25/25

It's been a while since we looked at the Draw in the Premier League, in part because there haven't been that many this season. With 250 games played, exactly 20% have ended as Draws, an all-time low for the Premier League. As always with football, using Pinnacle's closing odds courtesy of Joseph Buchdahl's Football-Data web site, the outcome of backing the Draw in every game is, as usual (2010-11 was an exception), a disaster.

Currently you'd be down 56.97 points from 250 bets, a negative ROI of 22.8%, and you'd be forgiven for thinking the Draw offers no value, but as I wrote back in November:

A more selective rule of less than 25% and this climbs to 41.78 points from 155 matches, an ROI of 27%".

The rule being that of backing the Draw in "Big 6" matches when the difference between the 'true' win probabilities for both teams is in that 25% to -25% range. 

With only seven qualifying matches so far, it's not a big sample (to put it mildly), but these close contests have produced three winners and a 3.58 point profit. 

What about other match types in the 25% to -25% range - the Little 14 and David v Goliath matches you may be asking? Backing the Draw in both these categories is profitable, no surprise there as they are by definition 'close' matches, but what is a surprise is how much profits are improved by ignoring Little 14 matches where the market has the Home team as favourite. 

Overall, the 25/25 system since 2000 is up 73.10 points from 1,456 matches, but eliminate those Little 14 matches where the market makes the Home team favourite, and the profit jumps to 129.91 points, while the number of matches drops to 664. The difference in ROI is huge, almost quadrupling from a decent 5% to a very decent 19.6%.

The outstanding value in the EPL this weekend would appear to be Tottenham Hotspur at a very generous 2.96 with Pinnacle, as advertised in their Tweet yesterday (above). Good luck collecting though. Clearly a palpable error will be claimed as there is no such team as Leicetser City. 

Bayes Laughs, Others Miss The Joke

It was't the most exciting end to the 2018 NFL season with the lowest scoring Super Bowl ever, but from an investment perspective, it was another profitable one.

For those following the Small Road 'Dogs system this season, the regular season ROI was 7.8%, and for those saving themselves for Divisonal games only, the ROI was 9.9%. In the playoffs, the ROI was 30.1%, and for all categories combined the ROI was 9.6%. 

As readers will be aware, the Small Road 'Dogs strategy isn't new. Since the 2002 season, the numbers for the Regular season are:

Those are the baseline numbers. If you are a little more selective, those percentages can all be increased and only one season since 2005 has seen the strike rate below 50%:

It may not be the most exciting way to make money, but 56.9% is fantastic over 17 years. Ignore the claims of those who say they can win coin-toss bets at a strike rate anywhere close to 70% as one Twitter handle (now deleted) claimed:

The esteemed Joseph Buchdahl (@12xpert) has a few tweets on this conman, and I liked this comment from Andrew Mack after the claimed 70% strike rate went closer to 40%:

No one, not even Mel (his claimed strike rate was 50% to 60% at 2.8), can beat the odds long-term by this kind of a margin.

To paraphrase Steve, for profitability you need an edge, discipline, patience and perseverance. A sense of humour might be helpful too:

I may have added at least six years to mine.

Undesirable Behaviour

In my last post, I mentioned a comment made by spanky, whose bio on Twitter describes him as a Professional Sports Bettor. Some of you follow him, and would have seen that a few days ago he posted some videos of himself being restricted at some sportsbooks.

At the time, my thoughts were that this might not be the smartest move to make. Not only do some of the videos show sportsbook employees, but his own face is clearly identifiable, and I'm not sure why someone already having trouble getting on would draw attention to themselves in that way. Sportsbooks in the US have strict rules about filming and clearly his actions with a hidden camera breached those rules. 

Spanky Tweeted on January 14th:

Yesterday, he gripes on Twitter that:

"I just got a certified letter dated January 16th banning me. My “Undesirable Behavior” is winning too much!?! I never even stepped foot in the joint! Regulated Bookmaking in America sucks!"

As quite an expert on undesirable behaviour myself, I'm not convinced that winning belongs in this category. My suspicion was that it was actually his filming in casinos which had brought about the ban, and had nothing to do with "winning too much" but this justification drew the sympathy of many followers judging by the comments. 

But sure enough, there in the comments several hours later was a credible reply explaining that:

Presumably the casino made clear the reasons for the eviction at the time, and leaving out this rather important detail, and promoting one more to his liking is poor form. I wonder why he might do that?

It's probably also not in his favour that he's previously been in legal trouble, with a criminal record, agreeing to a plea deal in Queens, NY, to stay out of jail after being charged by the FBI with:

"enterprise corruption; fourth-, third-, second-, and first-degree money laundering; first-degree promoting gambling; fourth-degree conspiracy; and fifth-degree conspiracy."

That's a lot of degrees! If spanky really has an edge, he should bet on the exchanges (now legal in New Jersey I am told) and keep a much lower profile than has been the case of late.  

The Super Bowl Trap

According to the NFL Players Association, the average career length is about 3.3 years, which makes it all the more remarkable that of the 18 Super Bowls since 2001, the New England Patriots will have played in exactly half of them. Since 1986, they will have played in 11, with a 5-5 record to date. Their opponents next Sunday are the Los Angeles Rams.

Seventeen seasons of data isn't much, but there are a couple of trends if you feel the need to bet on the biggest event of the year, the risks of which I have written about before. 

These big sporting events are seldom good for the serious investor. With so much interest, value is impossible to find. The Derby might be a big deal for the owners, jockeys, trainers, but for the sports investor a winner is a winner whether it be in a maiden race at Cartmel (I've been there too) or the Prix de l'Arc de Triomphe. It might not sound so good in the pub that you didn't have a bet on the Derby but that you had the winner (Breeze Out) in the 2:10 at Hexham, but then why bother? No one except you really cares anyway!

Here's Spanky's opinion on this topic:

The argument against this of course, is that because it's such a huge game, the ratio of sharp to mug money is at its lowest.

You have been warned. This season's game has (currently) the highest total since 2001 at 58.0 points. Of the four previous Super Bowls with a total at 50 or higher, three have gone Under, and the one Over outcome needed an overtime. Overs is historically the play when the line is 50 or less, with a 61.5% record, but the total won't be anywhere near this. But before you lump on Unders, read on.

For the line, Favourites have a poor record, covering the spread in just 5 of the 17 games. However in the five games with the narrowest spreads, Favourites have a winning record. 

The line (currently) for next week has the New England Patriots at -2.5 / -3.0, and a narrow spread tips the scales in favour of Overs, with 7 of the top 8 games ending Over. 

The Rams actually opened as one point favourites, but William Hill reported that 94% of money that came in at that number was on the Patriots, and the line moved. The amount of money bet is useful data - Pinnacle's 'Betshare' is not. 

NFL Divisional Round 2018

The New England Patriots are unique among NFL teams in that when it comes to the playoffs, there's a relative abundance of data to look at. 

While every NFL team has played in at least one playoff game since the current format was introduced, yes, even the Cleveland Browns, exactly half have played in games totaling in single digits. 

Far and away at the top of the list is the Patriots with 34 games, soon to be 35 following their not unexpected thrashing of the Los Angeles Chargers this evening in the Divisional Round.

The pre-game price of 1.59 on Betfair looked remarkably generous given the Patriots 18-3 record at home in playoff games including 10-1 in Divisional games. The last nine of these games have also been Overs, with the Patriots covering the spread in 6 of the last 7 games.

Overs is generally the value bet this weekend as I mentioned last week, but for matches played on grass, the value remains on Unders, as evidenced by the two Unders in yesterday's games hosted by the Kansas City Chiefs and Los Angeles Rams.

The upcoming New Orleans Saints v Philadelphia Eagles game is being played on an artificial surface, and while it's a smaller data set than for the Patriots, perhaps worth mentioning that Overs has been the result in all five Saints home playoff games, and that the Saints have a 100% record straight up.

Streaking On Ice

While the NFL playoffs are the most high profile thing going on in January for the sports I follow, the NHL and NBA continue on a daily basis. 

I mentioned the NHL system earlier this year, and two more wins in 2019, including the Dallas Stars last night, have extended the winning sequence to 12, which is just two shy of the record for any of my systems. 

14 consecutive winners in Baseball in 2013 is the record, but those selections were all in the 1.26 to 1.33 range, so the accumulator was 'only' around 40-1. 

By way of comparison, the NHL accumulator currently stands at 825-1, which certainly is a record. 

In the NBA, Overs continues to dominate. At last seasons 215.5 points entry level, the 2018-19 season has so far seen 423 bets, and has an ROI of 8%, while the more manageable 225.5 points mentioned pre-season currently has an ROI of 10.8%.

Not all matches are the same however, with the ROI increasing to 19% when visiting teams are from the West.

And not all Divisions are the same for that matter, with some Divisional teams pushing the ROI still higher this season to 35.2%. This is getting to be more profitable than UK horse racing!

American Football Pro Am

The NFL Wild Card Weekend "W" strategy (Unders and Underdogs) was again profitable this past weekend:

Small Road 'Dogs (receiving 7 points or fewer) are now 25-13-2 since the current format was implemented in 2002, with the NFC selections hitting at an astonishing 73.9%, with a verifiable ROI of 42.4%.

The upcoming Divisional Matches this weekend have their own personality, although the edge on Small Road 'Dogs continues in this round. The over / under advantage overall moves to Overs in this round, but not on all surfaces, so be careful. 

Last night saw the College Football season come to an end with the Championship game between Alabama and Clemson. The current playoff format was only introduced in 2015, so data is meagre, but these two teams have certainly dominated. Of the 15 matches, Alabama feature in nine, Clemson in seven, and Alabama v Clemson comprises four of them. The games are all on neutral grounds and one early trend suggests the Small Neutral 'Dogs are worth following in these games. But with almost a year to wait until the next playoffs, hardly worth detailing right now.    

NFL Wild Card Weekend 2018 Season

This weekend's Wild Card and next week's Divisional rounds are my favourite of the NFL season. Two elimination games a day, and with an average line of 4.8 points, the games are usually competitive. 

Although the format for both weekends is the same, the matches themselves, and thus the markets, are not. The biggest difference is that the Divisional Rounds sees the four home teams all rested after a bye week, their reward for being one of the top two teams in each Conference. It's a huge advantage. 

Since the current playoff format was introduced in the 2002 season, only three wild-card teams have won the three road games needed to reach the Superbowl, and none since 2010.  

As I mentioned earlier in the week, and last year, Unders is the value play on Wild Card Weekend. These games are similar in nature to the Divisional regular season games, and are sometimes between Divisional rivals. The most recent example was yesterday's Houston Texans v Indianapolis Colts match.

The table (left) shows the Unders results in regular season Divisional games since the 2008 season. 

Underdogs are also the play in Wild Card Weekend, as I tweeted yesterday. Road 'dogs by a touchdown or less cover the spread 64% of the time.

There's still one game to go this weekend, but followers will be happy with the results so far. 

I had a cheeky bonus bet on the Los Angeles Chargers to win outright at 2.46. 

My wife seems to have lost interest in her home town team since they relocated to Los Angeles, but her father's interest seems to be rekindled this season. 

What a difference a winning season makes.

Up next, my son's Eagles, looking to cover 6.5 points in Chicago. Well actually, they're probably looking to win, but I'll take the small loss and Under 42 points.

Fly Eagles Fly.

Law Of Anomalous Numbers

Life is full of coincidences. Yesterday I wrote a post and extolled the virtues of a certain Leighton Vaughan Williams, while almost ten years ago, I wrote about Benford numbers, and included an article written by the same Professor Williams on the subject. 

Casually included towards the end of that article, were these lines:

The same principle applies to trailing (i.e. last) digits. It's a great way, therefore, of checking the veracity of receipts. If, for example, there is an unusual number of trailing digit '7's, there's a decent chance that the figures are cooked. Tax authorities are alert to this.

In the past, I have published the Benford numbers from my Betfair trading spreadsheet, which is now into its 14th year, having been started on January 1st 2006. They're nothing more than a curiosity, but I like numbers so it's a fun annual exercise. 

Having re-read the article referenced above, I was a little sceptical that the claim that the law applies to trailing digits was correct, and sure enough it isn't. If tax authorities are analysing trailing digits, they are wasting their time.

Below are my 13 years of Benford data, including for the first (and last) time, the results for trailing digits:

Other than my 7s and 9s being 0.8% lower and higher than expected respectively, the numbers are pretty close to expectation, but for the trailing digits, the evidence is clear that every digit has pretty much the same chance of appearing. Benford's law does NOT appear to apply to trailing digits.

Benford's Law does apply to the second digit, although within a narrower range, and again my results are fairly close to those expected, but from third digit on the differences are even less. 

The law is useful for detecting bogus numbers, speaking of which, an astonishing claim was made overnight regarding my post on horse-racing and beating the insider traders.

Aluckyaday Tweeted:

The effort required to profit from horse racing at softbooks is very minimal. My selections take me about 15 minutes a day, and have over the last 3 years returned a 27.5% ROI. If you are able to bet with softbooks then racing offers more profit opportunities than any other sport

Goodness me. And there I was thinking an ROI of 2.75% over one year was good. 

Curious though as to what planet these soft-books are located on, that allow someone to win more than peanuts over three years at anywhere near this rate of return? 

An Acceptable Reward

There's nothing like a healthy debate to get the hit count climbing. The topic is the impact to the general public of the presence in UK horse racing markets of insiders, specifically can the advantage of insider information be overcome long-term?

Others, far more knowledgeable than myself about betting markets, and who also maintain a healthy attitude of scepticism, have reached the conclusion that 

"long term profitability in racing requires some form of insider knowledge" 

and I am with Joseph Buchdahl on this. With one caveat.

There seems to be no dispute that insider gambling exists. A 2010 paper from the University of Sussex stated that:

It has been suggested that insider gambling is an acceptable reward for those involved in owning and training horses (see the discussion in Crafts, 1985). However, in most countries of the world, the use of insider business information is illegal and it is difficult to argue that horse racing has any features that would make insider gambling acceptable. Thus, there is a strong economic argument for regulation of insider gambling. However, the detection of insider gambling raises many practical problems.

The question thus revolves around just how big a hurdle the advantage held by insiders is. Readers of this blog will know that one of the books that has had the most impact on my sports investing is Leighton Vaughan Williams' Information Efficiency in Financial and Betting Markets.

On this topic, he writes (p140) that:

On the basis of this evidence, Crafts concluded that British horse-racing betting markets do offer insiders the opportunity for profitable exploitation of information not publicly available.  

However, Williams also notes (p139) that some races are more likely to be influenced by insiders than others, an argument which makes perfect sense and which applies to other sports as well.

He [Crafts] reasoned that a shortening (lengthening) of the odds available about a horse during the course of the market may indicate evidence of insiders who knew the true probabilities of that horse winning were greater (less) than those implied in the odds offered early in the market. 

Williams' wrote a lot more in his ~390 pages, and if you are serious about making money from betting, you really should read every page, and probably more than once. It's not cheap, but you get what you pay for, and the book should pay for itself many times over. 

Insider information is logically much less of a concern in the Derby than a Maiden race at Cartmel, and while there is only one English Derby a year, there are certainly several high profile races a year where a disciplined expert bettor would be playing on a fairer playing field.

Again, the idea that anyone outside of the racing industry can be profitable long-term seems unlikely, but with a selective approach, I'm happy to concede that it is theoretically possible.

I was expecting someone to give this selectivity as a reason why my intentionally broad statement might be wrong, but that no one did, is interesting. 

I suspect that in practice, with account restrictions and premium charges, not many are able to make a good living even with such a selective approach. Perhaps the thrill is more in the mathematical challenge of it all rather than for the money. I can identify with that feeling. It would seem likely that the amount of time spent to gain an edge in racing would be significant, and of course, the higher profile the race, the more competition you are up against in the hunt for value, again something that applies to other sports too. The chances of having a genuine edge in the Superbowl would seem to be far lower than in say a season opening Arkansas Razorbacks v Missouri Tigers game.  

Hugh Taylor's name came up during the debate, and regardless of the extent of his relationship with the racing industry, consensus appears to be that his edge comes from poring over the numbers. A lot of hard work, and it does seems strange that he wouldn't quietly go about his business and milk the golden goose, (mixed metaphors intended), rather than give the value away to others. Possibly an At The Races salary exceeds what can be made from backing these selections? 

I'll continue to mostly leave horse racing alone. There are plenty of sports markets with inefficiencies that are easier to exploit. It was suggested that I...

... seem to have an axe to grind against horse betting, I suspect you tried and failed and its comforting to label everyone else the same. It appears you can make wild claims with no evidence and feel vindicated

It would be odd to have an axe to grind against an activity, but regardless, since tracking my results from 2006, my Horse Racing returns are surprisingly positive, (meagre, but nonetheless positive), so I wouldn't say that I have either tried or failed. I'm just not sure the rewards would justify the effort. 

Your Logical Fallacy Is Anecdotal

As I mentioned previously, I found myself dragged into a debate on the topic of whether it is possible to win long-term on UK horse-racing given that insiders are ever present.

It was @lordlard who included me in a response to @SmarterSig tweeting:

@SmarterSig then changed the topic, writing:

I do not agree with his assertion that you cannot beat the market in horseracing using publicly available data

I suggested that:

It’s fine to disagree with me but you should be able to support your assertion with a logical argument. Why would insider trading be unlawful if the public were not at a disadvantage? By its very nature, horse racing has its insiders. Good luck beating their edge long term.

My basic premise is this - Horse racing has always had its insiders as I have written about before. If you are not privileged to such information, then you are at a disadvantage, and have a negative EV. If others know more about a race than you do, the odds are against you. Sure, you might win over the short-term, but you are highly unlikely to overcome this disadvantage over the long-term.

SmarterSig claims that he and others are making money long-term from UK horse racing, but anecdotal evidence is limited in value. SmarterSig conceded that horse-racing markets are rigged but wrote that:

My numbers suggest that I am not being lucky

Hardly an unbiased opinion, and the suggestion that there may be skill at work rather than luck remains unproven.

I'm not the only one who is sceptical about the likelihood of overcoming a negative EV long term with no non-public information. Fellow sceptic Joseph Buchdahl joined the fray, adding:

I’m already on record as believing that long term profitability in racing requires some form of insider knowledge. Of course it’s not my field so I may be wrong. 

It's not my field either, because as an outsider, I see the challenge of beating horse racing as similar to trying to forecast a company's financial results. Others with inside (or privileged) information will always know more than I do. There's a reason why insider trading in financial markets is illegal - it is unfair to take advantage of those without access to this information.

If a horse can be backed at a certain price, it's because others more knowledgeable than you aren't interested in it at that price. Is it because they don't know what they are doing, and are missing out on the value? Unlikely, or they would soon be out of business. The only other reason is that it is poor value.

An optimistic attitude is all well and good, but a healthy dose of reality needs to be maintained.

If someone really does have an edge in UK horse-racing, they should soon be very wealthy indeed, if they can keep accounts open of course, and as @lordlard wrote:

Folk quietly making a living aren’t going to be shouting on Twitter about it. It’s at odds with the skillset required.

Quite. Returning full circle to the initial topic of complete frauds, you might expect the lifestyles of supposedly successful traders to be a little more reflective of their reported success than appears to be the case. I suspect that there is a direct (inverse) correlation between how much people talk about their success, and how successful they actually are. 

As unlikely as it is given the completely different structures of the betting markets in Hong Kong and the UK, if someone is 'doing a Bill Benter' in the UK, you won't know them by name. And no, it isn't, and wasn't, Adam Heathcote. 

Lennon, Marmite and Heathcote

These new years come around fast as you get older. 2019 is the twelfth year of this blog, and although my posts were down in number last year, the hits keep coming. I mentioned in the last post of 2018 that I'd be taking a break, although it wasn't as relaxing as I'd hoped.

My work trip to New York ended with my return coinciding with the night of the reported drone activity at Gatwick, resulting in my flight being diverted to the northern wasteland of Liverpool and its John Lennon Airport. Hard to 'imagine'. I arrived at Gatwick by bus about 18 hours later than scheduled, and my bags finally caught up with me two days after that. 

In the preceding few days, my stubborn Mum fired all the carers provided to her after fracturing her hip in a fall. One had put bone china into the microwave, one committed the heinous crime of making marmalade instead of Marmite on toast, and a third was too tall, although there may have been more to that story.

Having unilaterally declared her independence, she then proceeded to fall three more times in the space of five days, before one of my sisters took control and moved both of my parents into a care home. One of my nieces found her on the floor after fall number three, and her claim to have "suddenly felt tired and decided to lay down" was not the most convincing cover story.

While not happy at first, she does now seem to be resigned to the fact that after 63 years, her days at the home her father bought her as a wedding present may well be numbered. It's all rather sad really.

So to betting, and December was a great month for the NHL system which started the month with a loss but which is now on a winning streak of ten:

In the NBA, the West v East Road Dogs system also had a profitable December: 

The Beast continues to be profitable and at least one person is taking advantage. At last season's 215.5 entry point, the system has an ROI of 6.8% while at higher entry points, the ROI is as high as 12%.

The NFL Regular season wrapped up with the Small Road Dogs in profit again for the 11th time in 13 seasons, and the Division system also adding to the profits:

The NFL's Wild Card weekend sees the Unders as the value bet, with an ROI since the current play-off format was introduced of 14.4%, and over the last six seasons of 38.3%. Be careful though, as the sample size is small.

Twitter has been interesting so far this year, as I found myself dragged into a debate on the topic of whether it is possible to win long-term on UK horse-racing given that insiders are ever present. I actually have to work today, but a full blog post on the topic will surely be along soon.

In the meantime, my old friend Mark Iverson raised the name of Adam Heathcote yesterday:

Adam was a relatively short lived Betfair character who after months of publishing unverified and highly unlikely profits - coincidentally from UK horse racing - started a subscription service which, by all accounts, was a complete and utter disaster.

After raking in a supposed £360k in two years, why Adam would have needed the income from a subscription service, or more importantly, was willing to give away the secret to his self-proclaimed success, and thus his edge, were two questions that didn't seem to trouble his subscribers. And of course there's always the question of why anyone with a Golden Goose would be telling the world about it. As @Lordlard wrote today:

Folk quietly making a living aren’t going to be shouting on Twitter about it. It’s at odds with the skill set required.

As the 'nice blog post' about Adam Heathcote mentioned above said:

It is quite staggering how quickly he was able to scale up.

Indeed it was. 

I wrote a couple of posts on this topic back in 2009, one of which I noticed has recently been quite popular. 

Some commenters did share my concerns, and one comment supportive of Adam included this all-time favourite line (typos included):

Your the type of bloke that would marry a Thai bride, sport a little beard and wear crocs.

The second post from a few days later is here with several people complaining about the quality of the service.

There's also another more recent post which touches upon Peter Webb's tie-in with Adam, and indeed Webb's transparency, which may interest some readers. 

NCAAF 2018 Small Road Dogs Summary

While there is one College Football game this weekend which technically qualifies for the Small Road 'Dogs System, it's the College version of a post season game, in this case a 'Bowl' game, which is being played in the home stadium of the one of the teams.

These games do come along at an average of 1.3 a season but they are not good propositions with a record since 1996 of 11-19-1.

Which means that the official numbers for the regular season system are now complete and the success continues.

A profit of 13.93 points is the second highest this century, and just one losing season in 18 years is really quite phenomenal. After 1,740 bets, the ROI is 7.7% over this time.

Restricting selections to Conference games resulted in even higher profits. The highest points total ever and another double digit ROI percentage.

The NFL version has four more weeks before the regular season is over, and continues in profit to date with an ROI of 6.8%. No updates before then anyway as I'll be travelling again for work from Monday for ten days, before taking some well deserved time off to spend Xmas with family.

There is one Big 6 match this weekend in the Premier League, with the ROI on these games 41.7% for the season, and 17.9% over the last 100 matches.  

Ignore The Rest, Sometimes

The importance of rest is well known in sports, and is more important in some sports than others. In baseball, the starting pitcher typically has four of five days between starts, while the NFL schedule means teams always have at least three days rest between games. NFL scheduling these days makes sure that no 'short rested' teams plays against a longer rested team - only one game on a Thursday in early December 1997 (Cincinnati Bengals v Tennessee Oilers) was an exception, when the Bengals played on the previous Sunday while the Oilers enjoyed a full week's rest after playing on Thanksgiving Day. Not that it did them any good, trailing 0-38 after three quarters before losing 14-41. They were drilled, you might say.  

The two sports where rest does matter are the sports (excluding baseball) where teams go on 'road trips'. For the most part, the relative differences in rest days between two teams is factored into the lines. As I said, the importance of rest is well known. What is considered and often discussed is the impact of a game going to overtime, but I suspect something that isn't generally considered is when the previous game was a comfortable win or an uncomfortable loss, but in either case, players are rested in the fourth quarter and thus while technically the game is a back-to-back, in practical terms it is not.

In other words, an NBA team playing triple overtime in a close fought game should be considered differently in their next game from a team that had a 20+ point lead early in the third quarter and coasted to victory, allowing the bench players to finish off the game.

In the 2017-18 season, this system had a 12-9 record, and backing such teams against the spread this season now sits at 4-1. All time the record is 135-109-5 (55.3%). 

Including home teams, the above numbers become 9-2, 3-0 and 200-170-8 (54.1%) respectively.

There are a couple of other parameters that can boost the historic win percentage to 63%, but selections become few and far between and not many people have the discipline to wait for all the planets to align.

There's also a definite edge on Unders in these games, 56.2% overall an as high as 62.4% with other parameters.

I'm not sure how excited Christopher Haley of Winnipeg was when he saw this Tweet yesterday given that the last time anyone scored five goals in one NHL game was on 2nd February 2011.

But you can guess the rest. Finland's 20 year old Patrik Laine, defied the odds by scoring five goals from five shots in the Jets 8-4 victory and win Mr Haley a nice Can$1,100,000, payable over 20 years.

This game was a selection for the NHL system, but my profit was a little less than Mr Haley's, although I don't have to wait 20 years for it. So that's good.    

Knowledge

Some of you may have caught a discussion on Twitter yesterday regarding the use of statistics in betting, specifically in football and horse racing. 

Because Twitter's character limit can be a little constraining, here's a summary, though you can read the full conversation here.

The basic claim of A Lucky A  Day was that because soft books "seem to" use early prices as loss leaders, betting on horses pre-race "can be profitable for someone in their living room". I begged to disagree.

A Lucky wrote that:

Opening horse racing markets are generally less efficient than opening soccer markets. 

While pointing out that one can't compare a ternary event with a horse race that may have over thirty possible outcomes, I think this is generally true, the reason being that privately held inside information is what makes a market inefficient, and as I have written before, horse racing is a sport which will always have insiders. It's far easier to make sure a horse loses than a football team.

Large price moves alone don't mean a market is inefficient. In fact it could well mean the opposite, and that the market is simply reacting quickly to smart money coming in to the event.

A Lucky continued:

The more inefficient a market is the more opportunity there is to profit from knowledge. 

This statement is essentially correct. An inefficient market is one "in which an asset's market price doesn't always accurately reflect its true value. In an inefficient market, some investors can make excess returns while others can lose more than expected". 

The problem is that the knowledge required to make sure you are on the "making excess returns" side of the coin, isn't available to the living room punter. It's the insider who has this edge. The armchair punter is essentially guessing. He may win sometimes, he may lose sometimes, but ultimately in the long-run he will lose out to commission / transactions costs. 

Lucky seems to think that an armchair punter can use public data to gain an edge:

Everything I've read says in an inefficient market all public information is not factored in, so the edge can come from interpretation of public information, In an efficient market the edge can only come from private information.

The source of his confusion perhaps lay in the false assumption that an inefficient market "was the opposite of Eugene Fama's definition of an efficient market. The papers that I have read, that test betting markets for inefficiency, do it by trying to beat that market using public information".

I'd love to see those studies! Of course all public information is factored in to markets, wherever they lie on the scale of 'efficiency'. (An inefficient market is not the 'opposite' of an efficient market any more than red is the opposite of violet in the visible spectrum). 

The argument that "we don't all interpret data in the same way" doesn't mean that the data isn't factored in. 

Nor does the suggestion of Daniel Górka make too much sense, that:

because [the] majority of gamblers don't know at first place how to compile their own win probabilities and then how to to use/incorporate those information into their pricing process

In which case, these would hardly be people in a position to gain an edge in any market.

The truth is you're not going to gain a edge in horse-racing markets by looking at data available to the public, and which has been pored over by the thousands of people who are looking for a bet. 

To imagine that you have a unique ability to spot something thousands of others have missed is naive at best, and frankly more than a little arrogant.

If someone does have a unique ability to read markets and thus has an edge generating a long-term profit, some thoughts.

One, they would not be writing trading manuals, producing videos or offering trading courses to give away their edge.

Two, someone else will find the same edge one day, and it will disappear.

Three, with a skill like this, they should move into the far more liquid and lucrative world of financial  transactions.

Overs Keeps Giving - Thanks

With 250 games in the record books, i.e. 20% of the regular season, it's a good time to look at how the NBA Overs System is faring in this 2018-19 season.

At the 216 points entry level, the Overs currently have an ROI of 9.6%.

The 220 points entry level last season had an ROI of 12.2%, the best for 200 selections or more, but this season is currently falling a little short of that number.

I thought the 220 point level would average about two bets a day, but we are averaging almost exactly four a day, which is OK if they're winning I guess.

Regular readers will have noticed that some strategies carry over from one sport to another, and while backing Overs in MLB games when the total is on the high side has previously been discussed, I'm not sure I've mentioned this strategy in the NFL. Below are the results since 2010.

A reminder that today is Thanksgiving, and there are three NFL games in play. 

The Big 6 Premium Charge, Pinny Style

I postulated yesterday that when a Big 6 team are playing, Pinnacle know there will be a lot of interest, and have started to increase the over-round.

A Lucky A Day had another idea, asking:

This did seem a reasonable observation, given that many of the games with the higher over-rounds had one team at short-odds, but having researched further, this doesn't explain why this season is different to previous seasons. Short priced odds-on favourites are nothing new, and a match between Tottenham Hotspur and AFC Bournemouth in October 2017 actually has the lowest recent  over-round 101.2%, so that's no excuse.

Going back to the 2015-16 season, only 40 matches (of 1,260) had an over-round above 102.5%, and 35 of these featured a Big 6 team playing a Little 14 opponent. Four were all-Little 14 games and one was a Big 6 match.

Here's the thing - all but five of these 40 matches were played since April 2018. 

Something has changed, and the evidence would suggest that it's deliberate.

A season finale game in May 2016 was the first of the five exceptions, and the second was also an end of season game in May 2017. Both featured Manchester United. 

The other three were in August, September and October of 2017, and then none until April this year; the lull before the storm.

Again, Pinnacle's decision to elevate the over-rounds in certain matches is fair enough. Non-monopoly businesses can charge what they want, and can choose which customers to do business with for that matter, and if the customer doesn't like the terms, then they are free to take their business elsewhere. 

The impact of over-rounds is not understood by many bettors, and books tend not to shout about their margins, so it's unlikely that too many people have noticed this yet. 

That books got away with over-rounds in excess of 112% in football for many years, and still do in some horse races, is a good indicator that the average customer is not sharp. They either see betting as a hobby and care little that they lose money, or they are irrationally exuberant. Caveat emptor.

There is good news though. Of the 40 matches discussed above, Bet365 had a lower over-round in 15 of the highest 17, and in 25 of the 40. It's good to have options.

Pinnacle's Big Seven

In my recent post on the EPL Draw, I mentioned the troubling trend whereby Pinnacle's over-round this season has crept up from last season's 102.11% (itself up from 2016-17's 102.05%) to 102.24%. 

We're still early in the season, but a closer look reveals that the larger over-rounds are in matches where there is a Big 6 team playing a Little 14 team. 

Of the 17 matches where the over-round is 102.5% or greater, 16 fit this description. The one exception is Crystal Palace v Newcastle United and there's a legitimate argument for including Palace in any list of 'Big' teams. Two FA Cup Finals since 1990, a Zenith Data Systems Cup win in 1991, back-to-back FA Youth Cup wins in the 1970s, first ever winners of Division Three in 1921... the list goes on. 

Conversely, where the over-round is less than 102%, 23 of the 28 games are all Little 14 matches. 

It seems likely that when a 'Big' team (or Crystal Palace) are playing, Pinnacle know there will be a lot of interest and push the over-round up, while for the matches between 'smaller' teams such as below (no sign of Palace here, which rather backs up my theory about them), the odds on offer are a little more generous. 

It makes perfect sense from a business perspective, but it's something to be aware of as the season resumes next week.

Unofficial Sixteen

Pleasing to know that at least one reader made some money yesterday on the College Football selections. 

Not all of the 16 selections may end up as 'official' selections, (Northwestern moved from 'dog to pick 'em), but it was a good day. At a little after midnight, the state of play was:

Iowa State ultimately lost, as did Ole Miss who went to overtime, but a 10-6 day is excellent, even if it looked at one time like an even bigger day. Frederic J commented:

Attention turns to the NFL today, with four probable 'official' selections for the Small Road 'Dogs with a small bet on the Tampa Bay Buccaneers at 2.38. 

EPL - 18 Years Of The Draw

I mentioned in a recent post that I would have more on the English Premier League (EPL) Draw, and as a man of my word, here it is.

Thanks to Joseph Buchdahl’s Football-Data.co.uk website, it is possible to look at prices for matches going back to the 2000-01 season, i.e. we have 18 full seasons of price data. Unfortunately back in the olden days, the over-rounds were a lot higher than they are since Pinnacle arrived on the scene, so making comparisons of earlier seasons with more recent ones isn't fair.

It's worth mentioning that Pinnacle's over-round appears to be creeping back up this season, currently at 102.24%. Perhaps not significant to most readers, but if you are taking your betting seriously, it's something to be aware of.

Many readers will be familiar with David Sumpter's book “Soccermatics: Mathematical Adventures in the Beautiful Game” and in other articles he has promoted the idea that backing the Draw in Big 6 games is a profitable strategy:

When two big-six teams meet then all the focus is on one of the two teams winning and the draw is forgotten by the punters and the bookies. These circumstances are somewhat unique to the Premier League, because there are so many ‘just for fun’ gamblers involved in the market and six teams with a worldwide following.

There hasn't always been a Big 6 of course. The EPL began competition with the 1992-93 season, and is now in its 27th season.

In the early seasons, Manchester United dominated, winning four of the first five Championships, before Arsenal, Chelsea and Liverpool joined United in forming a ‘Big 4’.

Of the twelve seasons from 1997 to 2009, these four teams filled the top four places six times, with three of the four in the top four the other six seasons. 

Only Leeds United, Newcastle United and Everton were able to break into the top four places in the final table during this time.

The nine seasons since have seen the emergence of a Big 6, with Manchester City and Tottenham Hotspur being added. These six have taken the top six spots in four of those seasons, five of the top six four times, and only in 2015-16 were two of the six displaced, famously by Leicester City who won the Championship, and less famously by Southampton who finished sixth.

As an aside here, since the formation of the EPL, only three non-Big 6 teams have won the FA Cup, namely Everton, Portsmouth and Wigan Athletic, and Tottenham are the only Big 6 team with no Cup wins in this time.

Back to the League, and I thought it might be interesting to compare the returns from the Big 4 matches (2000-09) and Big 6 matches (2009-date) with the over-round adjusted to the 102% of recent seasons. 

First, here are the results of backing the Draw in every EPL game from the 2000-01 season: 

As I've written before, there are many matches where backing the Draw is akin to throwing your money away.

For Big 4/6 matches over the same period:

Clearly, blindly backing the Draw in all Big games isn't a profitable strategy, and why should it be? Big 4 teams have finished as low as 7th, while Big 6 teams have finished as low as 10th. A 'Big' match isn't necessarily a 'close' one. 

For the unwashed masses, "Back the Draw in Big 6 matches" is a nice and simple system. However, David Sumpter has also written:

It turns out that when two well-matched teams meet (i.e. the probability of a home win is only slightly bigger than the probability of away win) then draws are under-priced. When matches are skewed so there is a strong a favourite (i.e. the probability of one team or the other winning is larger than the other) then draws are over-priced.

While the definition of well-matched teams is vague, there are a couple of measures I like to use. One is to exclude any matches where a team has a 'true' win probability greater than 0.5, and where the 'true' probability of the Draw is 0.25 or less.

Using these filters, backing the Draw in 'Big' matches from 2000 would have resulted in this:

The other method is to calculate the difference between the 'true' win probabilities for both teams. For teams within 40% of each other the profit is 22.81 points from 232 matches, an ROI of  9.8%. A more selective rule of less than 25% and this climbs to 41.78 points from 155 matches, an ROI of 27%. 

Expanding this criteria to include all EPL matches, and the profit is 137.67 points from 1,431 matches, an ROI of 9.6%. 

ROIs around 10% over 18 years should catch everyone's attention.