Sunday 5 November 2017

Sumptuous Pickings

As I have noted previously, some betting articles from Pinnacle, "the world’s sharpest bookmaker", are worth a read. Some are absolute nonsense, but a recent one from last month by "Soccermatics" author David Sumpter piqued my interest, touching as it did on the draw - one of my long-time favourite football bets as followers will know.

Sumpter writes that:
In one section of the book, I did manage to beat the bookies. But it wasn’t because I found a magical formula that predicts who will win soccer matches.

The way I did it was much simpler. I looked at the odds and found a very small but significant bias in how they were set. Bookmakers and bettors hadn’t paid enough attention to predicting the draw in soccer.

Maybe it is because of the popularity of the Over/Under markets.
Maybe it is because bettors don’t like betting on a draw. But, whatever the explanation, it turned out that draws in the Premier League were not properly priced.
As I've explained before, the idea that bookmakers "set" odds is really misleading. Bookmakers, especially those with a Pinnacle like model, adjust their odds as money comes in to the market, with the goal of making a profit whatever the outcome. The odds are not "set" as such, which implies that they are firm (set in stone).

Opening odds are available to small limits, and as the market firms up, float up or down depending on the money wagered. The closing odds are the result of the opinions, backed up with money, of the market's participants.

I also don't agree with the suggestions that the draw offers value because the Under / Over 2.5 goal markets are popular or that bettors don't like betting on a draw. Agreed that the casual punter may not like the draw, but there are much larger enterprises who should be backing the draw if it offers value.

Those issues aside, David Sumpter writes:
It turns out that when two well-matched teams meet (i.e. the probability of a home win is only slightly bigger than the probability of away win) then draws are under-priced. When matches are skewed so there is a strong a favourite (i.e. the probability of one team or the other winning is larger than the other) then draws are over-priced. 
The above conclusion was drawn from the five seasons 2011-2016, but closing odds are not available for 2011-12 so how the Draw odds for this season were extracted is not clear. 

I looked at the five EPL seasons from 2012-17 using Joseph Buchdahl's Pinnacle Closing Odds, and blindly backing the draw was the worst 'blind' approach. Homes was the best (-1.8%), followed by Aways (-3.2%) and finally Draws (-4.3%).

Betting in this way is generally a losing proposition, although there will be short-term intervals where such a strategy is profitable.

Back in January this year I wrote about a Draw System named Draw-4:
Given that backing every Draw would have 'only' lost you 43.01 points, and it doesn't take a genius to work out that there was value backing the Draw up to a certain point. I've previously referred to this basic system as the Draw-4 (it's catchier than the Draw-4.11, and the 4.0 / Implied Probability 0.25 is close enough) but if you're going to be backing the Draw, you're generally not helping yourself by looking at games like Manchester City v Cardiff City at 12.38.
The basic system can be improved by additional filters, such as ignoring matches where either team is evens or shorter, somewhat confirming Sumpter's observations because such matches are by definition, between closer matched teams.

Using Sumpter's idea of using the differential between the Home and Away probabilities to determine when to back the draw, where the difference is up to 30%, the profit from 947 bets over five seasons is 76.8 points, an ROI of 8.1%.

By way of comparison, an improved Draw-4 system of backing the Draw when the Home team is priced between 2.01 and 3.25 would have been up 84.28 points from 688 bets, an ROI of 12.25%

Perhaps an appropriate time to point out that Draws are in decline in the EPL. In its 25 season history, the average has dropped from 29% of matches in the first five seasons, to just 24.7% in the most recent five seasons, a natural consequence of the goals rising from an average of 2.59 per game (1992-97) to 2.73 since 2012.

2017-18 to date - Draws 23.6%. Goals per game 2.59. 

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