Tuesday 10 October 2017

Short Of A Full Stack

The Tweet from Pinnacle reads:

“Learn how to beat the bookies in the Over/Under goals markets when betting on soccer”.

Admittedly, Pinnacle do have some pretty good articles, but this “beat / bash / clobber the bookies” narrative from people who know better, not only Pinnacle, is completely misleading and suggests the targets for such features are the less sophisticated reader.

Modern day sportsbooks operate in a similar way to actuaries, an actuary being defined as “a business professional in the insurance and assurance industries who deals with the measurement and management of risk and uncertainty”.

Actuaries must possess skills in mathematics, finance, analysis and have business knowledge and if you are serious about betting for a profit, you should have these skills too - ideally using them for your full-time career and for your part-time betting hobby.

“Bookmakers do not generally attempt to make money from the bets themselves but rather by acting as market makers and profiting from the event regardless of the outcome”.
While the “us” versus “them” theme may be something the bookies would like you to believe, make no mistake about it - gambling is not a contest between you and the bookmaker. 

It is a contest between you other gamblers, and to win in the long-term, you not only need to beat other punters, but you need to beat them by a big enough margin to cover the market maker’s costs.

Sportsbooks are not in the business of competing with the punter. They merely facilitate the ability (sometimes) for punters to invest their money in exchange for a fee , e.g. commission or vigorish. 

Bookmakers will adjust the odds or the lines based on the money coming in to the market. If their opening (soft) prices, typically only available to small limits and known sharp players, attract more money on one side than the other, the sportsbook will adjust the odds and attempt to reduce any liability. Limits will increase as the ‘true’ probabilities become firmer, and the event start time approaches.

This is a very logical and sensible business model. What would not be logical and sensible would be for a business to take unnecessary risk by voluntarily going in-play with an unbalanced book.

As a result, the implied probabilities derived from closing prices are typically a highly accurate measure of the true probabilities of an outcome. If they are not, then there is an opportunity for the sharp player.

Somewhat related to this is a pet peeve of mine, which is the habit of some sportsbooks to make public the “BetShare” for certain markets. Again, this is totally misleading in that it is useless information.

The “BetShare” simply gives the percentage of bettors (not money) per outcome. An extreme example to highlight the pointlessness of this is where 99 bettors each back an outcome with a £1, while one bettor lumps on £1,000.

It would be at best misleading to say that the BetShare for this market is 99% to 1%, and given that it is relatively rare for Pinnacle to publish BetShares, one might be excused for thinking they are looking to attract the less sophisticated follower into following the 99% and helping to balance the book.

Follow the prices if you want to see where the money is going. The outcome backed by the 1% will be the one with the shortening price in this example.

Bookmakers aren’t going to give away information with any value. If they’re promoting something, it’s for a reason. Don’t be fooled.

If you want to be profitable from betting, whether it’s in the Over / Under goals markets or whatever, you need an edge over other gamblers. The bookies prices simply reflect the opinions of the market’s participants.

As I’ve mentioned before, many participants are experts at what they are doing. Starlizard has about 200 employees — traders, software engineers and analysts — as well as paid informants around the world. They're looking for more:

“We are currently expanding and need a number of software developers and support staff with skills in C# / F# / Java / Python / Full Stack Development / DevOps"
How many people reading this think they have the skills to take on 200 highly educated individuals earning a decent salary paid from profits accrued from betting? A few Twitter accounts seem to think they do.

Of course individual sportsbooks will at different times have different liabilities to offset, and hence prices will often vary a little, and by taking advantage of the best prices, you’ll put yourself in a good position in the short-term, but as many of us know, if you look like you know what you’re doing, you’ll soon be banned or limited.

Will you find the edge you need to be profitable long-term from a Twitter account?

Ask yourself this - if someone finds a hidden trove of gold, how likely is it that they’ll leave it there, go home, and then tell everyone where this gold is hidden?

Based on what I read on Twitter, it’s apparent some people think this is quite normal behaviour, handing over their money to a complete stranger. That is delusional. The account selling tips almost certainly knows no more than you do.

In the rare instance that he may have exclusive inside information, he has either already backed the value out of it, and the information is thus worthless, or he hasn’t, which means he has no confidence in it, so why should you?

1 comment:

Steve, Albufeira said...

I don't normally disagree with you but... In an ideal world what you say is true but the days of bookmakers being able to make a balanced book online are well and truly over. Exchanges lowering margins to almost nothing and price comparison sites have seen to that. They can only take money online if they offer top price. They now have to rely on having efficient prices to make a profit. A casino model rather than a bookmaking one. With a bookmaking model it does not matter if sharp punters win as they will be paid by the losers, but with an efficient price model you can not allow sharp punters to take all your profits before prices become efficient, hence the staking restrictions and closing of accounts of those that try. Bookmaking is now much more of a battle between bookmaker and the sharp punter than it used to be, and the closure of accounts is testament to that.