FTL - Final Day

Not too much action or drama for the final day of the FTL season, as most entrants appear to already be on the beach. The XX Draws have a final three matches from La Liga, but nothing from anyone else.

Free Under Over Soccer Picks will doubtless be active today, but it's rather unlikely that he will make an impact at the top. Other than that, only table proppers Football Formbook might make a late selection, but the fat lady is warming her tonsils.

The standings after last week are below, except that the three XX Draw selections are already included assuming all end as 9-0 home wins with all nine goals in each match coming in the first half:

In other words, at least some of the Classic and Extended numbers should improve. (The 9-0 isn't me being pessimistic - I use that score as a place-holder and unfortunately didn't take a screen-shot of the table before I did it this week).

I should have a season review of the table done by Sunday. I know you can't wait.

Elliott Short Of A Few Years Of Freedom

The trial of the infamous Elliott Short has reached it's conclusion after five weeks, with the 'Betfair King' being found guilty on nine counts of fraud and one of 'making or supplying an article for use in fraud' - the 2009 News of the World article. Although the five year sentence was based on the sum of £400,000, it appears to have been the case that several other defrauded 'investors' declined to come forward for various reasons, and that the true amount was closer to £1 million. The Daily Mail has the details of the trial:

A greedy gambler who boasted that he was the ‘King of Betfair’ after convincing family friends to sink £400,000 into his bogus betting system was today jailed for five years.

Elliott Short, 26, of Chester, Cheshire, lived a fabulous lifestyle - splashing out on a chauffeur-driven Mercedes, staying in plush hotels and being a regular at exclusive London nightclubs.

Short went on holidays around the globe, spent thousands of pounds on designer clothes from Ralph Lauren and Christian Louboutin in Harrods in Knightsbridge and went to Eclipse nightclub in Chelsea, south-west London.

He even managed to dupe the News of the World into running a story about his apparent success, convincing the now-defunct newspaper that he was a former City trader who netted more than £21million from his betting system.

Short had an impressive office in Knightsbridge and dazzled potential investors with his boasts of huge returns, insisting on paying for expensive items to show off his supposed wealth. One investor was told he would get monthly dividends of £70,000, but they never materialised.

He claimed he could make ‘extremely high returns’ using a system on gambling website Betfair, London's Southwark Crown Court heard.

But the system had never worked and the tabloid was forced to print a retraction after Betfair said the returns Short had quoted were impossible.

A jury convicted him of nine counts of fraud and one count of making or supplying an article for use in fraud, after a five-week trial.

Victims James Crawford - who met Short via his mother and step-father, Rosemary and Tom King - and Christopher Antoniou were each fleeced out of £200,000.

Short was acquitted of four further counts of fraud relating to another £200,000 from Mr Crawford, together with £20,000 invested by Melinda Barrett - a long term friend of Short’s mother.

Sentencing, Judge Peter Testar said Short ‘lied shamefully through his teeth’, adding that he was ‘potentially dangerous as far as the financial interests of others are concerned.’

The judge said: ‘The question is why did these intelligent people with the experience of the world allow themselves to be taken in by you?

‘You proved yourself to be a very accomplished confidence fraud trickster. You left a profound impression of someone who is deeply dishonest and shamefully mendacious. You deployed your charming personality to exploit that instinct in people to trust their fellow human beings.

‘Having conned others you simply poured their money away on hiring helicopters, taking expensive holidays, spending thousands in bars, nightclubs and restaurants and thousands more in shops.

‘You may not have wanted to cause harm to others and through your betting, you wanted to win. Who doesn’t? But the fact of the matter is that of the £400,000 that was paid, very little was actually spent by investing in Betfair.’

Short bowed his head as the sentence was passed, before being led out of the dock.

Prosecutor Mark Hick said he had ‘no assets and had some liabilities in relation to utility bills’.

He had been living in rented accommodation until he was convicted and remanded in custody.
Mr Hick said: ‘Despite his claims, Elliott Short did not have a successful betting scheme, and over the period of several months he lost all his investors’ money, either on his unsuccessful gambling, or on funding his lavish lifestyle.

‘Throughout this time, Mr Short continued to reassure his investors that he was making huge profits. Mr Short would celebrate his victories, dancing and chanting things such as ‘Who is the Betfair King?’

‘However, none of his investors received any money back, and it eventually became apparent that Mr Short had been lying to them all along.’

Mr Crawford was told he would receive monthly dividend payments of £70,000, but the cash never materialised. Mr Antoniou lost £200,000 given to him by his mother, Helen.

He too never saw any return on his investment and became suspicious after reading the newspaper article about the scam, although Short managed to fob him off with excuses.

‘Mr Antoniou recalls Mr Short telling him that most of his investors didn’t have a contract for months, if at all, and since he was friends with all of them he would never dream about "f***ing them",’ Mr Hick said.

Mr Antoniou told how Short would insist on paying for everything, shelling out for bills in excess of £1,000, to show off his supposed wealth. Bank statements revealed he spent more than £4,500 on a room at a Hilton hotel and almost £2,000 at Brinkley’s Wine Gallery in Chelsea.

The third victim, Melinda Barrett, a long-time friend of Short’s mother, ploughed £20,000 into the scheme, without ever receiving a penny back. Short denied the charges against him.

FTL Update, and 2013-14

The end of the season is fast approaching, and there is still all to play for at the top of the Friendly Tipster League table. No change from last week, with no Bundesliga selections, but with seven of the eleven Extended selections reaching half-time with no goals, the HT 0-0 category moved into third place. Pete Nordsted's Drawmaster found a draw at Sunderland for the seventh time this season (from eleven picks) and moved up to 5th spot. The Bundeslayga system had a good week moving back into profit with three winners from four, and also moving into profit for the first time since October were the Extended Under 1.5 selections. These were down by 33 points less than three months ago, but 34 winners from 89 has righted the ship and the Extended selections are now ahead in every category (Match Odds, U1.5, U2.5, U3.5 and HT 0-0).

That's the good news. The other seventeen contenders are all in the red. Backing Ian Erskine's 'Lay the Draw' selection is the best of the worst, followed by some Classic categories and some extinct contenders. Jon (Talkbet) and Neil are anything but extinct, but Neil is likely wishing he had quit at the end of January when he was up over 9 points, and in sixth place. Possibly he is wishing he had quit in July is Football Elite who had no selections this weekend. Little Al found one draw from the EPL games (the Sunderland v Southampton game) but the five losses meant an overall loss.

The grand total number of bets is now exactly 1700, for an overall loss of close to 48 points. The XX Draws (all categories) are up 72 points (not helped by the Classic selections it must be said, but fortunately more than compensated for by the other categories) while the professional services are in the red due to the under performance of Football Elite.

Speaking of which, I checked in to Daily25 and saw this rather interesting comment on the last week of April:

Soccer was the only sport to have an off week. Football Elite went 0-3 again and lost another $6,000, absolutely disgraceful, I think in the last 15 bets there has only been 1 or 2 winners. XX Draws made another nice profit and that’s usually the case when other soccer models don’t perform. It added $3,300. Combi FI lost $2,000 and TFA Established and Euro lost $800.

"Usually the case when other soccer models don't perform"? Steve does specifically mention Football Elite, who certainly are having a nightmare season, but Matt and I have observed how often our selections are the same, so perhaps Matt's misfortune is my gain.

Last weekend, (Matt had no selections this latest one), we overlapped on just two selections, both from the Bundesliga, and both were away wins. I take some comfort from the fact that both were Under 2.5 with Schalke '04 winning 1-0 at Moenchengladbach thanks to an 82' goal, while Bayer Leverkusen won 2-0 at Nuremberg.

As I may have mentioned before, Matt calls this overlap the result of us both fishing in the same waters, and the away team in my selections has won more times (176) than the home team (166). 153 have been draws. At the end of the season, I'll look back at last season and this and see how profitable laying the home team in these matches would have been.

Finally, after receiving positive feedback (and several renewals) from current subscribers, I have decided to continue the XX Draws service next season. Prices for new subscribers will be the same as last season - a bargain £99 for anyone joining before the end of June, rising to a still incredibly reasonable £149 after that.

Based on this season, there should be a little over 500 selections, and I think this offers really good value when compared to other services, but then I am biased!

Payment can be made via PayPal to CalcioCassini@aol.com

As for the FTL next season, several people have asked about how they can join, and I'll give this some thought. To encourage people to actually stay in for the full season (no one likes a quitter as they say at AA meetings) I may look to collect a small deposit of say £20 which will be paid out to the non-pro first three at the end of the season. Just a thought.

Betfair - Pricing And Crack Trading Team

Some very well thought out ideas on Betfair's pricing strategy, and their 'crack' trading team, written as a comment on Mark Davies' blog by Graffiti and deserving, in my opinion, to be read by a few more eyeballs:

Betfair’s problem is a very simple one. Have they ever put enough thought into their pricing?
Market liquidity operates along an S-curve / sigmoid function. Initially it is hard work (the first early players can’t get matched at a fair market-clearing price, or bets they leave up are unmatched). Once a market reaches a critical mass, then the conflicting opinions kick in, and the betting turnover starts increasing at a much faster incremental rate, with only a proportionately smaller increase in the number of players.

Betfair need to address the S-curve with their pricing. It just isn’t good enough to have the same pricing policy for a major liquid market, as it is for a side market where there is a danger of liquidity drying up.

If a layer operates in a big main market, they pay normal charges. But someone putting liquidity up into a side market adds a much greater value to Betfair’s diversity of markets/betting events. There has to be the introduction of a financial incentive for people, especially key big layers, to make it cheaper to operate in a market which will be in essence a lot less profitable for them (their bets won’t get matched as easily/often, they will have to give away value to get anything matched).

Betfair’s pricing is almost exclusively based on profit/loss, whereas it needs to be changed to reflect liquidity, especially urgently needing to focus on favouring people who leave bets up in illiquid markets. The time and effort people put into side markets makes them proportionately much harder work and more hassle. This must be reflected by Betfair in its pricing, and is why Betfair’s current pricing is, well, a bit meh.

Betfair needs at the extreme, where a market has dropped below critical mass, to not just offer zero commission to big layers, but if the little fish come and nibble away, paying 5% commission on their side of the bets, why not give maybe even half of the commission to the layer. You would then in effect have NEGATIVE commission on bets in these markets to the layer, whilst a boost in turnover overall, with Betfair getting half of the commission, is better than getting none at all, surely? .

A market maker would suddenly find that markets which were much more costly to them to price up (not just in pecuniary terms, but in time terms too) would suddenly be back in play and worthwhile participating in.

You then reduce these discounts/incentives once sizeable liquidity has been reached.

There is something intrinsically valuable to Betfair in having as many markets being offered, with as deep liquidity as possible. Ever thinner and narrower side markets drive people away. The reason side markets have shrivelled is solely because of a faulty mix of pricing/incentives to people to get involved in them.

There is also huge room for a new type of market-making. The “crack trading team” is a throwback to the stone age of bookmaking, and an embarrassment for Betfair. What is obvious, is the crack team often don’t understand pricing in the internet era. The crack trading team needs to be disbanded, it is a waste of time and money. Betfair haven’t spotted what to replace them with. I remember Betfair buying a small company/startup which analysed betting patterns (to stop linked accounts, through intelligent analysis of them..?). That is where the future of pricing is, that is where Betfair will find the answer to their liquidity problems.

A large part of me thinks the Betfair sportsbook and exchange separation is a huge mistake. Ebay made a strategic decision to show less information/clutter to new users, to keep it initially simple, but more frequent users were allowed a much more full set of information. I think the exchange and sportsbook should be merged, where someone who logs on in the UK (to keep things simple), they will see say 5/6, and take 5/6 on a bet, but behind the scenes you could actually give them 1.95 or whatever the current higher price available is on the exchange. That would keep things simple for Joe Public, but bearing in mind Yu and Morana’s epithet when they spoke together on record saying they could see that people kept coming back and playing more when they got a better run for their money (hence why Yu was in favour of the Betfair education/statistical database tools etc), this would combine great value, with simplicity. I suspect the crack trading team don’t care how profitable Betfair is, they probably care how much money is diverted onto their poor prices (often with knockback size).

Betfair should be a £5billion+ company. It should be the biggest and best bookmaker of all. I don’t even think that gambling bets should be the flagship profit for the Betfair exchange to match, but that is by the by. 

It would be great to see Betfair in 2015 aspiring not to be Paddy Power 2013 “Lite”, but to be Betfair 2013 “heavy”, if you see what I mean.

May Delay

I've been a little tardy on the Friendly Tipster League update from last week, but here is the table as of last Monday. The midweek updates and this weekend's results will be posted early next week. A lame excuse, but I have had family staying with me on all week, and my usual routine has been a little disrupted, but in a good way. It seems like forever ago, but the highlights from last weekend were that the leading XX Extended Draw category has seen its lead trimmed back after going 0 from 6 selections, while the second place XX Bundesliga selections had two winners from two selections. Among the other leaders, Peter Nordsted's Drawmaster found two draws from three, which guarantees the season will end in profit for these, and little change among the other 'in-profit' contenders.

In the red zone, Neil's nightmare Spring continued with four losses from four, and Football Elite's nightmare season continued with another losing weekend, while Talkbet chalked up a second profitable weekend in a row.

Nothing from a few of the regulars this weekend. With the silly season upon us, a few people are being extra cautious. My own XX Draws have had four selections voided in the last couple of weeks, with the draw price well below 3.0 - and three went on to be draws.

Looking For A Silk Purse

Webbo asked on the last post:

What price did you get out at Cassini? Or did you let this one run? I remember you saying once you have no intention of losing your whole stake when you trade so why wouldn't you have 'redded up' at 1.01?

Unfortunately it is not clear to which event or bet his comment relates to, but when trading, it is true that I have no intention of losing my whole stake. Unfortunately, whether it is my intention or not, that unfortunate outcome does result from time to time. Sometimes the market moves against you, and you do not get an opportunity to trade out at anything close to value. In trading the NBA for example, one risk of getting involved late on in close games is that you will see huge swings. Great if you called it right, but unfortunately us mere mortals sometimes call it wrong, and we are left holding a large red. For less liquid sports such as baseball, the problem is often that there are no takers at the true price, but you are better served in the long run to hold a position than you are to trade out at an unfavourable price - assuming of course that you are staking sensibly, which is easier said than done when a great opportunity presents itself. Webbo says “why wouldn’t you have ‘redded up’ at 1.01?’ In my experience, 1.01 is not usually a value back. It can be, but more often it is the case that the 1.01 is taken and the price then moves out. Years ago, I read a reported statistic from Betfair that only 70% of 1.01s actually won. I have no idea if that was true then, or is true now, but what I do see in the sports I trade is that the 1.01 gets taken too early.

Some of you may have woken up yesterday morning to find that one baseball game was still in-play. The Oakland Athletics v Los Angeles Angels of Anaheim game went to 19 innings and didn’t end until 9:42am BST. Money had traded at 1.01 on the Angels – not mine unfortunately - and they went on to lose.

I mentioned the Brooklyn Nets – Chicago Bulls game at the weekend in this post. Here, not only 1.01 traded, but also 1000 traded, and the ‘sure-thing’ lost.

Even when a 1.01 wins, more often than not, a little fear creeps in to the market, and you can back at 1.02 later on. I caught the end of the Golden State Warriors game on Sunday night / Monday morning, and the Warriors had a comfortable lead in the fourth quarter, up by 16 / 18 points or so. I layed five figures at 1.01, not because I expected the Warriors to lose (although that would have been a nice bonus financially) but because I expected Denver to close the gap at some point, which would result in a few rattled nerves. Greed and fear drive the markets. Sure enough, I was able to back some back at 1.03, some at 1.02 and make a little low-risk money when the lead dropped to 13 or 14. All it takes is a turnover, an ‘and one’ or a three-pointer to shake someone’s confidence.

The second part of Webbo’s comment went like this:

BTW, I'm trying to test an edge I may have over thousands of bets on the football. It's puzzling me that using a Kelly staking system this is profitable but to level stakes the bets make a slight loss just short of break even.

I wanted to know what you thought of this as I remember you and someone (Al maybe?) debating whether a system can make a loss at level stakes but a profit using another staking method. I previously thought you were right but now I'm not so sure.

Not sure about me being right?!! Oh ye of little faith.

A system can certainly make a loss at level stakes but be profitable using another staking method - in the short-term. In the long-term, no. For an example, look at Roulette. The true odds on black are 2.0556, whereas you will get paid at 2.0. Can you employ Martingale to overcome this negative expectancy? For a while, most likely you will, but sooner than you might think, probability catches up with you and you hit the house limit, run out of money, or you lose your nerve. Labouchere might seem a gentler way of playing this bet, but again, sooner than you might think, probability catches up with you, and you have a losing run and the stake size becomes too high. There's a reason there are no professional roulette players.

Unlike in Roulette, the edge on football bets will vary from event to event. It is quite possible that the edge on the smaller Kelly stake selections is negative. Perhaps Webbo would tell us what the level stakes P&L is when the lowest Kelly bets are expunged from the data set. A few higher value bets with larger stakes would compensate for the lower edge bets.

And now the moment you have all been waiting for - the Friendly Tipster League updates from the weekend. The XX Draws (Extended) had three draws, all 0-0, from 10 selections, three one goal games, and a 90th minute goal to take a draw away, so overall not bad. The Monday night game between Aston Villa and Sunderland was the final selection of the weekend, and not the best suggestion the spreadsheet has ever had.

Just two Classic selections, with the 1-1 draw between Real Vallodolid and Sevilla ensuring a profit on the draw bets. No joy in the Bundesliga though, where an 87th minute goal prevented one draw from two selections.

The top six are all from the XX family, with the Extended HT 0-0 moving into a Champions League spot:

while the next six, and the remaining profitable, entries are:

Premier Betting moved up form 13th, while Drawmaster came up empty and drop down from 6th.

In the red by less than 10 points are these nine:

The Bundeslayga selections are having a bad run with just two winners from 12, and the big gainer was the Extended U1.5 selections which has mentioned above had six winners from 10 selections. Neil's poor run continues too, with just one profitable weekend since mid-March. At the end of January, Neil was in 6th spot, and up 9.63 points, just 10 points off the lead.

The Hall of Shame candidates are this sorry lot:

Football Elite's nightmare season continues with just 4 winners in the last 25 selections, and my own XX Draws (Classic) remain in the relegation zone. Credit to Football Formbook though for keeping the selections coming on his blog. Plenty of others gave up long ago.

And hello May. Until this morning, April was something of a nightmare month, and the only one in the red in total.

April Daily Averages (Net)

After seven years of roller-coaster results, I finally realised where I was going wrong and after a decent, if not spectacular April this year, every month is now green, although April remains very much an outlier.

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: