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Beating the bookies – how the online sports betting market is rigged

242 points by zeristor 9y ago

zeristor 9y ago
Courtesy of slashdot: https://science.slashdot.org/story/17/10/21/1744218/data-science-meets-sports-gambling-how-researchers-beat-the-bookies https://science.slashdot.org/story/17/10/21/1744218/data-sci...
nnfy 9y ago
I am confused. If the betting is rigged, then how were the authors able to beat it consistently? What did I miss?
- PeachPlum 9y ago
  That if you keep winning they restrict your account. > They kept this up for five months, placing $50 bets around 30 times a week. And they were winning. After five months the team had made a profit of $957.50 -- a return of 8.5 per cent. But their streak was cut short. Following a series of several small wins, the trio were surprised to find that their accounts had been limited, restricting how much they could bet to as little as $1.25.
- downandout 9y ago
  "Rigged" is the wrong word. What it essentially says is that all of the data that a professional could reasonably analyze is already baked into the odds that bookies initially set, and if those odds stayed the same until bets were no longer being taken on the event, sports betting would be consistently unprofitable because of the 10% "juice" that most bookmakers charge. However, the odds do not stay the same. Once they are posted and bets begin to come in, the market takes hold and begins swaying the odds one way or another, because bookies change the odds in order to try to balance their books such that they have little to no actual risk. It is in the swinging of the odds by the market, which has many unsophisticated participants - people betting on a team simply because they live in that city etc. - where money can be made, because there is an incredibly large amount of "dumb money" in the sports betting market.
  - mikkom 9y ago
    No, rigged is exactly the right word. From the paper: > Our strategy proved profitable in a 10-year historical simulation using closing odds, a 6-month historical simulation using minute to minute odds, > and a 5-month period during which we staked real money with the bookmakers. > > Our results demonstrate that the football betting market is inefficient ‒ bookmakers can be consistently beaten across thousands of games in both simulated environments and real-life betting. > We provide a detailed description of our betting experience to illustrate how the sports gambling industry compensates these market inefficiencies with discriminatory practices against successful clients.
    - downandout 9y ago
      The fact that they limit the accounts of successful bettors doesn't mean that it is "rigged". It simply means that they reserve the right to do business with whom they choose.
      - pocketsquare2 9y ago
        They are artificially manipulating the market. That's about as textbook rigging as putting three masts on a ship.
        Spivak 9y ago
        If you consistently lose money whenever you transact with someone then you're going to stop doing business with or try to limit how much you lose. They're not rigging the actual game in any way. But if they're not throttling you it's a pretty good indication that you're not coming out ahead. If there was an obscure way to play craps that made the house advantage negative they would either change the rules or ban the practice. You could call it rigging but by that token every game is rigged, that's the whole point, you're playing in the hope of beating the odds. The rules and odds are completely transparent, 'rigging' would be like using weighted dice.
      - johnvonneumann 9y ago
- Spooky23 9y ago
  Nobody is in the business of giving money away. So the bookmaker put controls on how and how much you can bet. There’s a reason why this stuff was illegal for a long time — gambling is always a vicious cycle for the player.
johnzim 9y ago
Just like the rake or the edge the house advantage of making the rules has always been the reality of betting. Online or offline. Forever. Get too successful and you’re no longer invited to bet. Asymmetry of information has never been the bookmaker’s most powerful weapon. The book is. Those who are successful at it accept this reality. They grumble and make peace with it - paying the super taxes and liquidising markets where they’re asked to. Ultimately however, while it’s interesting to see how they do some of this (and there are plenty of practices not covered in the paper, I assure you) it’s a bit like complaining the DM won’t let you do something in dungeons and dragons - you’re dicing with the god of your domain so the rules can change at any minute.
ChuckMcM 9y ago
"Send enquires about this paper to our newly acquired private island in the Bahamas." :-) One of the most depressing things I realized when I learned to count cards, and confer upon myself a small but meaningful advantage in the game of Blackjack, was that the casinos simply ask you to leave if you win too much. That put an upper limit on the rate at which one could win. The folks who figure out slot machines have a much better time of it because it takes longer for the casinos to figure out they are losing money.
- GigabyteCoin 9y ago
  I used to use the betfair platform until it they blocked themselves from being viewed in Canada for some strange reason right after they were purchased by ladbrokes I believe it was. Anyways, after playing with them for a few years, I was horrified to learn about their 60% tax on consistent winners that they have dubbed a "premium charge". Found some sort of edge to exploit and reap profits? Betfair doesn't even care to talk to you to ask you what you are doing, they will just charge you 60% of your winnings once you go over a certain limit. [0] [0] https://www.theguardian.com/sport/2011/jun/29/betfair-premium-charge-increase https://www.theguardian.com/sport/2011/jun/29/betfair-premiu...
  - phillc73 9y ago
    Betfair merged with Paddy Power, not Ladbrokes. They probably stopped offering their service in Canada due to unclear licensing and operating regulations for their Exchange product. It has happened in a number of other jurisdictions too. What you need is a good friend or relative in the UK or Ireland, and a VPN. However there are now other exchange betting options, with at least some degree of liquidity - Betdaq, Smarkets and Matchbook for example. Professional punters still have ways of getting on, which circumvent the online restrictions. Once all their accounts have been limited or closed with the online bookmakers, the next step is usually a string of agents across multiple locations, working on commission, and placing bets on the punter's behalf. It's still possible to get on for farely large amounts like this. If horse racing is your game, Hong Kong is where the money is at. Huge totalliser pools (park-mutual) where the size of an individual's bet is unlikely to move the market very much. Now that there is co-mingling with a number of other pools around the world, one doesn't have to be in HK to bet there. I've recently started having a proper go at the Daily Fantasy Sport option, now that Draft Kings has opened up in the UK and a few other European locations. Moneyball in Australia is also quite good, albeit much smaller prize pools. However, this weekend they just launched a DFS horse racing product which looks pretty interesting.
utnick 9y ago
There has to be more to this story. I would like to hear the bookmakers side of this. Perhaps the researchers were scripting or triggered some other kind of security tripwire. Winning $900 split across several different bookmakers is absolutely nothing in the sports betting industry. William Hill, one of the companies that the researchers claim restricted them is a multi billion dollar company. They aren't sweating small time bets like this. EDIT: I noticed that the screenshots they used as proof their bets were restricted are for bets on very minor football leagues (Australian semi pro football), its common for betting limits to be lower for games that don't see a lot of betting action & is not proof enough to me that the bookmakers lowered their limits globally
- mason55 9y ago
  My guess is that it’s the manner by which they were winning. Thirty $50 bets per week over five months is over 500 bets. That’s not the long run but winning at an 8.5% ROI over that many bets is probably enough for the house to realize they’re somehow a winning player even if the stakes aren’t huge.
  - utnick 9y ago
    Sportsbooks in general don't mind winning players though, especially big ones. They make money off the vig and move odds to get equal money on each side of the bet so that they'll make money either way.
    - valuearb 9y ago
      They hate “sharps”, winners who win through skill exploiting lines, they love those who win by chance. Sharps will continue to bleed them, the lucky fish often become whales whose luck fades over time.
      - nasredin 9y ago
        In casino games the "luck" stays the same. One or two percentages (or more) lower than 50%.
mherdeg 9y ago
Not mentioned in the abstract is that they also used real money: > During that period we obtained an accuracy of 47.% [sic] and a profit of $957.50 across 265 bets, equivalent to a 8.5% return (Table 1, Figure 3). For some reason the "ok but how much did you ACTUALLY MAKE?" is always my favorite part of this kind of business or economics literature.
SubiculumCode 9y ago
I don't see why we cannot have completely distributed betting platform using para-mutual betting strategy that collects and distributes bets and winnings on the basis of publicly reported sports results with no take-out. I prefer para-mutual rather than a house deciding the odds. It is a more free-market approach. It has been used in horse racing, but the takeout has been too large which makes it hard to be profitable.
- dogruck 9y ago
  Yes -- customers don't like it because it's too hard to win. Said another way, customers will choose to place bets with market makers, instead of some paramutual operation.
  - razwall 9y ago
    Why is it harder to win?
    - au_gambler 9y ago
      In paramutuel betting the prices are not fixed, so you cannot leverage differences between the odds on offer and your estimate of the prospect's chances. The final odds you receive are equal to the total stakes placed on that prospect divided by (sum of all stakes less the operator's take). You can't formulate an optimal staking plan with unknown odds, and you're forced to compete on win rates rather than price ineffeciencies.
      - SubiculumCode 9y ago
        I don't think your reasoning is correct. A bookmaker setting the odds presumably would hire the most accurate handicapper analytics team to set the odds appropriately, then take their cut. In paramutual betting, you need only be better than the average bet..and there are a lot of stupid betters. You know the odds pretty well by posttime.
        9y ago
antouank 9y ago
Yes, of course you can beat the "popular" bookmakers. Once you start beating them ( being profitable in value prices ) they will simply close/ban your account. Nowadays, it happens extremely fast ( in a day or a few hours, depending on your moves ). It's a well known tactic, and in practice, you cannot do anything about it ( other than keep opening new accounts in new names ). Try beating a betting exchange.
- brucen 9y ago
  They did have betfair in the list - I wonder if they placed any bets there.
psynapse 9y ago
"Retail" bookmakers are only interested in mugs. If your betting patterns indicate someone who is wise to the market, you will be limited or shown the door. Be prepared to have arbitrage positions pulled out from under you. The game is rigged insofar as the book decides if it wants to entertain your position. If you want to make money you have to bet against, and be able to beat the books that know what they are doing - The high limit, low margin books like Pinnacle, SBO, IBC et al will happily take you on.
conistonwater 9y ago
> A few weeks after we started trading with actual money some bookmakers began to severely limit our accounts, forcing us to stop our betting strategy. Isn't this like literally one of the oldest tricks in the book? I remember reading Reminiscences of a Stock Operator, which talks in part about early 1900's bucket shops, and the same stuff was there even then. Similar stuff is also mentioned in market microstructure textbooks with market makers on one side and informed traders on the other side. Is rigged even the right word here? It might be, but did the bookmakers have a responsibility to keep accepting their bets? Is it different from claiming that casinos are rigged?
- dogruck 9y ago
  Correct -- the market maker (or casino) is under no obligation to take your action. And, why should they be? The penalty for refusing action is that you take your business elsewhere.
- agilebyte 9y ago
  Same here. If you have a strategy that wins you money overall, bookmakers either send you a nice email saying your account is closed as they do not welcome professional players or they just severely limit your stakes (think $20 a bet). (Will Hill, Interwetten, Betway are exactly the type of bookies that will close your account as soon as they catch on) Yes, the odds can be exploited and there is a whole bunch of services offering picks, but eventually the sportsbooks catch on and close your account. The sportsbooks that welcome professional players are few and far between and their odds are on point.
glenjamin 9y ago
I used to work for a popular UK online bookmaker. The thing that a lot of these comments are missing is that bookies aren’t going to sell a product at a loss. They’re also not even selling the product you think they are (something akin to an investment). Bookmakers sell excitement / entertainment - the thrill of the potential win is the product, and costs approximately 10% of what you can afford to stake.
au_gambler 9y ago
> A strategy intended to beat the bookmakers at predicting the outcome of sports games requires a more accurate model than the ones bookmakers have developed over many years of data collection and analysis. I disagree with this assumption and I think they have painted themselves into a corner because of it. To illustrate, imagine charting win rates against bins of price-implied-chances. $3 horses win roughly 33% of the time, $4 horses 25% for example. It resembles a noisy 1:1 linear relationship. Do the same for your selections and your line will be noisier, but crucially you're not taking bets where the price is worse than your estimate. This can leave a window of profitibility when you subtract the two, even when you are less 'accurate' as measured by win rate or KLD or other measures. The goal is profitibility, not accuracy. The problem with including the odds you are betting against as a feature for your ensemble is that it dampens that window. If you're right about your selections, you'll bet less and win less. * If you're concerned about the volitility that comes with being less accurate, there are better ways to address that. I've been doing this for a couple of years and in many ways it's a dream side-project. Location independent, no customers, automatable, and in some jurisdictions tax-free. It can be a little lonely at times though. I would love to chat with anyone else applying tech/math to beat the bookies. Sorry for the throwaway, I'll put a contact in my profile.
- Bromskloss 9y ago
  > I would love to chat with anyone else applying tech/math to beat the bookies. Sorry for the throwaway, I'll put a contact in my profile. How's that contact information coming along? :-)
skizm 9y ago
I always thought bookies just kept moving the lines until they were making money at the snap of the ball. Their initial line isn't as important as adjusting the line so that there is equal money on both sides of the line and therefore the bookie is guaranteed money due to the small fee they build into the bets. Their profits don't depend on accurately predicting the game's score, just moving the line strategically as more bets come in.
- dogruck 9y ago
  Easier said than done. Suppose your book is balanced, and you have $25,000 on each side. Then a new bet comes in, size $250,000, on one side of your book -- what to do? Or, more simply, when you set your initial line, what do you do when a known sharp immediately wants action on one side?
  - CamTin 9y ago
    You open things up to select sharps earlier than the general public, with limits. They get the benefit of potentially better lines and you get the information benefit of what the pros think the fair price for any bet is, allowing you to adjust the line before allowing bets from the general public. That's how a lot of the offshore sportsbooks handle it, but it may not actually be legal to do so in Vegas. I don't actually know.
    - dogruck 9y ago
      One other factor is sometimes you actually are willing to take principal risk -- like when there are hoards of people willing to place bad bets on the local team -- you're willing to run an unbalanced book.
  - kirykl 9y ago
    Don’t honor the bet until you can balance it or limit it to an amount you can balance ?
    - dogruck 9y ago
maaaats 9y ago
They claim the market is inefficient. I worked for a company that to some extend fixed that. Can't remember all the details (I worked on a different part), but something like this: Most big betting companies were customers. They all continuously sent their updated odds to us, and we would broadcast to the other companies. They would react to the change based on certain rules and send new updated odds back to us. This would then converge. The inefficacy comes from promotions, company X always wanting to have odds .1 better than company Y etc. Edit: Not sure how it works now, but: https://www.betradar.com/ https://www.betradar.com/ and https://mts.betradar.com/ https://mts.betradar.com/
- repsilat 9y ago
  Haha, this exactly describes arbitrage. My old company was "sent ... updated odds" (well, we scraped their sites often...) and "we would broadcast to the other companies" by betting on those other companies' sites when the lines crossed, and "This would then converge" because one of the bookies in the arb would move the odds after we hit them (or after we hit them a second or third time...)
  - maaaats 9y ago
    Yeah, but with the difference that they pay a flat fee for the arbitrage through a third party, not leaving money on the table for others.
watoc 9y ago
I don't totally understand why the bookmakers would limit their accounts. The bookmaker wants to balance his book for each game to make sure he makes a profit no matter what the outcome is. To balance their books they might give better odds for an outcome than what a statistical model might suggest. But what difference does it make if the bettor who helps them balance their books is a consistent winner or not? Do they prefer to give these "good" odds to people who are losing money long term?
- joosters 9y ago
  It’s really simple: For a bookie, if a customer is winning money, then you are losing money. Doesn’t matter if they are helping balance your books or not. So why take their bets? Likewise, bookmakers will happily take bets from guessers all day long. If they are lucky enough to get a ‘whale’ placing huge (but dumb) bets, they can easily lay off those bets elsewhere to manage their risk. They don’t need skilful gamblers to help balance their books.
- hudibras 9y ago
  Don't try to overthink it: imagine the bookies having a dashboard that shows everybody's win rate (or alternatively, how much the bookie is losing) and then they ban or limit the top performers. Instant and legal profit for them.
  - watoc 9y ago
    Shouldn't they try to maximize their profits overall and minimize their risk at the same time rather than try to maximize profit for each of their clients individually?
- s17n 9y ago
  Probably the bookmakers are actually OK with the betting activity that is described in the paper, but they have limits on successful accounts as a safety mechanism to prevent themselves from losing too much money in the event that somebody comes up with an unforeseen method of winning lots of money.
shakedown1 9y ago
They could have reduced a lot of the work (calculating the mean across 32 bookmakers and applying a constant for the margin) by just taking the price from a highly liquid exchange like betfair, which is pretty close to a 100% efficient de-marginated line. Although it still wouldn't have prevented their accounts from being limited.
SCAQTony 9y ago
"Of course the game is rigged. Don't let that stop you—if you don't play, you can't win." -- Robert A. Heinlein, "Time Enough for Love"
scwoodal 9y ago
Link to the code used from the PDF: https://github.com/Lisandro79/BeatTheBookie https://github.com/Lisandro79/BeatTheBookie
au_gambler 9y ago
A couple of suggestions to improve on this method. The authors' regression left an intercept or 'adjustment term' of 3.4% - 5.7%. For a perfect bookmaker, this intercept term would be equal to the overround. The number calculated unfortunately averages that overround between different bookmakers and at different times (overrounds often decrease over time). It might be more effective to adjust for the actual overround of each market sampled, i.e. divide each price by the sum of the inverse of the prospects. They appear to use a flat betting strategy, and the threshold to bet or not was selected based on profitibility. I was simplifying in another comment when I said profitibility should be the goal. In reality it's utility you should be optimizing for. Nobody wants a ultimately profitable system that reads like an EKG, they want a high sharpe ratio. The paper's results are actually very good here, but the trend could be lifted and stabilized further by betting proportionally to expectation, or by explicitly optimizing for such.
- shakedown1 9y ago
  Interesting. Are you refering to kelly criterion?
  - au_gambler 9y ago
    There needs to be some degree of risk aversion given the uncertainties in estimating your edge. I am thinking more along the lines of a CRRA utility function - something a little less aggressive than kelly.
    - qwtel 9y ago
      in your opinion, is there any practical benefit over just using half kelly?
- brucen 9y ago
  Raises an interesting point regarding a staking strategy. Given the bookmakers are going to cut you off, it potentially could be better to just go as hard as you can & live with the risk. Alternatively, an interesting tweak would be to see what the best historical edge has been, and wait for the best opportunities to surface & only bet on those. Effectively you limit yourself by saying "I can only place N bets per bookmaker, what should my strategy be?"
Rainymood 9y ago
How long do you think the authors would have waited to publish this paper if their accounts were not restricted and they would continue to profit? My guess would be a long time.
andr3w321 9y ago
What the authors are doing is “chasing steam” and most books will ban or limit you if you try this. This should come as no surprise to people with experience in the industry. The books aren’t limiting/banning them for winning - it’s the way in which they were winning. They are betting slow moving books’ lines. Their strategy only works at poorly managed books as long as they can bet quickly. I doubt they made any bets at a sharp friendly book like pinnacle. If anyone would like to collaborate with some model building get in touch. I already have a large db of most of the stats you’d ever need and some okay but not amazing models for most major sports.
- LittlePeter 9y ago
  How would I go about contacting you?
  - andr3w321 9y ago
    Contact info is in profile but andr3w321 at gmail
    - phillc73 9y ago
      People say their contact details are in their profile, but I never see contact details in any profile I view. Am I missing something?
      - bckygldstn 9y ago
        If you view your own profile you can see your email, but some people don't realise it doesn't show up in your public profile.
mherrmann 9y ago
TL;DR: Researchers made $950 (8.5%) but say it wasn't worth the effort [1]. [1]: https://github.com/Lisandro79/BeatTheBookie https://github.com/Lisandro79/BeatTheBookie
- brucen 9y ago
  They really should have automated the bet placement from the outset, which would have made it worth the effort. Could probably make a few thousand $ before getting cut off, per person. Definitely a worthwhile venture, considering you could probably then sell off the software after using it for some more profits. Sites like https://www.oddsmonkey.com/ https://www.oddsmonkey.com/ are kind of on this track already.
  - mherrmann 9y ago
    I've qualified my comment - thanks.
alkonaut 9y ago
The most interesting thing was left out: how did they find this data? Both historical and realtime is pretty hard to find. Ten years of odds from a dozen bookies looks like a massive task. Next: how do you mask this behavior to not be obvious. Once you have a betting stratetgy the real difficulty is turning it into one that isn't obvious.
soniman 9y ago
I've been trying my luck at tennis betting ( https://matchstat.com/profile/soniman https://matchstat.com/profile/soniman ) and the only strategy that seems to work consistently is finding injured players and betting against them. Good example of an injured player is a player that limps (Andy Murray at Wimbledon this year). The computers don't watch matches so injured players can be overvalued by the models. Also, any British tennis player tends to be overvalued because the books are based in the UK. For instance there is an overweight British player named Marcus Willis that last week was a 1.01 favorite to win at a tournament in Las Vegas; he lost, apparently due to dizziness aka being fat. There are some other patterns that can be exploited but the highest return strategy has to be betting against injured favorites. However, I think that would probably require more tennis watching than I want to do. Maybe I could hire somebody on Mechanical Turk to watch tennis for me and report on players who appear to be injured or take medical time outs.
- flashman 9y ago
  Maybe you could find a sport where injuries are logged or can be inferred from other data? For instance if a racehorse performs far slower than its typical pace, its odds of losing the subsequent race might be higher.
  - oreo81 9y ago
    The whole point is that computers can't use injuries as a data point. This strategy won't work in any sport that can have the injury factor calculated by a computer.
PaulRobinson 9y ago
A bookmaker's tissue prices (the initial market prices they offer up), are not intended to be a measure of probability. They are meant to be a measure of expected Weight of Money (WoM). A bookmaker's job is not to accurately reflect odds of occurrence, but to ensure a balanced book of liabilities. There are many books covering this going back hundreds of years and is the principle discovery of those who gathered at Tattersalls coffee shop on the Strand and invented modern bookmaking (via horse racing), and for whom there is named an enclosure on all 55 British racecourses to this day. The tissue has to be "over-round", (i.e. the probabilities they represent have to add up to over 1.0, or 100%) because sometimes a market will look at the prices, see that the odds are very much in the favour of a selection and act accordingly. As such, the WoM causes a market to move. This is not news. If you have a reasonable idea of true odds and you are being offered different odds, Kelly (who worked with Shannon - the creator of Information Theory), established the optimal stake to bet at each stage. A substantial amount of research has been done on Kelly Criterion and its application because it underpins many a hedge fund strategy: it works for fixed odds games, fiscal markets and bookmaker markets just as well. There are trading opportunities here, and there is a wide community of people who look to exploit inevitable market moves using exactly this technique: establish average industry odds, look to where betting exchanges are and bet accordingly, moving out of the market when a profit comes to you. The bookmakers don't care - you've helping get turnover up, and they know increasing turnover through the market is the best way to get balanced liabilities. On a horse race, they might offer prices that give up an over-round of 110%-130% most days, but on Premier League Football which has a much, much higher turnover, and WoM is far more predictable (due to team loyalties coming into play), over-rounds can be as low as 102%. These markets are therefore more likely to provide value to the authors' methods, however I note they are making the majority of their bets between 5 and 1 hours before a game, and therefore to some extent are able to factor in team selection and some of their results might be the result of a market inefficiency: team line-ups aren't announced until 60 minutes before kick-off. Now, here's two major downsides: 1. Bookmakers will eventually end up closing their accounts, because winners are never welcome long-term. 2. There is a reason why successful gamblers don't publish. Even Thorpe who invented card counting and blackjack basic strategy realised publishing (which was his academic need) ultimately caused him to need to do something else: he ended up privately and quietly running a hedge fund. These guys are probably finished within 2 weeks of this paper going around, and what's more because now a whole ton of people will go to implement this method, bookmakers will adapt and simply move from tissue to industry average as quickly as possible, whilst limiting even more players to reduce liability exposure (as has been the style in recent years). EDIT: I only skim-read the paper when I wrote the above. Now I've read it a little more closely I am even more convinced there is nothing to note here, and also, their accounts have already been limited or closed.
greggarious 9y ago
Personally I've come to find poker is the only reliable way to "beat the house". But that's because you're not beating the house, but other players - the house gets their rake. If you play a tight-aggressive game in venues the pros avoid (anyplace with less than $2/hour comps in Vegas) you can do decently. Not get rich, but make a few hundred in an afternoon.
arisAlexis 9y ago
For anyone interested in running data analysis I have probably the biggest and most comprehensive dataset in the world, bigger that what this team had available.
rajacombinator 9y ago
Shouldn't the goal of a bookie simply be to balance his book and have no position on the actual odds of the match? Of course it makes sense to deny action to known sharps, this should come as no surprise.
Zaita 9y ago
Wanted to post this a few days ago, but life got away on me. I worked for a monopoly bookmaker and spent a fair amount of time looking at how they work. Our turnover was $2.6bil/yr with $150mil profit in a country with less than 10 million people. So, Some things to give you guys a bit more context. 1. There are two types of bets. Fixed Odds and Tote. - Tote is a pool based betting system where the odds can change after you have placed your bet. The odds are calculated automatically based on the distribution of bets on the options available. Typically the house will keep 50%+ of the total pool as profit and distribute the remainder among the winning punters. This is a very high profit betting system that the book keepers are trying to keep alive. It's dying off at a pretty rapid rate though. - Fixed Odds Betting (FOB) is where you get payment on the odds you lock in at the time of placing your bet. Most betting now is FOB. For the sake of responding to various points other respondents have made I will focus only on Fixed Odds; especially as Tote is only used for horse/dog racing. 2. How do the odds work? For us, we had university students who'd manage the books. They had software that showed them how much risk/leverage they had and what the guaranteed profit was. They can set "bet limits" and manually approve (or deny) any bet that was greater than the bet limit. Most of the time they would have open websites from other bookies and copy the odds from theirs as they change. It's quite popular for bookies to just copy each other manually. For Live/In-Play betting the book keepers will watch the event and manipulate the odds as things occurred. Either using their own knowledge or copying from other gambling sites. Again, the process is completely manual at the back end. There is a move for organisations around the world to consolidate on their sources of odds (e.g. using a common back-end odds distribution platform); but ultimately there is still a large manual component to changing the odds, especially during live play. 3. How do they make money? On Tote, they take 50%+ of the total pool before creating dividends. For Fixed Odds, they balance the books. They change the odds to always ensure it's in the houses favour. We always aimed for 10-15% profit on events with fixed odds bets. Home players/athletes will always have much lower odds because of people's tendency to bet with the heart. They deny bets. The bookie doesn't have to take your bet. For large bets they will often push back an offer to you at a lower rate than advertised to ensure their books stay balanced. For live/in-play bets they'll delay your bet until that odd is no longer available ensuring your bet is not accepted. They have A LOT of different betting options where only a few will actually win. People tend to bet with their hearts and the number of options are setup to basically ensuring the bookie is profitable. If you win too much, they shut down your account. They have no obligation to deal with you. Their goal is to make money and they see your gambling as a way you "enhance your enjoyment of the event", not an attempt to make money. So there isn't a large tolerance for people who do make money. 4. How do I (the punter) make money? Surprisingly, you can consistently make money gambling. Don't bet on Dogs/Horses. Even the top 1% of punters barely break even. They're profitable because of the kick-backs the bookies give them for having high turnover (>$1mil/yr). Find a sport you know a lot about that supports in-play betting. It's going to be you vs a person. So if you have indepth knowledge of the sport you'll be able to see changes in flow and make winning bets before the bookie notices. FWIW, I bet on League of Legends. During the LOL Worlds I can make 2500% with >90% win rate. Now, I'm only winning a few $k total so nothing significant. That's all I can think of at the moment. Happy to answer any questions you have.

242 points by zeristor 9y ago

Courtesy of slashdot: https://science.slashdot.org/story/17/10/21/1744218/data-science-meets-sports-gambling-how-researchers-beat-the-bookies https://science.slashdot.org/story/17/10/21/1744218/data-sci...

nnfy 9y ago

I am confused. If the betting is rigged, then how were the authors able to beat it consistently? What did I miss?

PeachPlum 9y ago
That if you keep winning they restrict your account. > They kept this up for five months, placing $50 bets around 30 times a week. And they were winning. After five months the team had made a profit of $957.50 -- a return of 8.5 per cent. But their streak was cut short. Following a series of several small wins, the trio were surprised to find that their accounts had been limited, restricting how much they could bet to as little as $1.25.
downandout 9y ago
"Rigged" is the wrong word. What it essentially says is that all of the data that a professional could reasonably analyze is already baked into the odds that bookies initially set, and if those odds stayed the same until bets were no longer being taken on the event, sports betting would be consistently unprofitable because of the 10% "juice" that most bookmakers charge. However, the odds do not stay the same. Once they are posted and bets begin to come in, the market takes hold and begins swaying the odds one way or another, because bookies change the odds in order to try to balance their books such that they have little to no actual risk. It is in the swinging of the odds by the market, which has many unsophisticated participants - people betting on a team simply because they live in that city etc. - where money can be made, because there is an incredibly large amount of "dumb money" in the sports betting market.
- mikkom 9y ago
  No, rigged is exactly the right word. From the paper: > Our strategy proved profitable in a 10-year historical simulation using closing odds, a 6-month historical simulation using minute to minute odds, > and a 5-month period during which we staked real money with the bookmakers. > > Our results demonstrate that the football betting market is inefficient ‒ bookmakers can be consistently beaten across thousands of games in both simulated environments and real-life betting. > We provide a detailed description of our betting experience to illustrate how the sports gambling industry compensates these market inefficiencies with discriminatory practices against successful clients.
  - downandout 9y ago
    The fact that they limit the accounts of successful bettors doesn't mean that it is "rigged". It simply means that they reserve the right to do business with whom they choose.
    - pocketsquare2 9y ago
      They are artificially manipulating the market. That's about as textbook rigging as putting three masts on a ship.
      - Spivak 9y ago
        If you consistently lose money whenever you transact with someone then you're going to stop doing business with or try to limit how much you lose. They're not rigging the actual game in any way. But if they're not throttling you it's a pretty good indication that you're not coming out ahead. If there was an obscure way to play craps that made the house advantage negative they would either change the rules or ban the practice. You could call it rigging but by that token every game is rigged, that's the whole point, you're playing in the hope of beating the odds. The rules and odds are completely transparent, 'rigging' would be like using weighted dice.
    - johnvonneumann 9y ago
Spooky23 9y ago
Nobody is in the business of giving money away. So the bookmaker put controls on how and how much you can bet. There’s a reason why this stuff was illegal for a long time — gambling is always a vicious cycle for the player.

johnzim 9y ago

Just like the rake or the edge the house advantage of making the rules has always been the reality of betting. Online or offline. Forever. Get too successful and you’re no longer invited to bet. Asymmetry of information has never been the bookmaker’s most powerful weapon. The book is. Those who are successful at it accept this reality. They grumble and make peace with it - paying the super taxes and liquidising markets where they’re asked to. Ultimately however, while it’s interesting to see how they do some of this (and there are plenty of practices not covered in the paper, I assure you) it’s a bit like complaining the DM won’t let you do something in dungeons and dragons - you’re dicing with the god of your domain so the rules can change at any minute.

ChuckMcM 9y ago

"Send enquires about this paper to our newly acquired private island in the Bahamas." :-) One of the most depressing things I realized when I learned to count cards, and confer upon myself a small but meaningful advantage in the game of Blackjack, was that the casinos simply ask you to leave if you win too much. That put an upper limit on the rate at which one could win. The folks who figure out slot machines have a much better time of it because it takes longer for the casinos to figure out they are losing money.

GigabyteCoin 9y ago
I used to use the betfair platform until it they blocked themselves from being viewed in Canada for some strange reason right after they were purchased by ladbrokes I believe it was. Anyways, after playing with them for a few years, I was horrified to learn about their 60% tax on consistent winners that they have dubbed a "premium charge". Found some sort of edge to exploit and reap profits? Betfair doesn't even care to talk to you to ask you what you are doing, they will just charge you 60% of your winnings once you go over a certain limit. [0] [0] https://www.theguardian.com/sport/2011/jun/29/betfair-premium-charge-increase https://www.theguardian.com/sport/2011/jun/29/betfair-premiu...
- phillc73 9y ago
  Betfair merged with Paddy Power, not Ladbrokes. They probably stopped offering their service in Canada due to unclear licensing and operating regulations for their Exchange product. It has happened in a number of other jurisdictions too. What you need is a good friend or relative in the UK or Ireland, and a VPN. However there are now other exchange betting options, with at least some degree of liquidity - Betdaq, Smarkets and Matchbook for example. Professional punters still have ways of getting on, which circumvent the online restrictions. Once all their accounts have been limited or closed with the online bookmakers, the next step is usually a string of agents across multiple locations, working on commission, and placing bets on the punter's behalf. It's still possible to get on for farely large amounts like this. If horse racing is your game, Hong Kong is where the money is at. Huge totalliser pools (park-mutual) where the size of an individual's bet is unlikely to move the market very much. Now that there is co-mingling with a number of other pools around the world, one doesn't have to be in HK to bet there. I've recently started having a proper go at the Daily Fantasy Sport option, now that Draft Kings has opened up in the UK and a few other European locations. Moneyball in Australia is also quite good, albeit much smaller prize pools. However, this weekend they just launched a DFS horse racing product which looks pretty interesting.

utnick 9y ago

There has to be more to this story. I would like to hear the bookmakers side of this. Perhaps the researchers were scripting or triggered some other kind of security tripwire. Winning $900 split across several different bookmakers is absolutely nothing in the sports betting industry. William Hill, one of the companies that the researchers claim restricted them is a multi billion dollar company. They aren't sweating small time bets like this. EDIT: I noticed that the screenshots they used as proof their bets were restricted are for bets on very minor football leagues (Australian semi pro football), its common for betting limits to be lower for games that don't see a lot of betting action & is not proof enough to me that the bookmakers lowered their limits globally

mason55 9y ago
My guess is that it’s the manner by which they were winning. Thirty $50 bets per week over five months is over 500 bets. That’s not the long run but winning at an 8.5% ROI over that many bets is probably enough for the house to realize they’re somehow a winning player even if the stakes aren’t huge.
- utnick 9y ago
  Sportsbooks in general don't mind winning players though, especially big ones. They make money off the vig and move odds to get equal money on each side of the bet so that they'll make money either way.
  - valuearb 9y ago
    They hate “sharps”, winners who win through skill exploiting lines, they love those who win by chance. Sharps will continue to bleed them, the lucky fish often become whales whose luck fades over time.
    - nasredin 9y ago
      In casino games the "luck" stays the same. One or two percentages (or more) lower than 50%.

mherdeg 9y ago

Not mentioned in the abstract is that they also used real money: > During that period we obtained an accuracy of 47.% [sic] and a profit of $957.50 across 265 bets, equivalent to a 8.5% return (Table 1, Figure 3). For some reason the "ok but how much did you ACTUALLY MAKE?" is always my favorite part of this kind of business or economics literature.

SubiculumCode 9y ago

I don't see why we cannot have completely distributed betting platform using para-mutual betting strategy that collects and distributes bets and winnings on the basis of publicly reported sports results with no take-out. I prefer para-mutual rather than a house deciding the odds. It is a more free-market approach. It has been used in horse racing, but the takeout has been too large which makes it hard to be profitable.

dogruck 9y ago
Yes -- customers don't like it because it's too hard to win. Said another way, customers will choose to place bets with market makers, instead of some paramutual operation.
- razwall 9y ago
  Why is it harder to win?
  - au_gambler 9y ago
    In paramutuel betting the prices are not fixed, so you cannot leverage differences between the odds on offer and your estimate of the prospect's chances. The final odds you receive are equal to the total stakes placed on that prospect divided by (sum of all stakes less the operator's take). You can't formulate an optimal staking plan with unknown odds, and you're forced to compete on win rates rather than price ineffeciencies.
    - SubiculumCode 9y ago
      I don't think your reasoning is correct. A bookmaker setting the odds presumably would hire the most accurate handicapper analytics team to set the odds appropriately, then take their cut. In paramutual betting, you need only be better than the average bet..and there are a lot of stupid betters. You know the odds pretty well by posttime.
      - 9y ago

antouank 9y ago

Yes, of course you can beat the "popular" bookmakers. Once you start beating them ( being profitable in value prices ) they will simply close/ban your account. Nowadays, it happens extremely fast ( in a day or a few hours, depending on your moves ). It's a well known tactic, and in practice, you cannot do anything about it ( other than keep opening new accounts in new names ). Try beating a betting exchange.

brucen 9y ago
They did have betfair in the list - I wonder if they placed any bets there.

psynapse 9y ago

"Retail" bookmakers are only interested in mugs. If your betting patterns indicate someone who is wise to the market, you will be limited or shown the door. Be prepared to have arbitrage positions pulled out from under you. The game is rigged insofar as the book decides if it wants to entertain your position. If you want to make money you have to bet against, and be able to beat the books that know what they are doing - The high limit, low margin books like Pinnacle, SBO, IBC et al will happily take you on.

conistonwater 9y ago

> A few weeks after we started trading with actual money some bookmakers began to severely limit our accounts, forcing us to stop our betting strategy. Isn't this like literally one of the oldest tricks in the book? I remember reading Reminiscences of a Stock Operator, which talks in part about early 1900's bucket shops, and the same stuff was there even then. Similar stuff is also mentioned in market microstructure textbooks with market makers on one side and informed traders on the other side. Is rigged even the right word here? It might be, but did the bookmakers have a responsibility to keep accepting their bets? Is it different from claiming that casinos are rigged?

dogruck 9y ago
Correct -- the market maker (or casino) is under no obligation to take your action. And, why should they be? The penalty for refusing action is that you take your business elsewhere.
agilebyte 9y ago
Same here. If you have a strategy that wins you money overall, bookmakers either send you a nice email saying your account is closed as they do not welcome professional players or they just severely limit your stakes (think $20 a bet). (Will Hill, Interwetten, Betway are exactly the type of bookies that will close your account as soon as they catch on) Yes, the odds can be exploited and there is a whole bunch of services offering picks, but eventually the sportsbooks catch on and close your account. The sportsbooks that welcome professional players are few and far between and their odds are on point.

glenjamin 9y ago

I used to work for a popular UK online bookmaker. The thing that a lot of these comments are missing is that bookies aren’t going to sell a product at a loss. They’re also not even selling the product you think they are (something akin to an investment). Bookmakers sell excitement / entertainment - the thrill of the potential win is the product, and costs approximately 10% of what you can afford to stake.

au_gambler 9y ago

> A strategy intended to beat the bookmakers at predicting the outcome of sports games requires a more accurate model than the ones bookmakers have developed over many years of data collection and analysis. I disagree with this assumption and I think they have painted themselves into a corner because of it. To illustrate, imagine charting win rates against bins of price-implied-chances. $3 horses win roughly 33% of the time, $4 horses 25% for example. It resembles a noisy 1:1 linear relationship. Do the same for your selections and your line will be noisier, but crucially you're not taking bets where the price is worse than your estimate. This can leave a window of profitibility when you subtract the two, even when you are less 'accurate' as measured by win rate or KLD or other measures. The goal is profitibility, not accuracy. The problem with including the odds you are betting against as a feature for your ensemble is that it dampens that window. If you're right about your selections, you'll bet less and win less. * If you're concerned about the volitility that comes with being less accurate, there are better ways to address that. I've been doing this for a couple of years and in many ways it's a dream side-project. Location independent, no customers, automatable, and in some jurisdictions tax-free. It can be a little lonely at times though. I would love to chat with anyone else applying tech/math to beat the bookies. Sorry for the throwaway, I'll put a contact in my profile.

Bromskloss 9y ago
> I would love to chat with anyone else applying tech/math to beat the bookies. Sorry for the throwaway, I'll put a contact in my profile. How's that contact information coming along? :-)

skizm 9y ago

I always thought bookies just kept moving the lines until they were making money at the snap of the ball. Their initial line isn't as important as adjusting the line so that there is equal money on both sides of the line and therefore the bookie is guaranteed money due to the small fee they build into the bets. Their profits don't depend on accurately predicting the game's score, just moving the line strategically as more bets come in.

dogruck 9y ago
Easier said than done. Suppose your book is balanced, and you have $25,000 on each side. Then a new bet comes in, size $250,000, on one side of your book -- what to do? Or, more simply, when you set your initial line, what do you do when a known sharp immediately wants action on one side?
- CamTin 9y ago
  You open things up to select sharps earlier than the general public, with limits. They get the benefit of potentially better lines and you get the information benefit of what the pros think the fair price for any bet is, allowing you to adjust the line before allowing bets from the general public. That's how a lot of the offshore sportsbooks handle it, but it may not actually be legal to do so in Vegas. I don't actually know.
  - dogruck 9y ago
    One other factor is sometimes you actually are willing to take principal risk -- like when there are hoards of people willing to place bad bets on the local team -- you're willing to run an unbalanced book.
- kirykl 9y ago
  Don’t honor the bet until you can balance it or limit it to an amount you can balance ?
  - dogruck 9y ago

maaaats 9y ago

They claim the market is inefficient. I worked for a company that to some extend fixed that. Can't remember all the details (I worked on a different part), but something like this: Most big betting companies were customers. They all continuously sent their updated odds to us, and we would broadcast to the other companies. They would react to the change based on certain rules and send new updated odds back to us. This would then converge. The inefficacy comes from promotions, company X always wanting to have odds .1 better than company Y etc. Edit: Not sure how it works now, but: https://www.betradar.com/ https://www.betradar.com/ and https://mts.betradar.com/ https://mts.betradar.com/

repsilat 9y ago
Haha, this exactly describes arbitrage. My old company was "sent ... updated odds" (well, we scraped their sites often...) and "we would broadcast to the other companies" by betting on those other companies' sites when the lines crossed, and "This would then converge" because one of the bookies in the arb would move the odds after we hit them (or after we hit them a second or third time...)
- maaaats 9y ago
  Yeah, but with the difference that they pay a flat fee for the arbitrage through a third party, not leaving money on the table for others.

watoc 9y ago

I don't totally understand why the bookmakers would limit their accounts. The bookmaker wants to balance his book for each game to make sure he makes a profit no matter what the outcome is. To balance their books they might give better odds for an outcome than what a statistical model might suggest. But what difference does it make if the bettor who helps them balance their books is a consistent winner or not? Do they prefer to give these "good" odds to people who are losing money long term?

joosters 9y ago
It’s really simple: For a bookie, if a customer is winning money, then you are losing money. Doesn’t matter if they are helping balance your books or not. So why take their bets? Likewise, bookmakers will happily take bets from guessers all day long. If they are lucky enough to get a ‘whale’ placing huge (but dumb) bets, they can easily lay off those bets elsewhere to manage their risk. They don’t need skilful gamblers to help balance their books.
hudibras 9y ago
Don't try to overthink it: imagine the bookies having a dashboard that shows everybody's win rate (or alternatively, how much the bookie is losing) and then they ban or limit the top performers. Instant and legal profit for them.
- watoc 9y ago
  Shouldn't they try to maximize their profits overall and minimize their risk at the same time rather than try to maximize profit for each of their clients individually?
s17n 9y ago
Probably the bookmakers are actually OK with the betting activity that is described in the paper, but they have limits on successful accounts as a safety mechanism to prevent themselves from losing too much money in the event that somebody comes up with an unforeseen method of winning lots of money.

shakedown1 9y ago

They could have reduced a lot of the work (calculating the mean across 32 bookmakers and applying a constant for the margin) by just taking the price from a highly liquid exchange like betfair, which is pretty close to a 100% efficient de-marginated line. Although it still wouldn't have prevented their accounts from being limited.

SCAQTony 9y ago

"Of course the game is rigged. Don't let that stop you—if you don't play, you can't win." -- Robert A. Heinlein, "Time Enough for Love"

scwoodal 9y ago

Link to the code used from the PDF: https://github.com/Lisandro79/BeatTheBookie https://github.com/Lisandro79/BeatTheBookie

au_gambler 9y ago

A couple of suggestions to improve on this method. The authors' regression left an intercept or 'adjustment term' of 3.4% - 5.7%. For a perfect bookmaker, this intercept term would be equal to the overround. The number calculated unfortunately averages that overround between different bookmakers and at different times (overrounds often decrease over time). It might be more effective to adjust for the actual overround of each market sampled, i.e. divide each price by the sum of the inverse of the prospects. They appear to use a flat betting strategy, and the threshold to bet or not was selected based on profitibility. I was simplifying in another comment when I said profitibility should be the goal. In reality it's utility you should be optimizing for. Nobody wants a ultimately profitable system that reads like an EKG, they want a high sharpe ratio. The paper's results are actually very good here, but the trend could be lifted and stabilized further by betting proportionally to expectation, or by explicitly optimizing for such.

shakedown1 9y ago
Interesting. Are you refering to kelly criterion?
- au_gambler 9y ago
  There needs to be some degree of risk aversion given the uncertainties in estimating your edge. I am thinking more along the lines of a CRRA utility function - something a little less aggressive than kelly.
  - qwtel 9y ago
    in your opinion, is there any practical benefit over just using half kelly?
brucen 9y ago
Raises an interesting point regarding a staking strategy. Given the bookmakers are going to cut you off, it potentially could be better to just go as hard as you can & live with the risk. Alternatively, an interesting tweak would be to see what the best historical edge has been, and wait for the best opportunities to surface & only bet on those. Effectively you limit yourself by saying "I can only place N bets per bookmaker, what should my strategy be?"

Rainymood 9y ago

How long do you think the authors would have waited to publish this paper if their accounts were not restricted and they would continue to profit? My guess would be a long time.

andr3w321 9y ago

What the authors are doing is “chasing steam” and most books will ban or limit you if you try this. This should come as no surprise to people with experience in the industry. The books aren’t limiting/banning them for winning - it’s the way in which they were winning. They are betting slow moving books’ lines. Their strategy only works at poorly managed books as long as they can bet quickly. I doubt they made any bets at a sharp friendly book like pinnacle. If anyone would like to collaborate with some model building get in touch. I already have a large db of most of the stats you’d ever need and some okay but not amazing models for most major sports.

LittlePeter 9y ago
How would I go about contacting you?
- andr3w321 9y ago
  Contact info is in profile but andr3w321 at gmail
  - phillc73 9y ago
    People say their contact details are in their profile, but I never see contact details in any profile I view. Am I missing something?
    - bckygldstn 9y ago
      If you view your own profile you can see your email, but some people don't realise it doesn't show up in your public profile.

mherrmann 9y ago

TL;DR: Researchers made $950 (8.5%) but say it wasn't worth the effort [1]. [1]: https://github.com/Lisandro79/BeatTheBookie https://github.com/Lisandro79/BeatTheBookie

brucen 9y ago
They really should have automated the bet placement from the outset, which would have made it worth the effort. Could probably make a few thousand $ before getting cut off, per person. Definitely a worthwhile venture, considering you could probably then sell off the software after using it for some more profits. Sites like https://www.oddsmonkey.com/ https://www.oddsmonkey.com/ are kind of on this track already.
- mherrmann 9y ago
  I've qualified my comment - thanks.

alkonaut 9y ago

The most interesting thing was left out: how did they find this data? Both historical and realtime is pretty hard to find. Ten years of odds from a dozen bookies looks like a massive task. Next: how do you mask this behavior to not be obvious. Once you have a betting stratetgy the real difficulty is turning it into one that isn't obvious.

soniman 9y ago

I've been trying my luck at tennis betting ( https://matchstat.com/profile/soniman https://matchstat.com/profile/soniman ) and the only strategy that seems to work consistently is finding injured players and betting against them. Good example of an injured player is a player that limps (Andy Murray at Wimbledon this year). The computers don't watch matches so injured players can be overvalued by the models. Also, any British tennis player tends to be overvalued because the books are based in the UK. For instance there is an overweight British player named Marcus Willis that last week was a 1.01 favorite to win at a tournament in Las Vegas; he lost, apparently due to dizziness aka being fat. There are some other patterns that can be exploited but the highest return strategy has to be betting against injured favorites. However, I think that would probably require more tennis watching than I want to do. Maybe I could hire somebody on Mechanical Turk to watch tennis for me and report on players who appear to be injured or take medical time outs.

flashman 9y ago
Maybe you could find a sport where injuries are logged or can be inferred from other data? For instance if a racehorse performs far slower than its typical pace, its odds of losing the subsequent race might be higher.
- oreo81 9y ago
  The whole point is that computers can't use injuries as a data point. This strategy won't work in any sport that can have the injury factor calculated by a computer.

PaulRobinson 9y ago

A bookmaker's tissue prices (the initial market prices they offer up), are not intended to be a measure of probability. They are meant to be a measure of expected Weight of Money (WoM). A bookmaker's job is not to accurately reflect odds of occurrence, but to ensure a balanced book of liabilities. There are many books covering this going back hundreds of years and is the principle discovery of those who gathered at Tattersalls coffee shop on the Strand and invented modern bookmaking (via horse racing), and for whom there is named an enclosure on all 55 British racecourses to this day. The tissue has to be "over-round", (i.e. the probabilities they represent have to add up to over 1.0, or 100%) because sometimes a market will look at the prices, see that the odds are very much in the favour of a selection and act accordingly. As such, the WoM causes a market to move. This is not news. If you have a reasonable idea of true odds and you are being offered different odds, Kelly (who worked with Shannon - the creator of Information Theory), established the optimal stake to bet at each stage. A substantial amount of research has been done on Kelly Criterion and its application because it underpins many a hedge fund strategy: it works for fixed odds games, fiscal markets and bookmaker markets just as well. There are trading opportunities here, and there is a wide community of people who look to exploit inevitable market moves using exactly this technique: establish average industry odds, look to where betting exchanges are and bet accordingly, moving out of the market when a profit comes to you. The bookmakers don't care - you've helping get turnover up, and they know increasing turnover through the market is the best way to get balanced liabilities. On a horse race, they might offer prices that give up an over-round of 110%-130% most days, but on Premier League Football which has a much, much higher turnover, and WoM is far more predictable (due to team loyalties coming into play), over-rounds can be as low as 102%. These markets are therefore more likely to provide value to the authors' methods, however I note they are making the majority of their bets between 5 and 1 hours before a game, and therefore to some extent are able to factor in team selection and some of their results might be the result of a market inefficiency: team line-ups aren't announced until 60 minutes before kick-off. Now, here's two major downsides: 1. Bookmakers will eventually end up closing their accounts, because winners are never welcome long-term. 2. There is a reason why successful gamblers don't publish. Even Thorpe who invented card counting and blackjack basic strategy realised publishing (which was his academic need) ultimately caused him to need to do something else: he ended up privately and quietly running a hedge fund. These guys are probably finished within 2 weeks of this paper going around, and what's more because now a whole ton of people will go to implement this method, bookmakers will adapt and simply move from tissue to industry average as quickly as possible, whilst limiting even more players to reduce liability exposure (as has been the style in recent years). EDIT: I only skim-read the paper when I wrote the above. Now I've read it a little more closely I am even more convinced there is nothing to note here, and also, their accounts have already been limited or closed.

greggarious 9y ago

Personally I've come to find poker is the only reliable way to "beat the house". But that's because you're not beating the house, but other players - the house gets their rake. If you play a tight-aggressive game in venues the pros avoid (anyplace with less than $2/hour comps in Vegas) you can do decently. Not get rich, but make a few hundred in an afternoon.

arisAlexis 9y ago

For anyone interested in running data analysis I have probably the biggest and most comprehensive dataset in the world, bigger that what this team had available.

rajacombinator 9y ago

Shouldn't the goal of a bookie simply be to balance his book and have no position on the actual odds of the match? Of course it makes sense to deny action to known sharps, this should come as no surprise.

Zaita 9y ago

Wanted to post this a few days ago, but life got away on me. I worked for a monopoly bookmaker and spent a fair amount of time looking at how they work. Our turnover was $2.6bil/yr with $150mil profit in a country with less than 10 million people. So, Some things to give you guys a bit more context. 1. There are two types of bets. Fixed Odds and Tote. - Tote is a pool based betting system where the odds can change after you have placed your bet. The odds are calculated automatically based on the distribution of bets on the options available. Typically the house will keep 50%+ of the total pool as profit and distribute the remainder among the winning punters. This is a very high profit betting system that the book keepers are trying to keep alive. It's dying off at a pretty rapid rate though. - Fixed Odds Betting (FOB) is where you get payment on the odds you lock in at the time of placing your bet. Most betting now is FOB. For the sake of responding to various points other respondents have made I will focus only on Fixed Odds; especially as Tote is only used for horse/dog racing. 2. How do the odds work? For us, we had university students who'd manage the books. They had software that showed them how much risk/leverage they had and what the guaranteed profit was. They can set "bet limits" and manually approve (or deny) any bet that was greater than the bet limit. Most of the time they would have open websites from other bookies and copy the odds from theirs as they change. It's quite popular for bookies to just copy each other manually. For Live/In-Play betting the book keepers will watch the event and manipulate the odds as things occurred. Either using their own knowledge or copying from other gambling sites. Again, the process is completely manual at the back end. There is a move for organisations around the world to consolidate on their sources of odds (e.g. using a common back-end odds distribution platform); but ultimately there is still a large manual component to changing the odds, especially during live play. 3. How do they make money? On Tote, they take 50%+ of the total pool before creating dividends. For Fixed Odds, they balance the books. They change the odds to always ensure it's in the houses favour. We always aimed for 10-15% profit on events with fixed odds bets. Home players/athletes will always have much lower odds because of people's tendency to bet with the heart. They deny bets. The bookie doesn't have to take your bet. For large bets they will often push back an offer to you at a lower rate than advertised to ensure their books stay balanced. For live/in-play bets they'll delay your bet until that odd is no longer available ensuring your bet is not accepted. They have A LOT of different betting options where only a few will actually win. People tend to bet with their hearts and the number of options are setup to basically ensuring the bookie is profitable. If you win too much, they shut down your account. They have no obligation to deal with you. Their goal is to make money and they see your gambling as a way you "enhance your enjoyment of the event", not an attempt to make money. So there isn't a large tolerance for people who do make money. 4. How do I (the punter) make money? Surprisingly, you can consistently make money gambling. Don't bet on Dogs/Horses. Even the top 1% of punters barely break even. They're profitable because of the kick-backs the bookies give them for having high turnover (>$1mil/yr). Find a sport you know a lot about that supports in-play betting. It's going to be you vs a person. So if you have indepth knowledge of the sport you'll be able to see changes in flow and make winning bets before the bookie notices. FWIW, I bet on League of Legends. During the LOL Worlds I can make 2500% with >90% win rate. Now, I'm only winning a few $k total so nothing significant. That's all I can think of at the moment. Happy to answer any questions you have.