relevant better patterns... why not lay down your own bets at competitors?
As the book who accepts smart money and has non-anonymous customers, you have a more accurate idea of the actual odds than anyone else.
As the book who accepts smart money and has non-anonymous customers, you have a more accurate idea of the actual odds than anyone else.
This is attractive in theory but it's a bit difficult to do in practice. Usually the places with the worst comparative odds are also quite aggressive in banning sharp accounts (including any proxy accounts you'd set up as this rival sportsbook). You've got to take the vig into account, as well, which is likely high. So in most cases it's probably not be worth the cost. Especially when there are plenty of other ways to use sharp information to make money.
> why not lay down your own bets at competitors?
It's not worth it. Even if they don't ban you outright, the stakes/winnings are very limited for that kind of thing to make sense. And then there are odds data services like Betradar which provide every subscribing bookmaker with enough near-live data to instantly improve their prices so as to make any arbitrage very hard. (source: worked at several bookmakers)
It's not worth it. Even if they don't ban you outright, the stakes/winnings are very limited for that kind of thing to make sense. And then there are odds data services like Betradar which provide every subscribing bookmaker with enough near-live data to instantly improve their prices so as to make any arbitrage very hard. (source: worked at several bookmakers)
Gotcha. I figured it was too obvious of an idea for people to not already have optimized it.
Interesting about bookmakers being subscribed to a common line feed. I didn't know that, but it makes sense in a borderless-money, networked world.
Interesting about bookmakers being subscribed to a common line feed. I didn't know that, but it makes sense in a borderless-money, networked world.
Sounds like they should be the bookies.
Yeah, I never quite understood that part of the business plan either, but it was a data science Meetup, so focus was else where
> Yeah, I never quite understood that part of the business plan either, but it was a data science Meetup, so focus was else where
Perhaps because of the regulations?
Perhaps because of the regulations?
While these schemes are technically impressive, as a society it's sad that so much labor and electrical power goes into something which creates absolutely zero value.
There's a lot of value in parting money from fools. Puts it to better use.
You can try to justify fraud and con jobs with the same logic.
> "The hilariousness of it," Donoughue added, "is that they restricted one of my member's accounts, and he's a Lord."
Maybe there's something about British class relations that I'm missing (I'm not British) -- can anyone explain why it's particularly hilarious or even unexpected that they would have restricted a "Lord"'s account, as opposed to anyone else's?
(Tangential question: does "Lord" here mean a member of the House of Lords? Or anyone with an aristocratic title? Or something else?)
Maybe there's something about British class relations that I'm missing (I'm not British) -- can anyone explain why it's particularly hilarious or even unexpected that they would have restricted a "Lord"'s account, as opposed to anyone else's?
(Tangential question: does "Lord" here mean a member of the House of Lords? Or anyone with an aristocratic title? Or something else?)
> Maybe there's something about British class relations that I'm missing (I'm not British) -- can anyone explain why it's particular hilarious or even unexpected that they would have restricted a "Lord"'s account, as opposed to anyone else's?
Not really. I think he's just saying that these filters are meant to keep out the cheating proles, but in this instance they banned a true-blue member of the British Aristocracy!
I kid, but no - we really don't assign any great value to aristocracy. Not us common folk anyway. Except the queen, she's wonderful.
It mostly means you may have a family estate (see: expensive mansion) now but even most of those have been sold off.
> (Tangential question: does "Lord" here mean a member of the House of Lords? Or anyone with an aristocratic title? Or something else?)
The house of lords used to be all aristocracy but my understanding is that they let any old bugger wander in now. Mostly MPs who rank up I believe.
Not really. I think he's just saying that these filters are meant to keep out the cheating proles, but in this instance they banned a true-blue member of the British Aristocracy!
I kid, but no - we really don't assign any great value to aristocracy. Not us common folk anyway. Except the queen, she's wonderful.
It mostly means you may have a family estate (see: expensive mansion) now but even most of those have been sold off.
> (Tangential question: does "Lord" here mean a member of the House of Lords? Or anyone with an aristocratic title? Or something else?)
The house of lords used to be all aristocracy but my understanding is that they let any old bugger wander in now. Mostly MPs who rank up I believe.
In most countries, politicians wouldn’t say “hilariously, this even affected a rich person!” which is why I thought there must be more to it.
Glad you said something. I also go to that sentence and had a moment of culture confusion.
For reference, I suppose the nearest we'd have here in the US would be "... and he's a Roosevelt / Kennedy!"
For reference, I suppose the nearest we'd have here in the US would be "... and he's a Roosevelt / Kennedy!"
the aristocracy and their associate bum-scratchers do still hang around, and to them it may well be hilariously crass that a bookkeeper might ban a member of the elite. But I don't think it's much different now compared to other elite castes. I don't doubt there are people out there who would find it funny if a Saudi prince or a tech billionaire was banned from a casino.
I read this as if it's unlikely the customer is an advantage bettor, he would be (stereotypically) well off and easy with his money, rather than analytical.
Here Lord means someone in the House of Lords.
Here Lord means someone in the House of Lords.
Member of the House of Lords. It's fairly clear from context:
"secretariat for an all-party parliamentary group that focuses on gaming"
But any member of the House of Lords has the aristocratic title – probably as a life peerage.
"secretariat for an all-party parliamentary group that focuses on gaming"
But any member of the House of Lords has the aristocratic title – probably as a life peerage.
I'm not British, but I would take it to mean "They placed limitations on some rich guy's account." when those limitations are ostensibly intended for deadbeats.
They should just do gambling like predictit. Sell contracts for a Buck a piece and only return .90 (or some other fraction). If big analyst come in and buys one way or another the casino doesn't care.
That's more or less how a sportsbook operates. However if the action doesn't balance out, the book has considerable exposure if the team with more bets on it wins.
>
That's more or less how a sportsbook operates. However if the action doesn't balance out, the book has considerable exposure if the team with more bets on it wins.
Beforehand: I don't do sports betting. So I don't know much about the sports betting culture.
But why doesn't the bookmaker simply let anybody "pre-buy" bets (just like you do a bidding on an eBay auction). You will get your bet "approved" as soon as it becomes matched (or at least "near-matched") by the bookmaker. If it cannot be matched, you, of course, get your money/betting token back (just like you don't have to pay anything on an eBay auction if you become outbid).
Perhaps it might even be interesting to offer "flexibility in the ratios" for the bettor, i.e. if you are willing to only get 1.5 times your stake (instead of 2 times), you get "more in front of the queue for finding a match" (because this is better for the bookmaker).
Beforehand: I don't do sports betting. So I don't know much about the sports betting culture.
But why doesn't the bookmaker simply let anybody "pre-buy" bets (just like you do a bidding on an eBay auction). You will get your bet "approved" as soon as it becomes matched (or at least "near-matched") by the bookmaker. If it cannot be matched, you, of course, get your money/betting token back (just like you don't have to pay anything on an eBay auction if you become outbid).
Perhaps it might even be interesting to offer "flexibility in the ratios" for the bettor, i.e. if you are willing to only get 1.5 times your stake (instead of 2 times), you get "more in front of the queue for finding a match" (because this is better for the bookmaker).
>However if the action doesn't balance out, the book has considerable exposure if the team with more bets on it wins.
isn't that only an issue if the counterparty to each bet is the sportsbook? why can't a sportsbook operate like an exchange, with a bid/ask orderbook and take a % off each trade?
isn't that only an issue if the counterparty to each bet is the sportsbook? why can't a sportsbook operate like an exchange, with a bid/ask orderbook and take a % off each trade?
Well, I mean, you could, but the point of a book is that they take action. It's like a market maker.
> why can't a sportsbook operate like an exchange
It can and some do. But it's nearly impossible to do combined bets (multiples, accumulator etc) in an exchange, and they are very popular. Also as already mentioned it's leaving money on the table.
It can and some do. But it's nearly impossible to do combined bets (multiples, accumulator etc) in an exchange, and they are very popular. Also as already mentioned it's leaving money on the table.
There are book exchanges.
Historically that was leaving money on the table though as squares outnumber sharps.
Historically that was leaving money on the table though as squares outnumber sharps.
It's not either-or, really. If you run an exchange you can bet on it (maybe depending on jurisdiction.) Then you get the commission or the winnings. IIRC matchbook.com do that though I may have been misinformed.
You just described Betfair and Smarkets.
I had several arbitrage bots betting in several bookmakers. There is nothing illegal with that. Most of them either banned me or limited my account to $1 to seem more legit.
I've actually been building a tennis model to beat the bookies for around a year or so and am now beating them by ~6% overall. About to launch a public site in next few weeks. In the mean time, if you'd like to follow picks for free for the US Open just drop me a line and I'll add you to my group.
404 or something
The basic idea with bookmaking without risk is that you want your books balanced - since you get a percentage of the total amount wagered, if your bets on both sides are approximately equal, you can't lose. The risk the "sharps" represent is that they may come in with a large bet on a small market which won't have enough volume to take the other side. Historically it's always been possible to get an edge on these small markets - the canonical example I've always heard is lower division college basketball in the US. The problem is that these lines are so thinly bet than even low 4-figure bets are out of the ordinary, and you need to make an awful lot of them at a single digit percentage advantage to make any real money. Maybe you can come in one day to bet $1000 on Middlebury to beat Lebanon Valley, but good luck coming the next day with a sudden interest in laying down similar amounts of money on Whitman vs. Claremont/Mudd/Scripps. Basically, in general the beatable lines are in areas that nobody really cares about. If you want to come in every week and bet $10k on every NFL point spread, you'll have no problem getting action.
> "I had bet $8,400 to win $4,000 on a tennis match and $2,000 on a [first-five-innings] total on baseball..."
I'm not sure about the baseball bet, but depending on the level of the tennis match, this seems almost guaranteed to raise red flags. Tennis has a somewhat sordid history of suspected fixed matches in lower level competition, and short of major events like Grand Slam late round matches, I'd guess that this kind of action is wildly anomalous.