Wednesday, 12 February 2014

Weighting Game

Anonymous - there may be a lot of them about - asked me:

What do you think would be possible starting with a £200 bank pre trading horse racing? Is it too little a bank to start with?  Am I better off building a bigger bank. Seems like long hours for a little profit cheers.
He must be a new reader, because horse racing is not an area of interest, nor expertise, but my answer would be that £200 is quite sufficient a starting bank IF you have an edge. My one deposit into Betfair netted out at £98.50 so I know from personal experience what is possible. My problem here is what on earth makes Anonymous think that he has an edge in horse racing markets? It seems to be this would be about the least likely place you might find an edge, so unless you have contacts at your local stable, I would strongly recommend saving your money. While I can appreciate the spectacle of horse racing, and have been to several Derby and Oaks days at Epsom, Derby Trials at Lingfield, and had other good days out at places like Goodwood, Windsor, even little Cartmel, from a betting / investment perspective, I can't understand the interest, especially given the multitude of alternative betting options on offer these days.

My Twitter time-line yesterday was full of details about weights for the Grand National. At least I think that was what was going on, but I couldn't care less. As an investment opportunity, the Grand National must be about on a par with the offer I had from Nigeria in my spam folder this morning.

Anyway, IF you have an edge, then £200 is plenty, as even the smallest edge will soon generate a huge bank given the number of races each day. It's one reason why the Sultan's sudden change in fortune raised a big red flag. Tennis matches are in-play pretty much every day, and the Sultan had an edge, yet wrote:
Firstly, I want to clear up the whole situation with me not being able to compound. The reason why I can't is irrelevant, that's nobodies business but mine, the only important detail anyone needs to know is that I can't.
As Hejik wrote in his excellent dissection of the Sultan and his Academy* (and do check it out if you haven't seen it):
Well, it is kind of relevant if you're asking them to give you their money to play with. His solution to this problem is quite hilarious:
"Therefore, trading with someone else's money is a good alternative as far as I'm concerned"
You'll see the concern here, and I'm glad I'm not the only one who found something a little strange about the whole saga. An edge does not come from trading with someone else's money, or from having a large bank, but an edge does come from having access to data ahead of everyone else. Emp had this to say:
"personally profitable and socially pointless"
Isn't this why there's so much stigma around gambling in general? That there's no social point to either court-siding or what you feel are more ethical ways of gaining an edge?
Small traders and fish still flock to markets, and they'll still keep gambling. Courtsiders are just eating up profits that would have gone to winners using other strategies.
For many, gambling is entertainment, and lots of people are clueless about probabilities and don't even understand over-rounds. Not your 'sharp minded' Betfair customer of course, but just take a look in the local high street bookmakers, or read about the problems caused by FOBTs. 

And yes, for what it's worth, while court-siding is not illegal, and not even against the rules, Betfair only allow the practice to continue because it is not their money being 'eaten up'. Not directly anyway, but in the long run I think it's a mistake, because the markets will dry up. No company would allow it if it was their money being taken by the same accounts time and again. My opinion is that Betfair have a responsibility to ensure that the delay is sufficient to protect their customers. As they themselves say, without this protection, liquidity, and thus shareholders profits, will fall:
This delay protects both backers and layers and leads to greater liquidity.
Yes it should, but no, it often doesn't.

* The views expressed in linked blogs, posts, articles or tweets are of course those of the authors of the blogs, posts, articles and tweets and do not necessarily represent the views, opinions, or positions, of myself and should not be shown to the police*.


Hejik said...

I'm glad you enjoyed the post Cassini, I suspected that you might but was concerned I was over-stepping by posting a link.

Thanks and much appreciated!

Anonymous said...

Does Hejik go round threatening people for a laugh ?

Anonymous said...

Interesting to see Cassini moderating critical comments.

First one was very tounge in cheek. Second mocked you directly. This one, men.


Cassini said...

Anonymous: What comments have been moderated? You're not making much sense to me, and I doubt anyone else knows what you are on about.