The post League of Betting Legends appeared first on The Church of Betting.
]]>And today I want to dive into one of the hottest topics in the betting world at the moment: e-Sports betting. More specifically, I will look into the most popular e-Sport nowadays, the League of Legends (LoL). Every month more and more bookmakers are offering new League of Legends betting markets and if until today you were scrolling past those weird sections with a raised eyebrow it is perhaps time to pay them the attention they deserve, since there might be some money to be made.
Of all the exotic betting markets, why did I pick exactly this one, you might ask. I might as well have written an article about darts, chess, the Eurovision song contest or the latest UK election. While these are all interesting topics in themselves, what caught my eye about e-Sports and LoL in particular was the recent availability of great arbing opportunities on those markets. I have had more than one case where I was able to place an arb between two sharp books on an e-Sports event. Those of you with some arbing experience would know how rarely an arb involving only sharp books comes along. This got me thinking: if even the sharp books cannot adjust their markets in a timely manner, it is possible that the traders are not that far ahead from the rest of us in this new market.
What’s more, it seems that the market is here to stay. The LoL story can by no means be compared to the short-lived Pokemon Go craze from a few months ago. LoL is on the market since a few years already and has been on a growing path ever since. As of September 2016 the game had reached a milestone of 100 million monthly players. There are numerous international tournaments being hosted with players from all over the world flying in to play in front of huge crowds in packed sports stadiums. The events are also broadcasted online where the bigger games attract hundreds of thousands and sometimes millions of viewers. Some of the teams are being owned and funded by notable sports investors who don’t like to waste their time with short-lived spells. Many of the tournaments and players have secured contracts with large corporate sponsors.
Soda drinks and Doritos included
In brief, we have a young market where a lot of books are still testing the ground as it comes to setting the right odds, but also want a piece of the action as the market is expected to grow further in the future. So I think that is a pretty good place to be at as a punter. What is left for us is to take the challenge and start building our LoL betting skills. What you should know about the sport, where to place your bets and some betting strategies, I will cover it all here.
LoL is a tactical team-game played by two rival teams of 5 players each. Teams start from two opposing corners of the map, each player picks a champion and the champions fight each other with the ultimate goal of reaching and destroying the other team’s base. In the process of doing so the two teams are destroying vital buildings but also killing each other’s champions. A killed champion is placed off the map for a certain time before reappearing in his team’s base.
The most basic LoL betting market is the win outright market. In the common 2 out of 3 games format the game also does not have the option for a draw, so it is a two-way market. However there are a few more markets on offer such as a total number of kills, a kill handicap (notice that you don’t necessarily require more kills to win, so this market is more similar to a game handicap in tennis than a point handicap in basketball), which team will make the first kill (aka “First blood”) and a few more.
Whether you’d go for the more established markets or the more exotic ones is a matter of taste, however I do think you have to pick your niche and stick to it, since those markets are driven by very different factors. I will just share a few thoughts on the main ones.
This is the most usual LoL market and therefore it could be said it is the most efficient one. However, I still think it is one of the best ones to get into. Being the most basic market, you will find selections for every featured event, even the most obscure ones. And arguably the smaller leagues are where you could find the most opportunities. This is also the market where I have landed all my arbitrages so far.
It is a difficult and extremely unpredictable market. Depending on how the game goes or what strategy a team has chosen you could be surprised by the end result and trends are difficult to spot. However, if you get a solid knowledge about the teams and their preferred tactics against certain opponents you might get an edge here.
This is actually an interesting market with a great potential. The reason for this is that by design, during the game the winning team accumulates an advantage against the losing one, resulting in the greatest gap between the two right at the end of the game. So, except for games that are really close ties, you could expect that at the end of the game the winning team will lead with a handful of kills. Therefore, if you want to back the favourite, but are not happy with the odds, you might go with the handicap instead. By the same logic, a handicap bet on the outsider would of course be a poor bet.
This one is a very unpredictable market (think “who will have the first corner”), but is still far from a coin toss. Teams’ odds are usually closely matched in this market even when there is a clear favourite for winning the game. However, there is some rationale behind picking the winner that can give you the edge. I will talk about that in more detail in the betting strategies part
For big games you sometimes get an even more obscure markets such as “Which team will kill the Baron Nashor” (Baron Noshar is a strong neutral beast at the center of the map) and the like. In my opinion those markets are incredibly unpredictable and so far I could not identify the factors that can help you make an accurate prediction there. Still, you might look into those once you get deeper into the sport
As in every sport, knowing the game, the teams and the players pays off. Look for stats of the teams and players (1, 2, 3) and try to evaluate the relative player’s strength. Rosters (the LoL transfers) are a common occurrence and can influence the team’s performance significantly, so be up-to-date. To learn more about the players or just get a feeling of the whole thing, watch a few games on Twitch, live or recorded VOD (videos-on-demand). The games are broadcasted free of charge with a very professional commentary, often from other experienced players, so they could be a great source of knowledge.
How about Rating systems? There is plenty of data on LoL around there, so you could surely prepare some cool model. However, there are a few things you should keep in mind. For one, team performance is volatile and heavily influenced by, among all, the participating players who are switching teams constantly. So it makes much more sense to rank players as opposed to teams. Team chemistry is also a factor, but team performance from year to year or even from tournament to tournament can change dramatically. League compositions are also very dynamic so teams will often come and go from one season to the next.
Actually, player ratings have been around since the beginning. LoL was using Elo-ratings to rank players for some time before switching to a proprietary rating system (LP), which should act similarly, but some details are kept secret. You could use the LP or develop your own ratings.
A trader-like approach, you can aim at reacting to price-relevant information before everyone else does. As it is with other sports, social media is your friend. You can also join the big LoL communities such as the Reddit boards dedicated to LoL. A great tool for you for this strategy (and LoL betting in general, actually) are the Discord chats where the LoL community is discussing the games, teams and what’s new.
What sort of information you are looking for? There are quite a few surprises as it comes to the starting players for a team. For international contests Visa issues often pop up. Players are being substituted for this and other reasons, which would sometimes damage the winning chances of a team, so it might be a good idea to place a quick bet on the opponent.
You could develop your own thesis on certain trends for certain leagues, backtest them and then try them live. For example, Jordan Mackenzie, who is sharing his LoL betting experience in one of the websites dedicated to LoL, has observed that bookmakers offer too generous odds on the favourite for a few leagues. I recommend following his blog, I find it an interesting read.
Being based on a computer game, the rules of LoL as a sport tend to change quite frequently, especially compared to a traditional sport. Every new version (aka Patch) of the game brings something new to the gameplay and these come at least a couple of times a year. These are no fundamental changes to the rules, but they can give an advantage to certain champions, or roles, on the board.
Roles is a huge topic in itself so I would not get too deep into it, but in short, different champions play different roles on the field, just like in every other sport. You have a Jungler, who is for the most part hiding from the opponent players, trying to surprise them for a quick kill, and plays in a very mobile fashion in general. There is the Support who tries to improve the capabilities or save the lives of the other team players. Then you have the Tank, whose main goal is to attract the attention of the enemy players to himself due to his durability, while the rest of the team members use the time to destroy their opponents. And then there are many other roles and subroles, which are detrimental for the tactics of the game.
Why do you need to know that? Players usually specialize in a certain role. So a team might have a great Support player, but their Jungler might be less than impressive. If a patch that benefits the Support champions and reduces the role of the Junglers gets introduced, that might be a great boost for such a team and might influence their short term winning rates substantially.
Being aware of the new patches and their effect is another way to gain an edge in front of the bookie
And finally, an interesting and really fun approach is to try to guess which team will get the first blood. I have mentioned some of the roles above, and the one role that plays the most here is the Jungler. Again, that is the guy who is moving around the map and is waiting for an opportunity to surprise an opponent and make a killing. Often times the Jungler will be the one to take the first blood or at the very least he will be involved in it. The best strategy here is to wait for the players to pick their champions and immediately after that place your bet. You should not waste any time as the market closes shortly after the last pick is made.
At this point you should know which of the two Junglers is the better one, the more aggressive one, has the better champion and in general is more likely to go for the first kill and make it. Factors like how fragile are the other team’s champions in the early game can also influence your pick. Once you have taken all those factors into account, if the odds are right, you could try your luck. The bet will be settled relatively quickly as the first blood normally takes place during the first few minutes of the game. You could also analyse past games and the short time window for analysis allows taking a look at a larger number of games. In general I believe that is an interesting market and mastering it could ultimately bring you some nice profits.
Kind of like those gamer guys who just won 2 million dollars from a LoL tournament
League of Legends is a young and growing market where most bookmakers are still testing the ground, but there are already a lot of betting opportunities available. There are quite a few betting strategies you could practice and master, which can give you the edge over the rest of the market participants. But most importantly, LoL is a cool new sport which you can have a lot of fun betting on. And it is also available in the summer! So there is a great way to fill in the summer days when the big sports and leagues are taking a break.
If you have any experience to share from the e-sports markets I would love to hear from you. If you have any questions or comments feel free to post below or drop me an email at admin@churchofbetting.com. Finally, I hope the arbers among you had a great season so far and will enter the summer months in a happy mood! Thanks for reading and see you around!
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]]>The post The Favourite-Longshot Bias appeared first on The Church of Betting.
]]>Today I want to expand further on the overround analysis from my last article. There I have demonstrated the relatively well-known fact that overround in the betting markets is declining in the recent years, but have also offered a more detailed look into the different developments within different markets/countries/leagues. The article was received well, showing that the topic is an interesting one for the betting community and is perhaps not getting the coverage it deserves.
So today I dive deeper into the topic of overround and more specifically the famous favourite-longshot bias. The favourite-longshot bias refers to the not-so-intuitive fact that bookmakers tend to assign disproportionally large overround to longshots. As a result the average price a bettor receives on a favourite is, relatively speaking, more favourable compared to the one for the longshot. There have been a few attempts to explain why that is the case, so I will not speculate on that here. But I have not come across a lot of material trying to quantify the bias. The question by how much exactly is the overround for longshots overweighed remains largely unanswered. So that is what I am looking at today.
The base case, or the simplest assumption one could make is that the margin is attributed equally to all outcomes. I will call this the linear case. So if you have a 5% margin you simply multiply the offered odds with 1.05 to get the fair odds, the formula being:
O_{f }= O * (1+M)
The alternative is a formula proposed by Joseph Buchdahl in football-data.co.uk. In summary, it assigns the margin to the different outcomes not equally, but in proportion to the size of their odds, or in a reverse proportion to the probability of the outcome. I call it the proportional case. You can see the exact formula in the link above. Unlike the linear formula, the proportional one takes the favourite-longshot bias into account, yet we could test if it quantifies it correctly. The formula:
O_{f }= n*O / (n – M*O)
In the two formulas above O_{f} stands for fair odds, O for offered odds, M for margin (aka overround) and n for number of outcomes (3 for a 3-way market).
I am using the names linear and proportional for the sake of simplicity, although one might argue that they are not factually correct, since the linear formula still adds the overround in proportion to the odds while the proportional one gives the odds even higher weight resulting in a sort of an “overproportional” attribution of overround. Anyway, I will stick to that convention for the rest of the article.
I test the two formulas with the odds data provided by football-data.co.uk. I have gathered results for the few soft books with the longest record (Interwetten, William Hill, Ladbrokes, bet365) and for Pinnacle.
First I simulate a betting strategy with the fair odds assumed by the two formulas. If we were able to bet level stakes at the margin-free fair odds as opposed to the ones the bookmakers offer, we would expect to have around zero profit in the long run.
I have arbitrarily determined 10 ranges of odds for each bookmaker so that I get approximately the same number of bets in each of them. The first bracket has the lowest odds, the second one has the second lowest and so on. Then I have averaged the returns of such a strategy for each range and for both formulas and have drawn a graph. Ideally the lines should be flat and close to 0. The results are below:
It is safe to say that the graphs confirm the favourite-longshot bias. Clearly, for most if not all of the bookmakers, the linear formula gives too high fair odds in the low odds range and too low in the short odds range. The proportional formula seems to do a better job.
The graphs give an interesting insight but are inconclusive for shorter sets of data and lower margins – like the Pinnacle set. In particular, the graphs suggest that the favorite-longshot bias is not present in Pinnacle odds to the same extent as in the soft books, but are insufficient to make a strong conclusion. So I started looking for a more scientific way to measure the correct distribution of margin in order to be able to draw more precise conclisions.
There are a number of so called scoring rules often applied for that purpose. The most common ones include RMSE (root mean squared error), MAE (mean absolute error) and LE (logarithmic error) – but I did not find any of them particularly useful. The problem I have encountered is that they do well in measuring wrong predictions in the low/high probability range (like 5% and 95%) but were essentially useless for probabilities close to 50%. I don’t want to bore you with the details, so just consider this: assigning a 50% probability to a series of 100 outcomes, whether you got 100 wins, 100 losses or 50 wins and 50 losses does not change any of those scores – while obviously you made a good prediction only in the third case.
Still, I decided to report the results for MAE as it is somewhat useful in detecting deviations for low/high probabilities. I have decided against RMSE and LE as they both overweight mistakes in the extremes (e.g. a very short odds bet lost or a very long odds bet won), which, variance aside, is all the same for the bettor, since he cares mostly about how much money he loses/wins on average and MAE is the best estimate for that. However, MAE is just as incapable as the other two at detecting bad predictions around 50% assigned probability so keep that in mind.
As I was a bit disappointed by the accuracy of the scoring rules I kept searching and found an interesting suggestion of using the series of binaries (1-happened, 0-did not happen) as the dependent variable and the percentage predictions based on the fair odds as the independent variable in a linear regression. In any case the correlation and r-squared are low because the dependent variable always ends up at one of the two extremes. However, with accurate predictions one would expect a slope close to 1 and an intercept close to 0.
You can see the summarized results for the linear regressions and the MAEs (the lower, the better) below:
For the linear margin distribution we consistently get slope higher than 1 and negative intercept. So to arrive at the correct probabilities we need to take the “fair probabilities” derived from the linear model, give proportional increase to all of our probabilities and then deduct a fixed amount from the result. Let me give you an example.
Let’s say our initial probabilities according to the calculation with the linear formula for two outcomes of an event are 80% (fair odds 1.25) and 20% (fair odds 5). We have a slope of 1.10 and an intercept of -0.05. So to arrive at the correct probabilities, we first multiply both by 1.1 (or 10%) to 88% and 22%, then deduct 5% from both arriving at the final probabilities of 83% and 17%. Now, these are not strictly the correct probabilities either, since depending on the coefficients they won’t necessarily add up to one, but in the context of the model those numbers do a better job at explaining the result of the event then the initial ones. Therefore we could safely say they are closer to the true probabilities.
Meaning we have underestimated the probability for the 80% (short odds) and overestimated it for the 20% (long odds). Why did we do that? Well, most probably we have assigned too big of a margin to the short odds, therefore the fair short odds we arrived at were too high and the respective fair probability was too low – and the other way around for the long odds.
So, for a slope higher than 1 and an intercept lower than 0, the bookmaker assigned a higher portion of the margin to the long odds and a lower one to the short odds than what the model accounted for. And the other way around for slope lower than 1 and an intercept higher than 0 (as we have it for some bookies with the proportional model).
Our table shows us again that the proportional formula accounts for margin attribution on average much better than the linear one. However, we also see that different bookmakers assign margins differently and there is no one-size-fits-all solution. For example, Interwetten assigns an even lower share of the margin to the short odds and an even higher one to the long odds than what the proportional formula would suggest. On the other hand William Hill seems to be using something between the linear and the proportional formula.
What does that mean in practice? First, if you bet randomly at all books (which I hope you don’t), at Interwetten you will get much better results betting on short odds than on long ones, at William Hill the difference will be smaller, but in all of them short odds will give you a better result.
Second, and more importantly, we see that if we are to use just one formula to estimate the fair odds across all bookmakers, we can hardly find a better contestant then the proportional formula suggested by Joseph Buchdahl at football-data.co.uk. This is important for sharp bettors or services like Trademate that try to estimate the fair odds a bookmaker has calculated based on their odds on offer. For them the proportional formula is a great choice and could be used as it is or fine-tuned a bit to fit the bookmaker in question more accurately. In any case the proportional formula beats the linear one by a mile and I would prefer it for any bookmaker out there.
So that’s it from me on the favourite-longshot bias and the bookmaker overround. I see that some of you like these articles a lot, yet others seem to be a bit bored by them. So I plan to follow with some lighter stuff like interesting stats from Trademate, some arbing wisdom and perhaps a few exotic betting markets. In any case, if there is anything in particular you would like to read more about just let me know. Good luck to everyone and till the next time!
On an unrelated note, Rebel Betting have let me know that they have started a major sale, offering large discounts on their long-term offers. It’s a big one-time payment but a great per-month value and if you are planning to arb long-term I think you can hardly find a better deal than that. If you are going for the 6 months, just make sure that the leagues you are aiming at are playing during summer, since it is usually a quiet season for arbers. But in any case I don’t think you can go wrong with the 32 month option.
Also, a big thank you to whoever purchased the software from my banner. If you need any support or advice just drop me an e-mail at admin@churchofbetting.com and I will do my best to help you.
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]]>The post Overround Decay appeared first on The Church of Betting.
]]>The bookmaker margin, overround or vig is the profit margin of a bookmaker from a bet a punter makes (assuming the bookmaker’s books are balanced). It is calculated by dividing one by the odds for every possible outcome and adding those fractions up. For example if a bookmaker offers you 1.92 for o2.5 goals and 1.89 for u2.5 that translates to (1/1.92+1/1.89) – 1 = 4.99% overround. An arbitrage is a group of bets with a negative overround. The better the odds a bookmaker is offering you the lower the overround and vice versa.
A higher overround takes money out of the punter’s pocket and puts it in the bookmaker’s. So in a sense, a decrease in the overround indicates an improvement of the quality of service a bookmaker offers. This means we as punters can look into historical data to see what treatment we receive from the bookies and how it has changed over the years.
I have taken odds data from football-data-co.uk for my analysis. The data includes odds from several bookmakers as well as aggregate average and maximum odds from BetBrain. Many European leagues are covered, but I will only look into the few main ones – England, Germany, Spain, Italy, France – to see how the margin varies across countries. I have gathered the data for the others as well so if there is any country in particular you are interested in just let me know.
First I had a look into the development of the overround for the different tiers within a country. I have taken England as the dataset covers the widest range of leagues there. I have worked with aggregated data, looking into the 3-way (home-draw-away), over/under 2.5 goals, as well as Asian handicap markets. For all three markets there is a graph for overround based on average odds (left) and on best odds (right).
This is where we see the most dramatic reduction of overround. The average overround got down from ~9.5% in 2005 to ~4% in 2016 for Premier League. The reduction was a bit smaller in relative terms for the lower tiers of English football, but still significant.
The case is similar for overround using best odds, which for Premier League is negative since 2013 and for lower leagues is in the 0-1% range, a substantial decrease since the beginning of the period. An interesting detail is that 2015 was the only year in which the overround using best odds increased across all leagues, while in 2016 the trend got unclear. Meanwhile, looking at average odds, the decrease of overround does not seem to be slowing down in 2015 and 2016. Was that due to the fact that margins approached the 0% level and arbitrage started clearing market inefficiencies? Or was there less divergence between odds of big bookmakers from 2015 onwards? Later on I will use some further evidence from the data to try to answer that question.
There is a decline here similar to the 3-way market but less pronounced. Across leagues the average overround has fallen from ~8% to ~6%. In recent year the gap between the overround of higher and lower leagues has increased as well, which is again somewhat similar to the 3-way market. And finally, there is the same jump in overround using best odds from 2014 to 2015. It seems this particular effect is apparent across markets.
Asian Handicap seems to be the only market where the average overround hasn’t declined significantly during the years but has rather remained stable. The Asian Handicap concept has been considered an innovation some 15 years ago and while today it is established and understood by most punters it is probably still not as popular as the 3-way and Totals markets. Perhaps this is the reason why we don’t see the same improvement in the average overround for this particular market.
We also see a spike in overround (both average and using best odds) in 2009, which is missing for the 3-way and the Totals. The overround has since returned to its previous levels. I am curious what happened in 2009 that caused this so if anyone has ideas please feel free to share.
The comparison between countries is interesting from two points of view. First, to see whether the effects in place for the English leagues have been replicated abroad and second, to check which countries are assigned lower and higher overrounds by the bookies. Here are the charts for the different markets (again using average odds to the left and best odds to the right):
For all of the markets there are no significant differences in overround development across countries. Again we see the steepest decline in average overround for the 3-way markets, followed by a milder decline for the Totals and a very small to none for Asian Handicap. Again as it comes to overround taking best odds there is an increase in overround in 2015 while the average for this year keeps going down, indicating a convergence of odds between different bookmakers.
In terms of overround per country, we see the lowest overround for England, which is to be expected as this is perhaps the most commercial and watched league as well as the one attracting the most betting action. For the most periods/markets Germany, Spain and Italy follow with the second smallest overround, followed by France with the highest one. The overround differences across leagues are probably caused by their relative popularity, but those differences are not too big so a change of ranks in the coming years does not seem unlikely.
Finally, a comparison between bookmakers offers a perspective on how the overrounds developed across different betting firms. If you use only one of those, perhaps you could find a bookmaker where you get better value for your money. Since we have already found out that differences between countries are pretty slim, I decided to go back again to the different English divisions and see how overrounds moved there during the years.
Again we see that the overrounds have been declining across the board. The ones who were the most dedicated to offering higher odds to their customers seem to have done fairly well in attracting turnover, like bet365 for example. We also see, unsurprisingly, that only a few soft bookies can match Pinnacle’s odds for any of the leagues. Bet365 and Betvictor offer the best odds in English football from the soft book group and William Hill and Ladbrokes seem to be catching up although with some delay. But of course, as long as those bookies are available at your jurisdiction, regardless of their overrounds it makes sense to shop for the best odds among them for any given event.
During the last 12 seasons overrounds in football were declining for virtually any bookmaker, any country and almost any market in the data set. The overround was declining the fastest for the 3-way market, slower for the Totals market and remained stable for the Asian Handicap market. The trend is pointing towards a further decline for the 3-way market and is rather unclear for the others.
The analysis shows that the online betting revolution has truly improved the prices the average punter has access to. It takes longer for the mug punter to blow his bank than it used to. And even though the bookies have worse profitability per bet than they had 12 years ago, their presence online has allowed them to take an unprecedented amount of bets. The increased turnover has more than compensated the reduced profitability per bet, so their profits continue to rise. Of course some betting companies have done better and some worse in this new environment but the general trend is clear and every betting company needs to adjust to it.
The overround using best odds on the other hand seems to have stabilized and even increased a bit in recent years. Is that a sign for some consolidation in odds calculation across bookmakers/odds calculating firms?
Some insiders seem to believe that this is what the future holds for the betting industry. All bookmakers offering the same or similar odds on all events will basically eliminate arbitrage opportunities on the betting markets even with decreasing overround. Would this bring the end of profitable sports betting for everyone except the bookmakers?
I personally don’t believe that would be the case. As the saying goes, if everyone is thinking the same, no one is thinking. Different methodologies for odds calculation and different perspectives on sports betting (even if some are on average less successful than others) are what makes the sports betting market efficient. I don’t think that a single odds calculator or betting company can take hold of the countless sports events worldwide which you can bet on nowadays. You have probably seen in my Trademate review that even Pinnacle’s odds are not perfectly efficient before closing. A week ago I have made a few e-games arbs between two sharp books, one of which was Pinnacle, which was another evidence for that.
So my believe is that regardless of what the future brings, the betting industry will always have place for different kinds of players, big and small. A single sharp punter will always have the “little guy” advantage over the big books, being able to specialize in a single market and get his hands on odds-moving information before anyone else. This hasn’t changed so far even with all the amazing technology bookmakers have on their disposal and I don’t see it changing in the future either.
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]]>The post Review of Trademate (revised) appeared first on The Church of Betting.
]]>Luckily, as I was preparing to write this article I got a message from the Trademate team inviting everyone on the platform to a stream where they discussed the aggregate results of the tips the platform was producing. This was a great opportunity to compare the data I have gathered with the overall performance of all the platform’s clients. It has helped me confirm some of my observations, but also get a new perspective on my results.
An important point I would like to make is that after writing the first version of the article a major issue with the settlement of tennis bets was discovered, which severely affected my results. After settling the problematic bets manually I have updated the results and my comments on them.
Before I dive into the analysis, let me give you a short overview on what the review will be about. I will of course share my experience with using the product, the functions that the software is offering and the customer support. And while all that is certainly important, the million dollar question is whether the product delivers on its promise to find an edge on the betting markets and improve your betting returns. Therefore I will focus most of the article on answering this question. There were some things I liked and some things I believe could be worked on. I will make sure to go through all of these. Here we go.
Trademate is a web-based betting app that scrapes data from the betting markets in order to identify value bets and deliver them to its customers. How does it do that? It will take a base bookmaker offering the highest liquidity for a given betting market and compare all the others to it. Taking that difference and adding up the margin of the bookmaker, it will calculate the supposed edge for that selection and deliver it to you.
You can watch some videos from the Trademate Youtube channel to get a feeling of the platform. I have found it very intuitive and easy to use. You can build all kinds of presets to test different betting strategies. You can choose the bookmakers you want, the target edge, a desired range of time left till the start of the event and a few other things. The Core version gives you a bunch of soft bookmakers to choose from and with the Pro version you get three sharp books added to the list – SBO, IBC (Maxbet) and ISN. You get a section with your open and settled trades which you can use for bookkeeping purposes.
I have used the preset building option to build two main presets. The first one was the widest possible preset including all the books, odds, edges, etc. The goal there was to collect the biggest pool of data possible and cut it into smaller pieces later for a more detailed analysis. Then my second preset was one with only the sharp books, whereby I have added a sound alert to it so that I can catch as many of those as I could. I was particularly interested in the performance of this subset since this was basically what the Pro version offers on top of the Core one.
I have gathered a total of 11554 bets of which 3263 were with sharp books. Below are the overall results for the two subsets of bookmakers:
You will find a lot of data here so I will give you a quick rundown on what is what. Above you see two numbers for Total EV (Expected Value) and Closing EV. These are generated based on the assumed edge of your bet at the time of placing it and at the start of the event respectively. The closing edge is calculated based on the closing price at the base book. The colors seem to be a bit messed up so look at the labels.
You will see that the average closing EV always stands below the total EV. This means that the price at the base book on average moves closer towards the price we have taken as the event approaches. That is not all that surprising given that different books giving different odds represents market inefficiency and those tend to get corrected by the market. However it is worth noting that the gap closes from both sides – albeit surely not at the same rate – meaning that odds at the base book are not necessarily fully efficient. I have seen that in practice too in the form of many drifts at sharp books I have been victim of during arbitrage betting.
This brings me back to an exchange we’ve had with a reader in the comment section of my last article regarding what edge you have when betting the soft side of an arbitrage pair. As I said back then I think the base book is not fully efficient at the time the arbitrage is placed and I believe the numbers above confirm this.
Yet it is commonly stated that the closing price at the base book is the most efficient price you can get for an event. Therefore Trademate calculates a closing edge based on that. The closing edge is supposed to be the actual edge you have for this bet, not to be confused with the edge you see when placing the bet, as the closing price is supposed to be the most efficient one. Again, the margin of the base book is added in the calculation.
Therefore, if all is well, in the long run we would expect our return on capital to approximate our closing edge and our profits to stay around the Closing EV line.
In an earlier version of this article the profit line was running way below the closing EV line. The main reason behind this was that the data provider of Trademate seems to settle Over/Under Tennis bets wrongly. All of those bets were settled as losses whereas of course some of them were winners.
Overall the profit line runs closely to the closing EV line for a large number of bets. From this it can be concluded that the software does its job.
In my trading I have not aimed at maximizing my profit but at expanding the data set I have available for analysis. Using Trademate’s advice and my own intuition I have tested some more refined subsets in order to try and improve my results. In doing so I have noticed some interesting trends and also some issues with edge calculation within specific subsets. I will come to that again later.
Before going to the subsets where it doesn’t go that well, let’s first see where we can find the most profit potential. In the help section of the platform the Trademate team recommends to look for higher edges the further away the start of the event lays. The logic behind this is that the variance of your edge is proportional to the time left before the start of the event, therefore from risk/reward perspective you would want a higher return to take on a higher variance. That makes sense.
Furthermore, in general the team recommends focusing on lower odds and betting closer to the start of the event. I believe that suggestion comes from their analysis of the community results where they have noticed that lower odds & betting closer to kick-off deliver better results.
I have to admit I was a bit baffled by that suggestion. While I understand the risk/reward point, I don’t get why would anyone drop high odds and early bets out completely. Yes, the risk for both is higher but there you can surely find value bets too. In fact, as it comes to time before kickoff I would expect to find more value bets earlier while the market hasn’t matured yet. Furthermore, concerning odds, the higher risk of high odds is considered by the Kelly stake formula, which is used by Trademate, so this shouldn’t be an issue at all.
I decided to test those suggestions using the data I have gathered.
Let’s start with the most obvious one. Higher edge must bring higher returns – I guess that doesn’t need further explaining. Let’s see how the picture looks for different edge ranges. Below I have put the results for 5 different minimum edges in the range of 0-8%.
The profitability in terms of average ROI does seem to improve with increasing edge. Somewhat similar effect can be observed for flat ROI, although the effect is not that strong there, which is a bit concerning. In general it might be concluded that higher edge will give you better profitability. Still, you get a negative flat ROI even for some high edge ranges, which can raise some concerns. I believe there is a clear indicator of value in those edge ranges as for higher edges I beat the closing odds with a higher margin, so the increasing profits are not the result of chance. Then what’s the matter with the flat ROI?
Have a closer look at the average odds for the different edge ranges. As we increase the edge, the average odds of the tips the platform returns increase too. Does that mean that the longer odds contain more value? I don’t think so. I believe that the edge might be overestimated for the long odds. This leads to the fact that for the flat strategy you get long odds selections, the value of which is in fact not that high, if there is a value at all. The Kelly stakes mitigate that negative effect as they adjust the stake to the odds but one can still see the issue in the flat ROI.
That aside, betting with a high edge will give you better profitability, but of course also a lower total number of bets. The advantage you have against the closing odds at the base book is a clear evidence for that. However, I think some “false positives” slip into the data set. I will look further into these with an analysis of different odds ranges.
I believe the task for everyone using Trademate would be to find a balance between a high enough number of bets in order to turn over the whole bank, together with a satisfying expected return per bet. I will give my suggestion on that later.
As I said, the Trademate team recommends avoiding long odds bets. Yet, according to the analysis above, long odds bets on average give you a higher edge, which to me is strange. I decided to look into how long and short odds are performing within the data set. I have looked into the results with minimum odds of 1-6.
The results confirm the suspicion that something is wrong with the long odds bets. Once your odds go above 4 most profitability metrics start deteriorating. I have repeated the test for all possible edge ranges and with very few exceptions the trend holds. It is telling that the flat ROI goes down as well for the high odds ranges. For me this is another clue suggesting that the edge for high odds might be estimated incorrectly.
So far, so good. We have established that higher edges give us higher returns, showing that the software does identify value. We have also noticed, strangely enough, that we should rather drop the high odds as something’s wrong there.
The Trademate team suggested focusing on bets short before kickoff to minimize your variance. Let us see how the performance differs across the Time-Before-Kickoff ranges. I have looked into bets placed 0-6 hours, 6-12 hours and 12-48 hours before kickoff.
The suggestion does seem to have some merit. We get slightly better returns and lower variance for the range of up to 6 hours before kickoff. However, the difference is not that big and I believe excluding the early markets altogether would rob you of too many good bets. If you are aiming at a lower total number of bets it might be a good solution for you, otherwise I would not recommend it.
I still don’t believe that there is more value to be found closer to kickoff. Intuitively it just does not make sense – this is when the markets are supposed to be most efficient. It is indeed the case that betting further away from kickoff increases variance in the edge and the results prove this. I have talked with the Trademate team about that and at this point I am sure there is no error in the margin calculation for earlier bets. My belief is that even though value bets do exist in the early markets, it is harder for Trademate to identify them as Pinnacle is not that efficient before closing. I guess using fundamental knowledge instead of technical methods like the one applied by Trademate, the sharp bettor might find just as many if not more value bets in the early markets as opposed to the late ones.
I was thinking about how an optimal strategy with Trademate would look like. We have seen that the profitability improves for higher edge ranges, that long odds bets suggested by Trademate are generally less profitable and that lower time-before-kickoff does seem to improve results somewhat but not by much. As I would like to aim at the highest total number of bets at a decent profitability I would go with an edge of at least 4% and will avoid odds higher than 4. Here are the results of such strategy.
The profit line moves next to the Closing EV as it should be. You get a solid profitability and a total of 1790 bets for around a month and a half of betting. Very nice!
You have perhaps noticed I have also restricted the maximum edge at 10%. The reason I have done that is that apparently the majority of bets with edge higher than 10% were palpable errors. As you probably know these will not only fail to deliver any profit (as they will most probably be declared void by the bookie) but will also limit your account in no time, so it is best to avoid them. Of course, you can include the highest edges too and decide on the spot whether it is a palpable error or not. Odds comparison website like oddsportal will help you for that. In my experience the majority of them are just that so be careful.
As I mentioned earlier, the Pro version adds three additional sharp bookmakers to the list – SBObet, IBC (currently Maxbet) and ISNbet. You also get Dafabet but I don’t count it separately as it shares odds with Maxbet. I am running at a small profit so far after a total of 3263 bets. However, that does not tell much by itself as in the overall subset I don’t manage to beat the closing line on average so I am still a bit skeptical. Therefore I have had a look at what happens when I increase the edge. You can see the results for the overall sharp data set as well as a minimum edge set at 2, 4 and 6%.
The profitability does look better by some measures as the edge is being increased. The edge against the closing odds increases. However, one can also see that the closing EV line is further away from the EV line at placement. It seems beating the Asians is much harder task as the Pinny odds drift much more in this case. The edges are slimmer and the variance higher. My sample is not large enough to determine what is the actual edge, but the community seems to be running at a 0.6% long-term ROI in the sharp books, which could be taken as benchmark.
Of course, given that we are talking about sharp books here the amount of bets you get is certainly smaller than with the softs, however I don’t think this would be an issue since you do not get limited, so you don’t have to focus on a league or sport and could just bet on everything. The average edge is much smaller in comparison to the whole data set, so you should not expect profitability as high as with the softs, but that’s not unusual either.
All in all so far I think the Pro package would be a valuable tool for the high-roller. I would strongly advise you, given the reduced profitability compared to the softs and the higher price of the product, to consider carefully whether you have the needed capital to make it work. Furthermore, considering the tiny edge you will have pursuing such a strategy, be ready for some serious variance down the road. You can refer to my article on betting variance to get an idea.
Alright, we have established that the software works and you can make a solid profit from it. But I am also suspecting that there might be a problem with the edge calculation for higher odds. What could the problem be?
A common trait for long odds bets is that the bookmakers apply to them higher margins than usual. I have been assured that Trademate does apply the margin when calculating the odds. However how exactly it is applied is unclear to me.
What is the case in practice? Intuitively, one might expect the margin for an event to be applied to all betting outcomes proportionally to their implied probabilities. However, this is not the case. In fact, longer odds receive an over-proportional share of the margin. It could be speculated what is the reason for that, but perhaps bookmakers want to increase their expected profit per long odds bet due to the higher riskiness such a bet brings them compared to a short odds one. You can read more on that in Joseph Buchdahl’s Fixed Odds Sports Betting: Statistical Forecasting and Risk Management.
Furthermore, margins vary per sport, league and country. In general, the margin can be easily calculated for any given event but it must be split between the different outcomes carefully. I might be wrong, but I think a further look into this can significantly improve the performance of high-odds bets in the Trademate platform. This would bring value to the customers as it would expand the total range of viable betting opportunities.
I haven’t said much about the support from the team yet. I would like to thank Marius and the rest of the team as they have been very responsive with every question I had. They also organize periodic meetings to discuss the results of the whole community. I really like that as it shows great transparency, which is extremely important in the betting industry. At those events the customers get the opportunity to see how everyone else is doing and to share their thoughts and feelings about the product with the whole community. All in all I have found the customer support to be at a good level.
Trademate does deliver on its promise to identify profitable opportunities on the sports betting markets. The team has developed an innovative software solution which would be an asset for any serious bettor.
I believe there are some flaws with the edge calculation of certain subsets that I have outlined above, which I am sure will be addressed by the team soon enough. Keeping those in mind you should have no problem turning a profit with Trademate relatively quickly.
Another point of improvement is the collection of data – there is currently an issue with the settlement of tennis trades in the platform, which has seriously impacted my records. I needed to settle those manually, which for data set this big was quite a lot of work. I hope the team will take care of that in the near future.
That aside, the software is easy to use and offers a lot of nice features. The customer support is on a very good level. Overall I would recommend the software to anyone who follows value betting strategies and has the necessary budget.
Some final words
This is certainly my longest article so far, so thanks for reading to everyone who has made it to the end. Thanks to the Trademate team for giving me access to their product, which made this review possible. I would also like to use the opportunity to thank Steve from Daily25 for giving a great feedback to my previous article and helping me improve the count of my Twitter followers substantially. Steve is offering a product based on Trademate for the Australian market, so if you are an Australian bettor make sure to check it out.
Also, if you would like to see any further stats from my data set in Trademate or want to ask anything just drop a comment or get in touch. I am sure the Trademate team will also be around to answer your questions.
On an unrelated note, I have prepared a short e-book on Sports Arbitrage, which you can download from the ‘Sports Arbitrage Guide’ tab on the top of this page. In that way you will also be added to an email list where I will update you on any new content in my blog. Alternatively, you can also subscribe to my RSS feed below this article or in the upper right corner. Thanks for following!
EDIT (12.03.2017, 12:39 CET)
Just wanted to let you know that I have presented the review to Marius from Trademate and he had a few comments on it. I am posting them with some delay here.
Concerning the edge calculation, Marius shared my opinion that there is an inconsistency in the margin attribution for long odds bets. He has let me know that the team is working on developing a solution. I am glad that the issue is being addressed by Trademate and I am sure that solving this problem will further improve the quality of the product. Marius has also stressed that it is advised to focus on lower odds in order to reduce overall variance, since many customers find out they are uncomfortable with the risk that higher odds bets carry.
Regarding the time before kickoff, Marius raised the valid point that the margin could be (and is) easily calculated using the odds at time of placing the bet. Therefore it is safe to assume that the margin is calculated correctly there. That fact only makes the underpeformance of early bets more interesting – since the margin is not the reason, there must be some other factor depressing the returns. At this point I am struggling to see what that might be, so if you have any ideas I would be happy to hear them. Regardless, this might turn out to be quite a useful finding by itself. It is good that platforms like Trademate collect large amounts of betting data so we can notice such particularities and improve our betting knowledge.
It was confirmed that all the closing edges are calculated against the Pinnacle closing line.
I have also added the missing link to the picture in the Time-Before-Kickoff Analysis part.
EDIT2 (26.03.2017, 18:56 CET)
It was discovered an issue with wrongly resolved tennis results has badly affected my results. It turns out all Total Game Tennis bets were settled as losses, which depressed the returns of my data set and most subsets significantly. Since the effect of this is substantial I decided to resolve these bets manually and update the article accordingly. I apologize to all readers for this confusion.
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]]>The post Arbing without a Hedge: The Insanity of Betting Variance appeared first on The Church of Betting.
]]>So at the end it all comes down to whether you think the price of getting rid of this variance is worth it. It is hard to give an intuitive answer to this question if you don’t have a good feeling for how much variance you should expect. I have run some calculations to show you just that.
So I want to simulate a strategy of placing arbitrage bets on soft books without covering them in sharps. It would be similar to a value betting strategy with a certain edge.
I start with a bank of 100 units, placing 1 unit per bet.
For simplicity, it is assumed that all bets are placed at odds of 2. Since odds of 2 imply a probability of 50%, this must be the average odds of your bets in the long run.
I have assumed you are always getting an edge of 1%. In my experience this is approximately your average return on turnover when doing sports arbitrage, so I consider it to be a realistic number. This means for every bet with odds 2 and implied probability of 50%, your real chance of winning it will in fact be 1% higher, or 50.5%. Your chance of losing will be 49.5%, respectively.
I have run three simulations: one with 100 bets, one with 1000 bets and one with 5000 bets.
Using the above preconditions, I have run a 1000 Monte Carlo simulations for each number of bets to find out what is the chance to end up with a loss and what is the chance to blow your bank.
A “Monte Carlo simulation” might sound scary to those of you who haven’t dealt with it. In fact it is quite simple. I just simulate a thousand instances of 100/1000/5000 consecutive bets under the conditions described above, using the Excel random number generator (the RAND() function). Here is what I have found out.
You cannot blow your bank in 100 bets under the above conditions, as for this you would need to lose all 100 of them, which is extremely unlikely. However, what is the chance to end up with a zero or negative return after the 100 bets even though you have an edge of 1%? Higher then you might have thought, it turns out. When simulating 1000 instances of 100 bets and looking at how many of those instances failed to show a profit, the average of all simulations seems to lie around 50% and I very rarely get anything below 48%.
In fact, to get the exact probability of failing to turn a profit we don’t need a Monte Carlo simulation. Since the profits of such series would follow a binomial distribution we might simply calculate it. The actual formula is:
…but since I’m way too lazy for that, I just go to this binomial calculator, input p=0.505, number of trials = 100, number of successes = 51 (the minimum number required for a profit) and hit the button. It turns out in exactly 49.99% of the cases, 100 bets with an edge of 1% will fail to turn a profit.
Think about that for a second. In a single arbing session you might place anywhere from 20 to 100 bets. But if you have a few bad days, don’t have access to that many bookmakers and you are arbing only on the weekends 100 arbs might be your total for a couple of weeks. So you might go for a couple of weeks of arbing without hedging and there will still be a 50% chance that you will have nothing to show for it! That would be very disappointing and very likely too.
Let’s see what happens when we increase the number of bets to 1000.
As the number of bets increases, we would expect our edge to finally materialize in a nice profit. Indeed, the percentage of negative profits for series of 1000 bets looks better. Not much better though. Again using the binomial calculator, we find there is a 38.79% chance to end your 1000 bet adventure without a profit.
1000 bets can extend to one or a few months of arbing. You must keep in mind that in the meantime your money is locked and you need to invest in transaction fees and software subscription, which are not accounted for in the equation. And at the end of it, if you don’t hedge in sharps, you have a 38.79% chance to have absolutely no profit.
What’s more, there is even the slight chance that you blow your bank. The Monte Carlo simulation of 1000 instances shows a destroyed bank or two. The chance for this to happen seems to revolve around 0.1%. So what if we increase the number of bets even further to a 5000?
That must be much better, right? Well… kind of. The binomial calculator says there is still a 24.41% possibility that you fail to turn a profit. That is 1 out of 4, not exactly negligible.
5000 bets is easily half a year of arbing. 27 arbs per day if you arb every single day. Considering that summers are usually quite weak and you will have to go out of your cave to communicate with real people now and then, that probably translates to at least a full year of arbing. And you have a 1 in 4 chance to fail to make any profit from it. On top of the wasted time you will need to cover a year of arbitrage software fees. Ouch.
But it doesn’t end here. With such a long time span you get the added benefit of around 5% chance of blowing your entire bank, as the Monte Carlo simulations show.
I have run a simulation on a series of 10000 bets whereby the chance to blow your bank increases to around 10% and the chance of finishing in negative territory is at 16.10%. You can play with the numbers some more with the calculator linked above.
The numbers above are all for an edge of 1%, which I find to be a realistic estimate for most arbers. I have also run the calculations for an edge of 2% and 3%. Such a high edge is rare, but certainly possible to obtain. Intuitively, with a higher edge it must be less likely to blow your bank or finish in negative zone. The question is, how much less likely?
Below I have summarized the results for the different sample sizes and edges. You will find the probability of negative or zero return first and the probability for losing the whole bank second.
100 bets | 1000 bets | 5000 bets | |
---|---|---|---|
1% edge | 49.99% / 0% | 38.79% / ~0.1% | 24.41% / ~4.5% |
2% edge | 45.99% / 0% | 27.39% / ~0.01% | 8.07% / ~1.25% |
3% edge | 42.04% / 0% | 17.94% / ~0% | 1.75% / ~0.2% |
Given the above, should you skip hedging your arbitrage bets? Well, if you are fine with arbing for a year or two without turning a profit you could … I guess. Unfortunately I don’t know many people who would wait for that long. Moreover, you need to pay your arbitrage software and transaction fees in the meantime and they don’t really depend on how well your arbitrage business is running.
So for me, it’s a clear no. I always hedge my arbs and I believe this to be the superior strategy from a risk/reward perspective. But since everyone has their own risk appetite, feel free to decide for yourself. Just make sure to keep the numbers above in mind.
By the way, this simplified example can also give you an idea about the inherent variance in most value betting strategies. An edge of around 1% is what most successful value bettors and tipsters work with. You might make good money, but you would be in for a wild ride.
If anyone has some related experience, I would love to read from you in the comments. If you want to run your own Monte Carlo simulations you can check out this video or drop me an email at admin@churchofbetting.com and I will give you my Excel sheet.
Thanks for reading and see you around!
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]]>So you are already up and running. You got familiar with the main risks and pitfalls and even managed to score a few profitable arbs without getting limited (yet). It is time to think about maximising profits with the capital you have available.
Your arbing profit is in reality your employed capital times your arbing returns. Therefore, these are the two things you have to pay attention to. Maximizing your returns is pretty straightforward. Your arbitrage service will give you the return of every arb pair delivered. You should just strive to get the ones with the highest return (of course, keeping palpable errors in mind). On the other hand, how do you go about employing the most of your capital? In this chapter I want to give a few insights on that part.
When you are getting started with sports arbitrage money management is key, especially when you are tight on budget. You would like to avoid making too many transactions and it might possibly be you are betting on sharp bookmakers through a broker, so you need to be able to plan how much money you are going to need for each bookie or group of bookies.
Furthermore, in any given day you are arbing you will want to deploy your full bank as this is what will bring you the highest return on your capital. Imagine having a 10k budget split 5k in soft and 5k in sharp books. It runs well and at some point during the day you are out of money in the soft books but are still left with 2k in the sharp books. That means you have 10k available but you only used 8k for Sports Arbitrage and you cannot use more as a withdrawal of the other 2k might take days. That would be a pity. So what is your best approach?
Knowing that an arb normally involves a sharp and a soft book, splitting your budget 50:50 between softs and sharps would be a reasonable starting point. However, there are a few more factors to consider, as you are going to see.
First, since sharps are more competent in setting the right coefficients, in the long-term you will expect at least in theory to win in soft books and to lose in sharps. In my experience this is true in practice as well, meaning you would need a bit more money for the sharp books as your balance there tends to decrease.
Perhaps you are also thinking now, what would happen if you just do not bet in sharps at all? You expect to lose money there, so why not cover only the part of the arbitrage in the soft book, wouldn’t that increase your expected profit? These are very legitimate questions and are in fact central to the theory of sports arbitrage. See my in-depth answer to this question in the following article. In short, I always prefer to cover my arbs as not covering is going to increase volatility tremendously and this is something I prefer to avoid.
So we know that it is more likely to lose money in the sharps and win in the soft books. Now, let us look at the odds. If we are getting the same average odds in both soft and sharp books, they would not play a role in our budgeting decision. However, that is usually not the case.
In my experience, in an arbitrage pair you will more often get the higher odds in the sharp book and the lower ones in the soft one. Meaning you will have to use more capital in your soft book and it has to be better funded than the sharp one. There are of course exceptions but on average the rule holds. So this is one factor in favor of funding your soft book accounts better.
Finally, when in a certain book you’re all out of money, give preference to arbs involving higher odds in the same book, even when the returns are a bit smaller. You might have to wait a bit for those, but since you are out of capital it is not that urgent to place arbs right away anyway. Your total profitability would improve even when you take lower return arbs since this return will come on a larger pile of capital.
Taking all of the above factors in mind, you have to decide how to optimally split your capital. I cannot give you the exact numbers as that really depends on the markets you are arbing on, but you must aim at the optimal distribution in order to maximize your employed capital and improve your returns. You will get a good feeling for that with the passage of time. Just keep in mind that maximum capital * maximum return = maximum profit.
The article above is just another chapter from the Sports Arbitrage guide that I am preparing and will publish quite soon. Since I know this stuff is interesting to you I give it to you here as well so you don’t need to wait until I’m done with all the structure and formatting. But the material is growing bigger and bigger every week and I think it will make for a nice and comprehensible strategy guide.
I continue to work on the review of the Trademate Sports software. I have already collected a total record of around 2500 bets of which 500 in sharp books. Not bad in itself, but I am hoping to gather at least double that to have a reliable sample. As the guys from Trademate themselves say, you should compare your monthly and not your daily returns. I stand by that and continue to gather data in order to be able to present to you the full picture. So if you are looking forward to this, please be aware that it will take some time but you might be sure I will not compromise with the quality of the analysis. Just follow my Twitter, Facebook and Google+ pages you will be among the first to get it.
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]]>The post Sports Arbitrage Risks appeared first on The Church of Betting.
]]>I hope you liked my latest article on how to get started with Sports Arbitrage. As I wrote I am currently working on a free Sports Arbitrage guide and am going through the few relevant topics I haven’t covered yet in the blog. So I found out I still haven’t got through the important Sports Arbitrage risks. As an arber you will need to understand what can go wrong in a sports arbitrage, what are your potential risks and how can you manage the consequences. In this article I present you the three main risks when placing a Sports Arbitrage and what to do about them.
You have to remember that like every other market, the sports betting market is dynamic. Meaning that when you find a combination of odds forming an arbitrage you cannot know how long these odds will remain the same. In fact you can be sure they will move at some point. What is more, since the market participants tend to clear market inefficiencies (such as arbitrage) at the moment they arise, you should expect the odds to drift in an unfavorable direction in a very short period of time.
The good news is that since the betting markets are not as efficient and fast-paced as, say, the financial markets, those opportunities will not disappear immediately. Normally an arbitrage opportunity between a soft and a sharp bookmaker would last a minute or two which gives you enough time to take advantage of it.
However, this is not always the case. It might happen that while you are placing the one leg of the arb, the other one has already drifted. It could be either because you were too slow, or because your arbitrage software is delivering your arbs with a delay, or because the arb was simply too short-lived, in which case there is not much you can do about it.
When this drift happens you will find yourself exposed to the outcome of the event in the bookmaker where you already placed the bet. You won’t be able to turn this bet into an arbitrage anymore since the odds on the other side have dropped. What are you supposed to do?
First, to prevent this situation from occurring you should always place your bet at the soft book first. The soft bookmakers will mess up the coefficients much more often than the sharps leading to a higher risk of a negative drift there. This is not to say the same cannot happen at the sharp books. You can face the same problem there, but in my experience quite less often. Moreover, the soft books can limit your account at any time without a warning, which does not happen at the sharps and represents additional risk. Therefore, always bet at the soft book first.
And second, once the situation has occurred, the most reasonable thing for you to do will be to cover your exposure, as fast as possible, at the highest odds available at the market. This is sometimes referred within the community as a “negative arb” (which is incorrect since a losing trade cannot be an arbitrage per definition, but anyway). In this way you will incur a sure loss. As bad as it sounds, this sure loss will only be a few percentage points the size of the potential loss you would incur if the game goes the wrong way.
This is an important point. You might be tempted to leave your position open instead of hedging it and see what happens. However, in the arbing circles it is often said that arbing and betting are two fundamentally different activities. As an arber you are not supposed to bet and to expose yourself to any risk regarding the outcome of an event. Betting is not part of the philosophy of arbing and at least at the beginning you should try to avoid it where possible.
For most people who have just gotten into Arbitrage Betting and have no background in professional betting this issue comes initially as a surprise. Sometimes when a book messes up the odds (happens at sharp books too, by the way), the offered odds are deemed a “palpable error” by the bookmaker, your bet is cancelled and your winnings taken away.
A bookmaker will normally claim a palpable error when the odds they have offered were “obviously wrong” due to a human error. Now, the definition of “obviously wrong” is obviously unclear, but in general when you see an arb of a very high percentage (say, 10+% whereas the average arb will bring you only 1-2%), chances are high that you have a palpable error.
Always check whether or not the bookmaker is offering the same odds for another, objectively less likely outcome. For example, you get an arbitrage with an AH+2 bet at 1.95, but you notice AH+1 is offered at 1.95 as well. This makes no sense and is probably a palpable error.
Furthermore, as written above, if the arb percentage is unusually high, the chances are higher that it will be deemed an error. In that case you can decide whether it is worth it to take a risk, bit for a beginner I would just advice to abstain from those at least until you get some feeling for the market.
Unfortunately there is no strict rule as to whether the bookie will claim an error and void the bet or not. Even when you take these precautions it will still sometimes happen that your bet is being voided for no reason. You find it out after the event and there is nothing you can do about it. This is part of the life of every arber and every now and then you will lose some money from this. But don’t stress too much over it, it does not happen that often and especially if you follow the steps outlined above it shouldn’t affect your arbing bank all that much.
In the rare case (not so rare after you place a couple of thousands of arbs) when an event is rescheduled or cancelled mid-play for whatever reason, often different bookmakers will have different rules regarding whether the bets on the event shall be settled or voided. For example in a tennis match one bookmaker might require the match to come to an end in order to settle bets while other might settle after the game has passed only the first set. This might have the unfortunate effect for you of losing both sides of the arb.
The same situation might occur when the bookmakers simply have different betting rules for certain sport. This is especially common in point betting. For example in basketball point betting for Totals in the fourth quarter, some bookmakers will add up the points of an overtime to the total while others will not. Very often such difference in the rules is the very reason the arbitrage occurred in the first place – in fact it was no arbitrage at all, since you were betting on two different things.
There is no other solution to this problem aside from learning the rules for the sports you are arbing on in the bookies you are using. This looks like a tedious task (and it is), since you would need to dig through the T&C of every bookmaker and spend a long time looking for the sports you are interested in, assuming you are actually lucky enough to find that information on the bookie’s website.
Fortunately, there is quite some information about that around the web available for free if you only do your research. You can find tables for tennis (1,2,3), basketball, baseball, ice hockey and others. Of course there is the possibility that the information is outdated but for the most part, bookies do not tend to change their rules as it leads to unnecessary confusion.
So, these were the three most common issues while doing Sports Arbitrage. Remember them, learn how to solve them and you will be one step closer to becoming a successful arber.
This article will be included in my free sports arbitrage guide which is already in an advanced stage. I hope I will be able to present it to you in a week or two. Meanwhile, the guys from Trademate Sports have contacted me to write a review of their product. I am currently paper trading with their software to gather a sample long enough to be worth a look. Once I have enough data (here I also suppose I will need a few weeks) I will do the review, so stay tuned to read more about the product. Until then if you have a question or anything to share feel free to drop a comment and good luck with your betting.
The post Sports Arbitrage Risks appeared first on The Church of Betting.
]]>The post Sports Arbitrage: Getting Started appeared first on The Church of Betting.
]]>I figured out it has been long since I have last written about Sports Arbitrage and I wanted to correct that. This week I want to give you some information on getting started with Sports Arbitrage and what are the tools you are going to need. The article will link back to some of my earlier material and give you an overview over the necessary administrative tasks you will need to take care of. Let’s get started.
You will need a computer with good internet connection. A mobile phone or a tablet won’t do the job. You need a desktop computer for quick navigation between your arbing software and the pages of the bookies. That being said, there are people connecting their desktop computers to their mobile phones in order to trick the bookies into thinking that they are playing from mobile, which makes them less suspicious. I personally don’t have the technical knowledge to pull that off but if you know what you are doing, go for it. In any case, your arbs are best placed on a desktop computer.
If you start opening an account after you have found an arb you are already too late. Remember that speed is the key. Therefore you must consider which bookies you are going to use. First and foremost, research their reliability. The fact that a bookie is covered by your arb service is no guarantee. My Recommended section will give you a few bookie review sites, you can start from there.
Having the list ready, set up all your accounts. Make sure to input your data correctly – you will probably need to verify it with an ID later on and any mismatches will lead to additional inconvenience and will slow you down. That being said be prepared for…
When you verify your account bookies will often ask you for an ID to confirm your account data is correct. Sometimes (although less often) they might ask for a utility bill, a bank statement or even give you a call. Have all those documents prepared (utility bills and bank statements must be up-to-date, issued within the last 3 months) and be ready to answer phone calls with questions regarding your account. Record, or better yet, remember all the security questions and answers of your accounts. Usually it is possible to make the verification before you start with your betting activity. Look for this option and use it. This will not only help you save some time in the future but also, and more importantly, you will avoid unwanted attention at a later point when your account has already been active.
If certain sharp bookmakers (most notably Pinnacle) or exchanges are not available in your country, register with a broker. A trusted broker that I would recommend is PremiumTradings. If a certain soft bookmaker you have available is not covered by your sports arbitrage software, find its clone and mark it in the software. Brokers and clone tables will greatly expand the total number of bookies you have at your disposal.
Verify and fund your e-wallet of choice and your broker accounts. You will use the e-wallet money to deposit to and withdrawal from your bookmaker accounts. E-wallets are the preferred payment solution for arbers as they are the fastest and the cheapest ones. Having your funds in your verified e-wallet account and your bookmaker accounts ready, you will be able to deposit in a matter of seconds. I have found out the best starting capital to be in the range of 5-10k EUR/GBP/AUD, but of course that depends on your financial situation. You can get started with less and bag some bonuses to grow your bank, however it is possible that this will reduce the life of some of your accounts.
Sign up for a Sports Arbitrage software. The highest quality product on the market and my personal choice is RebelBetting. Set it up with all the bookmakers you will use and get it running. Make sure this is your last step. You will want to make the most out of your subscription so you’d rather not waste time with administrative tasks while the fees are running.
Many people recommend to start with some paper trading or small bets. If you don’t feel confident about the whole thing that is an option but honestly not one I have gone for. Arbitrage is a fairly simple activity. There are some little traps but you will learn them best by doing. And unfortunately, losing 10 cents will never give you the same learning experience as losing a hundred bucks, so take for granted that you will make some mistakes along the road. That is normal, but if you want to get good it is better to start sooner than later. If you want to start with paper training though don’t do it for too long and always think about moving to the real thing. At least that is what I did and I don’t regret it.
Once you are up and running, make sure to stay under the radar by following some essential rules I have already laid out.
I hope the article will give you a kick start in sports arbitrage betting. In fact I am currently working on a complete pdf Sports Arbitrage Guide where I intend to cover everything relevant to this betting strategy. It is a broad topic so it will take some time, but I hope to have it ready in the next couple of weeks. It will also be totally free, so don’t forget to follow me on Twitter, Facebook and Google+ to be among the first notified about it. Until then, if you have any questions let me know in the comments or drop me an email under admin@churchofbetting.com. And best of luck in your arbing adventure.
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]]>The post Home and Away Value in European Leagues (Mid-Season Review) appeared first on The Church of Betting.
]]>First it is worth noting that for all 3 countries – Spain, Italy and Germany – blindly backing the home win has been a profitable strategy so far this season. The strategy I have tried was to back only the teams that had performed well last season, return-wise. So far the results are quite inconclusive. Taking only the teams that gave a positive return last season did deliver some premium over the blind strategy, however increasing the required minimum return from last season did not seem to do much and the results were all about the same, with the exception of the highest minimum returns where it went downhill, however the number of observations there was way too small to draw any conclusions (a problem encountered in the original analysis as well). The results could be seen in the graph.
I have taken the cumulative results from all 3 countries, however the results per country do not differ much.To summarize here are the 3 main findings:
So the second finding was that backing away teams in Scotland in general has been quite profitable in the last 10 years. In addition, backing the teams that did well away the last season seemed to deliver certain premium. The thesis was tested with results from this season, similarly to the other one.
There were several key observations. First, the general away strategy for all Scottish leagues is back in the green. If that does not change till the end of the season, we would see a 9^{th} season in a row where blind away backing turns a profit in Scotland.
Second, unlike earlier this season we don’t see better results when we only take teams with positive away returns from last season, in fact the returns are for the most part worse. However, it is still the case that the outliers, the teams with the best away returns from last season managed to outperform significantly. Here is the graph with the findings.
In summary:
Again, we should be cautious with the results since the number of outliers in terms of away performance is small. If you are interested, here are the names
Dumbarton 17.61
Falkirk 13.89
Montrose 11.73
Raith Rvs 10
Berwick 7.81
East Stirling 7.34
Brechin 6.97
St Johnstone 6.14
Aberdeen 6.12
These were the Scottish teams which delivered an away return higher than 6 in the last season with level staking. Backing them away appears to be a good strategy so far this season as well.
The Scottish leagues are unique in that you have approximately two times smaller number of teams per league and the teams play against each other a total of 4 times per season compared to 2 for most other leagues. Therefore there is a lower variety among the teams, more repeating games, which in my opinion should lead to higher predictability and consistency in trends from season to season. This is just a theory of mine and I don’t have any numbers to back it up, so as usual – apply carefully.
These were the mid-season reviewed results for the Home and Away strategies described earlier in the blog. I will make sure to come back post-season and see where they end up. Until then, I have a few more ideas about stats-related articles, some more arbitrage, staking, political betting and the Oscars. The list is long and my resources are limited, so if you have a preference for any of the topics drop me a comment I would gladly give it a priority.
On an unrelated note, Erik from Soccerbetblog has renewed his tipping and his results are only getting better. As you have read here first, he will only allow new free followers until he reaches 250 and he is at 230 at the moment, so if you haven’t followed him yet this is probably your last chance. Don’t miss it!
Also, I have just created a page for the blog in Google+ and I’d be happy to see you there. And of course the Twitter and Facebook pages, where I will keep updating you on any new content and will continue posting interesting news from the betting world. Till the next time!
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]]>The post Affiliate deals – Pinnacle & Rebel Betting appeared first on The Church of Betting.
]]>Pinnacle is a low-margin high-odds bookmaker that will never limit you. They are a must-have bookie in the toolbox of every serious bettor. What made me approach Pinnacle for an affiliate deal is that unlike the majority of bookmakers on the market, Pinnacle stands out as one of the very few winners-welcome, sharp and customer-friendly bookmakers. Not only will they never limit you, but they also accept arbers (to my knowledge the only bookmaker to openly state that). Furthermore, they are dedicated to improving the overall betting knowledge on the market by posting some great educational articles on different betting topics. I have already quoted many of their articles in my blog.
You will not find any bonus offers or other marketing gimmick with them. The deal is plain and simple – you will never get limited and will get the lowest margins on the market from one of the most trusted names in the business. Check out the Top 100 Bookmakers ranking and what Pinnacle’s customers have to say about them. Pinnacle gets the highest quality score of all 100 bookmakers. There is a big crowd of people with nothing but positive experiences to share from their interaction with Pinnacle. Pinnacle is quite easily my favorite bookmaker and I am more than happy to promote their product to you. You can sign up now for the best bookmaker around if you have not already.
RebelBetting is a Swedish arbitrage software company. Since their launch in 2007 more than 95,000 customers have used their product. Their arbitrage software is essentially screening a large number of bookmakers and delivering you all the arbitrage opportunities found across them. You will find their product easy to use and will enjoy a lot of unique useful features. They cover a total of 69 bookmakers, which in fact translates to a much higher number if you add in all the clones.
RebelBetting are in the upper part of the pricing range, which is justified by offering a premium product. With RebelBetting you get more arbs from the same bookmakers, less expired arbs and faster odds delivery. What is more, you get the feature of being redirected from their site directly to the bet slip for the respective arbitrage. That saves you a great amount of time and allows you to land a much higher amount of arbs. All this is crucial when doing arbitrage betting and will give you better returns than any cheaper arbitrage product. The investment in RebelBetting is worth it and I can testify to that. Sign up and try for yourself.
You will find Pinnacle’s and RebelBetting’s affiliate links and banners across the blog. If you sign up from those you would bring me a small commission. I would appreciate that as a thank you from you, the readers, for the content I am providing here. I highly trust and use myself the services and products of both companies, which I find absolutely necessary for me to promote them. If you have any questions about Pinnacle or RebelBetting, feel free to ask via an article comment or an email to admin@churchofbetting.com.
Hopefully you are off to a good start of 2017 and are setting up for a profitable sports betting year. I will do my best to help you in that: there will be a revision of some of the strategies that I have written about earlier in the blog and see how they are performing so far this season. I am also currently researching some new trends and hope to have found something new of value till then. So stay tuned for the upcoming articles and see you around!
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