Thursday, 9 February 2012

Under / Over 5%

Regular readers will know that I never, ever, seek to be provocative with any of my posts, but yesterday's did bring a few comments, and hopefully a few extra hits to SoccerDude Eddie's post, which I did, indeed, cherry-pick for the juicy bits, and who responded with this:

Hmm, a little bit of cherry-picking to make your point? Surely not.

The last part of my post that you quote does conveniently leave out the important next sentence. I said what I said about the past - not to say that you can just dismiss it all with a majestic sweep of your hand, but rather to point out that it does not necessarily mean things will continue to be like that in the future.

A leopard doesn't change its spots, it is said - but I know from my own experience that I have changed the course and the methodology of my betting over time. So change is indeed possible.

That's the point I was making. Not that your lifetime P&L is unimportant.
SJ added:
As I conveniently inferred in my post a few minutes ago, previous lifetime losses can actually be of benefit if/when you do finally crack it not only as a commission generated buffer as I mentioned but also because you will (hopefully) have previously had a lot of bad habits that you’ve learnt to avoid.

If I were a betting man I’d say that overall winners, i.e net lifetime profit >= £0.01 was significantly higher than 5%. I’d also agree with the both of you, firstly with Cassini in that net profit has to be framed in a long-term context (not sure that lifetime is suitable in all cases). Also with Eddie in that people and their habits can and do change. There are probably very, very few people who win their first bet and go on to never drop below that starting figure.
Agreed that it is certainly possible to learn from mistakes, make changes, and turn things around, and if those earlier losses were on Betfair, they would indeed be helpful in the battle against the Premium Charge (at least until the noose tightens again) but I disagree that overall winners, defined as "net lifetime profit >= £0.01" is significantly higher than 5%. Since gamblers, as defined by the Gambling Commission, includes activities such as lottery, scratch cards, bingo, fruit machines, casino games FOBTs and football pools, I would be surprised if the figure were even 0.5%. There's the occasional big winner of course, but for most people gambling is entertainment, not a serious attempt at making money, and most lose.
The Gambling Commission's 2010 report stated that:
Overall, 73% of the adult population (aged 16 and over) participated in some form of gambling in the past year. This equates to around 35.5 million adults
5% of that number is 1.775 million. Is the suggestion that this number, or anywhere close are "net lifetime profit" serious? That number defies logic, and I would love to hear a counter-argument in support of that suggestion.

LayThatDraw, of the defunct Novice Football Trader blog, who perhaps learned that his very optimistic goal of 30% to 40% a month wasn't at all realistic:
I'm a 22 year old who has just discovered the world of sports trading, and is keen to make it work as a part time money spinner! I will be concentrating on in-play football markets only, with a general target of making 30 - 40% per month
(we're all keen, it's just not that easy, especially in the in-play football markets where value is incredibly hard to find) asks
Cassini, where can one watch live NBA on uk tv? cheers!
On UK TV, not often - but NBA has an online League Pass service, there is or a search on Google for "watch nba online free stream" or similar will give some other options. Some pictures can be delayed, but there are good live score sites, e.g. and on the drop down menu "Scoreboard Tools" select the "Launch RealTime Scores".


SJ said...

I feel 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.

BF said...

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 makinga profit but it hasn't but it hasn't changed the game to the extent SJ thinks.

Griff said...

Spurs v Newcastle

Breco said...

Im interested in your XX draw selections, and how can i get it? ;)