Saturday, 11 February 2012

Profitable Sports Betting

The last post on how many winners there are, received a couple of comments with SJ feeling
that the goalposts have changed somewhat between my comment and your post. Your blog is primarily focused on value based sports betting not picking lottery numbers or how to cheat fruit machines. It was sports betting I was referring to and I still think it unlikely that within that category the figure is less than 5%. You're probably not going to have anyone argue your original point but it would be interesting to see someone argue less than 5% of sports bettors.
Indeed, I gave the goal posts a good shaking just to make the point that in a debate of this nature, it is important to know what we are actually debating. Not that I ever said anything about cheating fruit machines - not my thing, but from what I understand you put 100 units in and get back 90 or so - or at least less than you put in. But even if we limit the debate to sports bettors, I still think 5% is far too optimistic a number. Maybe it's because I think of myself as being more special than just a 1 in 20, but over a lifetime of betting on sports, I doubt that 5% end up ahead.

BF, an accountant, wrote a very interesting comment on the subject which is repeated here in full - thanks for taking the time -
The simple answer is neither of you know the answer to what % of gamblers is profitable is and any figures tossed out here are at best educated guesswork. I will try and give the worms eye view from someone who worked in the shop of a high street bookmakers chain here in Ireland. I freely admit extrapolation is dangerous but I suspect my experience is fairly typical notwithstanding that. I can say of the core clientele of 150 to 200 that only a handful who hit a fluky trixie or Goliath made a profit of any sort for a year. By handful I mean 5 or less. There was however a hit list circulated around shops of people who we were under no circumstances to be allowed more than X on any particular horse. These were players, faces or the known commission agents of the same. This list had at any particular time no more than 10 names on it. Allow for the fact that some of these were commission agents acting for the same person and there might be 5 to 10 people in Dublin so profitable on the nags that the online route was shut to them and that needed to get the best of the early prices. This list was incidentally one shared between chains at least unofficially so it is not like there were many of these guys not going to our chain. There was at this time around 45 shops in the 2 square miles of the central Dublin area (all chains or independents flying under the same flag of convenience) so say a core group of between 6,500 and 9,000 regulars of which if my experience is representative maybe 2 or 3 on average made an annual profit in each shop. That’s 1%.

As for the casual big meeting trade it strangely probably did better than the regulars as the odd freak year could see the lucky punter make a nice packet. A local teacher who plays Cheltenham only walked out with a 200/1 double+ 1 year and while exceptional there were always winners who you’d know to see but who saved their money, put some thought into their bets and played. The casual players probably did better than the regulars as if they won they were actually less likely to hand it all back in the coming days weeks and months. I would class most internet gamblers as regulars with all the bad habits of regulars – they give their money back eventually. An added difficulty for those not on the exchanges is showing any profitability will get you shut down double quick time necessitating all sorts of subterfuge and skulduggery to get on.

You need to make a distinction between gambling at its purest (lottery, roulette) where you and the lottery / house are playing honestly you will eventually be ground down by the house edge and gambling where some degree of skill and application will turn your edge into constant profitability. The point Cassini makes about 3.7 million being profitable is surely playing devil’s advocate for the sake of it. It’s a straw man argument.

Also using the Premium charge to assess the % of profitable is almost as facetious as hauling in all the Bingo playing grannies to support your argument. You are profitable if you make €1 more than you put into the business. Everything else is just degree. I’d be inclined to think that whatever figure is profitable that the Pareto principle is well and truly in operation when seeing where the bulk of the profitability lies.

My own personal view which has as much pinsticking in it as anyone elses and should be viewed as such is that 5% is at the very upper edge of profitability and of that the numbers making more than the industrial wage are insignificant. Betfair has definitely increased the numbers making a profit but it hasn't but it hasn't changed the game to the extent SJ thinks.
I would agree with that last paragraph.

2 comments: said...

Mr C

Just dropped you a mail re the draws- I sent the mail over on Thursday?. I managed to find a lot of bad weather and a couple of draws!



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