Tuesday 22 November 2022

USA Sports Betting, MLB 2022 and Marital Discord

The 2022 MLB season is over with the Houston Astros winning the World Series by four games to two over the Philadelphia Phillies. It was an interesting season, with the Phillies reaching the final despite finishing third in their Division behind two teams winning over 100 games. The Astros were the best team in the American League though, so their success wasn't such a surprise, but with four teams winning 100 games for only the second time in history, and the New York Yankees only one short on 99, it's not surprising that there were a record number of 'hot' favorites this season.

Unfortunately the strategy of backing such teams in the regular season wasn't a winning one this year overall, except in inter-league games. The universal adoption of the Designated Hitter (DH) rule may have been disruptive, but this doesn't explain why American League (AL) clubs playing intra-league games would have been the worst performing types of game.

Here are the numbers going back to 2013, and note that in 2020 the DH rule was also not in effect:
Excluding the 2020 COVID season, the number of 'hot favourites' (shorter than 1.5) has doubled in the past five years as parity between the teams has dropped but of the five teams winning 99 or more games this season, only backing the Yankees and Atlanta Braves when hot favourites was profitable.

The majority of selections are Home teams, but ROIs have been slightly higher historically on Away teams with that for the 2013 to 2021 seasons (excluding the COVID 2020 season) at 8.9%, but this season the ROI on Aways was -10%.  
The above image shows the results by League, and while it might not be a surprise to see the National League disrupted in the two seasons with no DH rule, the season just ended was the first where the American League selection has lost (other than that very small loss in 2016). 

One other possible explanation is the huge increase in sports betting in the US in recent years. Just five years ago, Nevada was the only state with legal U.S. sports betting but a Supreme Court ruling in May 2018 gave states the power to legalise and regulate sports betting. It's a constantly increasing number but more than 30 states have legalized some form of U.S. sports betting, with likely more to come.

It could be a blip of course, but as markets open up, and billions of new dollars pours into markets, of course there is going to be some disruption. I'm in California at the moment, (it's Thanksgiving this week, although my in-laws are both currently sick and turkey plans may well be disrupted), and today's New York Times had a feature on the topic: 
Four years ago, betting on live sports was illegal in most of the United States. Now, fans watching games or attending them at stadiums are barraged with advertisements encouraging them to bet on matchups, not just watch as spectators.

This transformation in sports betting started nearly a decade ago, at first with the explosion of wagering on fantasy sports. Then in 2018, the Supreme Court cleared the way for states to legalize wagers on live games. Today, 31 states and Washington, D.C., permit sports gambling either online or in person, and five more states have passed laws that will allow such betting in the future. Professional sports in the U.S. now are part of a multibillion-dollar corporate gambling enterprise.

This shift represents the largest expansion of gambling in United States history.
At least $161 billion in wagers have been placed since sports betting was broadly legalized in the United States. This explosion of gambling is just the start. Betting companies have made clear that the ultimate goal is to bring so-called iGaming to states across the nation, where customers can use their mobile phones to play blackjack, poker and other casino-style games.

California is one of the minority of states with no legal sports betting, but TV shows now openly discuss odds, lines and totals, and 'bad beats' are often featured and while sports betting has always been a part of life here, it's never been so openly discussed. 

When the last World Cup was played, just three states (Nevada, New Jersey, Delaware) had legal sports betting markets, but for the current one:
20.5 million American adults plan to bet $1.8 billion on the 2022 World Cup, per a new report from the American Gaming Association. Three in 10 (29%) of American adults who plan to watch the World Cup intend to wager on the tournament.
Of course, not all the money is too sharp:
If given $50 to bet, most Americans would put their money on the U.S. (24%) to win...

Systems that have worked well for several years in the NBA and NHL are also off to poor starts this season, but touch wood, American Football seems to be its usual self. It's unlikely I'll get to see a game live while I'm here, but with Friday being a holiday for most Americans, and the game starting at 11am local time here, bars should be lively for the US v England game. Whether or not my wife will still be talking to me afterwards remains to be seen. 

Thursday 3 November 2022

Stupid Small Eyed Pig

Backing the 'Dog in the MLB Playoffs had another winner last night, with the Houston Astros 'officially' winning at evens but backed at 2.06 on Betfair, following on the heels of the Philadelphia Phillies win on a delayed Tuesday night game three at an official 2.05 but again, backed higher on Betfair at 2.16. Betfair take their 2% commission so we're not comparing apples to apples here, but 2.16 is equivalent to 2.137. 

With a maximum of three games left, this post-season is guaranteed to end up in profit. I'll look at the MLB season in its entirety later this month. It's been an unusual one with the significant rule changes, but it's nice to end out the season positively.

With the series tied at two after a rare no-hitter last night, tonight's Game Five is hugely important, with the Phillies a home underdog at 2.46. 

With my wife away, I've had some extra time on my hands, and with excellent timing, I've been entertained by a crypto scammer in recent days. It started with a text from an unknown number addressed to "Kevin" referencing interest in a property deal, and asking for the contract. 

Being a decent chap, and assuming positive intent, I responded clarifying that I was not Kevin. I'd hate for someone to miss out on an opportunity because of a genuine mistake, and the reply stated that "my assistant saved the wrong number digits" adding "I hope I didn't cause you any trouble".

"None whatsoever" I replied, to which I was told "You are very gentle... Let's make a friend, How old are you?"

And so it began. By nature, I'm a sceptic, and 99.9% sure this now wasn't a genuine wrong number, and sure enough within a few messages my new friend was saying how they were "analysing the crypoto currency market" in their spare time.
"My aunt is a finance expert from a Japanese university, majoring in financial market analysis, quantitative investment and sound asset management, He (sic) is trading short-term Bitcoin call options. She will notify me in advance every time there is a good market quote, so I have been able to make rich profits in the cryptocurrency market for the past two years.
The target for next year was $800k. 

The two years later grew to four, with 3 to 4 trades per month on average and when pressed on the strike rate and position size was told 100% and 30% respectively.
Not a single trade of a total of approximately 168 made had ever lost. Very impressive? 

Even more remarkably, the profit on each was 40%. When I pointed out that this seemed rather unlikely and that with compounding they would now literally be a billionaire even starting with a very modest bank, I was told that I'm old and don't understand trading.
Well, I am certainly old, although I prefer the term 'experienced' and after being told I was a 'stupid pig' with an 80s / 90s mindset my new friend is no longer reaching out to me every hour to see if I've opened an account yet. Hopefully I wasted plenty of their time, and saved someone else from potentially losing money. 

Tuesday 1 November 2022

October in Perspective

It seems that when writing a weekend, weekly or monthly review that I often use the phrase "good in parts", with my first reference to the curate's egg all the way back in January 2010, and it's hardly surprising.

For those of us who have a number of systems or strategies, it's to be expected that over any given short-term period, some will be up and some will be down. If each individual system has a positive EV, the overall trend will be positive, but the more systems you have, the rarer it becomes for a month where everything was up, or down for that matter. 

While the big picture financially last month was positive, a welcome change to how much of the year has been going, the sports investing division of Cassini Holdings wasn't the cash cow I was hoping for, with an 'official' loss of 10.77 units, a negative ROI of -3.8%.
The EPL Draws extended their losing run to seven, with the one selection this weekend (Brighton and Hove Albion v Chelsea) failing. Longer losing runs when you're backing the draw are to be expected though, and hopefully the record of 15 will not be broken this season. 

The two seasons that started last month (NBA and NHL) haven't started off well, and while it's always a concern that something has changed in the close season, I've not seen anything along the lines of last year when NBA rule changes directly impacted the number of points being scored.

Hopefully with a few more matches in the ledger this month, things will have settled down. Handling losing runs never ceases to be difficult, but looking back at past results is always helpful, and implementing a stop-loss after a drawdown is one strategy where you reduce or even stop betting and just monitor results until your confidence returns. 

Overall though, October was a good month, the second best of the year after March, but still down almost 13% from my high, and 9.2% down year-to-date. The major indexes all had good months with the FTSE100 up 2.9% but the S&P 500 was up 8% and the narrower DJIA almost 14%. It also helped that my company's share price hit a new all-time high on Halloween, with those stock options nicely in the money.

It was also a good month for exercise and weight. I covered 226.5 miles on foot, slightly fewer than September, but well on track to average 5 miles a day for the year, and despite my wife going off on holiday, I was more self-disciplined than I thought and only consumed alcohol on three days resulting in a losing month on the scales. 

The worst part of the month by a long distance was losing one of my dogs, which put into perspective a few losing bets. She was 12, had congestive heart failure and was starting to suffer, so we had to make the tough decision to put her to sleep, and it was a lot tougher process to go through than I thought.

An animal rescue charity in the US runs a 'poorly drawn pets' fundraiser where you send in a photo of your pet with a donation, and in return get a drawing. I was rather pleased with mine:
If you're not a dog or pet owner, you won't understand how upsetting the loss of one can be, but I have two more with me who are probably wondering what the heck is going on after my wife has also disappeared from their lives, although she should be back this weekend.

Life goes on, and here's to a winning November, with a major football tournament to turn our attention to.