Change Is Constant, Mean Not So Much

"The only constant in life is change" - Heraclitus

By some distance, although admittedly with no competition, yesterday's post is already the most popular of the year, prompting comments in abundance on Twitter.

Mel (Scientia Trader) does indeed appear to have vanished from the face of the earth, with Dionysios confirming that:

Indeed, hopefully the latter. Unfortunately for Mel, the laws of probability do not suspend themselves just because you want them to, and the claim of a 50% to 60% strike rate being sustainable at a price of 3.8 (implied probability 0.26) was always quite ludicrous. Hopefully he is alive and well, and gainfully employed and didn't lose anything more than his pride. Of course, it is always possible that his huge edge was genuine, and that he is now retired and living on a private island somewhere. Nah. 

A Lucky A Day sent me some links to data for the Draw and Under prices, with the free version being the less useful (but nevertheless interesting) opening prices from both bet365 and Pinnacle. There's about 210,000 rows of data so I may be gone a while!

The closing prices come at rather a high cost, and I'm not sure senior management here, still seething after seeing my 2019 alcohol expenses, will be approving it.

In addition to being very helpful, Mr Lucky did comment that:

Personally I do think draws get overlooked and inefficiencies could last a long time!

Agreed, and the Draw has served me well over the years with thanks due to Derek McGovern for planting the seed in my brain back in 1999.

They also served many readers well when I shared the XX Draw selections for three seasons in the last decade:

Not a huge return for the effort, but For comparison, backing the Draw blindly in every game in those leagues for the three seasons would have lost you 5.8%. 

In some ways it's a shame I had to discontinue the spreadsheet, as it was based on the idea of expected goals before xG was even a term, but as I've mentioned before, it took several hours a week to make all the updates and a promotion at work meant that was no longer a viable proposition. For most of us, time is a precious commodity and as the cost of spending hours watching a sport in-play waiting for an entry point, so there is a cost to spending several hours a week updating the numbers for ~100 clubs.

Graeme Dand back in 2014 had this to say on the Draw:

I really buy into the idea that few punters back draws and they are more interested in backing a team to win (same idea as why no one backs 0-0 when watching a game as they want to see goals!)

Another expert who saw the potential for value in the Draw (and Under for that matter) was Daily25, who had this to say back in 2012:

I love the "in the right circumstances" qualifier, (aren't all bets profitable "in the right circumstances?") but a quick look at the free data would suggest the Under / Draw relationship I mentioned yesterday might have some merit. 

The Premier League data isn't quite current, with the latest matches from early December, but they go back to the 2010-11 season which is a fair way.

Stripping out the matches where one club is odds-on or the Draw is priced at 4.0 or greater, backing the Draw in matches where the Under is odds-on produce the following results:

I may need to change the wording from "odds-on" to "favourite" but more to come on this, and thank you to A Lucky A Day for the pointer.

Then there was this comment from Joseph, a little passive-aggressive in tone perhaps, but Joseph is more into the theory side of betting than the practical side, so I'll assume positive intent:

The problem with talking about a regression to the mean when it comes to sports and betting, or at least my technical analysis based form of betting, is that there is no specific and invariable mean, because both the sports themselves, and their related betting markets are constantly changing. 

In sports for example, from 1888-1892, the average number of goals per game in the top flight of English football was 4,37, and the percentage of matches ending in a Draw was 14.5%. Is this the mean to which the number of goals is expected to return to?

As mentioned many times previously, sports change over time. Rules are updated and scoring becomes easier or harder. Look at the impact of the 1925 changes to the offside rule in football. Points for events are changed (e.g. Rugby and NFL). Strategies change, e.g, the higher scoring seen in the NBA since 2012. Divisions, conferences and schedules are rearranged. The list is long.

The net effect of this is that data from one season often cannot be usefully compared with another season and the idea of numbers regressing to a mean is nonsense. Values are not constants.

Similarly with the betting markets that accompany these sports. For one example, one need only look at the football markets from Joseph's own website from 2000-01 where the over-round (William Hill) averaged 112.54%. This season the average (Pinnacle) is 102.77%, which marks a huge difference and you can't simply compare the results of a strategy without recognising this difference.

Markets also have to change because the underlying events change. I've written before that if you are able to foresee how a change in the sport might impact results, you should make hay while the sun shines because at some point the market will catch up to you. It has to, and only a fool would think that it won't. 

Of course winning strategies should eventually go "tits up" as Joseph puts it, and there should be no need to "save face" when this happens, unless you are claiming your golden goose will live for ever, and yes, there are probably gullible fools out there who would believe that line. 

As Alfred Lord Tennyson put it so eloquently:

'Tis better to have loved and lost than never to have loved at all.

Assuming you didn't lose all your profits of course.

That some biases appear to be so strong that systems like the Small Road 'Dogs have had more winners than losers in effectively a coin-toss for 19 seasons and counting is the real puzzle:

All my strategies, and those of anyone, should have a limited shelf-life. The key is to identify current market inefficiencies, use them to your advantage until the market catches up and it is no longer profitable, and move on to the next idea. 

Remember that the ideas offered on this blog are all based on technical analysis and are all offered for free, although donation to the retirement fund are always gratefully received. 

The main idea for this blog is to show the process required to identify market inefficiencies rather than offer selections themselves. I hope it also shows that making a profit from betting is also possible with the right approach.

Mean regression might be meaningful (pun intended) if you are measuring the performance of a tipster who is using fundamental analysis to identify selections, but for a technical system where the market is always changing, it is not. 

The idea that markets evolve shouldn't be news to anyone who is actively betting. I don't believe Joseph actually bets on a regular basis, and thus may not be aware of these changes, but as others on various forums have pointed out over the years, successful strategies can stop working literally overnight. 

You're basically buying a property on top of an eroding cliff. At some point, your house is going to fall into the sea, but you should be able to enjoy the view for a while before that happens.

Build up your bank while you have the edge, move a stop-loss up as your profits increase, and stop betting when (not if) your stop-loss gets hit. The idea that one should wait until the system has been 'proven' over 10,000 events, possibly going back years when the markets were quite different, is frankly nonsense. We're not testing a coin-toss or a roulette system - we're playing in constantly changing markets. 

The idea that betting markets evolve shouldn't be a surprise - the financial markets do too, and a punter, like an investor, needs to stay flexible:

The important thing to remember is that there is not a set rule you can apply. You must factor in what is going on in the world. For example, if the economy is in trouble, corporate earnings can be worse than expected. This lowers investor expectations, and stock prices will go down. Even if the market seems fairly valued at a P/E ratio of 14, bad times could cause the market returns to continue on a downward spiral with the P/E ratio going much lower.

On the other hand, during booming economies, corporate earnings can continue to rise, and stock prices can continue to rise for many years in a row. A P/E ratio of 16, or even 20, does not automatically mean the market is overpriced. In the early ’90s, many thought the market was overvalued based on P/E ratios, and thus they missed years of great returns from 1994 to 1999.

The point is that the betting landscape is constantly in a state of flux. New players with new ideas and sometimes sophisticated analytical tools, come in to the markets, sportsbooks with revolutionary business models appear or disappear: 

When Pinnacle began trading in 1998, most gaming companies used bonuses to lure potential customers. Rather than offer sign up or reload bonuses, Pinnacle became the first sportsbook to introduce a reduced margin pricing model or reduced juice, thus deriving profit from lower margins but a far higher turnover. Pinnacle began offering -105/-104 ($1.95-$1.96) prices on head-to-head match odds and spreads, significantly undercutting the standard -110 ($1.91) pricing model that was used by its competitors.

These changes are why the challenge of betting profitably is so much fun. 

What happens when NBA teams play faster and increase the number of possessions per game? There are more points scored. Do the 'traditional' sportsbooks sit and wait for mean regression? No, of course not. There is no 'mean'. There are 'means' over certain periods of time, but they are generally pretty meaningless (sorry, did it again). 

Finally, Mark had this to say on the topic of bookie restrictions:

Hopefully by mentioning him, his interest will continue for at least another day or two, but my point on this topic was really that anyone with the ability to become a long-term winner at betting is unlikely to be someone who would be surprised at having their business declined. Or as I put it last year:

Are you suggesting that someone with the skill to win at betting long-term is someone who would be unaware that they might not be able to extract money from a business indefinitely? This seems highly unlikely to me.

Anyone starting out today on Betfair is certainly well aware that in the unlikely event they are successful to the extent of the lifetime limit, there will be a Premium Charge applied on future profits. The complaint from the relatively few customers impacted at the time, (in reality, far more people were complaining than were, or would ever be, affected by the charges) was that the lifetime limit was being retroactively applied, and if you were already there or almost there, it was unavoidable, whereas if you were just starting out, it was fairly easily avoidable.

But life goes on, for me it's only a hobby, and we adapt.

Hopefully a few of you were with me on the Unders last night in the NFL Wild Card games. With two winners already, the worst case scenario for the weekend is a small loss after commission, but while my 'official' results will record the wins at 1.952, the actual bets were made at 2.08 (Tennessee Titans @ New England Patriots) and 2.02 (Buffalo Bills @ Houston Texans) so it will be a profitable weekend no matter what. Fly Eagles Fly. 

 

EPL Draw - Under Consideration

A Happy New Year to everyone reading this, and 2020 is the 13th year in which this blog will have active. This will be post number 1,660 with the current posting rate for the past two years somewhere around two a week, which is probably sustainable for a little while longer. 

While the pedant in me knows that the 202nd decade of the Common Era doesn't end for another year, I'm reasonably comfortable with going along with the masses and thinking of the 'twenties' as a new decade, and the last one was certainly interesting from a betting and investment perspective.

Betting is too individual to draw any sweeping generalised conclusions about, but personally the big change, to use investing terms, has been from active (in-play) betting to passive (bet-and-forget) betting. 

The first investment anyone makes is time. You must do this prudently before you can be successful investing money.

Some of the free time gained from not betting in-play at all hours of the night has been spent researching ideas for the bet-and-forget approach, but the importance of sleep should not be underestimated.

At my advanced age, betting returns are a small percentage of income, with net worth changes hugely dependent on what the financial markets are doing, and long time readers will know my thoughts on low cost index funds and investing in the US:

In more traditional financial markets, once again the main US benchmark index outperformed the UK's FTSE100. Only 4 times in the last 24 years has the FTSE prevailed, and the disaster that is Brexit means the US and Overseas markets are where most of my investments will again be in 2018.

Here are the updated numbers for the last 'decade', and with 9 out of 10 'wins' for the S&P 500 and an overall 189.7% gain over the period, I have no plans to change this strategy in the near future.

Anyway, most of you are here for betting and I've not written about the EPL Draw since the summer, but as the 2019-20 season is now in its second half, it seems like a post on the topic is overdue. 

One of the more popular posts of 2019, at least in terms of views, was this one detailing my history with the Draw, and the importance of selecting matches where the difference in win probabilities is relatively small. While this isn't the most complicated of calculations, it does require a little effort, but here is an idea that requires literally no effort at all.

Long time readers, and followers of the XX Draws from several years ago, will know that there is a correlation between the Unders (under 2.5 goals) and the Draw: 

These selections are also profitable when the Under 2.5 goal selection is backed. I first noticed this early in the 2011-12 season, and I started recording these prices at that time.

When you are looking for draws, you obviously want matches where the probability of goals is low, and as I have written on my blog, in a way, it is more satisfying to select a match that ends 1-0 than it is to fluke a 5-5 draw as I did on the last game of the 2012-13 English Premier League season.

Prior to this season, I didn't have access to an accurate closing price for the Under 2.5 goals markets. Joseph Buchdahl's Football Data web site included Maximum and Average prices from several sportsbooks, but the numbers were all over the place.

However, starting this season, Joseph has added the Under closing price from Pinnacle, and the simple strategy of backing the Draw in matches where the implied probability of Unders is above 0.5 has so far proven to be profitable.

As a benchmark, backing the Draw in every EPL game this season (never a good idea, so don't try this at home) would have cost you 10.34 units, an ROI of -4.95%.

Forget matches where the Draw is priced at 4.0 and the ROI becomes positive at 3.91% and if you only back the Draw in matches where no side is odds-on, the ROI is up to 7.11%.

Looking at matches where the Under 2.5 goals is sub 2.0 and the ROI is a very nice 24.4% (15.89 units from 65 bets). 

And the return is even higher as the probability of goals declines:

If you combine the strategies mentioned above with matches where the difference in win probabilities is less than 20%, the ROI is currently at 62% but half a season isn't the largest of samples.

Dionysios tweeted the following recently:

I'm not so sure this necessarily makes sense. My character restricted reply was that: 

The point is that the betting markets of today, like the underlying sport, are not the same as those in the past. The sports themselves change as do the markets, so comparing the results of a concept or an idea which may be profitable today with results from the past is somewhat limited in value. 

While there are obvious exceptions where markets continue to be inefficient because biases can be extremely stubborn, it seems logical that inefficiencies will, in general, be recognised, and self-correct as money comes in to take advantage, often resulting in an over-correction!

Dionysios' idea seems to revolve around in-play football, which seems optimistic to say the least given the level of competition that is analyzing and investing profitably in this sport's markets. 

As I've written before, tracking the number of minutes elapsed in a game from your bedroom isn't going to cut it. 

Speaking of wild optimism in in-play football, is my old friend Mel (Scientia Trading) still raking in the profits? Things seem to have gone very quiet, although it is quite possible that I've been blocked and am missing out on the continued success of his claimed 60% strike rate at 2.8...   

The NFL play-offs get underway today with the Wild Card games where historically the value is on Unders. Only twice in the last fifteen seasons has Overs 'won' more than two of the four games, the last time being the 2011 season. Of the other thirteen, three were split for an overall 40-27-1 record.

The totals market is most inefficient for matches played on grass, but only one of the weekend's games (Philadelphia Eagles v Seattle Seahawks) is being played on this surface and it's the one game that sees the road team as favourite - despite having lost three of their last four games. I suspect the market is giving too much weight to the Seahawks 17-9 win in Philadelphia at the end of November although a road record of 7-1 is impressive.  

Road 'Dogs are generally under-rated at this stage also, with a 28-22-2 record ATS, and in the last two season are 7-0-1.  

Finally, the NHL system which struggled early on this season has bounced back with a seven game win streak and currently has an ROI much more in line with expectations at 22.4%.

My Coup Runneth Over

Courtesy of the excellent Guardian newspaper last week comes this article which contains some great stories of betting coups.

The 'hole in one gang' story was covered here in 2010, along with a couple of other memorable tales from the early days of sports betting. 

1) The Yellow Sam coup (1975)

In perhaps the most famous betting coup in British or Irish horse racing history, the Irish former band manager and trainee Jesuit priest-turned gambler, racehorse owner and philanthropist Barney Curley, entered a horse named Yellow Sam in a National Hunt race at the small provincial track of Bellewstown in Ireland.

His reasons for targeting that particular course were quite deliberate: at a time long before the advent of mobile phones and email, it was serviced by only one telephone, a public call box. In order to ensure his horse went off at generous odds, he had previously run it in a series of races in conditions that could best be described as “unfavourable” (translation: over distances or going he knew the horse would not particularly like).

On race day, an army of Curley’s runners were dispatched to a wide variety of bookmakers with sums of money ranging in size from £50 to £300 which were wagered on the horse in the 10 minutes prior to the beginning of Yellow Sam’s race. As the money piled in, just over £15,000 in total, various bookies began to panic and attempted to contact their representatives at Bellewstown to get them to bet on Yellow Sam. By doing so, his starting price would be slashed and their liabilities would be hugely reduced. Unfortunately, their efforts at self preservation were scuppered when it became apparent that the telephone at Bellewstown was, at the time, being hogged by a particularly distraught racegoer who was having one final conversation with an aunt who was dying in hospital.

The grieving nephew in question was Benny O’Hanlon, a friend of Curley’s and his dying aunt was a figment of his imagination, unbeknownst to the betting agents standing in the queue waiting to use the phone he kept tied up until Yellow Sam had won his race by two-and-half lengths at the ridiculously generous odds of 20-1.

Curley’s profits on the race amounted to £300,000, which adjusted to current inflation rates amounts to about £1.4m. He used the windfall to buy stables and set up as a racehorse trainer and has proved a constant scourge of bookmakers ever since. His most recent of several big money coups was pulled off earlier this year, when he arranged for four horses from three different stables to win on the same afternoon in January and caned the bookies for a reported £2m.

2) The hole in one gang (1991)

Having conducted research into the probability of a hole in one being scored in a professional golf tournament was no more than even money, Paul Simmons and John Carter, two Essex men with backgrounds in the bookmaking industry toured the UK and Ireland looking for independent betting offices who would give them odds on a hole in one being scored at five different tournaments: the British Open, the Benson & Hedges, the Volvo PGA, the US Open and the European Open. They were able to get 100-1 on it happening at all five events in a wager that should have been priced at nearer 30-1 and placed a series of doubles, trebles and accumulators at similarly inflated prices.

Remarkably, at least one hole was aced in all five tournaments, with cigar-smoking Spanish bon viveur Miguel Angel Jiménez bringing home the majority of the bacon for our intrepid duo by finding the cup with his drive during the European Open at Walton Heath in Surrey. Simmons and Carter won over £500,000, not counting the winnings they failed to collect from 12 different bookies who refused to pay out on the grounds they had been bankrupted by the pair or else failed to renew their licences for other mysterious reasons.

3) Fred Craggs: 50p millionaire (2008)

Started in fine style by a racehorse called Isn’t That Lucky and brought home by one named A Dream Come True, a 50p eight-horse accumulator placed by the agricultural agent Fred Craggs in the Thirsk branch of William Hill in north Yorkshire on the eve of his 60th birthday had the distinction of making him the United Kingdom’s first betting shop millionaire. All eight horses came in at combined odds of over 2,000,000-1, leaving Craggs to rue the 10p he’d wasted on the bet, as the William Hill small-print meant his winnings were capped at £1m instead of the £1.4m he should have got. “I lost 10p on this one because I only needed 40p to get the limit up,” he mused, upon being presented with his giant cardboard novelty cheque for a million quid. “That was an extravagance.”

In truth, another rule in the William Hill small print meant the firm could have capped Craggs’s winnings at £100,000 if they’d so desired, as some of the horses he’d bet on had been participating in races overseas. The company’s spokesman Graeme Sharpe said that further reducing the pay-out would have been “churlish”, but made no mention of the potential PR disaster such a mean stunt would have caused his employers.

Having placed his bet on a Friday afternoon, the regular small stakes punter and student of the form did not find out about his astonishing win until the following day, his birthday. Having called into a different branch of William Hill, in nearby Bedale, a member of staff asked if he had any betting slips that needed to be checked and he remembered his all or nothing Hail Mary punt from the previous day. “I had a nice warm glow in the shop but none of the other customers seemed to notice,” he said, before going home to dine with his family, who were not informed of his win until the following day.

“I did not tell anyone about it at first but I had to come clean to everybody on Sunday,” he said. “I was not going to get all demonstrative – I was not going to go jumping about and shouting. It is just going to make life a bit more comfortable. I will put a lump on a pension, some on the family and if there is any left, I will use it to make that little bit of difference.” Hailing Craggs’s achievement, Sharpe described his bet as “the most amazing bet ever placed since betting shops were made legal in 1961”. To mangle that old Yorkshire adage: where there’s luck there’s brass.

4) The 6,479-1 novelty bet (1989)

While the name may suggest it is less serious than “serious” betting on sports events, the discipline of novelty betting can be a lucrative source of income for bookmakers or, less frequently, their customers. In their ongoing efforts to part as many punters as possible from their money, bookies will offer odds on the weather, religion, politics, reality shows, TV talent contests, the Christmas No1 and pretty much anything else you care to mention. While the stakes they accept on such bets tend to be limited, the potential for reward for society’s more prescient can be huge.

In 1963, William Hill bookmakers accepted a £100 bet at 100-1 odds from a customer named David Threlfall, who wagered that a man would walk on the moon before the end of the decade. Threlfall trousered his £10,000 in winnings with fewer than six months to spare, only for his good fortune to evaporate when he was killed in a crash in a sports car he’d bought with some of his winnings.

Threlfall’s winnings were small beer in comparison to those of an unnamed, 40-year-old rune reader with his finger pressed firmly against the cultural pulse, who placed a £30 accumulator in his local bookies in Newport, South Wales on 30 December 1989. The customer bet on a series of happenings before the turn of the century. Cliff Richard had to be knighted (4-1), the rock band U2 had to be a going concern (3-1), as had the BBC soap opera EastEnders (5-1), while its Australian counterparts Neighbours (5-1) and Home and Away (8-1) needed to still be on British screens.

All five events, such as they are, duly came to pass and a couple of days into the new millennium our intrepid mystic marched up to the pay-out hatch to collect the sum of £194,400 his 6,479-1 acca had netted him. As nobody had passed his slip on to head office when he placed it, it took a couple of days for the bet to be confirmed as a legitimate one and our hero was duly paid what remains the record amount for the biggest novelty bet win in the history of the bookmaking industry.

5) D Four Dave wins at Kilbeggan (2010)

In June 2010, a horse named D Four Dave romped home in a low key handicap hurdle race at an evening meeting at the small course of Kilbeggan in the Irish midlands. It was sent off at odds of 5-1, having been available at 14-1 earlier that day, in a state of affairs that suggested somebody had fancied it to win in a big way.

It quickly emerged that the horse had been the subject of an enormous gamble orchestrated by one of its part-owners, Douglas Taylor, the managing director of a recruitment company named MCR, with the help of 200 unwitting assistants, who were paid €30 each to place the sum of €200 on the nag by following specific instructions they were given in a letter along with the cash. To help maximise the secrecy of the sting, most of those employed were foreign nationals, many of whom had a very poor grasp of English.

Having received an envelope containing a watch with an alarm set for 6.55pm (five minutes before the horse was due to run) and their betting stake and instructions, they were driven to 200 different betting shops around Dublin and Kildare. The instructions were as follows.

“Dear Employee, enclosed you will find:

A completed betting slip for the betting shop that you have been sent to. €200 in cash for which you need to place the bet.

You should also have a watch with an alarm set to go off at 6.55pm. Your job is to place the bet exactly when the alarm goes off at 6.55pm. You need to be at the counter before the alarm goes off to be in position to hand over the betting slip and say to the person at the counter ‘I will take the price’.

When the person hands you back the betting slip you will pay over the €200. You then have to place the betting slip back into your envelope and return the slip immediately to your supervisor/driver along with the watch when he comes to pick you up. You can then return with your driver/supervisor to MCR office to get paid. Thank you.”

By having all their bets placed simultaneously to avoid arousing the suspicions of the shops they targeted and minimise the chances of shop staff getting through to head office to get the all-clear to take the bet, D Four Dave’s connections had hoped to land over €200,000 in the event of their horse prevailing what his trainer had reckoned to be “a bad race” that wouldn’t take much winning. But while their four-legged runner kept up his end of the bargain on the race track, not all of their two-legged ones proved as reliable in the betting shops and the clever coup landed those behind it considerably less than the hoped for sum.

“It is understood that some of them could not read the note they had been given, while others tried to place the bet after the race had concluded and the horse had sauntered home by seven lengths,” noted the Racing Post, although Sharon Byrne, the chair of the Irish Bookmakers Association, said many firms had taken a big financial blow.

“The whole of Dublin and most of Kildare were hit,” she confirmed. “Some of those recruited had really bad English and couldn’t even read what they were given. The staff could see two watches on most of their wrists and were aware that something unusual was happening. Some of the bookmakers’ staff got to keep the note that the runners had been given, although some of those recruited got a little aggressive and insisted they get the note back.”

With the Irish bookie Paddy Power reporting losses of up to €50,000 in the sting and their fellow bookies Boylesports claiming to have lost “a five-figure sum”, it seems clear that the majority of those recruited to place the bets managed to follow their instructions. “It was a really well-executed gamble,” said Boylesport spokesman Leon Blanche. “It was a really good punt landed.”

The coup’s instigator, meanwhile, insisted he’d pulled it off just to see if he could and was philosophical that it wasn’t as successful as it might have been. “It didn’t quite go to plan, some people didn’t make the journey and others got the instructions mixed up,” said Taylor. “It was just for fun and not for the money though.”

6) Slippery characters at Sheffield greyhound track (1996)

It’s the betting coup that got away. Or didn’t get away, as the case may be. Five of the six animals involved certainly weren’t meant to get away, as anyone who has ever witnessed the comical sight of a startled dog attempt to break into a sprint on a well polished floor can attest.

There are numerous ways of nobbling a greyhound before a race, from the traditional method of doping to the less sinister ploy of filling them up with food in order to ensure they run sluggishly.

At Sheffield greyhound track in January 1996, some industrious ne’er-do-wells attempted a far more ingenious scam, by reflooring five of the six starting traps to be used for that particular evening’s racing with shiny new rectangles of Formica laminate. Clearly aware of the huge advantage handed to any greyhound that gets a fast start in greyhound racing, our villains left trap No2 untouched, banking on any dog sporting the blue jacket getting off to a flier in hot pursuit of the hare once the stalls opened, while its rivals would be left scrabbling helplessly like Bambi on ice.

Sadly for the unidentified cheats, stadium staff discovered their handiwork before the commencement of the evening’s racing, the Formica was removed and racing commenced as usual. In the first two races, the dogs in trap No2 both went off as favourites, in a state of affairs that suggested somebody somewhere had put a decent amount of money on them. Neither won. By the third race, there was little or no financial interest in the occupant of the blue box, which means the slippery characters behind the stunt knew they had been rumbled and promptly cut their losses.

Caught In A Landslide

Mark tweeted the above earlier today, and my response was this:

Are you suggesting that someone with the skill to win at betting long-term is someone who would be unaware that they might not be able to extract money from a business indefinitely? This seems highly unlikely to me.

As stated in my previous post, sportsbooks / bookmakers are not charities. They exist to make a profit, and it's nonsense to think that any business would allow themselves to be exploited indefinitely should a loophole or vulnerability be identified. 

All-you-can-eat buffets ban customers who eat 100 plates of sushi and don't drink alcohol. Casinos will ban players they believe to be card-counting.

With the possible exception of individuals on the autistic spectrum, it seems almost impossible to think that anyone with the skill-set required to develop a long-term winning strategy would be someone unable to comprehend that they won't be allowed to win forever. It's basic common sense. 

No escape from reality, open your eyes, look up to the skies and see

The theory of winning at betting is one thing, but as many have discovered, the practical reality is somewhat different. This practical limitation on rewards needs to be factored in when deciding how much time and effort to spend working on developing an edge.

If the only profitable avenues for your systems are soft sportsbooks, save yourself some time because its useful life will ultimately be limited.

While I'm a big fan of the sharper book model and exchanges, there's always the risk that these may also change the rules, with the introduction of the Premium Charge a prime example. 

I'm just a poor boy, I need no sympathy
Because I'm easy come, easy go, little high, little low
Any way the wind blows doesn't really matter to me, to me

Anyone quitting their job to go full-time on Betfair before 2011 would have found themselves facing an up to 60% reduction in income on reaching the lifetime threshold, which may sound a lot but isn't if it is your sole income. 

There's always the chance that sharp books and exchanges will start to ban winning customers, or lower the threshold at which punitive charges are applied. Matchbook's threshold for example, is effectively nothing:

1. $1,000,000 (one million US Dollars) of Betting Volume; and/or
2. $20,000 (twenty thousand US Dollars) of Betting Profits

The bottom line is that unless you are incredibly naive, you know your opportunities for winning money from soft books are very limited, and there's a risk the sharper books and exchanges might change the rules. 

So put in the time and effort while understanding this reality. 

I'd also add that the discipline required to develop an edge is a skill that may not make you a fortune from betting, but which can serve you well in other areas of life. 

And with that, a Merry Xmas to everyone and before feeling too sorry for all these poor footballers who have such a hectic schedule coming up, a reminder that in the olden days, football clubs often played on three consecutive days over the holidays:

Betting Is Consensual - A Privilege, Not A Right

It's nothing new, but the topic of bookie restrictions flared up again yesterday with an article in The Times about Bet365's temerity to make money "by using data modelling to limit winning customers' ability to bet".

Joseph Buchdahl commented that:

Bets are always consensual, and if one side refuses to take action from another, that's their right, no matter how annoying it might seem to a skilled punter.

As I wrote in this post back in 2014:

The advertisement in the bookmaker’s window, web-site or in the Racing Post is an “invitation to treat”. The advertiser, in this case the bookie, is under no obligation to enter into a contract with a punter interested in an agreement at that price.

We, as punters, have the choice to make a bet, (an offer), and the bookie then has the right (but not an obligation) to lay the bet (an acceptance). If we choose not to make an offer in the first place, or the bookmaker chooses not to accept the bet, there is no contract.

This is the law, it’s a fact of life, and in my opinion whining about it is somewhat unlikely to result in modifications to contract law.

When I tweeted a link to that old post, Joseph generously commented:

The Times' article quotes a Bet365 spokesman who says:

"Online gambling operators, including Bet365, seek to manage their liabilities by restricting or refusing to accepts bets/wagers from certain customers. A bet is a commercial arrangement between two willing parties and there is no statutory right to bet.

In the same way that a customer can decide whether or not they wish to place a bet, a gambling business is also free to decide who they accept bets from, and on what terms, to manage their business and financial liabilities, just as an insurance company may do when setting premiums."

That there is no inalienable right to bet is a fact of life, and all the whining about it is futile. As Joseph says:

Bookmakers unfortunately are not charities so don't have to fund your activity if they don't want to. It may seem annoying but that's how it is.

Some were upset about the impact on horse racing of bookmakers trying to make a profit:

Cassini: Racing is a dying sport. Why promote it at all?

A Lucky A Day: If it were starting from scratch it would have a hell of a job getting off the ground, that's for sure. But it is part of British culture and employs a lot of people. There are quite a few incentives to keep it going, even though in its current form its not really viable.

Cassini: Pedestrianism was once very popular and funded by wagering but "was largely displaced by the rise in modern spectator sports and by controversy involving rules, which limited its appeal as a source of wagering". I see similarities with horse racing today.

Along with sensational feats of distance, gambling was a central attraction for the large, mostly working-class crowds which came to pedestrian events.

Horse racing has had a good run for its money, if you'll excuse the puns, but the sporting habits of society evolve. Cock fighting and bull baiting aren't what they were. Professional rowing? Sunk without a trace.  

Like cricket, horse racing had been organised since the eighteenth century and was followed by all classes from Lords to commoners. Gambling was at the core of its attraction and a flutter on the horses was extremely popular, despite its illegality(until 1963) when the bet was placed in cash and outside the racecourse. As with soccer, the sporting press offered form guides and was studied closely, with elaborate schemes being developed to predict a winner. The racecourse itself was often rather disreputable, with the sporting entertainment on offer to its large crowds being supplemented by beer, sideshows and, in the nineteenth century, prostitutes. It provided the middle classes with an opportunity to (mis)behave in a manner that would be impossible in wider respectable society.

Prostitutes! Who knew?

Going back a little further, 2012, to be precise, I wrote these words:

In my opinion, unless the rewards have a good chance of being available at least for a while, it’s simply not worth the effort needed to open these accounts.

One of the beauties of the exchange concept for me, was that winning accounts do not get closed down. They may do in the future, but for now they don’t, and while the commission charged to winning accounts may seem excessive, when you consider the alternative of not being allowed to play, well, at least the choice as to whether or not to continue is yours.

When Ladbrokes and Coral closed my accounts down in the 80s, I had no alternative other than to quit. I could have opened new accounts in other names, (and that was a lot easier back then), but it’s a road to nowhere. Sooner or later you run out of relatives and I don’t have many friends for some reason.

I still don't have many friends, but I do have other betting options these days. Yes, Betfair may be taking 50% of profits, but this penalty only kicks in after reaching a lifetime limit, and complaining about paying a higher rate of tax as your income increases isn't something that is morally defensible. Payer a higher tax rate is generally a good problem to have.

My complaints about the Premium Charge were about how it was implemented. The goal posts were moved, but I don't set the rules and no amount of crying or whining will move them back.

The 2008 implementation of a 20% tax was reasonable, but in late June of 2011, the second, and more punitive, phase was introduced when I was already about 90.4% of the way to the lifetime limit. It didn't seem fair to include previous winnings in the lifetime total, but there are some things in life we control, and for those we don't control, we adapt.

In my case, this meant that the time spent trading in-play could no longer be justified, so I moved to a bet-and-forget approach. Winning 50p for a few minutes 'work' is one thing; winning 50p after several hours is quite another.

As it happens, liquidity on the in-play markets I followed took a dive around the same time anyway, so in a way, the Premium Charge did me a favour. I made lemonade with the lemons I was given, as the saying goes.

And how did the bet-and-forget approach go this weekend?

We had several Divisional matches with the Unders going 5-2, and just the one Small Road 'Dog (Green Bay Packers) who won last night.

The Divisional Road 'Dogs, which included the Packers, went 4-1 on the weekend.

Since 2011, the final week of the Regular season is always all Divisional games, so next week will be a busy one. and after that it is on to the play-offs and the Wild Card weekend where Unders is where the value is usually found:

In the NHL, there was one losing selection in the basic Road Favourites system (below, right) while the numbers on the left are a more profitable sub-set: 

NBA Road Favourites moved their record for the season to 10-4, while Overs are now 45-38-1.

Capitals Skate, Tesla Accelerate

It was a good night for the NHL Road selections last night, with all three teams winning comfortably by exactly three goals. The Capitals were a selection for the Road Favourites system (below), which is now nicely in profit after the slow start to the season mentioned last month. 

Two of those cities above also combined for a win for Overs in the NBA, with the Washington Wizards and Toronto Raptors combining for 240 points. The only disappointment of the night was the Memphis Grizzlies losing in Cleveland but we're not going to win every selection so no point 'grizzling' about it. 

The Road Favourites NBA system has another qualifier tonight in the Los Angeles Clippers looking to improve on its 9-4 (69.2%) record this season. 

It's looking like a very quiet Week 16 in the NFL for the Small Road 'Dogs with just one qualifier at the time of writing, and that is Monday night's Green Pay Packers who are currently getting 5.5 points. 

As is traditional on the last Saturday before Xmas, the NFL has three matches on the schedule including Divisional Road selections Buffalo Bills and Los Angeles Rams. There are also several Under System qualifiers this weekend including the two games mentioned above and then just one week of the regular season before the play-offs begin.

And it's almost time for the dreaded annual reviews which mean absolutely nothing to anyone but the writer! I will say that if you have read this blog for a while, and taken my advice on Tesla stock, your bottom line for 2019 will be a brighter shade of green than would otherwise be the case, with the stock breaking through $400 this week and touching $413. 

Shares of Tesla hit a fresh record high for the third straight session on Friday, and were just $7 shy from the $420 per share price at which founder Elon Musk sought to take the electric carmaker private more than a year ago.

My personal bottom line was boosted last weekend with a surprise, but very welcome, donation from follower Ben who wrote:

Thanks for all the wonderful help you've provided me this year mate! I hope you spend the cash well, I hear a beer goes down well this time of year.

I should be able to find time to enjoy a glass or two over the next couple of months. I'll be in California this time next week with my wife and daughter to see in the New Year, and will be heading to South Africa in late January to watch a little cricket with my son. 

Zoning Out

A few years ago, it was a profitable NBA strategy to back the Unders when the line was 'big'. After looking good over an 11 year period from the 2005-06 to 2015-16 seasons, the system became a victim of the inexorable rise of the Overs as more and more points were being scored.

The definition of a 'big' line is subjective, and the line I used was 11.5. As is often the case, as one system dies, a new one is born, and markets for games with 'big' lines do currently (since 2010) show an inefficiency that some of you may want to look into, especially in December, but not after the All-Star Break. 

In the nine seasons since 2010, the strategy of backing favourites giving 14 points or more before the February break has a 63.3% record ATS and 71.7% in December, including last night's win by the Boston Celtics.

14 points or more is optimal in terms of ROI, but with an average of only 20 bets a season, that entry point is not for everyone. Lowering the threshold to 12.5 points or more drops the ROI slightly to 61.1%, but more than doubles the average number of selections. 

It's also worth looking at time zones as I have mentioned before. Big favourites heading West appear to struggle to meet expectations, although conventional wisdom has it that it is harder to perform after flying from West to East. 

If you eliminate teams travelling from other time zones to the Pacific Time zone, the ROI is up to 62.8%.

Week 14 of the NFL season saw a profit for the Small Road 'Dogs with two wins and a push from the four selections taking the season win rate to 58.5%.

In Division games, the record was 2-1-2 and 59.5% for the season, while the Divisional Unders went 3-2 after last night's NFC East game between the Eagles and the Giants was a winner despite going to overtime.

Unfortunately the two charity bets generously donated by Steve failed to come in, although the Dolphins / Fortyniners double came very close with the Dolphins losing by one point to a late Field Goal. Unfortunately the bet was straight up so the fact that the Dolphins were getting 5 points and covered was of small consolation.

Finally, the NHL System which was in the red at the end of November has now moved back into the green:

The Wonder That Is Steve

Good guys in the betting space are few and far between, but one who has been around for many years, and who will hopefully be around for many more years, is Steve ( @Day25 ) whose Daily25 blog has been around for almost as long as this one. 

Steve is a man of his word, and I well remember the thrill of waking up on Xmas morning 2012 and finding a gift hamper by the tree, his way of thanking me for some Draw selections:

Not one to say something and not follow through, here is a gift page created for the master of the draws, Cassini.

And now Steve's generosity continues with using $4,500 in bonus bets from Aussie bookmaker Top Sport who, and credit where it is due, "is the only Australian bookmaker to actually take a decent bet and usually have Pinnacle like prices" for bets to benefit charity.

Last night, the following tweet popped up in my notifications:

Joseph Buchdahl, or one-two to his friends, is also one of the good guys out there, and the chances of three decent people being lumped together in one tweet must be far greater than the 5/1 mentioned. Odds at this level or longer are generally not my thing, but given our history together with the Draw, my initial response was:

There were only two problems with my selections.

The first was that Top Sport's price on the Tottenham v Burnley Draw was only 4.9, although in my defence I looked at Betfair where 5.0 is available, completing ignoring the fact that with commission taken into account, the price would be less.

The second problem was that Steve wants bets that will be settled before Xmas, and as bad as Brighton are, even I don't think they will be confirmed as relegated before Xmas! 

We go again, and with the option of an accumulator, will now select the following bets on the NFL this weekend:

$50 double on Miami Dolphins / San Francisco 49ers 
$50 treble on Indianapolis Colts / Carolina Panthers / Kansas City Chiefs  

Meanwhile it was a perfect night for the NBA systems last night, with the three Totals games going Over and the Brooklyn Nets winning by 12, when 4 would have been enough. 

Digging Deep In The Den

Some useful words of wisdom for traders is shown above, courtesy (apparently) of Morgan Housel, who is worth a follow if you are into trading and investing.

While financial markets are quite different from those for sports betting, not least in size, many of the principles overlap.

For example, on the topic of biases, Morgan had this to say recently:

You can’t ever know everything about a company because the deeper you dig you more you realize that things you thought were simple are actually endless webs of complicated people with different and shifting needs, held together by a precarious shared goal.

At some point decisions have to be made, which means pulling the trigger when you know there are things you don’t know and being OK with that. This is less about willingly closing your eyes and more about the realization that a few variables tend to dictate the majority of outcomes. Putting the odds of success in your favor is about understanding those variables while accepting the unknown baggage that rides along.

As it relates to sports rather than companies, there are an infinite number of variables you can look at when analysing an individual match, but the key here is that "At some point decisions have to be made". 

I've written before about the futility of waiting for everything being perfect before entering the fray - "perfect is the enemy of good" is the appropriate saying.

Another financial markets orientated website, Philosophical Economics, has these words of caution regarding patterns which are all too common in sports betting. "Over the past 10 games, when a team has fewer than 168 running yards and they were an underdog playing a team averaging 238 or more passing yards..." or a real life example from today that just hit my inbox:

When we sample a system to test claims about the likelihood that it will produce certain outcomes, the sample needs to be random, blind. We cannot choose our sample, and present it as a valid test, when we already know that the results confirm the hypothesis. And so if we believe that there is something special about the New York Rangers, Game Sevens, and MSG as a venue–if we believe that the presence of those variables in a game changes the probability of victory–the appropriate way to test that belief is not to cite, as evidence, the seven at-home game sevens that we know the Rangers did win, the very games that led us to associate those variables with increased victory odds in the first place. Rather, the appropriate way to test the belief is to identify a different set of Rangers games with those properties, a set that we haven’t yet seen and haven’t yet extracted a hypothesis from, and look to see whether that sample yields an outsized number of Rangers victories. If it does, then can we legitimately claim that we’ve tested our belief in “the data.”

There has to be some rationale to these things, something I discussed in my Rationale Thinking post in May, which currently sits at #4 in my Top 10 most popular posts so someone's reading it.  

Week 13 of the NFL wasn't the most exciting from a betting perspective with the two Small Road 'Dogs splitting 1-1, and the Unders splitting 2-2.

In College Football, the system went 1-4-1 but as is often the case in sports, late weeks in the season are historically treacherous, so the damage was more to the official records than to the bank.