Gambling Spectrum

Just as the dust was settling, and we could all move on with our lives, Marty chimes in a thought on one aspect that he posits might be considered a fundamental approach.

I think one could make a case that whether the team is 'on the road' is fundamental information (ie is neither integral to the description of the contract / bet and is non-price). I don't know your systems completely, but this is the only area I would say might not be technical. You could also argue that past results are technical information because they are, generally, contained in the settlement price the correct score market.

Although the system mentioned is called the Small Road 'Dogs System, and that's the way I choose to play it, I could just as easily be playing a Lay Small Home Favourites System. 

It would make no difference, because the system is based on the determination that the market is inefficient when the line is (relatively) close to a pick, and that makes it a purely technical system.

Because every match has to have a venue, it's a given that there will (usually) be a home team and an away (road) team. Thus, home or away is irrelevant.

Past results are a major factor in where the line or price settles for a market, but whether or not a system is considered technical, fundamental or a combination of both, is based on how selections are determined, and these selections in my published systems are determined solely by the price. 

Were I to add conditions based on "injury reports, previous results, days of rest, time zones, individual match ups and so on" that would be adding fundamental analysis to the mix, but who has time for that?

Tony Stephens returns with a couple more comments, the first asking:

Does it really matter if criteria is technical or fundamental? Would one place additional confidence in a system that was classified either way?

What matters in regards to the approach, is what works for each individual. Confidence in a system comes from its results, not from the method.

The only reason this became a hot topic, and why the different approaches needed to be explained, was that my answer to @Statsbet's question was called out as being incorrect. The question was:  

Would you advise technical analysis or fundamental/statistical or both?

My answer - Technical analysis. 

I followed up with some explanatory details, which were that:

Unless you have access to private (insider) information, fundamental analysis is a waste of time. Others will always know more than you. Let all (private and publicly available) information hit the market, and then focus on a statistical analysis of the market’s estimate of probabilities. Try to understand the market sentiment behind the prices, and identify areas where the market may be vulnerable.

This drew the following response which normally wouldn't be a big deal, but coming from someone who is usually a rare voice of rationality and common sense in a murky pool of guessers, salesmen, tricksters and nincompoops, it was important to point out the error.

No systems on my website (blog) are based on fundamental analysis, and whether data is public or private is totally irrelevant. To claim otherwise is simply wrong.

Tony, clearly looking to become a full-time contributor at Green All Over HQ, (the pay isn't that great to be honest, but the Xmas parties are legendary) had a second comment:

So are we agreed that the gambling authorities should continue to give licenses to books where their business model can only work by only accepting bets from losers, even over very short periods of 1-2 bets?

The question is confusingly phrased, but I'm not against the idea of only licensing bookmakers who agree to operate as bookmakers! Certain protections would need to be in place regarding bet limits, but books who don't take relatively small bets on major events shouldn't be in business. That so many are in business is testament to the stupidity of people, or more politely, to the number of people who bet for fun with no idea about value. 

On this topic of having access, and the range of punting types, there's a passage in Adam Kucharski's "The Perfect Bet" that I was reminded of:

In an environment where there is apparently no shortage of players happy to lose steadily, the issue is whether regulators should allow books to restrict their customer base to this group, and maximise profits, or to enforce access to the sharper end of the spectrum, and reduce profits. The sharper end currently have no right to be granted access, but they do have options.

One way of looking at the issue is by comparing a bookmaker with a casino, where slot machines are like customers. While a casino is happy to have machines paying out at close to, but less than, 100%, they wouldn't be too happy at being told they have to have a machine installed paying out over 100%. 

As much as I would like to see bookmakers act as bookmakers, I don't see anything changing. What should happen is that customers take their business elsewhere and force the industry to change voluntarily, but as I mentioned earlier, there's a seemingly endless supply of money from people who simply don't care about losing. Unless human nature changes, traditional bookmakers will keep making their profits from these customers and sharps will just have to work around restrictions, or apply their skills in another way.

Thanks for all the comments. As stated before, it's always much easier to post new articles when the conversation is flowing.

Team Transparency

Another head-scratching comment from James, who wrote:

A lot of your data screenshots display win/loss etc. figures for teams.

If you don't use such fundamental data in your systems then fair enough.

While it is possible that in almost ten years of blogging I have on occasion shown results for a particular team, I can't actually recall any such screenshots.

My screenshots are typically either summary in nature, for example this one from last week and League Two Away and not a team name in sight:

Or they are contemporary, showing recent qualifiers and their outcomes, such as this one from the American Football Small Road 'Dogs Systems last weekend:

While it is true that these screenshots include a team name, this is for transparency so that anyone interested in following along can easily verify past results, which means I need to record whether an event was a win or a loss (or a push). 

I could simply say that we had 14 selections, with 9 winners, but if I were reading this blog and half-interested in this system, I'd want a little more detail to see what was going on. 

If someone isn't keeping detailed records that allow for results to be verified, I'd be a little concerned that they don't have what it takes to be successful.  

To say that the win / loss figures are for "teams" is very misleading. The team name merely acts as a reference rather than the criteria by which the selection was made, which remains purely technical.

Sports Equinox

They call it a Sports Equinox in the USA, one of those rare days when there are games in all four major sports.

Yesterday was such a day, just the seventeenth ever, and the first on a day other than a Sunday or a Monday. Courtesy of fivethirtyeight.com, here is the full list:

From a betting perspective, the day failed to live up to the hype. The MLB UMPO selection was the Chicago Cubs, and they were blown out by the Los Angeles Dodgers and their reign as "world" champions, as the US likes to describe their domestic champions, is over.

No selection in the NFL for the Small Road 'Dogs as the road team were favourites, and in the NBA just three games meant one bet, but a losing one for the Beast as the Clippers beat the Lakers in the battle of Los Angeles.

Albufeira Steve returned with a further comment on the Minimum Bet Rules post a few days ago. He writes:

I think the main difference with racing in the UK is the size of the margin. The UK soft books have been forced to run a very different business model to an Australian bookmaker. Due to competition and prevalence of odds comparison sites, margins have been squeezed to an extent that at best prices in the popular Saturday races, you can bet at less than 100%! They also offer best odds guaranteed, so if a horse drifts you get the better starting price. It is virtually impossible for a bookmaker to make a balanced book, within their margin, in a majority of UK races. In reality, for anyone with half a brain, it is harder to lose on UK racing with a soft book, than it is to win. The UK soft books have taken a business decision to use this loss leader model and only accept recreational gamblers who will lose their money on other channels.

This is not as bad as it initially sounds. The majority of punters are long term losers and will never suffer from restrictions. The fact that the margins on UK soft books at best prices, have been reduced to such a small amount, that recreational punters will lose money much slower than they used to. More than likely there will be more winning punters than before. OK, its due to luck rather than skill, but in reality most punters in the UK have not been effected by restrictions and are actually better off then they were pre-restrictions.

The punters that have been effected by restrictions, if they can really beat the market, still have the option to play on the base books and exchanges who do not restrict.
Markets and conditions change. Winning punters have to learn to change with them, instead of complaining that the edge they used to have has been taken away.

Thanks for the added detail Steve. I've long written that traditional bookmakers will ban punters who look like they have a clue (or more than half a brain perhaps) even if they have yet to take money from them. Again, as I said last week:

And if your accounts are not closed or restricted after a few weeks? Ask yourself what that is saying about you.

And as Steve says, you always have options for betting, since the exchanges do not ban winners (some just charge you a small fortune if you're really good, but at least you can play) and the new model sportsbooks welcome winners too, using their money to help them set sharper lines. 

An edge, with no place to bet, is no edge, and if an edge is lost, you need to adapt.  

Technically Speaking

The debate over what is fundamental analysis, and what is technical analysis, when it comes to analysis for sports betting continues. 

On September 28th, James noted (erroneously) that it is...

This tweet contained two errors, the first is that none of my systems discussed on the blog rely in any way on fundamental data, the second is the implication that fundamental analysis is based on public data.

James commented today that:

Once again, I didn't say fundamental data is, and only is, public data.

That is certainly what a reasonable person might infer from the tweet. James blames Twitter's 140 character limit for the confusion, writing: 

Tweet size limit prevented me from typing "using public data", which your systems do use (i.e. public price and fundamental data). 

Incorrect. My systems use price date, which is public and technical. They do not use fundamental data which comprises such elements as "injury reports, previous results, days of rest, time zones, individual match ups and so on".

"Using public data" does not make any of my systems fundamental analysis based.

Fundamental data can be public or private.

Technical data can be public or private. 

By James' own definition:

a technical trader pays no attention to the past performances of entrants, only considering price movements, market behaviour and structure.

How much more technical could the simple systems discussed in this blog be?

The clarification needed is for James to explain how my systems are fundamental. So far, I've not seen an explanation that supports this claim.

Black Monday

Hard to believe that Black Monday was thirty years ago today. Many readers probably weren't even born, others too young to remember it, but I remember it well. 

The previous Friday I had been unable to get to work in London as the Great Storm of 1987 knocked down an estimated 15 million trees, including some that blocked the Caterham line. 

Cassini managed to sleep through it all, although I was aware that the power had gone out. It was still out when I woke up, so my bath was a cold one, and with no radio or news, I set off to work as usual. I couldn't understand why the road to the station was so deserted.

The Stock Exchange in London was closed and that day the Dow Jones in the US fell by another 4.6% to end the week down 9.5%. It had already been a troubled month with the previous week down another 6%.

So it was after an unplanned long weekend that I headed to the City on the Monday, to hear that the markets were down. 

Not a huge surprise, as the UK had some catching up to do, but the scale of the losses was memorable with the FTSE ending the day down 11%. 

Fortunately I was single at the time, and relatively poor, but several thousand pounds were lost on paper. No spreadsheets in those days, so the exact amount has long since been forgotten. 

What I do remember doing was calling my broker late in the day and buying more at what I thought was the market bottom. Wrong. The FTSE 100 dropped another 12.2% on the Tuesday, but a valuable lesson learned.

Time heals and 30 years on, the DJIA is above 23,000. 

The FTSE 100 which touched 1,598 in October 1987 is lagging behind, but is now above 7,500.

Bookshops and Indeterminacy

While I was finishing off this morning’s post and confirming the date and venue of Haralabos Voulgaris' observations regarding the changes in the way NBA teams are now playing basketball, I came across this example of fundamental versus technical analysis, a topic discussed here recently following a mistaken tweet that confused fundamental analysis with data that is public.

The excellent book "The Perfect Bet" by Adam Kucharski gives an example of someone interested in buying a book shop. He gives two ways in which a prospective buyer might go about making his decision on which one to buy. One is to go into each store you short list, and check the inventory, interview management and examine the accounts. The second is to sit outside, and count how many customers enter, and how many books they leave with. The former is a “fundamental” approach, the latter is “technical”.

Twitter user Overs Specialist tweeted today that:

I can’t think of anything more ‘determinate’ than a system that says “If the price is this, bet”.

The entry point couldn’t be clearer, and there is no exit point other than that the event concludes, and the bet wins or loses. 

These systems are not trading systems, and the biggest benefit of a simplistic technical approach is the time saving.

What “when a market penetrates your line, you’re out” means, I have no idea.

I think the suggestion is to invest additional time predicting how the markets will move from the open, and good luck with that, but not only are you now looking at spending a lot more time, but as I keep saying, you’re competing with others far more knowledgeable than yourself, especially when we’re talking about football which is Overs Specialist speciality.

How exactly an edge is to be obtained betting on matches in South America, Poland, Montenegro etc. remains an unsolved mystery. A cynic might be of the opinion that football experts in South America, Poland, Montenegro might be better placed, but maybe Overs Specialist has contacts around the globe as do the likes of SmartOdds and StarLizard. 

Rockets Ride Randomness

Seven Away wins in League Two last night will have been appreciated by some readers, taking the profits for the season so far up to at least 10.26 points and an ROI commensurate with previous seasons.

Quite a contrast to League One where eight of the twelve matches were Draws, and the other four all Home wins.

Meanwhile in India, one of Crystal Palace's many stars of the future - Nya Kirby - saw England through to the U-17 World Cup quarter-finals (v USA), scoring the decisive penalty in the shoot-out after what appears to have been a thrilling game based on the AP updates:

Edge of the seat stuff, but the attendance of 53,000 was impressive.

In the NBA, the Over 215.5 System, henceforth to be known as the Beast (I'm sure some of you can work out why) got off to a winning start as the Golden State Warriors, after leading by 17 points and trading at 1.03, lost to the Houston Rockets 121-122 in a game where the Total was set at 228.5. 

These two teams were the top scoring last season, and I doubt that they will all be this easy. 

The Houston Rockets took the most three point shots last season, an average of 40.3 and last night shot 41. The Warriors 30 shots was very close to their average last season of 31.2.

Last night's game saw 71 three-point shots, with 83 points scored.

Line ups change of course, but fortunately player statistics are readily available. For example, Kyrie Irving played for the Boston Celtics against his former team (Cleveland Cavaliers) last night. His loss was one good reason why the Cavaliers took fewer three point shots. No surprise that his game was comfortably under.

For the record, last season, the average number of three point shots per game was 54, with 58 points resulting from them. 

As legendary NBA bettor Haralabos Voulgaris explained at the MIT Sloan Sports Analytics Conference in 2013, the nature of scoring in basketball is evolving, and because randomness plays a bigger role in three point shots, it's becoming harder to predict which team will score more points.

Total Moves

We ended with up with a bumper crop of 14 selections in total this weekend for the Small Football Road 'Dogs and with a 9-5 record no one should be complaining. 

Ten of these matches were either Conference or Division games, and these ended with a 6-4 record. 

The baseball play-offs are not doing so well, with UMPO down 10.58 points with a 5-17 record. The PO Overs ended up 11-5-1 (+5.47) to offset some of the damage.

With the two Championship Series now in progress, the value on Totals moves (slightly) to the Unders:

The NBA is back tonight with last season's finalists both opening the new season at home.  Both the Cleveland Cavaliers and the Golden State Warriors are odds-on to win their respective Conferences and repeat in the final for the fourth consecutive year.

With the increase in scoring I mentioned here last month the Blunders system made it's first loss since 2010, although 2015-16 showed warning signs of a decline.

A good example of how a fundamental change in the way teams play the game changes / eliminates the profitability of a system.

As I mentioned in that September post, I'll be looking at backing Overs in the 216+ range, which should average over two bets a day. 

In 2014-15 there would have been 36 selections, in 2015-16 117, and last season 362!  That's quite an increase.

  

Madoff With Our Money

Nick followed up with some more details on how the minimum bet rule works in Australia:

Dear Sir,

A follow up to my previous comments.

Australian internet bookmakers are not allowed to close an account simply due to someone backing winners. They can if you have breached terms and conditions. They also have to re open accounts that had been previously closed by them.

There is no provision for minimum bets on sport. Given the world wide liquidity on sport and the small price fluctuations (especially compared to racing), then barring or severely restricting punters on sport makes no sense at all.

To be able to win betting (trading) on racing and sport involves knowledge, bankroll and discipline and the amount of people who have all these traits (and you need all of them) is very small. There are lots of people who have knowledge and bankroll but no discipline and they just add the pool of losing punters.

If a "problem gambler" and by that i mean a person who has excluded themselves from betting is seen to be betting then it is an offence under legislation.

Without wishing to appear cynical.........but why not, it's not in a bookmakers interest to stop people from losing money.

I know of an employee of Centrebet who advised the powers that be of a client who appeared to a possible addict. They assured him that they were aware of this client and that everything was above board and ok.....

Finance chief 'swindled $7m' to fund gambling addiction: police

Enough for now.....again

Cheers Nick

I have to admit Australia seems to be heading in the right direction on this issue. While I've argued previously that you can't force a business to transact with someone they don't want to, since bookmakers require a licence, it wouldn't be too difficult to make this a condition of the licence. 

I'm warming to the idea. This might actually push the dinosaur bookies into the 21st century, and make them concentrate on producing sharper lines.

As someone who has had accounts closed years ago for betting on sports, which was frankly ridiculous, I have my doubts that in practice this would work quite as well as advertised, and it's hard to see the UK's Gambling Commission taking such a step any time soon, but gambling laws change. It was only in 1960 that off-course bookmakers were legalised, and only 12 years ago that the new Gambling Act was passed in 2005. 

As for Nick's closing story, it's no surprise that bookmakers wouldn't try too hard to stop a problem gambler from handing over his money. 

From Judas Iscariot, who betrayed Jesus for 30 pieces of silver, to Bernard L. Madoff to the standard member of Congress fighting tirelessly to further the interests of campaign donors, human history is full of examples of money’s ability to weaken even the firmest ethical backbone.

Perhaps the best piece of Nick's response were his comments on the skills required to be successful long-term, which can't be emphasised enough:

To be able to win betting (trading) on racing and sport involves knowledge, bankroll and discipline and the amount of people who have all these traits (and you need all of them) is very small. There are lots of people who have knowledge and bankroll but no discipline and they just add [to] the pool of losing punters.

Under the category of 'bankroll', and related to the original topic, I would include "access to the betting markets". You may well have funds available, but if you can't find a market maker willing to work with you, it's a problem.

One other comment on these skills is that if you possess them, you are wasting an opportunity to capitalise on them if you use them for betting full-time.

Minimum Bet Rules

One of the best comments in terms of new information, discussion points and all clearly explained, comes from Australia's Nick responding to my post on the ability for punters to all "get on". Nick writes:

Dear Sir,

In Australia we have an on course bookmaker minimum bet rule that applies at all tracks. The bookmaker must bet the odds to win $1000 ( some tracks will be higher) at the price displayed on his/her board.

There are no ifs, buts or maybes. At the price displayed anyone can come and have a bet to win at least the minimum amount.

A bookmaker by definition tries to make "an over round book" laying horses so as to make a profit regardless of which horse wins.

This is not always possible but taking a long term approach and making "book" as often as possible is the business principle.

The minimum bet rule has now been made a rule with the off course (internet) bookmakers as well (as it should ).

You may ask why a bookmaker should "have" to accept a bet.

A punter bets to win. a bookmaker accepts bets with an inbuilt margin so as to balance a ledger and have a profit.

The minimum bet rules allow the bookmaker plenty of scope to balance his/her book. In fact the amount of money that is eroded by long term winning punters is very small when compared to the final bottom line.

Winning punters can be equated to "loss leaders" that many other businesses have.

Pinnacle have displayed the capacity for a bookmaker to welcome winners. Given that they are very much predominately a sports (low margin) rather than race (high margin) bookmaker is a sad indictment to those bookmakers who have large racing offerings.

It can also be seen that bookmakers banning/restricting punters whilst targeting (they'll deny deny deny) problem gamblers is nothing short of predatory.

Comparisons have been made to casinos banning advantage players (predominantly blackjack). In days gone by i was an advantage (card counter) blackjack player. I was banned.

Casinos have addressed the problem of card counters by now utilising continuous shuffle machines which negate the advantage that a card counter can have.

Casinos had the problem of not being able to "balance their book" against teams of card counters which could conceivably bankrupt them if not addressed, unlike bookmakers who can change their price as money is bet on a horse.

Enough for now

Cheers Nick

Excellent comments! I do have a few follow up questions, not necessarily for Nick, but for anyone.

Does anyone in the UK have a problem getting a bet on at the racecourse, or is it only shops and Internet where restrictions are applied?

Does the "minimum bet" rule in Australia apply only to horse racing or is there a minimum for sports betting? If so, what is the minimum, or does it vary from sport to sport, league to league? I'd imagine that any minimum would be higher for an English Premier League game than say a National Premier Leagues South Australia match.

Is there anything to stop an Australian on-line book from closing an account or declining to re-open a previously closed account? It seems a rather Pyrrhic victory to force a book to take a minimum bet only to find your account subsequently closed.

What happens if a known problem gambler wants the "minimum bet"? Are there exceptions in the small print of the rule? Nick says there are no "ifs, buts or maybes" - really? Pubs don't have to serve anyone, and are negligent if they serve someone who is clearly drunk.   

How is this rule working out in practice? 

I totally agree with Nick that it would make more sense for traditional bookies to follow Pinnacle's example and allow winners, but where perhaps we differ is that in my opinion it is, or should be, ultimately their decision. 

From a UK perspective, I'd say that it would appear that for many bookmakers, their interest in bookmaking, whether traditional or modern, is somewhat less than their interest in installing FOBTs in low income high streets.

As for targeting problem gamblers, I'm totally with Nick here. Unfortunately the Gambling Commission in the UK are very weak on this, and other things, giving out pointless slaps on the hand rather then hitting them where it hurts.

As for adjusting prices to balance their books, certainly a bookmaker should be able to easily do this in a liquid market to manage their risk, and like I said in the original post, it's really rather silly of them not to take a bet on an EPL match or any high volume event.

Without knowing what sports the minimum bet rule applies to in Australia, it's difficult to add much more, but so long as the minimum bet is set at a level proportionate to the expected volume for the event, the idea has some merit.

But as I said above, it's of little use if your account can be closed.