Sporting DataGate

More developments on the story that refuses to go away, except on the Betfair Forum where a thread on the topic has been pulled by the powers that be and contributor Ballabriggs has been banned.

Betfair have not just censored the ballabriggs account from the forum, they have closed it too.

It's ok to leave the company knowing how the markets operate inside out, who wins, and how they win. It's ok to set up an external company, betting on Betfair markets, using courtsiders sent not just to places where it is legal to bet in-running, but also to places like the Australian Open and the US Open.

It's ok to send young 22 year olds putting them at the risk of prosecution to these places.

BUT. It's not ok to talk about it.

Betfair have to realise the enemy isn't the messager, it's the people straining at the very edges of legality, offering very poor out of date value to Betfair customers, which in turn does wound Betfair profits.

There is now a 2nd investigation in the news today, this time into a cricket courtsider.

http://www.theage.com.au/victoria/british-citizen-investigated-for-illegal-betting-at-domestic-twenty20-match-20140120-3146c.html

While there isn't much about this topic that is amusing, there was a comment on Ballabrigg's ban that did bring on a smile:

I think Betfair have outsourced the forum management to Sporting Data.

Mark Iverson sent me a link to a radio interview conducted by Sporting Data CEO Steven High. The interview explains who their clients are, or rather aren't. They have none. They have directors, and they use the data themselves, so the clarification number one posted on their web site last week is at best misleading.

"The set-up is a little obscure in that we have a company who itself does not bet however we are directors of that company and on our personal accounts we bet but the reason for that is to comply with UK gambling regulations and become as tax efficient as possible".

 Anonymouse stepped away from the cheese to say this and this:

Betfair have never given a monkeys, and this time they may have gone too far. If the Australian regulator works out what has been happening, it would be no surprise for Betfair to lose their Australian license for all in-running sport.

So the three ex Betfair employees send someone to courtside, and then bet on their own accounts from London. Great. Stay classy Betfair.

Emp chipped in, with:

I don't think there's anything unfair about getting faster access to information that is in the public domain than others. I also think that if you are gambling your money on events, morally speaking, regulator aside, it's your job to ascertain what the conditions are and decide if and when you want to place bets. I have no sympathy for those who can't be bothered to find this out, or for those who can but can't get access to this fast information and hence want others not to have it, so that they can be profitable.

If you can't access this info, develop a method that can withstand being 10 seconds late on info, it really isn't that tough.

I agree it's morally speaking unfair that plenty of bettors don't have PC or Super PC due to negotiated benefits, but it's a private company and they are not required to provide you with a platform to mint money. I've seen similar levels of entitlement from poker players on Poker Stars and I can't agree with it.

I fully agree with Emp on his first three words. The rest of his comment, not so much. Does he believe that trading should be a test of skill, person A pitting their wits against person B, or should the markets be more scrappy and about who can gain a big enough technological edge to ensure victory? If you believe the latter, then fine. It's every man for himself, but then what happens? Word will get out that the markets are unfair, and liquidity will fall, and when liquidity falls, Betfair make less money, and as a public company, they have a duty to maximise profits for shareholders. There's a reason why financial markets are regulated, and why London and New York are financial centres rather than Kabul or Baghdad, and there's a reason that the Gambling Commission took a close look at in-play betting in 2009. Emp might not care, but the GC might.

Whether you have sympathy for people who get caught out isn't the issue. As a reputable company offering a platform for individuals to trade against each other, there is an expectation that, as much as possible, the contest is a fair one. It is clearly not a fair one if the same three accounts are winning most of the time with an edge, not from knowledge of the sport and game-reading, but because they are one point ahead. The comment "If you can't access this info, develop a method that can withstand being 10 seconds late on info, it really isn't that tough" is laughable. As has already been discussed, it is not impossible for the Average Joe to win with sharks in the market, but it is a lot harder, and if your method with a 10 second handicap works, imagine how much it would make you if the market were a fair one. If you are not actually losing money, it is still costing you money in reduced profits. Emp mentions Poker, and it's a little like playing Poker against someone who has already seen the flop, or the turn or the river cards. You can win, but long-term, it's not very likely unless the guy with the advantage is absolutely clueless.

John Walsh raised the same point in a comment:

I don't want to take away from the discussion about Sporting Data, but I would like to address the part of G's comment about the ordinary punter having any chance.

I mainly trade the North American sport markets. The most liquid of those are NFL and NBA. When trading I assume that there are court siders. In fact I use them to figure out how much lag is in the feed that I am getting. For the NBA my feed is usually 10 seconds later than bets coming in, which would mean it is 15 seconds behind the action unless someone has a privilege of not being required the full 5 seconds delay on bets, which is another debate. For this reason I limit my betting to breaks in the action, which can be frustrating when I see an opportunity I'd like to jump in on but know I'm at a disadvantage if I do so I stay disciplined (a very important trait of any successful trader). Through experience and knowledge of the game I believe the ordinary punter can be successful. I use some in-play models but I don't think they are required to be successful. Cassini written much on this blog about being successful at betting in-play in the NBA. Odds get too short on teams that just finished a big run. Let's say Sporting Data is using their model and betting on the team that is a favorite at a certain point in the game and backing for what they feel the odds should be. Now you get others betting in the market that make bets that are for lower odds, lets say they are scared to miss out on what looks to be a winner. This is an opportunity where knowledge of the game and experience betting in-play comes in to play. In fact Sporting Data may have helped you get better odds because they are putting down large amounts that aren't getting fully matched and creating fear in the market.

If I have a television feed that is within the 5 seconds of live action I will put bets out there that if a team scores points the bet may get matched by someone reaching too far for a bet.

Meaning if odds were around 2.00 I would lay the team with the ball for 1.50-1.90, depending on what point of the game it was, and if they made a three the bet may get matched. If it doesn't it's not a big deal and if it does I would feel I got value.

The three-point shot is more popular now more than ever in the NBA. This creates more variance. It makes it harder for models to work, such that Sporting Data are using.

The NFL can be similar. If you look at the regular season game between the New England Patriots and the Denver Broncos. Denver was leading 24-0 at the half and were a huge favorite. I took that half time opportunity to make a huge bet on the Patriots. Teams constantly make adjustments through the game but half time gives coaches/players the largest amount of time to make adjustments. Bill Belichick is one of the best at making those adjustments. If the Broncos were down by a big score at half time I would have looked into betting on them too.

There is a point in a game if a team has a big lead that they will start to think about being conservative and using the clock. They may not stay aggressive and throw the ball as much because a deflection could mean an interception or a touchdown for the other team, an incompletion means that the clock stops. Comebacks are common in the NFL.

So G I feel there is chance for an ordinary punter in these markets to be successful. I'm an ordinary punter. I may use some in-play models but I rely on knowledge of the game and experience in the markets to get an edge.

Take my word on it that television feeds are not anywhere near 5 seconds of live action (I've been to NBA games), and betting on breaks in the action is akin to betting pre-game. The game state is known, although someone court-side will be able to see if LeBron James is hobbling off to the dressing room, or Aaron Rogers has dislocated his shoulder while the rest of us watch commercials. Speaking of game state, here is another reason why long-term, the presence of someone one play ahead of you will cost you money.

Here's a little graphic I drew up at the beginning of the 2013 baseball season.

Note how much the odds change after an out. If someone has that information, you really are up against it, unless you are Emp, in which case a model should turn this handicap into a winner. "It really isn't that tough".

And substitute an 'out' in baseball for a three-pointer in basketball, or a touchdown or turnover in the NFL or a home run with the bases loaded. The fast money will take anything of value before you even see the play - it really is idiotic to think that someone with fast data isn't hurting the average trader. Yes, you can still profit, but it is still costing you money, and it is ultimately costing Betfair and its shareholders, money.

Unfortunately the next Betfair shareholders meeting doesn't appear to be until next September, but shareholders, and I would say account holders too, have a right to know if certain accounts are protected by a special arrangement from Premium Charges and if all bettors are subject to the same delays. Sporting Data does not have an account we are told, the bets are all made from personal accounts. Are ex-staff accounts exempt of certain fees?

And what will the watching Gambling Commission recommendations be if it shown that in-play "irregularities" benefiting former employees have continued un-addressed for at least three years?

And finally, from the Australia Financial Review comes this, and apologies for the long post, I'll take a break tomorrow (probably).

Betting syndicate defends actions of courtside analyst
JESSICA GARDNER

The British employer of the man arrested courtside at the Australian Open on January 14 says the betting syndicate has been sending its ­workers to the tournament for the past three years and despite losing on the match in question, was on track to make a profit from the tennis ­tournament.

Sporting Data director Steve High claimed his employee Daniel Dobson had done nothing illegal by relaying information on the outcome of individual points back to the company in Surrey, just outside of London.

This information was used to take advantage of a delay in the fluctuation of odds on betting exchange Betfair.

Mr Dobson, 22, was arrested on Tuesday after the round one match between Australian Nick Kyrgios and German Benjamin Becker.

He is alleged to have “engaged in conduct to corrupt a betting outcome” by using an electronic device in the pocket of his shorts, which was linked to a smartphone, to send the information to Sporting Data.

But Mr High said he believed laws under which Mr Dobson has been charged have been applied inappropriately. “To have criminal charges pressed was unthinkable to us,” he said.

“We were shocked that the police got involved. Obviously it’s in the hands of the court, but we’re still strongly of the opinion it’s not illegal.”

Victoria Police declined to ­comment while the case was before the court.

Mr High said Sporting Data first sent one of its ‘data analysts’ to the Australian Open in 2012.

At the 2014 tournament the company has three paid analysts including Mr Dobson. The other staff members have stopped working ­following the charges.

Mr High would not disclose Sporting Data’s overall financial details, but he revealed that the company had laid bets of £74,346 ($139,000) on the Kyrgios v Becker match. The company had 148 bets matched on Betfair, but lost £2763. On a betting exchange, every bet laid is matched by another punter willing to take the opposite outcome. The exchange takes a commission on winning bets.

“Obviously we lost on this one and actually we were having a pretty poor tournament even before Dan was pulled in,” Mr High said. “I think we were still marginally up overall for the tournament though and we still expected a good profit for the tour­nament.”

A Betfair spokesman would not comment on individual punters, but said the total bets matched on the exchange for the Kyrgios v Becker match reached $776,461 (£423,627).

At a press conference following the arrest the Victoria Police said Mr Dobson’s employer was using the information to place bets on ­individual points. This is known as micro or spot betting.
But Mr High said the company was only laying “in-play” bets on the outcome of a match. It is illegal for Australian operators to offer micro-betting. In-play betting is allowed on the outcome of a match, but not via online platforms. Punters have to ­telephone a wagering company instead. Many international jurisdictions allow online in-play betting.

Mr High was previously employed by Betfair in the United Kingdom as a senior product manager until 2009. While working at a smaller betting start-up he developed an automatic trading tool and started Sporting Data with two other directors in 2011.

The company uses mathematical models to predict how the odds on the outcome of a match will fluctuate after a point is won or lost.

By knowing the outcome of a point faster than it is relayed either on a television broadcast, or updated on a betting exchange, the company can decide if the odds offered are out of line and as such could provide an arbitrage opportunity.

Mr High said Sporting Data approached Enetpulse, the Danish company engaged by international tennis authorities to sell live result information to betting operators like Betfair, about also paying for the data but it refused. The company could not be reached for comment.

A number of gambling experts said sophisticated punters often use un­licensed wagering operators because the markets available on matches between relatively un­known players aren’t deep enough to be lucrative. Mr High denied his ­company used illegal operators and only used licensed betting exchanges Betfair and ****.

“I don’t have the contacts to know who they would be and to trust them to pay up,” he said of illegal operators.

Mr High said Sporting Data would fight the charge against Mr Dobson, and was paying his legal costs. The company had taken advice in the United Kingdom twice before in the past to ensure their use of courtsiding was legal. Mr High said his data analysts acted covertly, such as hiding the electronic devices, because the company knew it was violating the terms and conditions of spectator tickets. “We have had people ejected from other tournaments. We want to be as discrete as possible,” he said.

This was the first time a Sporting Data employee had been charged with a criminal offence, despite the company sending staff to all four of the grand slams and other tournaments. Mr High said tennis most suited the company’s mathematical models, but they had begun testing football and cricket as well.

Mr Dobson has been charged under laws introduced last year by the Victorian government that make it an offence for anyone to “engage in or facilitate any conduct that corrupts or would corrupt a betting outcome of a sport or racing event resulting in financial advantage”.

“The court case may well have the affect of confirming we are [operating within the law], but I’m not going to want to go through this experience again,” Mr High said.

He is considering legal action against Channel Seven’s Today Tonight, after what he said were incorrect reports about his company. Today Tonight sent a television crew to his home and tried to interview his wife, he said.

“I didn’t know much about ­Channel 7 before but I know I’m not a fan now,” he said.

Mr High said he was reconsidering having employees courtside, but also said it was unlikely that tennis authorities could stamp out the practice. “I think maybe the tennis authorities should consider other ways of working with us and we could have a grown up discussion about courtsiding,” he said.

Tennis Australia did not respond to requests for comment.

Interesting to see that they are now looking at beating the clock in, I mean 'testing', football. Cricket, I think we all knew about.