Monday, 16 July 2018

Draws On The International Stage

A low-scoring third-place play-off and a high scoring final match were not what was expected based on history, but for those who understand the value of the Draw in knock-out games, World Cup 2018 was another success.

The 'official' profit from the fifteen matches using Pinnacle prices where available was 1.61 points, an ROI of 10.7%, which is completely meaningless given the small sample size of any one individual tournament, but we have now had five World Cups this millennium, a sample size of 75 matches, and the total profit from this strategy is 22.35 points, an ROI of close to 30%.

Only one World Cup, South Africa 2010, showed a loss (-1.99 points), and only one round (the Semi-Finals) shows an overall, but small, loss. With matches never overlapping, the number of consecutive losses is useful to know, and is just four. 

Fortunately, with next next World Cup four years and four months away, the success of a Draw backing strategy in international tournaments isn't just limited to the World Cup.

Euros from 2000 have an ROI of 19.4%, Copa America tournaments from 2007 (I have no price data for prior tournaments) have an ROI of 12.8%, and the three Confederation Cup tournaments from 2009 (again, no price data before that) have an ROI of 56%

Overall, these four tournaments combined have a basic ROI of 22%, 36.52 points from 167 matches, but as other studies of the Draw in 'big' matches have shown, applying a simple filter improves these numbers still further. 

For example, ignore matches where one team has an implied probability greater than .667 and the ROI climbs to over 35%, with 50.12 points from 143 matches.

There are also some matches where the confidence in the edge is much higher - for example when the Draw is priced at 3.0 or shorter, the ROI is 55%. As the image above shows, the true price on the Draw from 2002-2018 was 2.68, but the lowest Draw price with Pinnacle in that time was 2.88 (and a winner too, I might add). William Hill went just 2.7 for the Draw, in a book that was over-round by 112.8%. 

Risking a conservative 4% of the bank on each bet, a 1,000 point bank would now be a 5,377.4 point bank. With the longest losing streak so far not exceeding five, a less conservative 10% stake of the bank (ratcheted) would now be worth 93,682 points, off a peak of 117,103.15 reached with the England v Croatia semi-final.  

It's worth noting that pre-Euro 2008, the over-round averaged 106% and so these returns should be easily beatable. For subsequent tournaments, the over-round is a more reasonable 102%.

Roll on Copa America 2019, by which time 99% of you will have completely forgotten about this post. 

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