Wednesday, 17 April 2013

Keeping It Complicated

Up to, and including, Monday's games, the latest FTL table is shown here:

Since the last table was published three weeks ago, there have been no changes at the top, except that the top two have pulled further away. Some minor shuffling in the positions for the remaining profitable categories, with Neil having a poor run but still in profit. Premier Betting have dropped into the red, while Football Elite's golden spell has come to an end and has seen three consecutive losing weekends. Quite strange how badly the Classic XX selections are performing compared with the Extended and Bundesliga selections, the latter showing an unsustainable 54% ROI from 57 selections. Rather fortunate with two 2-2 draws last weekend though, while the Extended found five from 13 including a 3-3 fluke, and two near misses with draw-busting goals in the 86' and 90'. It happens. If anyone feels their numbers are wrong, please let me know. I've done my best to keep track while I was away, but the odd mistake or omission may  have crept in.

With football winding down, the NBA play-offs are almost here with the final regular season games tonight (and some 'unexpected' results expected), and baseball is establish some trends. Last season I played with a system that backed certain home underdogs, and found there was little difference between playing the Match Odds, or the two handicap (-1.5, +1.5) markets. If the Match Odds are evens, then +1.5 will be around 2/1 (3.0) and -1.5 will be around 1.63.

Value is value, and it's not logical to think that any one of these markets will be too far out of line with the others. One thing I've noticed with updating the FTL is how many entries go for something like a team -0.25. I understand that this reduces volatility, but if a team is value giving 0.25, then it will be value in any result market. I sometimes think people make these things unnecessarily complicated. The hard part is finding value, and once you have done that, where you back should make no difference to returns in the long term assuming similar liquidity of course. I suppose it looks like you are digging deep and researching late into the night to find the value, but I have yet to see any evidence that shows returns beating those on the Match Odds market. An opposing opinion would be interesting to hear.

Back to basketball and the NBA, and the final day of the regular season sees a lot of meaningless games, where anything can happen. Fifteen of the sixteen play-off teams are known, with the Utah Jazz or the Los Angeles Lakers the final qualifier. Utah needs to win their last game at Memphis, and with the Memphis Grizzlies already fixed at fifth seed in the West, they won't be going gang-busters to win. The Lakers have the edge though, both of playing after the Jazz game, and also of playing at home versus the Houston Rockets who have the incentive of wanting to win to avoid the possibility of facing the Oklahoma City Thunder in the first round. I wrote in my pre-season review:
The expectancy from the markets is for the Miami Heat to win, beating the Los Angeles Lakers in the final. I’m personally puzzled as to why the Lakers are favoured over the Thunder, and the health of their stars Kobe Bryant and Dwight Howard will be crucial. Howard has played little in pre-season, just twice, as he recovers fully from back surgery, and Bryant is already being reported as doubtful for the opening game of the season with a sore foot. They have added an ageing former MVP in Steve Nash, but backing any team at such a short price leaves you vulnerable to an injury.
I mentioned earlier that the loss of Derrick Rose to the Bulls last season not only cost the Bulls a possible championship, but it also cost Bulls backers some money too. It’s a long season, and I prefer to keep my cash for trading individual games rather than tie my money up for months, but a lay of the Lakers would be my suggestion if long-term markets are your thing.
As many of you will know, Kobe Bryant is out for the season with a torn Achilles, and may well never play again - at least not at the same level. The Lakers will exit early even if they make the play-offs. Former MVP Derrick Rose is still out for the Chicago Bulls, who do make the play-offs, but won't go far without him. Home court is key in the play-offs, with home teams winning 76.7% of games (versus 60.8% regular season) and I'm still happy with a Miami Heat v Oklahoma City Thunder final, with Miami winning it all.

And finally, a good comment from the Betfair forum posted by frog2:
The Premium Charge is a legacy of Betfair's former management team and hopefully the new CEO has an open mind to it.
Following the 1st charge UK pre-play racing volume, which has been growing nicely, started to fall. This is a key market in terms of real commission. Even now racing makes up over 40% of exchange revenues.
Following the 2nd premium charge both revenues and amounts matched on everything bar in play sports (where millions are traded for very little revenue) have gone from growing year on year to flat lining. At the same time group revenue growth has stopped. This is after growth in the sportsbook and mobile channels.
It's not difficult to see why this is happening. Betfair has a monopoly in some markets. Where people have to use them e.g. to trade on a test match cricket or a tennis match in-play they over no other option. They either play here or stop totally. Where people can go elsewhere e.g. pre-race horses or football they will go elsewhere. The charge is simply too high.
The problem is where Betfair has a monopoly it is making a low margin (trading) and where it does not (when people want an actual bet) BF makes a higher margin. Betfair is losing its higher margin business.
An outright punter winning just over 2.5% on stakes will pay the 40% premium charge if he stakes enough. This is a very marginal system yet he still falls into the threshold.
Even if Betfair acted now they have lost so much goodwill. I used to do 100% of my betting on here. I have never even paid the charge but slowly I am moving my betting elsewhere. I need to keep my generate commission rate high so I avoid high margin bets on here. I use it for lower margin bets and trading that I could not do elsewhere.
I hope Betfair see sense. In 2008 the exchange was not broken. It was still growing both in revenues and amounts matched across all markets. They refused to settle for this growth and are now paying the price and must scrap the charge before its too late and the decline becomes terminal. Otherwise they will just be left with a second rate sportsbook and casino.

1 comment:

The Golf Bettor said...

Hi Cassini,
I thought I would post my thoughts on betting derivative markets versus the outright markets particularly in football. I would argue that all those with healthy unrestricted accounts with all the bookmakers and are in the serious but non professional gambler category will be best served by betting the 1:2:x markets. Sadly this state of affairs does not necessarily last forever. Ultimately as stakes are increased and you begin to employ bookmakers from farther afield you realise that bookmakers offering Asian Handicaps on football have significantly higher limits particularly if their business originates in Asia. A respectable firm like SBO bet will lay a much larger bet on the handicap than the outright and this is simply due to the fact that the Asian market bets much more on the handicap. These firms in Asia routinely lay off liabilities with each other and systematically open arbitrage opportunities basis the sharp flow from certain marked accounts and agents. This is a huge volume business with tiny edges. Now when you reach the point where you can only bet football matches with the likes of Betfair, Pinnacle, 12Bet, 188Bet, SBO bet etc etc you find not only that you get much smaller stakes on the outright but also that when you take the best prices from all of them you are betting into a 102.5% market at times. Whereas when you take the best prices from those firms Asian handicap markets you can bet bigger bets and maybe bet into a 100.5% market. So you reduce the “spread” you pay and also end up reducing your drawn down. You then start to think that with the reduced drawdown you can afford to stake even larger and the next thing you know you are on the phone to a man in Indonesia asking for 20 grand on Yeovil +0.75. This scenario is even further exaggerated on Tennis where the limits on the handicap are far higher than the outright in Asia. Many US facing books are the same as well with their US sport offerings. Now whether a small tipster based in the UK offering tips to those who are going to place £50 maximum on their tips need to both with this is another matter. Incredibly bookmakers in the UK have started to stream Asian Handicap prices straight from Asia and are happy to lay all comers on it happy in the belief that it is a perfect market. Never mind the fact that Betfair is seeded by the Asian lines as well. I hear Bet 365 will lay several million pound bets to certain VIPs on Asian lines simply because they believe they are that much harder to beat. Those who are currently involved in the gold markets will know that just because a market is liquid and frequently traded does not mean that there are barriers to profiting. On a separate note it is also wise to remember that pricing by the herd is not always right.
The Golf Bettor.