Friday, 29 March 2019

Zero-Sum And Morals

The meme of the day in betting and trading conversation would appear to be the clarification that when betting, it is not you against the big bad bookie, it is you against other bettors.

My last post stated the fact that...

when betting, you are not betting against the bookmaker, you are betting against other market entrants
...and others have recently confirmed this on Twitter. Here's the esteemed Joseph Buchdahl yesterday:
As usual, Joseph phrases the facts far more eloquently than myself, but this is the truth of it. No one buys stocks or shares claiming that they are going to 'wallop Wall Street' or 'lash the London Stock Exchange', but the sportsbook is essentially the same middle man trying to balance the money coming in and guarantee a profit regardless of the outcome. 

They might not match up buyers and sellers in the same way that Stock Exchanges and for that matter Betting Exchanges do, but their role is still that of a middle-man. 

But still the myth persists. I guess it's a nice rallying cry for a tout to shout about "bashing the bookie" but it's ill-informed and clearly targeted at the less sophisticated punter. 

Here's the opening post which kicked everything off from spanky:
The thread is well worth a read, if only for the number of posts from people who clearly don't quite grasp the zero-sum (when including the vig) nature of the game, especially Diego for whom the whole thing is clearly beyond him. A Lucky A Day gets it:

The Church of Betting observed that:
A sportsbook may very well go bankrupt if they are not able to balance their books and end up being exposed on an outcome. It's why they minimise risk by having limits, line movement, and laying off bets, but a poorly run bookmaker, like any poorly run business, probably won't last long. The definition of a bookmaker is a person or entity which "accepts wagers in exchange for a premium" but if expenses exceed this premium, they will also fail.  

The thread also touches on the morality of gambling. If you are a long-term winner, then you know that it is highly likely that at least some of your winnings are coming from 'vulnerable and addicted' people. 
Finally, this comment from Phil Bull was, as Phil often is, amusing:
While spanky's profile does contain this message:
I'm sure it's simply that he's offering free advice about the betting industry in general and not anything... oh, wait:
Information? Presumably not tips, for moral reasons. 

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