Lay Grandad

Some major drama in the NBA last night with the Chicago Bulls facing the Brooklyn Nets. Down by 14 points with 3:45 left, the Bulls traded at 1000 (£14) as well as over £200k matched at 1.01. Need I tell you that the Bulls came back to win after three overtime periods?  More than a few hearts were racing I imagine, but the folly of laying at 1000 with so much time left in an NBA game should be clear. My biggest single win came in the NBA play-offs two years ago, in another game again involving the Bulls. Someone took my large lay at 1.03 and after dropping to 1.01, it bounced back to a winning bet as the Miami Heat went on a run to come back from a similar deficit. It's hard to beat the NBA as a trading medium.

Today's football selections from the Football Tipster League entrants interestingly sees one game feature more than once - the Espanyol v Granada game. I have recently started adding a Cassini 'value' selection to my email each week, and this is my value game for this week, but not only do I have it as value but so do others including the profitable Premier Edge and Football Formbook - who are not quite so profitable.

All of us find value in Espanyol. My recommendation was at 2.05 (-0.5) on BETDAQ, Premier Edge has 2.01 at 1.88 Bet, and Football Formbook had 2.05 at Pinnacle, but FF clearly are under the impression that Espanyol face an ageing team:

Granddad certainly needs the win more than Espanyol, but here's to hoping he feels his age, and Espanyol play to win.

Speaking of playing to win, the Atalanta v Bologna game qualified as as XX Draw Extended selection yesterday, but with a draw price around the 2.67 mark, the suspicion was that the game might not be played genuinely, and so it turned out. It's the Italian way. As Liam Brady said:

When a draw suits both teams in Italy, the game will end in a draw. It's all to do with the mentality of the Italian people. They see nothing wrong in such an arrangement.

Bologna equalised in the 76th minute (1-1) and there was little action after that - unless faking injury counts as action. I gave it a mention in the email to subscribers, but I am not including any selections where the draw price is sub 3.0.

Bologna have now been sub 3.0 on the draw six times since 2010-11, so this is nothing new for them. Three matches ended as draws so I guess 2.67 was value after all!

Shady Business

It has been mentioned on here before, but it is interesting how involvement in financial markets is generally admired and respected whereas a similar involvement in sports trading is generally treated with disdain. One factor is that financial markets have the advantage of longevity which begets respect - the London Stock Exchange dates back to about 1698.

Betfair, the first betting exchange, dates all the way back to 2000, and much has been written recently (regarding the move from exchange to sports-book) on how the trading concept remains beyond the comprehension of many.

Betfair could help themselves in this area in my opinion, for example by having just one price on binary markets. With a Back of Team A exactly the same as a Lay of Team B, why confuse people by offering an unnecessary choice? It might be hard for those of us who are familiar with the exchange to comprehend what is so difficult about the concept of backing and laying, but choice overload (overchoice) doesn't help, and offering just one price would make it easier for Betfair, and others, to present their product in a more readily understood stock market format.

The inspiration for this post came from Peter Webb's comment yesterday that betting markets are generally held in low-esteem because the public keep hearing stories about people getting ripped off in gambling markets.

Now it's true that people are ripped off in the financial markets too - insider-trading, Ponzi schemes, hidden fees etc. - but gambling markets have their cheats not only in the sports themselves (drugs, match-fixing), but also, as Peter puts it, people 'exploiting the gullible'. This weeks's example is someone using sports markets to (allegedly) defraud family friends out of huge sums of money for example.  Peter writes:

You also have the current issue that people who have never traded successfully are positioning themselves as experts or people are seeking to exploit the trading opportunity, rather than getting on and doing it, that isn’t helping matters.

It doesn't take too long to find people with absolutely no track record offering their tips for sale. Ian Erskine is hot on this issue too, but on the question of people seeking additional funds to invest for others, Peter continues that:

...it has to be said, it’s fairly obvious that if you are producing stellar returns on something, you just reinvest the money yourself. No need to seek outside involvement. I know that, because that is exactly what I and many others have done. I’ve never met a serious participant in the market who wouldn’t do the same.

Exactly. Peter then shows a chart showing his 'equity curve' for the 116 days this year - check out his post here for the full details -  and suggests:

From it you can see that I am unable to compounding all my earnings, else the graph would be exponential. The fact is, even if you have a decent track record it’s impossible to put that extra money to use because your ‘system’ will collapse under the weight of your stakes. You become the market! The upshot of this is that sports markets are just not scalable enough to warrant raising funds to deploy in them. Fire up a spreadsheet and you will learn quickly that compounding small amounts rapidly at pretty much any positive percentage will mean it isn’t long before your average stake dwarfs what is sensibly available in the market.

Others may disagree, or rather misunderstand, the scalability issue because just a few weeks ago, a generally well-respected blogger wrote:

I've heard it said that the sports markets are not scalable, which is rubbish. I've already scaled up from £2 bets to £200 bets and the markets will be able to take far more than that before I even get close to finding it tough to get matched.

What is rubbish was that comment. Scaling up from £2 to £200 is one thing, but try scaling up from £200 to £20,000. You can always get a top price for your £2, but not may markets allow you to get 10,000 times that amount on in-play, and in many sports, you'd struggle to get a fraction of that £20,000 matched, yet in financial markets, that kind of sum is a drop in he ocean. I wrote on 22 Feb that:

If you have an edge, use it for yourself, build up your bank, and your balance will at some point grow to more than you need for day-to-day trading.

As Peter says, there's absolutely no need to seek outside investment if you have an edge, and anyone doing their due diligence and researching such an invitation for 'investment' would realise this very quickly. The problem is that so many people are gullible and easily fooled by appearances and the prospect of easy money. A promised monthly dividend of £70,000 from an investment of £400,000 is just not realistic - even without the Premium Charge!

Elliot Short Of A Few Million

Towards the end of yesterday's post, I mentioned that a reality in the betting world is that most people in it are looking for easy money, and that strategies requiring a little research and patience don't seem to be too popular.

Not long after keying those words of wisdom, I noticed that the 'Elliot Short Of A Few Brain Cells” post from way back in June 2009 was receiving a lot of fresh hits. A little puzzling given the age of the story, originally published in the News of the World and widely dismissed on the Betfair Forum at the time, and indeed by Betfair themselves, but I guessed that the surge in interest was for a reason, and that reason turned out to be the start of the subject’s trial on thirteen counts of fraud and one count of making or supplying an article for use in fraud.

It’s alleged that one person (James Crawford) lost £400k and another (Christopher Antoniou) £200k, while others lost lesser amounts as they apparently handed over what I would consider enormous sums of money for Short to work his magic with. Invest £400k, and reap a monthly dividend of £70k. That really would be a magic trick. Why can't my financial advisers do that?

When I wrote my original post on the subject, one Arthutfaxsake wrote:

I know the kid, and the amount of winnings the NOTW posted [£20million] is correct, although how he did it is not - he didn't participate in the article, but was set up by an undercover reporter.

Oh really? Well, either he didn't know the kid, or he was quite probably one of the victims deceived by a few fake screenshots, as Elliot Short allegedly had quite a lot to do with the original News of the World article, and who swallowed the follow-up lie by Short that he had asked Betfair to release their statement as "he wasn’t happy with the story and publicity".

A couple of months later I wrote, unusually for me, a little sarcastically:

Of course, Elliot Short made millions, but then he had a well thought out strategy that no one else had thought of which was to make up a story and find a reporter who was too lazy to take any time to verify the story and the millions turned out to be as real as Santa Claus.

Scott Ferguson suggested at the time "It sounded like a glory-seeking tosser making ludicrous claims", but unfortunately it appears to be more serious than that with at least three victims, and while they have only themselves to blame, I hope the money was amounts they could afford to lose.

Greg Wood of the Guardian reported at the time that the story:

was drivel — and dangerous drivel at that — from top to bottom, as anyone with even a faint acquaintance with Betfair could see.

The old canard that some people have more money than sense is never truer than when something appears to be too good to be true. It usually is. 

The trial is expected to last for three weeks and it promises to tell a sorry tale. I’m sure many of us will be following with interest.

Baseball By The Numbers

Yesterday’s post on baseball was poorly written, and should have made clear that the prices mentioned were the true prices for backing the home team in the middle of the respective innings. The win probabilities are of course significantly different at the top of the inning compared to the middle of the inning, assuming no change in score, with the home team’s chances increasing with each out of the top half of the inning. I have updated that post to make it clearer for future generations.

Our old friend BigAl, still looking in on the blog on a frequent basis for morsels of wisdom (there are a few if you pay attention) despite his oft dismissive and derogatory comments, (I forgot he was banned before I allowed his comments through, although they were actually quite sensible) suggests that “it’s a dangerous game simply applying the overall average to every game” but perhaps BigAl is no more well versed in the nuances of baseball than he is in the rules of cricket. The unique (other than softball) nature of the sport means that unless you have a good reason to believe that in any one game the long – very long in baseball’s case – established probabilities may be wrong, backing at greater than true (long-established) value is as dangerous as backing heads at greater than 2.0.

At the risk of educating BigAl and others who might otherwise take sub-value bets from or offer plus-value bets to the more knowledgeable of baseball bettors, the key player is the starting pitcher. One need look no further than the prices on each day of a series between two teams. A team is often odds-on for game one, yet the next day underdogs, and the only difference in line-ups is one player on each team – the starting pitcher. Teams generally have five starting pitchers, who rotate to start a game every fifth day. I'd like a job like that.

In the game as it is played today, it is unusual for the starting pitcher to throws more than a hundred pitches, (the number throwing more than 125 in a season dropped from 212 in 1998 to a nadir of 14 in 2007, although it has risen slightly since then) and it is in rare circumstances that he remains in the game in the later innings. If he does, the most likely explanation is that he is having a blinding game, perhaps he’s on a no-hitter or a perfect game, but either way, it is thus unlikely that the game would be tied were this the case. The highest pitch count for a starting pitcher since 2005 is 149, thrown in a no-hitter, which rather supports my theory.

Alternatively, the starting pitcher may also be left in the game ‘taking one for the team’, but this expression refers to the fact that the bullpen (non-starting pitchers) are being rested and saved for another day. Again in this scenario, it is probable that the game is all but lost, so the tied game state we need would not be an issue.

So BigAl’s cautionary words are certainly true in most sports, and should always be a consideration even in baseball, but my assertion is that the established probabilities are a solid starting point. If the value price is 1.63, then you would obviously need to factor in your individual edge and look for that price rather than take the bare minimum, but ask for 1.79 and you will get filled more often than you might reasonably expect. (1.79 is psychologically a better number for someone to lay, compared to 1.8).  

Home Team Odds - Bases Empty

The rather astute visitor fizzer555 follows my thinking too. In addition to understanding the true meaning of my poorly worded post, while agreeing with BigAl in principle, (not often a great idea), he was also sharp enough to observe that:

Cassini may be on to something though as by the time you get to the 7th innings the main reason for the fav/dog bias may be out of the game (i.e. the SPs) but I think the market may retain some fav/dog bias (gradually reducing across the 9 innings) that may not be justified. Don't have data to prove that but over 2 or 3 innings the hitting strength of each team is going to be very similar except for a few outliers (e.g. Miami, Houston low hitting) and similarly with bullpen pitching a lot of the teams will be in a narrow performance range.

Indeed, and I am beginning to wish I’d never let the cat out of the bag on this strategy! 

At least it makes for an interesting discussion and I have every confidence that the Donate button (top right) will be extra busy in the coming days as grateful readers once again line their pockets with extra cash, courtesy of Cassini’s shared wisdom. 

As the opportunity cost of my trading moves ever higher, I may give away even more such nuggets.

Of course, the reality could be that 99.9% of readers will move on, impatiently looking for an easier way to make money. Strategies that require a little research and patience don't seem to be too popular. 

I believe it was Shakespeare, in his play The Comedy of Errors, (not a play about BigAl's betting), who wrote: "You can lead a gambler to the edge, but you can’t make him leap".

FTL Weekend Update 23.4

The Premier League may be over already, (I preferred last season's finish), but the Friendly Tipster League continues to thrill and draw viewers from all over the world. Unfortunately, rather like the EPL, it doesn't look like the title will be decided on the final weekend of the season, as the top two categories maintain a commanding lead, and the Extended Draws would now be trading at 1.01 were there a market on the 'unique' Betfair Exchange.

The top three remain the same as last week. The Extended draws started the weekend with 2 winners from 2 on Friday and Saturday, but gave some profits back on Sunday with three losers. The Bundesliga wasn't good this weekend, with three losers, but the three Classic U1.5 selections did well with two winners - Sunderland 1-0 v Everton and Osasuna 0-0 v Real Sociedad.

Up to fourth go the Extended U2.5 selections, and the Bundesliga U 1.5 moved up to fifth with two of the three losers being 1-0 results.

The remaining profitable entries are:

Drawmaster found the Liverpool 2-2 Chelsea draw, while Premier Edge made a small profit. Backing Ian Erskine's Lay the Draw selection found one winner from four selections for a small profit, and thus 10 of the top 11 places are either draw selections, or derivative markets of draw selections. The BundesLAYga system had just one winner from four for a loss, and the profitable entries are, for the time being, rounded off by Premier Betting who show a small profit after 98 selections.

Into the red, and eight are down by less than 10 points.

Neil has had a poor five weeks (4 winners from the last 19 selections) after being in profit for most of the season, CKL has long since given up, as as Tony and his Tips. Having recovered to 0.00 in early March, the post-International break period hasn't been kind to Football Elite with just 4 winners from 19 selections.

Last, comes the real strugglers of the season. Little Al has been hanging in there, finding the odd high-priced draw, but not enough to be profitable - at least not yet. The Free Under / Over selections continue to flounder while Griff also threw in the towel weeks / months ago. Credit to Talkbet (Jon) for hanging in but with just 4 winners from the last 22, he's at the wrong end of the table, as are my Classic XX Draw selections. Last season these finished second (behind the Under 2.5 selections), but this season has been very disappointing. My decision to include the Extended and Bundesliga selections was one of my better ones! Two out of three Classic winners this weekend helped, but they are still a long way from green.

And finally there is Football Formbook, still trailing but profitable three of the last four weeks and one blinding week could make a big difference. I should mention that neither Football Formbook or Free Under / Over Picks asked to be included.

As the season winds down, the overall net total (excluding commission, taxes, charges etc.) is:

For those who want a reminder of how the 2011-12 season finished, here was the table last May:

Interesting how backing the 'lay The Draw' selection has proven to be anything but an aberration holding true (profitable) after 153 selections. With millions of followers desperate to lay at any price, perhaps it's not surprising that the value appears to be solidly on the back side - if you'll pardon the expression. Some of you may recall that backing this draw found just one winner in the opening 24 games of the season, and was down 19.7 points on November, but a run of ten draws from the next 16 selections turned the ship around and showed Ian was human after all. It should also be pointed out that Ian's selections are not intended to be layed and left, but layed with a view to trading out after a goal, although as most of you will know, there are one or two problems with this strategy (the 0-0, the 'dog scoring first, a quick equaliser etc.) and it's not that simple.

Unique - Just Like All The Others

A somewhat ironic statement from Betfair in reportedly rejecting a £912m takeover bid led by Formula 1 owner CVC Capital Partners for being too low.

In a statement on Monday, Betfair said its board had rejected the bid because it "fundamentally undervalues the Company and its attractive prospects".

"We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise," said Gerald Corbett, Betfair's chairman.

What they failed to mention is that their 'unique' business is one that they are currently doing all they can to turn into a bog-standard, uncompetitive on-line sportsbook business. Despite this change in direction, the press-release driven article rather disingenuously continues to state that Betfair's business...

allows users to bet against one another, acting as a social network for gamblers.

Technically true, but it might be an idea to restore the default page for this 'unique' business to point to the exchange rather than make the more educated of punters hunt around for a small "Go To Exchange" button, while the hoi polloi take poor value on the sportsbook.

Possibly the 'unique' is a reference to the fact that it's the only business to tax its more successful customers at up to 60%?

And while I'm venting about Betfair, how about employing some Suspenders who actually know when a game is over? Top of the ninth in baseball with bases loaded is not game over, either literally or metaphorically (see below screenshot from Sunday night):

Your Premium Charges At Work

For anyone wondering what on Earth Day I was doing, one of my baseball strategies is to find a tied game after seven innings or more, and back the home team at greater than 1.69 in the middle of the seventh, 1.63 in the middle of the eighth and 1.55 in the middle of the ninth (or extra innings). You might be surprised at how often the home advantage at this stage of a game is under-estimated.  Or you might not.

They also Suspended and settled the Los Angeles Clippers v Memphis Grizzlies game prematurely this morning. Clippers went ahead with 0.1 seconds left and as unlikely as a change in result was, the possibility was there.

FTL update next post.

Taxing Times

An interesting, and rather sad, read from Betfair co-founder Mark Davies on his blog today. Here's an excerpt on the Premium Charge, but the article in full is well worth a read:

Take the premium charge, for example. Someone mailed to ask me about it yesterday, and pointed out that I was quoted, when we introduced it, as saying that it was needed, because without it the cost of acquisition was not matched by the lifetime value of a customer: too much of the money taken from a customer who would then churn away went directly into the pocket of a small number of other clients. I said then that any business that got to where we were would have to introduce the same thing, because otherwise the revenue gained didn’t match the cost of acquiring the customer, which was an obvious road to the poorhouse.

All that was true. But what my comments, and our strategy, probably didn’t take fully into account was why the cost of acquisition (which was so much lower than other gambling businesses) was rising (or why the network effects were diminishing); or the fact that a consequent drop in the number of advocates meant in turn that the cost of acquisition would go up at the same time as liquidity went down – creating a spiral which was going the wrong way. Replacing the lost revenue means increasing the tax on the people who are making the money, which in turn means more of them fall away, and the cycle continues. Observers of the broader economy will recognise the pattern.

Derivative Markets

The Golf Bettor posted an excellent comment, and to leave it in the comments section would be sacrilege. Here is his comment on my suggestion that betting -0.25 or whatever doesn't help the bottom line too much, and he has an interesting perspective on the subject:

I thought I would post my thoughts on betting derivative markets versus the outright markets particularly in football. I would argue that all those with healthy unrestricted accounts with all the bookmakers and are in the serious but non professional gambler category will be best served by betting the 1:2:x markets. Sadly this state of affairs does not necessarily last forever.

Ultimately as stakes are increased and you begin to employ bookmakers from farther afield you realise that bookmakers offering Asian Handicaps on football have significantly higher limits particularly if their business originates in Asia. A respectable firm like SBO bet will lay a much larger bet on the handicap than the outright and this is simply due to the fact that the Asian market bets much more on the handicap. These firms in Asia routinely lay off liabilities with each other and systematically open arbitrage opportunities basis the sharp flow from certain marked accounts and agents. This is a huge volume business with tiny edges.

Now when you reach the point where you can only bet football matches with the likes of Betfair, Pinnacle, 12Bet, 188Bet, SBO bet etc. etc. you find not only that you get much smaller stakes on the outright but also that when you take the best prices from all of them you are betting into a 102.5% market at times. Whereas when you take the best prices from those firms Asian handicap markets you can bet bigger bets and maybe bet into a 100.5% market. So you reduce the “spread” you pay and also end up reducing your draw-down. You then start to think that with the reduced draw-down you can afford to stake even larger and the next thing you know you are on the phone to a man in Indonesia asking for 20 grand on Yeovil +0.75.

This scenario is even further exaggerated on Tennis where the limits on the handicap are far higher than the outright in Asia. Many US facing books are the same as well with their US sport offerings. Now whether a small tipster based in the UK offering tips to those who are going to place £50 maximum on their tips need to both with this is another matter.

Incredibly bookmakers in the UK have started to stream Asian Handicap prices straight from Asia and are happy to lay all comers on it happy in the belief that it is a perfect market. Never mind the fact that Betfair is seeded by the Asian lines as well. I hear Bet 365 will lay several million pound bets to certain VIPs on Asian lines simply because they believe they are that much harder to beat. Those who are currently involved in the gold markets will know that just because a market is liquid and frequently traded does not mean that there are barriers to profiting. On a separate note it is also wise to remember that pricing by the herd is not always right.

Thanks for that. I'm not sure I will ever reach the point where I am asking for 20 grand on Yeovil Town, (wouldn't 20 grand BUY Yeovil Town?) although this season might have been a good one to do that. I guess several services are catering to some whales out there.

The last day NBA markets proved interesting as usual. I mentioned yesterday that the big question of the night was whether the Los Angeles Lakers or the Utah Jazz would make the play-offs and that Utah played first. With their loss against Memphis, the Lakers were through whatever happened in their game, and the drift on the Lakers price from 1.78 to 2.44 as the Jazz crumbled was an easier way to trade the earlier game.

The Lakers were still better served with a win and thus face the fading San Antonio Spurs rather than the top seeded Oklahoma City Thunder, but the 'MUST-win' factor was no longer there. It was a little surprising to me that the NBA didn't have simultaneous tip-off times for dependent games, but TV no doubt had a big say in the matter. The Lakers v Houston game turned out to be one of the best games of the season, with the Lakers coming back from 11 points down to lead by 3 before a buzzer-beating three pointer tied it up and the game went to overtime but not before some people thought the game was over...

The Unders (203.5) market had also traded at 1.01 before jumping out to 1.35 or so. Lakers -2.5 only traded at 1.03.

In the end, all three sets of premature 1.0x backers got away with it, as the Lakers won a low-scoring game 99-95. Roll on the play-offs. 

Keeping It Complicated

Up to, and including, Monday's games, the latest FTL table is shown here:

Since the last table was published three weeks ago, there have been no changes at the top, except that the top two have pulled further away. Some minor shuffling in the positions for the remaining profitable categories, with Neil having a poor run but still in profit. Premier Betting have dropped into the red, while Football Elite's golden spell has come to an end and has seen three consecutive losing weekends. Quite strange how badly the Classic XX selections are performing compared with the Extended and Bundesliga selections, the latter showing an unsustainable 54% ROI from 57 selections. Rather fortunate with two 2-2 draws last weekend though, while the Extended found five from 13 including a 3-3 fluke, and two near misses with draw-busting goals in the 86' and 90'. It happens. If anyone feels their numbers are wrong, please let me know. I've done my best to keep track while I was away, but the odd mistake or omission may  have crept in.

With football winding down, the NBA play-offs are almost here with the final regular season games tonight (and some 'unexpected' results expected), and baseball is establish some trends. Last season I played with a system that backed certain home underdogs, and found there was little difference between playing the Match Odds, or the two handicap (-1.5, +1.5) markets. If the Match Odds are evens, then +1.5 will be around 2/1 (3.0) and -1.5 will be around 1.63.

Value is value, and it's not logical to think that any one of these markets will be too far out of line with the others. One thing I've noticed with updating the FTL is how many entries go for something like a team -0.25. I understand that this reduces volatility, but if a team is value giving 0.25, then it will be value in any result market. I sometimes think people make these things unnecessarily complicated. The hard part is finding value, and once you have done that, where you back should make no difference to returns in the long term assuming similar liquidity of course. I suppose it looks like you are digging deep and researching late into the night to find the value, but I have yet to see any evidence that shows returns beating those on the Match Odds market. An opposing opinion would be interesting to hear.

Back to basketball and the NBA, and the final day of the regular season sees a lot of meaningless games, where anything can happen. Fifteen of the sixteen play-off teams are known, with the Utah Jazz or the Los Angeles Lakers the final qualifier. Utah needs to win their last game at Memphis, and with the Memphis Grizzlies already fixed at fifth seed in the West, they won't be going gang-busters to win. The Lakers have the edge though, both of playing after the Jazz game, and also of playing at home versus the Houston Rockets who have the incentive of wanting to win to avoid the possibility of facing the Oklahoma City Thunder in the first round. I wrote in my pre-season review:

The expectancy from the markets is for the Miami Heat to win, beating the Los Angeles Lakers in the final. I’m personally puzzled as to why the Lakers are favoured over the Thunder, and the health of their stars Kobe Bryant and Dwight Howard will be crucial. Howard has played little in pre-season, just twice, as he recovers fully from back surgery, and Bryant is already being reported as doubtful for the opening game of the season with a sore foot. They have added an ageing former MVP in Steve Nash, but backing any team at such a short price leaves you vulnerable to an injury.

I mentioned earlier that the loss of Derrick Rose to the Bulls last season not only cost the Bulls a possible championship, but it also cost Bulls backers some money too. It’s a long season, and I prefer to keep my cash for trading individual games rather than tie my money up for months, but a lay of the Lakers would be my suggestion if long-term markets are your thing.

As many of you will know, Kobe Bryant is out for the season with a torn Achilles, and may well never play again - at least not at the same level. The Lakers will exit early even if they make the play-offs. Former MVP Derrick Rose is still out for the Chicago Bulls, who do make the play-offs, but won't go far without him. Home court is key in the play-offs, with home teams winning 76.7% of games (versus 60.8% regular season) and I'm still happy with a Miami Heat v Oklahoma City Thunder final, with Miami winning it all.

And finally, a good comment from the Betfair forum posted by frog2:

The Premium Charge is a legacy of Betfair's former management team and hopefully the new CEO has an open mind to it.

Following the 1st charge UK pre-play racing volume, which has been growing nicely, started to fall. This is a key market in terms of real commission. Even now racing makes up over 40% of exchange revenues.

Following the 2nd premium charge both revenues and amounts matched on everything bar in play sports (where millions are traded for very little revenue) have gone from growing year on year to flat lining. At the same time group revenue growth has stopped. This is after growth in the sportsbook and mobile channels.

It's not difficult to see why this is happening. Betfair has a monopoly in some markets. Where people have to use them e.g. to trade on a test match cricket or a tennis match in-play they over no other option. They either play here or stop totally. Where people can go elsewhere e.g. pre-race horses or football they will go elsewhere. The charge is simply too high.

The problem is where Betfair has a monopoly it is making a low margin (trading) and where it does not (when people want an actual bet) BF makes a higher margin. Betfair is losing its higher margin business.

An outright punter winning just over 2.5% on stakes will pay the 40% premium charge if he stakes enough. This is a very marginal system yet he still falls into the threshold.

Even if Betfair acted now they have lost so much goodwill. I used to do 100% of my betting on here. I have never even paid the charge but slowly I am moving my betting elsewhere. I need to keep my generate commission rate high so I avoid high margin bets on here. I use it for lower margin bets and trading that I could not do elsewhere.

I hope Betfair see sense. In 2008 the exchange was not broken. It was still growing both in revenues and amounts matched across all markets. They refused to settle for this growth and are now paying the price and must scrap the charge before its too late and the decline becomes terminal. Otherwise they will just be left with a second rate sportsbook and casino.

Cassini Springs Back

Thanks to those who expressed concern about my absence from the blogosphere. It was a little longer than originally planned, but rumours of my demise are premature.

Geoff suggested that Crystal Palace's defeat at Brighton may have traumatised me, but my take on it is that this is all part of the plan to maximise income by achieving promotion via the lucrative play-offs (and possibly one or more games against Brighton) rather than the rather boring automatic route. Palace don't do boring.

While technically the skiing trip did result in some minor damage to my teeth, which will be fun getting fixed in the next few weeks, the exact details of the 'accident' are that it happened as a result of some over-enthusiastic pork chop chewing over breakfast one day rather than any loss of control on the slippery slopes. I do like my pork chops and eggs for breakfast.

After the skiing trip, the Green All Over staff, along with the proprietor's daughter, flew to California from whence Mrs. Cassini originates as I have mentioned before. What I haven't mentioned before is that she has two brothers, one of whom she has not seen since the age of four, and one whom she has never met at all. It's a long story. Although, like me, she is shy and retiring in character, there is no hiding these days on the Internet, and contact was established via a third-party and a long overdue meeting was arranged. The rather emotional story actually trended on Twitter for a while because one of the brothers is relatively famous with thousands of Twitter followers and several world records and unique feats to his name in the world of sports. It rather puts my sporting achievements in their place - with a short lived pro-cycling career perhaps the unlikely highlight, but everything in life is relative - pun intended.

On a sporting front, we took in a Golden State Warriors NBA game (the game v Minnesota Timberwolves where the home team clinched a play-off spot) but betting has been very quiet for a few weeks, and to be honest I didn't miss it too much. It seems to be the thing to return from a break and say how recharged the batteries are and how many new strategies one has come up with, but neither is true in my case. April is traditionally my worst month anyway, and the Premium Charge has done its job, and while I will get involved from time to time, I'm of the opinion that it's simply no longer worth putting in long, and often unsociable, hours for sums of money that I can make many times over when the stock market has a good day. I recommend Stephen Harris' article at Betting Exchange on Why do Bookmakers Limit Accounts for anyone who's not seen it. Bookmakers want 'recreational' punters (read clueless) - and for those who are serious about making profits from sports investing, it's becoming ever more difficult.

I did keep the XX Draws selections flowing over the last three weeks, and have kept track of the FTL selections which I will publish once the Monday night games are complete.

In other news while I have been away, rumours abound that a private equity group may be seeking to take Betfair private while baseball is back and (surprise surprise) BETDAQ actually have a baseball game in-running tonight. That's the good news - liquidity is, to put it mildly, on the poor side:

Elite

Two weeks ahead of Elite Eight Saturday, and Football Elite had its own special Saturday. Six selections, of which four were winners, for a profit on the day of 7.59 points - Matt's best day of the season by some distance. One loser on Sunday followed, but this service is now out of the red for the first time since September and four consecutive profitable weekends (10.76 points) supports Matt's decision to revamp his strategy, if not his selection methods. I say out of the red, rather than into the green, because after some 119 bets, amazingly the numbers I have are exactly 0.00. An impressive run.

Other big winners this weekend were Pete Nordsted's Drawmaster finding two draws from three matches and moving up to fifth, while Premier Edge moved up to sixth at the expense of Neil, who had something of a nightmare going 0 for 3 and dropping to seventh. The top four remained the same, backing the 'Lay The Draw' selection had one winner from three for a small profit, and the Bundeslayga had a good weekend with three winners from four selections. Premier Betting had a small profit, and Football Elite round up the non-losing entries. In the red, Al's losing run continues finding three non-draws, while Talkbet had a small profit, and Football Formbook a small loss.

The XX Draws were up overall, but the Classic selections continue a poor run going 0 for 4 with all four games ending 2-0 (or 0-2) so at least the Under 2.5 bets were winners. The Extended selections had ten selections, losing one to postponement, and of the remaining nine, had three perfect (0-0) draws, and three more single goal matches. Aston Villa v QPR was a draw until the 81st minute, Pescara was goalless until the 88th minute, and Wigan v Newcastle was a draw until the 90th minute so it could have been even better.

In the Bundesliga there were two selections, with one perfect draw in Hoffenheim v Mainz '05.

This week I am taking advantage of the International break and flying the entire Green All Over staff out for a ski trip in celebration of the 5th anniversary of this universally acclaimed blog which saw its inaugural post keyed on the 21st of March 2008 and now has 560,000 hits and counting.

In its five years, this blog has seen a total of 1,518 posts, and to repeat my amusing little line from the third and fourth anniversary posts - "Not all have been hugely interesting admittedly, but the other 1,517 have been...".  I wrote a year go:

Will the blog make it to five years? Possibly, if the (sensible) comments keep coming, and I can somehow find inspiration, and readers keep hitting. A year ago, I was looking forward to 250,000 hits. Today the count is 50% over that, 375,000 and counting. Next stop, half a million? Why not?

The blog continues to steer clear of P&Ls, which really don't make for an interesting read, and it will continue to seek out ideas from the news, forums, or other blogs.

A year on, and will the blog make it to six years? The comment regarding comments still applies, although I am  getting better at simply deleting nuisance comments. It used to be said that imitation was the sincerest form of flattery, but in the blogging world, the fact that people continue to visit says it all really. Anonymous (of course, except that IP addresses are known) goes to the trouble of commenting on my rather interesting piece about round numbers and their impact on sports, and writes:

yawn zzzzzzzzzzzzzzzzzz

Such incisive wit. It must have taken him almost as long to come up with that as it did for me to write my post, and of course he's been back since for more.

Well why wouldn't he? Where else can you be so cheaply entertained? No promises on six years though. Unsurprisingly, the Super PC has dented my enthusiasm more than a little, and LADDAQ still has some way to go. Nothing lasts for ever. It's getting harder and harder to first find and keep edges, and second to make it cost effective to put in the time, often at unsociable hours, to do so.

The last complete month's (February) basketball saw me 'make' close to £5,500, which sounds good, but divide that by (roughly) two for the Super PC, and consider that I was involved in a little over 100 markets, and is it all worth it?

Something to ponder as I turn the lights out at Cassini Castle for a few days, but I'll be back, barring ski lift failures or ill-positioned trees. Stay warm.

Here is the latest table in full;

Betfair Evolution

June 2000:

PITY the poor, traditional bookmaker. His familiar world is rapidly falling apart. Generations of monopoly over enslaved punters have already met challenges from the Internet and tax-free offshore rivals. Now even the last bastion of bookmaking - the ability to set the odds - is being taken away. As from today, those who have longed to back the Derby favourite, King's Best, at 5-1 rather than 3-1, or to take the money of anyone foolish enough to think that England can win Euro 2000, can theoretically do so.

The opportunity comes courtesy of a revolutionary form of betting that banishes those irritating middlemen with their sheepskins, sleek limos and bulging satchels. The idea has been kept carefully under wraps for months but tonight, in Covent Garden, just in time for one of the headiest sports betting weekends of the year, it will be launched to a gathering of gamblers and celebrities. A company called Betfair, describing itself as a "sports betting exchange", essentially gives the punter a chance to decide his own odds.

Put simply, the mechanism is a website that provides a dynamic screen on which it will be possible to call up a variety of sports events, nominate a bet and await it being taken by some other anonymous gambler in cyberspace. Participation will be restricted to account holders, who will be required to deposit a sum of money that will either grow or shrink depending on their success rate. 

It is all the brainchild of Andrew Black, a sports-mad computer analyst, whose background includes being thrown out of university for failing exams and spending successive years as a professional gambler and a full-time bridge player. "I've worked in the city and I have always gambled on sport," Black explained. "It was an extension of both activities to come up with a trading system for sports betting."

Conventional bookmakers will view this as yet another threat to their once sacred territory and will bridle at their role in the launch today, when a mock funeral cortège for bookmakers is staged through the City's square mile. Leaflets will be distributed simultaneously outside Underground stations proclaiming "The bookie is dead" and bidding a sombre farewell to the turf accountant "who emptied punters' pockets, took shirts off their backs, never made a decent price and died with the birth of open-market betting".

Such audacity, from a marketing team that includes Mark Davies, the son of BBC sports commentator, Barry, will ensure irksome questions about the legality of a scheme that ignores betting conventions. It seems that betfair has already covered this problem, however, as Linklaters, the firm of solicitors, is a shareholder in the company. "They assure us that we don't need to pay betting tax because, effectively, we are brokers rather than bookmakers," Black said.

The new company will make its profits through commission on winning bets. It begins trading today on Epsom's big races and Euro 2000, but its parameters could spread in unusual directions. "As we don't need specialist odds-layers, we can offer any sporting event at all," Black said. "We will put up sumo wrestling if people want it, so long as we can authenticate the results."

No thanks

Betfair Sportsbook

Betfair Exchange

2013, and the wheel has turned almost full circle. As most of you will know, Betfair have introduced a traditional Sportsbook alongside it's Exchange site, and it would appear to offer nothing to anyone with half a brain. Prices are poor in comparison to, not only the Exchange, but also other books - three screenshots for the upcoming Manchester United v Reading game illustrate.

A post from frog2 sums up the current state of affairs:

I think its fair to say that the current fixed odds website is very very poor. It is characterised by terrible prices and terrible limits. It has joined the current fad of being a soft bookie - i.e. refusing bets to anyone who has a clue. In short it is a pathetic offering and if it was launched without the Betfair name it would not last five minutes.

Betfair is struggling to find its identity. In the early years it was all about 'winners welcome', 'sharp minds Betfair'. When they took over Flutter they stressed that the merged markets would mean more liquidity and thus higher limits for customers. They developed the technology to match more bets that than all the European exchanges put together.

Then what did they do? They started looking for soft targets. They branched out into games and poker. At the time it was all still person to person. I remember one of the founders telling me they were not being greedy and they were sticking to their p2p principles. Then came the casino. The p2p games were replaced by ones run by Betfair themselves. The cross-matcher came in - to this day I still don't know if it gets to beat the clock in-running to match bets.

This was still not enough. They have since walked further from the starting point. They introduced the Premium Charge. Uproar at 20%. But really this would only affect traders, cheats and extremely good position gamblers. Then it went up to 40% and 60%. Now 40% gets all good big players. Arbers - gone. Decent position gamblers who have a long term return of over 3% on stakes - gone or slowly moving. The consequences of the Premium Charge are huge.

Then there are the data charges and bet placement charges. Great in theory. But a 1000 bets an hour max? Try pricing up and adjusting books for 30 races or football matches a day (with all their secondary markets) with that. You cannot. So early markets are no more.

So what started as the perfect limit order book market has evolved into a monster. It has not been helped by the lack of regulation by Betfair itself. Instead of the Premium Charge why did they not look to level the playing field? Encourage people to leave offers up rather than take them with commission rebates. Get rid of obviously unfair markets like in-play horses until real time streams are available. Not allow connections to bet on here. The list is endless.

Betfair could have hired someone who has experience of running a real exchange to run the company. Prices and policies and new markets would have been completely different. Maybe LMAX would not have failed if this was the case. But we now have an out and out industry man at the helm hired out of another soft bookie. So what can we expect going forward?

I would have liked to have seen a lot more thought going into the sportsbook. There are some bookmakers that do actually take bets and offer sharp lines using a proper dealer market. If Betfair had gone down that route I could see the point of it. If they could have offered decent prices to a fixed amount to everyone and adjust the lines if they believe a sharp has just placed a bet they could have had a winning product. The UK is crying out for this. Surely a crack trading team is capable of building the software to do this.

A rubbish sportsbook is a bad fit for the exchange. They need a fair limit, decent price one. Lower margin yes but much much higher volume.

One In A Thousand - Nap

The mention yesterday of Stanley Matthews playing one league game at the age of 50 reminded me of something I read about round numbers and the importance attached to them. It seems highly likely that Matthews decided well in advance to hang up his boots having reached 50. It looks so much more impressive than retiring age 49 and 360 days, in contrast to most of us who would probably much rather retire as soon as possible rather than work past age 50, 60 or 70 if we didn't have to.

And New Year's Eve was far more celebrated in 1999 than it was in 2000, never mind that 2001 was the first day of the third millennium, and not 1.1.00. Incidentally, the Embankment was a lot quieter on 31.12.00 than it was a year earlier.   

There is an amazing statistic from the statistic-heavy sport of baseball concerning hitting percentage. Not all readers will be familiar with baseball, but a hitting average of .300 (how the Americans record 30%) is something of a milestone separating a star player from a more ordinary one. Hit .299 and you are a relative failure, but hit .300 and you are a star. The difference in perception is huge, considering that the difference amounts to one extra hit per 1,000 at bats, and with salaries at the level they are these days, an average of .300 gives a player an estimated 2% more in salary than a .299 hitter. And with the average salary of a .300 hitter in the $6.5 to $7 million range, that's a fair amount.

So what is this amazing statistic I hear you ask?

A study of the final day of the seasons 1975 to 2009 looked at players entering that game on .299 and .300. When it comes to calculating averages, a 'walk' (look it up if you need to) doesn't count, and the study found that players on .300 walked far more often than players on .299 and .298 who swung away trying to get that hit to put them at .300. .300 hitters walked 14.5% of the time, .298 hitters walked 5.8% of the time, and hitters on .299?

Players hitting .299 have NEVER walked in their final plate appearance of the season over a quarter of a century. NEVER, meaning 'not ever'.

Having told you this statistic, I will be very disappointed to hear that this run ended in 2010, 2011 or 2012 after the study, but even if it has, it clearly shows how that .001 influences decisions far more than it should.

The study also noted that players on .300 are far more likely to take the last game off and preserve that number than a .299 hitter, who stays in the game to the final at-bat.

The outcome of this is that on the penultimate day of the season, .300 and .299 hitters is almost identical (0.8% and 0.79% of hitters respectively) but at season's end one day later, the numbers are 1.4% and 0.4% respectively.  

You'll see a similar thing in other sports too. In basketball, players getting close to a personal best or a double-double or a triple-double will usually stay in games long after they would normally have been pulled, and not only that, but their team-mates will play differently to try to ensure the target in question is reached.

On the subject of final day drama, one of the biggest controversies in baseball occurred during the 1910 batting race between the disliked Ty Cobb (a 'virulent' racist detested by opponents and team-mates alike) and the popular Nap (Napoleon) Lajoie. Wikipedia tells the story far better than I could, although to be honest, I don't remember the details too clearly after all this time.  

The Lajoie-Cobb rivalry reached a peak in 1910, when Hugh Chalmers of the Chalmers Auto Company (a direct predecessor to modern-day Chrysler) promised a Chalmers 30 Roadster to the season's batting champion. The public became fascinated with the daily statistics of Lajoie and Cobb in what became known as the Chalmers Race. Sports bettors, who by this time followed the sport attentively, also followed the daily reports with interest. Cobb took the final two games, a doubleheader, off against the Chicago White Sox, confident that his average was safe and would allow him to win the AL batting title—unless Lajoie had a near-perfect final day. Going into the final game of the season, Cobb's average led Lajoie's, .383 to .376.

Lajoie and the Naps faced a doubleheader against the St. Louis Browns' pitching staff in Sportsman's Park, Cleveland's final two games of the season. After a sun-hindered fly ball went for a stand-up triple and another batted ball landed for a cleanly hit single, Lajoie had five subsequent hits – bunt singles dropped in front of rookie third baseman Red Corriden (whose normal position was shortstop), who was playing closer to shallow left field on orders, it has been suggested, of manager Jack O'Connor. In his second at bat of the second game, Lajoie dropped another bunt but the runner on first base advanced. According to the rules of that time, the hit was scored a sacrifice and thus, Lajoie did not record an official at bat. He finished the doubleheader a perfect 8-for-8 and his batting average increased to .384, .001 greater than Cobb's mark.

Although the AL office had not officially announced the results, Lajoie began to receive congratulations from fans and players, including eight of Cobb's Detroit Tigers teammates. Most players in the league preferred Lajoie's personality to that of Cobb's. Coach Harry Howell is reported to have said to the game's official scorer, E.V. Parish, "to do well by Lajoie." 

Howell was reported to have offered a bribe to Parish, which described in Al Stump's biography of Cobb, was a $40 ($963 in current dollar terms) suit. Parish refused the offer and the resulting uproar ended in O'Connor and Howell being banned from the major leagues by AL President Ban Johnson.

Johnson had the matter investigated, and after having Cobb's September 24 doubleheader statistics re-checked, discovered only the first game of Cobb's statistics had been scored, but not the second game, in which he went 2-for-3. This put Cobb's suggested actual batting average at .385, again ahead of Lajoie's. In the end, Johnson ruled that Lajoie's sacrifice bunt should have been recorded as a hit (which would have allowed him to go 9-for-9) but that Cobb's batting average was greater, recording 196 hits in 509 at bats to Lajoie's 227 hits in 591 at bats. 

Johnson asked Chalmers if his company would award an automobile to each player, to which he agreed. Initially Lajoie refused the car but eventually relented and accepted it. Cobb said, "I am glad that I won an automobile and am especially pleased that Lajoie also gets one. I have no one to criticize. I know the games were on the square and I am greatly pleased to know that the affair has ended so nicely." 

Lajoie said, "I am quite satisfied that I was treated fairly in every way by President Johnson, but I think the scorer at St. Louis made an error in not crediting me with nine hits. However, I am glad that the controversy is over. I have the greatest respect for Cobb as a batter and am glad of his success."

The Sporting News published an article written by Paul MacFarlane in its April 18, 1981, issue where historian Pete Palmer had discovered that while Cobb's September 24 doubleheader was not correctly tabulated (perhaps purposefully) according to the correct date, the second game's statistics were in fact included in the next day's ledger, thus incorrectly recording a second 2-for-3 performance from Cobb which meant Lajoe's average was greater. Author James Vail wrote in 2001:

"To date, it seems that no one knows for certain who won that 1910 batting title. Total Baseball, which is now the official major-league record, lists both men at .384 in its seasonal section, but its player register has Lajoie at the same number and Cobb at .383—so even the various editors of that source do not, or cannot, agree." Jon Wertheim wrote in Sports Illustrated 100 years after the event, "The statistics for the Detroit players had been crossed out and nullified. Every Detroit player, that is, except one: Ty Cobb. It takes something less than a detective to arrive at the conclusion that at some point Johnson (or someone in the league office, anyway) realized the error and decided to conceal it."

Intrade Out

The FT has an article on Intrade's demise and the 'financial irregularities' that spells trouble for account holders, and Yahoo!Finance has this to say:

Dublin wagering website Intrade.com announced on Sunday that it was completely shutting down. The move comes months after the company was sued by the Commodity Futures Trading Commission (CFTC) for operating an improper, off-site options exchange.

Intrade shot to popularity during the 2008 presidential election when it correctly predicted a win for President Obama. The site also allowed users to place wagers on commodity prices, Oscar races and whether or not the economy would slip into an official recession. The "big idea" was that the predictive power of a market's collective intelligence was greater than that of any individual. The reality was that Intrade was a routine gambling market operating without U.S. oversight.

None of which matters much to the masses in the U.S., who are hardly wanting for ways to place wagers. What brings the story home is the drive to legalize online wagering sponsored by more traditional casinos.

New Jersey has the most at stake as the U.S. tries to redefine what constitutes "legal wagering." On February 26, New Jersey Governor Chris Christie signed into law a bill allowing online wagering in his revenue-starved state. As a give-back for the increased business, casinos agreed to a 10% to 15% tax hike on online revenues.

Christie's budget projects contributions to the state's Casino Revenue Fund will be anywhere from $235 million this year to $436 million next year, which is largely based on allowing online gamers to legally play any game found in a casino.

It remains to be seen what made U.S. regulators target Intrade, but it's impossible to rule out fraud given the accusations of fraud surrounding other gambling sites like AbsolutePoker.com, Full-tilt Poker, Online Poker Stars and Absolute Poker just in the last six years.

The most likely scenario is that the U.S. government will take pains to run the criminals out of business to maximize its own take. Such selective prosecution is exactly what was done with the lottery — which was once a black market numbers racket.

Legitimizing online gambling in the states would be a boon for companies like Caesar's (CZR) and Zynga (ZNGA), which are both counting on getting a piece of the online gambling action. Cracking down on the black market offshore sites gets rid of competition on the taxpayers' dime.

Since the end of January CZR and ZNGA are up 76% and 36%, respectively. Odds are the Intrade shutdown is an incremental positive for both, but it's a binary wager. Neither company has much going for it if they can't facilitate gaming.

And on the perhaps more interesting topic of prediction markets, the FT has this to say.