There is some complete nonsense written on the Betfair forum. The subject of value comes up regularly with people who really should know better arguing that value in sports betting doesn't exist and that there are other ways to make money on Betfair than by finding value. This reminds me of the Victor Meldrew quote "What language are you talking in now? It appears to be bollocks".
The simple fact of the matter is that the only way to consistently win is by making bets that are value. If you are a long-term winner, then you are finding value (even if you are blissfully unaware of it). If you are a long-term loser, then your bets are not value. It is that simple.
It seems that one of the problems is that whereas the value on a coin toss can be easily determined (2.1 is value, 1.9 is not), the value on a sporting contest is not, but just because the true probability is hard to determine, doesn't mean that a correct price doesn't exist. Possibly one of the easier sports to calculate probability on is snooker or darts. Conditions are always the same, and if Player A has beaten Player B in 80% (of a large number) of frames ever played, it's reasonable to assume that Player A will win a best-of-three contest 89.6% of the time, and is thus value at 1.12 (excluding commission). Yes, it is quite possible, probable even, that there are other factors at play - recent form, emotional state, physical factors, but this is a reasonable starting point. The true test of whether or not you are finding value is whether or not in the long-term your bets on Player A at 1.12 are profitable. If you are getting value, then they will be; if you are not getting value, then they won't be.
Other sports are that much harder to evaluate. Of individual sports, tennis has its different surfaces to consider, golf has over 100 possible winners, motor sports are subject to accidents and mechanical malfunctions, but if you favour these for betting, it holds true that if your bets are value, then you will make money and if they are not value, you will lose. There is no getting away from this.
With team sports, personnel or tactical changes mean that one never has the luxury of comparing say Chelsea with Liverpool over 100 games with the same line-ups and be able to compute value. There is always a subjective element when determining the correct price, (what weighting do you put on current form, how 'current' IS form - 6 games, 20 games?, injuries, suspensions, recent away games in Armenia etc.) but it is possible to give yourself a starting point by rating teams. Once again, if you are finding value, then you will make money, if you are not, then you'll be losing money.
One argument against the need to find value is that so long as you can back at price x, and lay at price y (x-0.01), then you will make money. This is true, but the problem is that I think you will soon find that if your back at price x is not value, then you will have trouble selling the bet at price y, which is even poorer value.
I haven't mentioned horse-racing. As regular readers will know, I think this is undoubtedly the hardest sport to consistently make money from unless you have access to inside information. An outsider like me has almost no chance of finding value consistently, and even if I could be bothered with rating hundreds of horses, there is no guarantee that the horse would be run cleanly anyway. Unless you're an insider, there will always be others that know more than you do about any particular race.
What people are arguing when they say that a true price doesn't exist is that it can't be known. It doesn't follow that as you suggest that because somebody shows a long term profit that any one of those individual bets were value, it just proves their value bets outweighed the poor bets. Long term winners have an edge, that may mean they can predict prices better than the market but it doesn't follow they've determined a true price. The fundamental problem is that you can't predict human emotions, you can make a subjective go it but it doesn't follow the same statitical rules as a dice or coin.
ReplyDeleteAnyway that was my bollocks, Nick