Signs of Cheating

A Lucky A Day asked about the impact of the cheating Houston Astros on the results for hot favourites in baseball I looked at in my last post.

For those who may not know, the Astros were caught stealing signs, something which in itself has always been an accepted, almost admired, part of the game, but the use of technology to steal them has always been considered cheating, and the use of technology in real-time was especially egregious.

Sign stealing in baseball has a long history and goes back to 1876:

when the Hartford Dark Blues hid a person in a shack to tip off their hitters when the pitcher would throw a curveball.

The team, supported incidentally by Mark Twain, folded after the 1877 season, after they had moved to Brooklyn.

The Boston Red Sox are also under investigation for cheating during the 2018 season, and the New York Yankees are also reported as being suspected of cheating in recent seasons.

The Astros cheating has been proven to have occurred during the 2017 season, which ended with the Astros winning the World Series, and into the 2018 season. No evidence was found of cheating in the 2019 season, although it has been suggested that it began as early as the 2016 season. While the impact of Home advantage has declined in recent years, this is one example where playing at Home was definitely an advantage.

As Winston pointed out, the cheating at Home probably had something of a carryover effect on Road games as well.

Possibly, but I think from a betting perspective, previous results would already be factored into the price, albeit with too much weight on recent results.

For non-baseball readers, the catcher signals (signs) to the pitcher what type of pitch to throw. By ‘stealing’ the sign, the information can be conveyed to the batter so that he knows what pitch to expect. One extreme example of this advantage is from Game 5 of the 2017 World Series when the Los Angeles Dodgers pitcher was Clayton Kershaw, well known to readers of this blog.

In that game, Kershaw threw 51 curveballs and sliders, and not one pitch resulted in a swing and miss. With the benefit of hindsight, we now know why.

Anyway, how did the Astros fare in Home (regular season) games during the period in question?

From 2014 to 2016, they were 1.5 or shorter on 15 occasions, winning 12 for an ROI of 15.8%.

In 2017, not surprisingly they were hot favourites on 20 occasions, winning 17 with an ROI of 20.3%.

In 2018 they were big favourites 55 times, although the 35 wins resulted in a negative ROI of 10.5%.

The 51 games in 2019 resulted in 41 wins and a 9.3% ROI.

Overall the difference over six seasons with the Astros excluded is small:

For Home games only, the numbers are:

Green Sea asked me what I meant by -200 or shorter. Poor wording yet again on my part perhaps, but by ‘shorter’ I mean any price that gives a lower return to a bettor, i.e. the implied probability of a win is greater. 

-200 is 1.5 in decimal odds, so anything shorter would include everything in the 1.01 to 1.5 range, although not many baseball teams start at 1.01 even if they are cheating!

Although nothing has been proven regarding cheating in the 2019 season, there are a couple of interesting observations. One is that in the World Series, the Washington Nationals won all four games in Houston after being warned by players from other teams about what was going on. As a result of these warnings, the Nationals “developed a complex system of mixing signs to thwart any attempts to steal signs by the Astros.”

Also notable was that:

Before the 2019 World Series, Joe Torre and other MLB officials had an unusual pre-series meeting with the GMs and managers of both teams to warn them against using cameras on the dugouts or catchers or using electronics in the dugout.

One might have expected the Astros to be stripped of their, already tainted, title, but MLB seem anxious to move on. The Dodgers can certainly feel they were cheated of a World Series, but then other AL teams were also cheated of the chance to play in the World Series

I did actually mention the Houston Astros a few times last season when their price was at, or close to, a record for the shortest ever in database history, but apparently they weren’t cheating.

Coincidentally, given that we are discussing favourites, the Houston Astros today became the shortest ever (since 2004 anyway) priced road team at around -430 but they lost 7-8. I saw that the price touched -500 at some places, but in a game like baseball, you really are playing with fire at those odds.

Hmmm. Someone certainly had confidence in them although as I mentioned, when you’re playing odds this short you are really playing with fire.

The Astros comprise five of the shortest six prices in database history, but backing into these lines isn't the path to riches:

Looking back, these 2019 Astros prices really were unusually short, but perhaps not surprising if cheating was going on last season. 

Insiders would have known that there was an edge on the Astros at home and the market will adjust to the money coming in, an illustration of why sportsbooks are taking a big risk if they use their models to take a significant position on a game.

Here are the results by season (including post-season) for backing the Astros both home and away:

Parlaying Big Baseball Favourites

Rufus Peabody, who is usually worth listening to, tweeted this yesterday:

Rather a sweeping statement, and certainly not true in all sports.

Eric, of whom I know nothing, and based on this tweet that is probably a good thing, chimed in with this comment:

Well, as always, don't believe everything you read. Do your own research, and it shouldn't take you long to confirm the findings in this blog that backing hot favourites in baseball has been a very successful strategy over the past few seasons. 

My definition of 'hot favourites' in baseball has been teams at -200 (1.5) or shorter, and below is the record of all such teams since 2013 (regular season matches only): 

As I've pointed out before, note the dramatic increase in favourites at this level, with the total number of selections increasing by 281% in just five years. When markets change this quickly, it takes a while for participants to adapt, which means there is opportunity.

While the numbers in the table above are impressive, adding in parameters for recency and looking at just road favourites, the ROI over those six seasons is 15.6%. 

With a positive edge (+EV) such as these in baseball, parlaying can be very profitable. The problem with baseball is that on any one day there won't be many selections, and you need to be very disciplined to parlay profits from one day onto the next, but the vague claim that parlaying big money favourites in baseball isn't a winning strategy is verifiably false.

Between May 7th and September 25th last season we had a sequence of 18 winners, (accumulator of 827-1), then a loss, followed by 11 consecutive winners.   

In the NHL, -270 (1.37) or shorter appears to be the level at which backing the favourites is profitable. With a record of 23-2 this season, and winning sequences of 13, 5 and currently another 5, again parlaying these hotties is profitable. 

It's a similar story in the NBA where Home Favourites of 13 points or more have a 64.5% record ATS since 2013 and parlaying should again be profitable. 

Bottom line is do your own research, and question sweeping statements such as the one that opened this post. The idea that parlays are for mugs is an old one, but when the individual bets have a positive expectation, it's not an idea with any merit.

Ride A White Swan

Steve tweeted yesterday that:

I didn't think a black swan event would be what caused the markets to crash, and I still think they will recover pretty quickly. As central banks continue to print money, there will come a day (in years) where it will all come tumbling down. I sit and wait.

Is the Coronavirus a Black Swan event? My opinion is that it isn't, at least not yet.

We have had pandemics before, the most famous being the Spanish Flu outbreak of 1918-20, and in 2016, the Commission on a Global Health Risk Framework for the Future estimated that pandemic disease events would cost the global economy over $6 trillion in the 21st century—over $60 billion per year.

To qualify as a Black Swan event, the first of three conditions which needs to be met is that the event is a surprise.

Technically the current COVID-19 outbreak is currently a Public Health Emergency of International Concern, not a pandemic, but were it to surpass Spanish Flu in terms of the number of people infected, or have a significantly higher mortality rate than other viruses, then this would be a surprise event, but for now it is all very much business as usual. When a commission estimates the cost of an event, it's hard to say the event was unexpected.

Currently the mortality rate is somewhere between 2% and 3%, with around 82,000 cases so it has a long way to go to become a surprise event.

As for the impact on stock markets, clearly investors have been spooked. The good news for the economy is that 80% of deaths have been old people (mostly 'economically inactive' as the delightful Home Secretary might say), 75% of whom had underlying health issues. 

This is not like Spanish Flu which took the lives of young and relatively healthy adults, so the economic impact should be limited. The technology sector relies on factories in Mainland China so there may be an impact there, but for now the evidence to me looks like the crash is an overreaction. I hope so, as I've just put quite a lot of money to work in stocks although the market wasn't helped by the Trump press conference last night:

Dow futures turned from positive to negative during Trump’s coronavirus news conference

Thanks Donald. VP Pence is now in charge:

In 2000, Mike Pence wrote an op-ed stating that smoking doesn't kill people. Since then, he's made no effort to deny or clarify his bizarre claim. This is the man Trump put in charge of our country's protection from the CoronaVirus. Science is real, Mike. Facts matter, Mike.

Praying should fix it. 

I rarely go back and edit posts, but yesterday's was so poorly worded and confusing that I did just that. To be clear, I was trying to make the point that ROI%s can be misleading. An ROI of 10% after one bet is quite different from a 10% ROI after 500 bets. There is nothing poor about most of the the MLB ROI%s at all as anyone who has been around betting for more than five minutes will appreciate.

I did find a couple of errors in the data, corrected below, and the calls for the editor to be immediately fired have been heard. I shall be having a stern word later today, an interview without coffee as the saying goes.

One thing I'm struggling with as I plan for the new MLB season is the disparity in results between the Money Line and the Run Line. One trend is backing certain home favourites playing a league opponent from outside their division in a day game, a system which had no losses last season, and just one in 2018. The returns from the two bet types since 2010 are:

I'm continuing to look at this in my spare time. I suspect it's an issue with the data, and that the Money Line markets simply have a reduced margin.   

Seasonal Table

After commenting that no one posts comments on blogs any more, the floodgates appear to have opened regarding emails, which is all good.

One email asked me:

I am taking the liberty of contacting you because I saw an article where you talk about the scientia trading site.

Do you know this man?

I've spoken with him a little and I'm suspicious of what he's proposing, should I run away as soon as possible?

I don't believe in the holy grail and he told me that he usually makes more than 30% return per month.

This is of course our old friend Mel, so at least this answers the question of whether or not he is alive and well. What exactly Mel is proposing remains unknown for now, but my advice was indeed to run away as far and as fast as possible. Long term returns of more than 30% a month are not possible. If they were, Mel would soon be one of the richest people on the planet, a target that has got a lot lower after the past two days in the stock markets with my own net worth spreadsheet suffering its worst one day and two day results ever, at least in real terms, and with a current six figure drawdown I guess retirement is (again) postponed for a few more months! 

Another reader wrote:

Hello. I guess you hear this often but i have to ask. Why don't you have your systems in a table or something? I'm trying to find your nhl system but can't. Even on google

I do update the results for my systems periodically, and at the end of the season, but as the sports are all seasonal, I don't see much benefit displaying them all together, although it might be interesting for comparison purposes. As for the NHL System, this one has been paid for by some so it would be unfair to give the details away for free to others. 

Just for fun, I thought I'd compile a table for the last five seasons (currently in-play shown in yellow) comparing some of the basic systems I've discussed.

Sorted by ROI, and the NBA's Road Favourites System and the NHL System take up the top six places ahead of a few College and NFL seasons. 

While the ROIs for MLB look relatively poor, this is due to the large number of selections in the latter sport which looks a lot better when ranked by points won:

Correction: In the initial post, I erroneously missed out the key word 'relatively'. Thanks to A Lucky A Day for commenting on this. As anyone involved with sports betting / investment will know, ROIs of the size seen above are anything but poor. My point was that ROI alone does not tell the story. We've all seen huge ROIs from small sample sizes, but these are meaningless. Only when the sample size grows larger can they be taken seriously.

The Urgent Zone

No one posts comments on blogs any more, at least not on this one, but I do get comments on twitter and via email so I know that someone is reading.

One recent email from Fadai concluded with this line:

And your blog is the most useful and interesting blog that I've seen (not just in betting)

Mark preceded his question with:

Thank you for providing such an interesting resource.

José is a fan too, writing:

Hey! I'm just reading your blog Green All Over and I find it very interesting.

Tibor said:

I like your blog a lot. Very insightful.

All much appreciated.

However, the most exciting email while I was away was from a TSA agent (strangely based in Qatar) who sent me this exciting news:

How are you today? My name is Mr. David Peter Pekoske from Transportation Security Administration (TSA) agency of the U.S. Department, please I’m very sorry for my late informing you about a package box worth sum of $11.8 million which was abandoned here in my office by one delivering man named Mr. John, please get back to me now, because your package box is free only waiting for your confirmation's just to say yes you are the owner and also reconfirm your full name and address if everything is the same with the information’s we have here then the delivering of your package box will takes place now okay.

Okay indeed! Seems totally legit, and this may well be my last post. Just finalising the details now - apparently I need to send some money first but I'm sure it's just a formality. I checked with @rast8 and he confirmed that I should give it the benefit of the doubt as he had not heard anything negative about this offer.   

The NBA is back after the All-Star Break and the strategy of backing Overs when the total is set high went into the break with a great record. At the start of the season I wrote that:

For anyone else interested, I'll be looking at backing Overs when the line is set as 229 points or higher to start with.

At the All-Star break, this total had a record of 95-66-3, which at 59% is a very good return (ROI: 14.9%). Hopefully the record after the break will continue to be positive.

 

Since 2013, back-to-back-to-back games in the NBA have been very rare, but the NBA announced today that the Lakers v Clippers game postponed at the end of January has now been rescheduled and the Lakers will now play on three consecutive days, all at Home, on the 7th, 8th and 9th of April.

Such sequences didn't used to be so rare, and using the last 112 such series as our guide, the following edges are found.

In the first game, Home teams cover 68% of the time. In the second game, Home teams have just a 39% record ATS, with Unders a solid bet here with a 59% record. And in the third and final game, back the Unders. 

The 2020 MLB season isn't far away with Spring Training in full 'swing' and the earliest ever start date of March 26th a little over four weeks away. The regular season will feature games in Mexico, Puerto Rico, London and the first professional baseball game in Iowa since 1875. Even older readers are unlikely to remember the Keokuk Westerns' disappointing record that year! 

The most impactful rule change from a betting perspective would appear to be that:

A pitcher must face at least three batters, unless the inning ends or the pitcher is injured.

This is an attempt to speed up the game, but is a significant change with managers no longer able to bring in pitchers to just get one out as has always been the case previously. Unfortunately in-play trading has pretty much dried up over the past few seasons, so how useful an edge understanding this rule change will be is probably limited, but rule changes often offer a temporary advantage to the thinking bettor.

The annual newsletter from Warren Buffett was released today, and as always included some interesting and amusingly written anecdotes. One such was this story about Berkshire Hathaway owned Lubrizol:

I must add one final item that underscores the wide scope of Berkshire’s operations. Since 2011, we have owned Lubrizol, an Ohio-based company that produces and markets oil additives throughout the world. On September 26, 2019, a fire originating at a small next-door operation spread to a large French plant owned by Lubrizol.

The result was significant property damage and a major disruption in Lubrizol’s business. Even so, both the company’s property loss and business-interruption loss will be mitigated by substantial insurance recoveries that Lubrizol will receive.

But, as the late Paul Harvey was given to saying in his famed radio broadcasts, “Here’s the rest of the story.” One of the largest insurers of Lubrizol was a company owned by . . . uh, Berkshire.

In Matthew 6:3, the Bible instructs us to “Let not the left hand know what the right hand doeth.” Your chairman has clearly behaved as ordered.

On the topic of focusing on your strengths, we have this:

Here, a pause is due: I’d like you to know that almost all of the directors I have met over the years have been decent, likable and intelligent. They dressed well, made good neighbors and were fine citizens. I’ve enjoyed their company. Among the group are some men and women that I would not have met except for our mutual board service and who have become close friends. 

Nevertheless, many of these good souls are people whom I would never have chosen to handle money or business matters. It simply was not their game. 

They, in turn, would never have asked me for help in removing a tooth, decorating their home or improving their golf swing. Moreover, if I were ever scheduled to appear on Dancing With the Stars, I would immediately seek refuge in the Witness Protection Program. We are all duds at one thing or another. For most of us, the list is long. The important point to recognize is that if you are Bobby Fischer, you must play only chess for money. 

And on the topic of Berkshire Hathaway being prepared for the ultimate demise of Buffett and Charlie Munger, he writes:

Three decades ago, my Midwestern friend, Joe Rosenfield, then in his 80s, received an irritating letter from his local newspaper. In blunt words, the paper asked for biographical data it planned to use in Joe’s obituary. Joe didn’t respond. So? A month later, he got a second letter from the paper, this one labeled “URGENT.”

Charlie and I long ago entered the urgent zone. That’s not exactly great news for us. But Berkshire shareholders need not worry: Your company is 100% prepared for our departure.

Pastafarianism and Snake Oil

One is generally best served in life by maintaining a healthy scepticism towards any outrageous claims that fly in the face of common sense. This is particularly true when the claimant is attempting to relieve the more gullible among us of our money.

The term 'snake oil salesman' originally referred to fraudulent health products or unproven medicine but has come to refer to any product with questionable or unverifiable quality or benefit.

It is essentially deceptive marketing and unfortunately the betting world has more than its fair share of characters engaging in such activities.

A few of these have been mentioned in this blog, including Psychoff, who as I mentioned recently has apparently resurfaced and is now offering a trading course for the not insignificant sum of £1,999 for up to 10 people.

As might be expected, views on the merits of this opportunity vary, with some like myself finding it extremely unlikely that such a course could be worth anything close to that amount, to those such as @rast8 who think there is a possibility the course might be worth every penny. 

Now to be clear, of course I concede that there is a possibility this course is indeed worth £1,999. Unfortunately, based on the evidence we have, this possibility is extremely small.

There's a possibility that the Flying Spaghetti Monster exists but the onus is not on me to prove that it doesn't actually exist.

The onus is on those making the outrageous claim (FSM / course is worth £1,999) to provide the extraordinary evidence that makes their case.

I have seen no such evidence from Psychoff, @rast8, or indeed anyone, justifying such a rich price tag.

Let's start with what we do know, which is that it was claimed 10 years ago that Dr Guven was having some success trading low-level Eastern European football games in-play. Given that the liquidity in such games is likely rather low, and the number of market participants similarly low, this is certainly feasible. I used to trade in some pretty thin markets myself, and there was money to be made but at the price of giving up hours of your life. Fortunately for me, this coincided with a time when I was working all hours of the night and could combine trading with my regular work!

If this strategy in these markets is still profitable, and I suspect such markets are not as lucrative now as maybe they once were, why would Dr Guven be willing to sell it to anyone?

As soon as there are 10 more people trading these games, his share of the pie essentially disappears. Not only that, but the 10 new entrants would find their opportunities also pretty much non-existent too, and it would be hard to justify their course fee.

If the strategy is no longer profitable, clearly the sale of such a course is an attempt to rip-off others. 

@rast8 suggested (above) that maybe Psychoff is tired of trading, and is switching to teaching his course as an easier way of making money, but in my experience:

If you're tired of trading, why not just take a few weeks off or cut down on the time you are trading and see how you feel after a break? When I used to occasionally work overtime it was great at first, the extra money was worth it, but after a time it would get old, but I didn't then quit my job. I eased back, took a holiday.

Does it really make sense to sell the golden goose just because you're currently bored or tired?

In the unlikely event that Psychoff has truly uncovered an edge in trading liquid football markets, this would be such a valuable edge that it would not make any sense to share it, and certainly not for a mere £20k. Such an edge may well be worth £20k to one person, but by sharing it among 10 others, it becomes valueless. I think we can safely eliminate this possibility anyway. Shouting from the rooftops that you have an edge would be strange behaviour from someone, especially a Doctor, who really did have such an edge. In my experience, there's often an inverse correlation between the amount someone talks about their success and the actual degree of their success.

And again, in Dr Guven's own words, he uses will-power to achieve success, although curiously this wasn't enough to overcome his weight problem. 

This is a big hint that things are not quite as claimed. We've had traders reviewed in this blog who claim fantastic success, posting pictures of themselves on vacation, interested in brand new cars and yet who dress like a homeless person and live in rented accommodation or famously, in a caravan in their mother's front garden. Look at the evidence available before reaching a decision, and in the meantime, err on the side of caution.

Caveat emptor. If you are going to throw away £1,999 on this course, at least weigh up the evidence rationally. What return are you seriously expecting on that money? As I've said before:

You can put 50 people in a room and teach them how to trade. But you can't teach them how to be a trader. It's a personal journey and one of self discovery.

Market Inefficiencies and Psychoff Offers A Slice for a Price

In response to a tweet posted by Hank Tate showing the results from a few 2020 bets on Road / Unders compared to Home / Overs, @stingerpicks wrote that:

This should come as no surprise to readers of this blog either, with most bettors overrating home sides and betting on what they want which is lots of scoring. 

What this means is that if you are absolutely clueless, you should look at Away / Road teams and the Unders as a good place to start if you want to lose your money slowly. If you are clueless, you should also read this blog from the start. It'll take you a while, but you'll be informed by the end. 

Many systems I play use the 'Road' angle for this reason. 

Looking at the Unders in every sport covered by Killer Sports, the database all-time results illustrate this inefficiency. In every one of the eight sports, Unders has won the coin toss of Over / Under:

The numbers are similar for Road teams, with the exception of MLB where backing the Home team would have resulted in a smaller loss than backing the Road team, although this has has evened out over the past five seasons.

These observations only mean that this is a good place to start looking for inefficiencies. It is not suggested that anyone blindly start backing all Road teams and every Unders as you need a 51.23% strike rate to beat the vig when betting into -105 lines, and only three sports would have given you that on the Unders and only in the CFL would blindly backing Road teams have been profitable. 

The other two forms of American Football (NFL and NCAAF) have also been profitable for Road teams and Unders since 2014 though, with readers well aware of the benefit of backing Unders in NFL Divisional games with another profit last season, albeit not the biggest!

As discussed in this blog before, home advantage in many sports is disappearing with technology leveling the playing field and leagues making travel schedules less onerous than they once were.

In other NFL news, and related to rich people doing dumb things as touched on yesterday, the Cleveland Browns Offensive Tackle Greg Robinson, who has made $29 million playing football over the past seven seasons, was just arrested trying to enter the US with 157 pounds of marijuana in his car and now faces up to 20 years in prison.

Moving on and I liked the below tweet, in more ways than one, which while it relates to financial traders rather than sports traders, the point remains the same. 

Sports betting / trading is not easy, and with no barrier to entry, the competition is stiff. It's a fun hobby but don't kid yourself you can make a decent living at it. 

I'm reading that our old friend Psychoff (aka Dr. Guven) is back and generously offering a trading class at just £1,999 for up to 10 people. You will have seen my tweets on this topic if you follow me on Twitter, but if you are pondering this, save your money. You are not going to learn any secret winning formula, as no one with an edge that has supposedly made him seven figures would be stupid enough to give it away so cheaply. What you will probably get is a lot of common knowledge albeit it with some nice folders and materials about trading, but the problem with this is that:

You can put 50 people in a room and teach them how to trade. But you can't teach them how to be a trader. It's a personal journey and one of self discovery.

Remember, this is the man who claims to be a physician who would:

use my willpower to get what I want week after week

Try using willpower in trading and see how that works for you. Results are comparable to those of prayer I've found. 

He also claimed to be interested in psychology and self-improvement and yet admitted to having a weight problem.

Something doesn't seem quite right, and although some of the comments on the referenced post above predicted a coming sales pitch, the post is now over 10 years old, so it's taken a while!

The final comment was interesting, from someone claiming to know the good Doctor from a forum. He offered some insight into the methods:

FYI, Betfair is illegal in Turkey and nobody can manage to use it.

He is located in Sweden, he got 7 different dishes to scan all the live football broadcasts all around the Europe + a Dreambox receiver to decode the encrypted channels.

As I am living in Hungary and I can watch the local games, I can honestly tell you that when you can follow the low leagues + eastern European games, even if the liquidity is low, there are couple of hundreds to make per game since nobody is Tevez, Rooney, Drogba , Henry or Messi to change the destiny of the game in 3 seconds...

The reason why he does not give any ideas about his methods is quite simple, there is a certain amount of sweet pie to eat, why would he create competitors?

So after the trading class, there will be at least 11 people watching low liquidity Eastern European games fighting each other for a slice of the rather small pie? Or perhaps the pie has gone or else why create the competition? Proceed with caution.

Meanwhile, the value of my Tesla stock has now almost tripled, with another crazy day yesterday. 

   

The $10m Cheque Was Not Honoured

Yesterday, I mentioned Matchbook's suspension by the Gambling Commission, but the good news based on my son's experience, is that funds can indeed by withdrawn currently with no issues or delays.

As to what led led up to the suspension, and who knows how long it might last, it appears that basically Matchbook extended generous lines of credit to some wealthy, but not very sharp gamblers. 

Being an exchange, the money these whales proceeded to lose in what appears to me almost record time, was won by others, but the credit was never fully repaid by the losers, leaving Matchbook to cover the losses themselves.

All very incompetent and reckless of course, if not illegal, and the best detailed explanation of the facts comes from Ireland's Independent and this article from the very Irishly named John Mulligan. Interestingly the article was published more than two weeks ago on January 30th, a while before the suspension. Here it is in full:

A gambling firm formerly operated by employees of Cork-based betting technology business Xanadu Consultancy has secured a judgment totalling $12.6m (€11.4m) in London against a number of defendants who laid bets of as much as $1m a day and engaged in what a judge described as a "co-ordinated deception".

The case shines a unique light behind the scenes of the world of global high-stakes betting.

The Channel Islands firm, Eurasia Sports, was part of online betting group Matchbook.

Xanadu Consultancy - which had no part in the deception - helped to procure high-rolling gamblers, including the defendants in the case, through Eurasia for Matchbook.

Xanadu is owned by an Isle of Man firm whose directors include the Cork company's CEO Mark Brosnan, as well as former Ryanair CEO and ex-RTÉ finance boss Conor Hayes.

Wealthy individuals were targeted directly by Eurasia to facilitate enormous wagers that could not typically be made via the Matchbook website.

"In essence, the service offered provided a brokerage product, working via Skype or over the telephone, which enabled large clients to bet considerable amounts quickly," noted the judge hearing the case.

All of the defendants in the case are businessmen who the court said were well-known in Peru or internationally, and all were known to each other.

One of the defendants, Lan-Chin Tsai, also known as Martin Tsai, was a "compulsive gambler", the court heard.

On September 2, 2014, Paul McGuinness of Xanadu, and Andrew Pantling, a director of a firm called Triplebet which trades as Matchbook, visited one of the defendants, Juan Omar Machi Aguad, at the Atlantic City Casino in Lima, which Mr Aguad owned.

Mr Aguad was keen to place bets of up to $500,000 on American football games that were held under the NFL in the US.

Eurasia was prepared to offer Mr Aguad $1m in credit without any security, given his reputation and what Mr Pantling said was the competition amongst betting firms for high-stake gamblers.

A day after the meeting, after due diligence paperwork was completed, Mr Aguad was given the $1m credit.

By the next day - the first day of the NFL season - he had lost it all after failed bets on matches. Further credit was advanced, and by September 7, Mr Aguad owed Eurasia $1.5m.

Mr Aguad offered a transfer of $500,000 to Eurasia via a business associate, if an account could be set up for that associate.

It was, but Mr Aguad also bet via that account and lost $500,000 on it. Days later, his associate transferred $500,000 to Eurasia.

Less than two weeks later, Mr Aguad said he would transfer $375,000 to Eurasia in part settlement of his account. He asked Mr McGuinness for more credit in that amount, which was allocated. The same day, Mr Aguad bet and lost all that $375,000.

In 2014, another of the defendants, Jose Roberto de Romana Letts, was to be appointed by Eurasia as an agent in Peru to introduce South American gamblers to the firm. In October 2014, he suggested that he provide security for the bets placed by the proposed new customers.

He said that because he had been involved in a tax investigation, he would provide the security via a $10m cheque.

On the basis of that cheque, further client accounts were opened, which also later benefited from credit from Eurasia, but which ultimately owed large sums to Eurasia after failed bets.

The $10m cheque was not honoured.

None of the defendants was represented in court for the case.

"I am in no doubt that this is a case involving well-informed and sophisticated defendants, most of whom have at some stage been legally represented and all of whom have been served with the claim form, the claimant's evidence and the trial notices in such a way as to have made them aware of the case being brought against them and the date of this trial," said the judge in the case.

"In my judgment the overwhelming probability is that the defendants' absence from the trial is due to a strategic decision on their part not to attend," he added.

It makes you wonder how some of these people ever accumulated such wealth. 

For me, Matchbook lost all credibility when they introduced a Premium Charge after smugly claiming that "they would never have to apply additional charges as some of our competition has chosen to do". 

Roll forward to 2018 and this news...  

Presumably neither of these thresholds applied to the targeted wealthy individuals, which is another issue altogether, but for us mere mortals, the lifetime limit is useless.

As I quoted Mark Iverson in the 2018 post on this topic:

It's all about the dream. Without that nobody starts.

Bettor Fans, Better Profits

I'm back, rested and recharged after a few weeks in South Africa with my son which was a great trip. The only negative was the rental car window being smashed in on day two of the trip during the nightly load-shedding (rolling blackouts) and my jacket being stolen, but other than that it was a wonderful experience to see a new country. I suspect I'll be back again fairly soon as my wife now wants to go and experience some of the highlights from the trip.

As for the cricket, we saw the ODI in Cape Town on 4th February which England lost, and the second ODI in Durban which was abandoned after a few overs of play. The efficiency of the ground crew left a lot to be desired, but it was quite entertaining watching the covers come off and go back on several times. They earned their money that day.

We also got to see some Super Rugby, and some not so super Rugby on TV with England looking very poor in their opening games of the Six Nations. 

After Durban we flew to Port Elizabeth to drive the Garden Route back to Cape Town stopping at Bloukrans Bridge on the way for my son to enjoy the world's highest bridge bungee jump at 709'. I was hoping to use my age as an excuse, but the oldest jumper there was aged 96 and as old as I am, I am nowhere near that impressive number! 

When I left, Tesla was trading at $564.82 which I was already excited about, but when I arrived back it was at over $800, and has just opened in New York close to 6% higher today, so the trip was more than paid for, and South Africa is a cheap country to visit. I hope some of you joined me on this stock when I wrote about it in the low $300s in 2018.

What did I miss in the betting world? Well I've missed a few bets of course, and the Superbowl, but a small price to pay for some life experiences. I also see that Matchbook have been suspended by the UK Gambling Commission. Not something that impacts me as their Premium Charge lifetime limit of $20k and 60% rate made this platform a non-starter, but my son has requested his funds be withdrawn and is a little nervous. The claim that they are a peer-to-peer betting exchange designed for smart bettors who want more value is hardly supported by their practices! It would appear that some of their decision making regarding extending lines of credit to compulsive gamblers has been anything but smart.

Back to the NFL, and for the Small Road 'Dogs it was another profitable season, with an ROI of 13.9%. 12 of the last 14 seasons have been profitable following this simple strategy. In Divisional games, the ROI was 9.3% with 10 of the last 14 seasons profitable.

I'm also noticing that bigger road 'dogs (>8) have been profitable for two consecutive seasons, something that last happened in 2005 and 2006, an area that night be worth monitoring, especially in the NFC. 

In the NBA my trip overlapped the All-Star break, but the Road Favourites system moved to 20-11-1 on the season (an ROI of 25.1%) while the Overs at 229 or higher has continued to generate profits and now sits at 95-66-3 for the season (ROI 14.9%).

I also missed the NHL's All-Star break, but the NHL System continues to have an ROI north of 20%, something that is not unusual for this system since the re-alignment in the league in 2013. 

The current win streak after last night's win by the Florida Panthers is now at seven. In my opinion, relative to the big three US sports (NFL, NBA, MLB) the NHL is somewhat overlooked and clearly the markets are less efficient. 

At least one study found in the NHL "that most bettors act more like fans than investors" which is exactly what seekers of market inefficiencies want. Exploit these while you still can.