Discusses he 10 most common reasons for why some of the people who use Trademate fail.Read More
When starting matched betting, there are some things that are very important to know. In this article I will go through the most important things as well as some tips from my own experience with it. I will go through how I would do a bet, and in this way try to show you how you can do it for yourself and what the most important things to think of are.
Before you read this article, you should be sure to read about what odds are and what a bet is. In matched betting the ultimate goal is to win a bookie’s bonus, using arbitrage as a mean to get it. In a way we will operate as both Andrew and Bobby, both backing and laying the same bet. This would as you might imagine end up as we started: with a profit of 0. But bookies provide us with welcome bonuses, which we can use to our benefit. Let us see how these works.
For a matched bet to be possible, we need to find ourselves a welcome bonus. This is because it is this money you basically will “win” in the end. A typical welcome bonus will give you a proportion of the money you deposit, normally 100%. For clarity, this means that if you deposit 100 dollars, you would receive 100 dollars, making your total bank roll 200 dollars. This is not free money as you might think, there are different terms and conditions bound to this money, which are crucial to read. There are mainly 3 criteria which are important to follow:
1. Minimum odds, the minimum odds you can have on your betting slip for the bet to count on your turn over progress.
2. Turn over claim, the minimum amount of money you have to place on bets before you can withdraw any of the bonus money.
3. Time restriction, typically 30 days turn over claim.
In addition to these there are usually other terms and conditions which change from bookie to bookie. Because of this it is important for you to always read the bonus terms and conditions thoroughly. If you want to know more about what you might need to think of when setting up an account, read this article. We now have the opportunity to take on the role as Andrew (backing), but we also need to be able to take on the role as Bobby (laying). Now, we need something that gives us the opportunity to lay bets, and it’s here the betting exchanges come in.
Because betting exchanges work in a slightly different way than what you might have gotten used to with Andrew and Bobby, I am going to show you how they work and how we use them for laying bets. There are mainly three things that are important:
1. Displaying of odds
Displaying of odds
Take a look at the odds display from one of the largest exchanges above. Right from the start there is something that is a bit off, we notice that the backing odds (in green) is almost the same as the laying odds (in blue). If we think back to the examples with Andrew and Bobby, we would notice that the backing and laying odds were completely opposite calculated from the underlying probability. The exchanges just display it this way to make it easier for people to do arbitrage bets.
Look at the odds from Senegal vs. Algerie.
The probability for laying Senegal victory is 1 – (1/2.96) = 0.6622, which corresponds to an odd of 1/0.6622 = 1.51.
The true probability as reflected in the backing odds (2.92 in green) is 1/2.92 = 0.3425, which corresponds to a probability of 1-0.3425 = 0.6575 and an odd of 1.52 for laying this bet.
This means that if you were to lay 100 dollars on Senegal, you would get 151 dollars back (51-dollar profit).
As you can see, the exchanges take a margin between the backing and laying odds. For exchanges, this margin is called the spread. This is misinterpreted on a large scale, where people tend to think that higher odds are better for them. In this case it means the opposite: because the laying odds displayed on the exchanges just tells you the corresponding backing odds for this laying bet. This margin is unfortunately not possible to get away from, because it all boils down to how the system is set up. For you to be able to lay a bet, there needs to be someone that has backed that bet in the first place. So, without going into details as to how the dynamics of the change in odds are, we can clearly see that there needs to be sufficient funds available at a particular odd before someone can lay a bet on it.
In this case it would mean that there has already been a lot of people betting on Senegal to win at an odd of 2.96. When there is enough money on this bet, the odds would drop to say 2.92 and the laying odds of 2.96 would be available to bet on. If the laying odds drops as displayed on the exchange, it really means that the odds for that event to not happen actually rises.
This is maybe quite a mindfuck, but it is important to understand a little bit of the mechanisms behind the exchanges to be able to understand what liquidity is, and how this affect you when matched betting.
All bookies and exchanges have limitations on how much money one can bet, which are constrained by the liquidity in the betting market. The liquidity in the market is basically how much money that is available at that specific market. If we look at the displayed odds at the exchange, and the numbers below the odds, this means how much money you could bet on a particular odd before the odds change. For the non-colour odds, it is what is available to bet on these odds, which are worse odds than the coloured ones. This is important when matched betting because there needs to be sufficient funds available for you to make big enough laying bets at the exchange. Therefore, the higher liquidity markets are usually what you should bet on.
All the betting exchanges take commissions, some more than others. This is mostly the way they make money, taking a percentage of the profits on every winning bet. This is important to consider, because it affects the way you bet. We’ll come back to this later, when showing how we do a matched bet.
Combining bookmaker and exchange to place a matched bet
Since there are so many things which is important when doing a matched bet, we might need something to track the best bets. Here, software comes into play. For simplicity, we will call the software we can use Software A. They do compare bets at exchanges and bookmakers, to make it easier for you to do arbitrage as well as matched betting.
Because the highest liquidity markets are the most accurate and efficient when it comes to odds, positive arbitrage opportunities are fairly rare between bookie and betting exchange. Because of this we usually lose a small amount of money on each matched bet. Therefore, we would try to minimize the losses or maximize the profits. Software A do this for us, first by finding all the best bets we can back (at a bookie we choose) that are closest to the corresponding laying bets (at an exchange we choose). This is a thing you could do manually for yourself but can be time consuming.
Software A will also provide us with a calculator which calculate the stake size on the exchange, or the lay stake. We want to bet all the money on the bookmaker at once, so it is the lay stake that is important. The lay stake is important because of odds differences between bookie and exchange as well as the commission on the exchange. You can find all the math behind the calculation here, but it is much easier to just use the calculator provided by Software A. Keep in mind that this is a payed service, but it is not much money compared to what you will gain If you start match betting.
Let us now use a simple example to just see how it would work if we were to do matched betting. We would start by going to Software A and find ourselves a bet. In this example we get 100% bonus on 500kr at the bookie. We now have 1000 kroner in our bank roll at the bookie. I use kroner as the currency to make it easier for myself. Right now, we choose Sheffield United versus Crystal Palace as our match. We can see that a draw in this match has no difference in odds, but we won’t break even because of the commission the exchange takes. We also notice that the liquidity is high (25 429kr).
To find out what we should place we click on the match and go to the calculator. Then put in our stake at the bookie (1000kr). We will then get the amount we should bet at the exchange to lose the minimal amount of money, regardless of the result. As we can see in this example, we would lose 14.3kr on the bet we placed.
Then we go to the bookmaker and place a bet of 1000kr on an odd of 3.3, giving us a potential return of 3300kr and a potential profit of 2300kr. The reason to why we bet at the bookmaker first will be explained in the last section where I go through matched betting tactics.
Then we go to the betting exchange and bet against draw on the same match. Be sure to do this quite fast, as the odds might change between the two bets you need to place. To clarify, we do the math on both sides:
You might notice that the betting exchange make it very easy for you to place matched bets, which is the reason the display the odds as they do. The lay stake you use (1006.1) will be almost the same as the back stake, because this is the potential profit at the exchange.
Potential return and liability on the exchange are slightly higher than on the bookie because we need to accommodate for the exchange commission and usually in other cases also for the difference in odds.
Now we have made a matched bet, losing 14.3kr regardless of the outcome. And if we remember correctly, half of the money at the bookie isn’t ours. This means that if Sheffield United or Crystal Palace were to win, we would be 500-14.3kr = 485,7kr in profits. If it would be a draw, we would need to make at least another bet, depending on how big the turn over claim is as well as minimum odds (or other terms and conditions). For every bet we make we usually lose a small amount of the total money we bet, as in this case. But, we can also make a small amount, which happens when the backing odds are higher than the laying odds.
Hopefully, you now know how a matched bet works, as well as how to make money off it. The next important thing is how you approach this, so you could make the most money in the shortest period of time. Let us go through a couple of things you should consider:
1. How to place your first bet
2. How to place your second bet (when winning at the bookie)
3. After you have placed any bet
How to place your first bet
We use the same example as above, but now we have turn over claim of 6 times the bonus and deposit (6 x 1000 = 6000) and a minimum odd of 1.5. I will also have 20 000kr at the exchange, this is important in how we decide to bet from the start.
When placing the first bet, there is two possible outcomes:
You win at the exchange and lose at the bookmaker
You win at the bookmaker and lose at the exchange.
You should always try to win on the exchange. That is because there is no turn over claims on the exchange, and you would need less money in the bank to keep placing matched bets. The money is also more secure on the exchange compared to the bookie, as you can read about here (set up accounts).
You should also always bet with all your money on one match with quite high odds on your first bet because this increases the probability of you winning at the exchange. So, let us see what we do if we bet on draw/not draw on Sheffield United vs. Crystal Palace. There are still just two possible outcomes:
1. We lose 1000kr at the bookie, and winning 985 (= 0.98*1006) at the exchange. If this happens, you should find another bookmaker and do it again! You made profits.
2. We get 3300kr at the bookie, and lose 2314 at the exchange. We now have several options on what to do.
How to place your second bet (when winning at the bookie)
After the first bet, we now have:
We have a turnover of 1000kr at the bookie, and we need to turn over 5000kr more before we can withdraw the money. Because we have a good amount of money at the exchange, we could try bet all the money at the bookmaker on a bet with high odds. I would go for an odd of 4 or below, because you would risk losing 3300*4 – 3300 = 9900krat the exchange and you would have 17686-9900 = 7786kr left there. This is more than enough to turn over the last 6000-3300-1000 = 1700kroners, with a minimum odd of 1.5.
If you were to have a smaller bankroll at the exchange you might want to choose a smaller welcome bonus or go for the lowest possible odds after the first bet. This example gives you a reason to why it is important with a large bank roll at the exchange as well as why you always should try to lose the first bet at the bookie.
A hot tip is to just jerk around with the numbers at both Oddsmonkey and the betting exchange, the numbers and logic will make sense quite fast.
To clarify, the amount of money and time spent if you win the first bet at the bookie is immense compared to the contrary. You should always try to win at the exchange.
After you have placed any bet
When you first place a matched bet, you should always bet on the bookie first, as mentioned earlier. This is because it is usually at the bookie they will limit how big a bet you can place without you knowing it beforehand. As you now know, the liquidity at the exchange is easy to find, but the bookie usually hides this. This is to mitigate for the risk that you have placed a bet at the exchange that you cannot match at the bookie.
You should also take a couple of minutes before the match you have bet on starts, to check if the bet at the bookie still holds. The bookies can void bets for several reasons, and this check-up has saved me countless times. If you have a voided bet and you can’t seem to fix it on the bookie, you could easily do the same backing bet at the exchange to match your bet, so you would lose a small amount of money instead of possibly a large amount. Or you could be a crazy person and take a chance on your laying bet at the exchange.
There are other ways of doing matched betting, but I have constrained this to the ordinary welcome bonuses because this way provides the best value. There is also possible to clear bonuses by value betting, and you can read about the differences between the approaches here.
You should now have learned how a matched bet works and have some smart tactics you could use to start your matched betting journey. Be sure to know your stuff, so read the articles on how to set up accounts, what odds are and what a bet is. Good luck!
Key Takeaway: Don’t cash out your value bets.
In recent years, sports bettors have been given the option to Cashing Out their bets in the middle of a game. This has grown to be a very lucrative revenue source for bookmakers. In this article we will explain:
What it means to “Cash Out” in sports betting
The formulas behind Cashing Out
Exemplify an option to Cashing Out
Conclude whether one should take advantage of Cashing Out or not.
TLDR: Don’t cash out your value bets.
Cashing out in Sports Betting is something that is considered to be the safe option, a middle-way between partially winning the bet and risking to lose it all. This option makes sure that the bettor can receive payment at any given point in time during the game, as the bettor withdraws from the bet when in the lead.
Let us say that we have a soccer match between “Team A” and “Team B”. If you bet $100 on Team A, with decimal odds of 3,20, your full payment from the bet would be $320.
If Team A is ahead at half-time, but not in an impressive fashion, you have the opportunity to cash out, and immediately receive a portion of the full payment. This will cancel the rest of the bet, and you might only receive $160 instead of $320.
This is due to the elimination of risk throughout the second-half, where Team A might not be able to keep their lead to the very end of the game.
What formula lies behind the Cash Out?
The formula behind Cashing Out is compiled from real-time odds and the full payment of your current bet.
In the example previously stated, the Cash Out option at half-time was at $160 instead of $320. The Cash Out option is obviously lower than the full amount, but if we look closer it is actually lower than what the correct, or “fair” amount is as well.
The fair amount of a Cash Out option is found by the following formula;
Full payment of bet / Real-time odds
If we use the formula on the example given, we have;
$320 / 1,60 = $200
This means that by Cashing Out during half-time, you would lose $40 compared to what the real and fair value of the bet is at this point in time.
This is more than likely to be the case in any given game, as the bookmakers are looking to take advantage of every opportunity to make money of the bets, or in this case make sure that they do not lose additional money from the bet. The bookmakers are likely to have a margin on the odds, and have a margin on the offered opportunity of the Cash Out as well.
This is largely why the Cash Out is an option that will harm your profitability in a long run, and should not be included in your betting strategy.
But, are there situations in which the Cash Out option is an attractive option?
- The short answer is: Yes (see examples below)
When the Cash Out option offered exceeds the market price
In some rare cases, the Cash Out option will have a higher value than what the odds from other bookmakers are. This is an indication that the offered Cash Out option is listed at a value above what the actual fair price is, and is definitely a favorable option for the bettor to take.
High values and acting rationally
As previously mentioned, the long-term strategy of a bettor should be to maximize profits through seeing out all bets to the very end. Despite this being the case in most situations, acting rationally should also play a part in your betting strategy. This means that you should be observant of your bets as they are happening, and always look for the best options for yourself.
Cashing Out might be relevant when discussing bets that are of very high sums of money or if a bet with very high odds has almost been fulfilled. In these situations, the bettor can choose to act in a rational way and Cash Out with the guaranteed payment.
For example, a bet on a team considered to be on the lower side of the table to win the league, with a $2000 stake and 200,00 in odds is nearing the end of the season. However, the competition, has improved their play lately and is very close to re-gaining the lead.
In this situation, the sensible thing to do might be to Cash Out, and receive some payment as a guarantee, rather than risking being left with nothing.
The full payment of the bet would have been $400000, and the Cash Out option might be $205000. The fair price however, would be the full payment / the real-time odds of 1,80.
This would have given a correct value of $222222. In this scenario, it might be wise to explore the option of Cashing Out, even though you might feel like it is a loss. So if you find yourself with a big bet on Leicester to win the Premier League again at 200 i odds and they are in the lead with 3 points and 3 games to go. You should consider cashing out the bet. (Really you should not place these bets in the first place, as they have sky high variance. In addition the bookies take very high margins on futures markets, which diminishes the value to be had).
Lowering the opportunity costs
When operating with bets that are connected to a long timeframe, the opportunity costs will increase. The opposite is the case for bets connected to a shorter timeframe, as the opportunity costs will decrease. Therefore, to lower the opportunity costs, it might be useful to Cash Out on some of the bets with the longest timeframes, if the right opportunity presents itself.
There is, however, an alternative to Cashing Out;
Hedging a bet will contribute to a reduced level of risk, but will also decrease the return on your investment. This alternative to Cashing Out will also put the bettor at greater risk of having your bet voided. However, If you place the hedge side of your bet at a sharp bookie or betting exchange you should be fine in 99.9% of the cases.
Hedging, in short, means to exploit the differences and changes in odds between the different bookmakers, to create a guaranteed profit from a certain game. This is a rarity, and does not happen in a bunch, but there are certain situations in which this can happen (see great example from an article we wrote on How to Hedge Your Sports Bets here.
If Team A has very high odds long before kickoff, and this suddenly changes into Team B´s favor, it would potentially be possible to exploit this. As long as the profit from the bets on each side covers the risk on the other, the total profit from the bet will be guaranteed. Typically you will get better odds on hedging the bet than you will on cashing out. So it is the recommended option of the two.
Cashing Out is not an option for Sports Bettors who want to make money from betting in the long run
In addition to losing on the margins the bookmakers take from the bets and from the offered Cash Outs, the Expected Value of the bet will decrease compared to seeing out the bet. Read more on Expected Value here. The bettor also runs the risk of getting limited or even banned from certain bookmakers.
Key Takeaway: Don’t cash out your value bets.
Lean about the main differences between sharp and soft bookmakersRead More
What is a soft book? What is the difference between a soft book and a sharp one? If you are wondering about this, check out this articleRead More
My name is Mauricio and I am the Marketing Manager of Trademate Sports.
Before working for Trademate, I had no interest in sports (and that hasn’t changed much), but after starting at Trademate Sports, I realized the potential of sports trading.
For me, value betting is a way of investing your money. After four months of working for this company, I decided to try out the product.
We decided to start with the challenge: “Start betting with no experience and with 1000 euros”.
The first week started out quite slow, these were some of Marius (the CEO) recommendations:
Read our FREE Ebooks, they have a lot of essential information about value betting and the software.
Be active from Tuesday to Thursday, from 19h to 21h.
Weekends are essential, be active from 11h to 16h (this is when the action happens)
Mondays and Fridays are resting days (but I still placed some bets)
Your presets are also essential, here's an article about the recommended presets.
The original idea was to distribute 1.000 euros into five bookmakers:
300 in Bookmaker 1,
300 Bookmaker 2,
200 in Bookmaker 3,
100 in Bookmaker 3,
100 in Bookmaker 5.
(I do not reveal the name of the bookmakers not to get limited even faster.)
How did I pick these bookmakers?
I looked at the signup bonuses. I am based in Norway, so I used Odsen.nu, but as I’ve seen, most bonuses are country dependent, so you will need to check which bonuses work better for you.
Since I was not an experienced bettor, I chose to use the “not so generous” ones first, otherwise, I will risk not to cash them out.
As a beginner, I felt a lot of pressure, bonuses have normally a lot of conditions, and if you want to cash them out, you have to be aware of their term and conditions, “there’s no free lunch”, and indeed, bookmakers don’t just give away free money.
Their main intention is for you to use your money and the bonus, and end up with nothing. And even if you don’t lose everything, not to be able to cash out the bonus.
The main condition is to turn over your bonus money five times within 30 days, which sounds challenging. Nonetheless, with a tool such as Trademate Sports, that should be relatively easy, after 2 weeks of betting and being away my two first weekends, I still managed to turn over more than half of what I need to.
Although my starting investment will be 1,000 as mentioned earlier, I started only with the first bookmaker.
Why? Sadly, the day I decided I would start betting, I realized that the 2 following weekends (when the action happens), I will be away or with friends visiting, so I wouldn’t have much time to place some good bets.
Because of that, I decided to wait a little bit, I didn’t want to waste my starting cupon, and to turn over my money, I knew I needed to be committed to the work.
Some of my recommendations:
- Create an e-wallet: I personally use Netteller, since the CEO of Trademate recommended me to use it.
Why? You will notice that in some bookmakers, it’s really hard to deposit money using a physical credit or debit card. E-wallets make this part easier and they are normally cheap to use.
- Start with a few bookmakers: I planned to start with 5 bookmakers, but as I just mentioned, I won’t have much time during weekends to trade, therefore I focused on getting the coupon on one bookmaker instead of starting with a few and not being able to cash them and miss the getting them.
Do I recommend this? NO. Just start when you know you will have more time, otherwise, it can be frustrating staring at the software, waiting for a +EV trade to appear.
- Plan ahead: If you know you will start to bet, and if you are a newbie just like me, you will have the chance to use many coupons, when you are using coupons, you surely want to have some time to bet because you will need to turn over your money at least 5 times in 30 days to be able to cash out your coupon.
Check that you don’t have very busy weekends, especially from 11h to 16h (Central European Time), or that you can at least have your laptop close to you every 20 minutes.
- Round up or down your bets: The software is going to recommend you relatively precise amounts (e.g. EUR 2,6). If you start winning, these bets look like very “educated” bets (which they are), but we need to fly under the radar if we don’t want to get limited way to fast.
Since I started with a relatively small bankroll, I got a lot of bets under 5 euros, which I just ignored (I’m not sure if that was the smartest idea). Nonetheless, try to place bets of in chunks of 5. Let’s call it the “rule of 5” (EUR 5, 10, 15, 20…).
- Bets with a higher stake are “better bets”: if you get two options and you need to pick one of them, the one with the higher stake will be considered a better bet, this is because they normally have very decent odds (more likely to win) and higher edge (according to our calculations, the odds should be much lower).
This is easy: the algorithm takes many things into consideration, if you see a small stake, the algorithm probably considers this bet as riskier or less likely that you will win.
- If you have any problems, just reach out: Accidentally, I had another bet that became -EV while I was about to place the bet (the odds lowered), and when I placed another bet, the previous one stayed in my basket and the bet became a combo.
I panicked! I thought I already lost my money.
Luckily, this bookmaker has a very responsive customer care team, I told them my problem, and they fixed it immediately.
If you ever have a problem like this, just give it a try and reach out to customer care, the worst thing you will get is a No as an answer.
- Activate your notifications: It can be annoying sometimes to go to the website and refresh every 10-20 minutes. The best option is to click on the bell icon, so everytime a new trade comes in, a little bell will ring, which means that there are new trades coming in.
You can also activate pop-up notifications, and while you’re working in the office, you will see when there’s a trade.
- Set a goal of minimun amount of bets per day: Go to the bonus section of each bookmaker and check how much you need to wager to be able to cash out that money, divide it among the days you have left, and start turning over that money!
Remember that some days will be harder to do so, but we always have weekends to make it up for that.
I hope you enjoyed this first post and stay tuned! We will be updating my progress, next time I promise screenshots. If you have any questions, please comment.
Imagine you were to bet on the toss of a coin. Assuming the coin can’t land on its rim,
there is a 50 % chance of heads, and 50 % chance of tails. Now, imagine you were to
bet on the outcome , and had two people offering you the following odds:
This article explains what expected value is. Obviously, you choose the bet with the highest odds, since the probability of each outcome is the same. Now, let’s see what happens if you place a bet on heads at 2.10. Half of the time, you’ll lose your $10 bet, and half of the time you’ll earn $11. From
this, we can calculate the expected value of your bet to be $0.5.
After one toss, you won’t have profits of $0.5. You will either be $10 down or $11 up.
However, if you increase the number of tosses, your average earning per bet will
theoretically converge towards half a dollar per toss. This means that if you toss the coin 1000 times, you should expect earnings of $500. Whether you end up a bit above or
below $500 is a matter of luck, but it is skill that landed you there in the first place. You can read more about what happens if you increase your number of bets in this article on the law of large numbers and how it applies to sports betting.
Finding Value in the Odds
It doesn’t require much skill to realize that 2.10 is a good odds on the toss of a coin. In
fact, since odds = 1 / probability, fair odds would be 2.00. Because the odds offered is
higher than what the underlying probability suggests, it is a good bet.
So why don’t we do the same in sports? Why don’t we use the probability of each
outcome to calculate the corresponding odds, and in turn distinguish a good bet from
That’s exactly what we do. Welcome to value betting.
How value betting works and how value occurs in betting markets
The next article covers how value betting works and this article shows an example from a game between Chelsea and Manchester City.
Proportional or Flat stake sizing
Bet sizing plays an extremely important role in any profitable betting strategy, and in this article I'm gonna try to give some insight into exactly how important it is.
In the sports betting community, there are mainly two general staking strategies bettors use. A flat stake, and a proportional stake. With a flat bet size, you either put the same wager on every single game, or you put the same wager on games that have the same odds and edge. Flat bet sizing is fairly easy to use, but it's hard to select a proper size. A size too big will increase the chance of going broke, while a size too low will not yield big enough profits.
As an alternative to this article, you can watch this video. Or you can do both:
The Kelly Criterion: A Proportional Stake Sizing Strategy for bankroll management
A proportional strategy is where you place a certain percentage of your current bankroll on each bet. Kelly's Criterion is a formula that maximizes the growth rate of your bankroll. The formula for the Kelly's Criterion is
where P is the probability of success and G is the odds you're given. Let's take an example.
If you were to bet on a coinflip - in a fair world you'd get an odds of 2. If you were to get odds of 2.1, you would've had an edge (you can read more about how edges occur here) of 2.12=0.05=5%2.12=0.05=5% and kelly would suggest
This means you should bet 4.545% of your current bankroll. Let's take the scenario where this is ran 2 times with a starting bankroll of $100, you win one and lose one.
You bet 0.04545∗100=4.5450.04545∗100=4.545 and lose, now you've got $100−$4.545=$95.455$100−$4.545=$95.455 left.
You bet 0.04545∗95.455=4.3380.04545∗95.455=4.338 and win, now you've got $95.455+$4.338∗(2.1−1)=$100.227$95.455+$4.338∗(2.1−1)=$100.227 left. (4.338 * 1.1 is the net return of the bet)
The interesting thing, is that the order of the bets does not matter. You would've ended up with $100.227 if you'd won the first one and lost the second one.
example of Results Distribution with Different Kelly Percentages
Now over to a practical scenario. The example written over is not exactly representative for the common bettor, because it assumes that you know the outcome of the previous bet before placing the next one. In the sports betting world, one would usually have between 5-50 open bets at the time. This obviously affects the bet sizing. If you were to place 10 bets in a row with similar odds and edge, the bet sizing would decrease as your current bankroll decreases with each bet. If every single bet were with the odds of 2.1 and edge of 5%, you would expect to win 50% of the bets. This gives you the possibility of losing all your biggest bets and winning all your smallest bets - hence ending up in the negatives after placing nothing but profitable bets. It's worth noting that the other way around could occur, you could win all your biggest bets hence flipping a huge profit.
Here is a distribution of all possible combinations of bets with odds of 2.1 and edge of 5%, giving a win rate of 50%. There are 20 open bets, and it randomly picks 10 winners and 10 losers, so it's running perfectly every time - and only a matter of how the wins and loses are distributed. The x-axis shows the bankroll after the bets are settled relative to the starting bankroll, and the y-axis shows the number of occurences (out of the 184756 possible combinations). It follows the kelly bet sizing, so the bet size decreases for each bet as it's always placing 4.545% of its current bankroll. The blue shows the results for 100% of kelly, the orange for placing 50% of kelly, and the green for placing 30% of kelly.
As we can see from the plot, the 100% of kelly (blue line) yields the highest possible return, and the highest average (~1.03). However the spread is huge. One could end up with everything from 88% to 117% of your starting bankroll. As you decrease the fraction of kelly to 50% and 30%, the spread gets alot smaller. The probability of ending up in profit skyrockets, where as the average return gets lowered ever so slightly. It's very important to note that by betting a lower fraction of kelly, you risk less money. By betting 100% of kelly, you risk ~60% of your bankroll to grow it to an average of 104%. By betting 50% of kelly, you risk ~37% of your bankroll to grow it to an average of 102%. By betting 30% of kelly, you risk only ~24% to grow your bankroll to an average of 101%.
You can read more about what you can expect from your results as your sample size increases in this article on the Law of Large Numbers and how it relates to sports betting.
Stats for 3 Different Kelly Settings
Betting less than full kelly to reduce variance
There is no doubt that following full kelly is the strategy that would maximize the growth of your bankroll. Many people will tell you to bet less than the Kelly formula tells you to. Two reasons are generally given for this.
The edge may change. If you place a bet 10 hours before kick off, the odds can swing both in and out of your favor. By placing a fraction of kelly, let's say 50% you have more rooms for error if the edge slightly decrease. If it increases, you can simply place more money on that bet.
Additionally, placing a lower fraction of kelly would generally decrease your bet size, making the probability of getting limited by the bookmakers smaller. You can read more about how bookmakers profile winning players here, and how to avoid bookmaker limitations here.
Do not bet more than Kelly suggests, so if you chose to go high risk (100% of kelly), do not over-bet. That will actually decrease the growth of your bankroll - as the full kelly value is a maximizer.
I really hope this gave some insight into how important bet sizing is. Additionaly, I want to point out that there are no perfect bet sizing that fits all. The fraction of kelly you're comfortable with placing depends on your personal risk profile. Do whatever you're comfortable with. In Trademate Sports - you can now select between 3 different betting sizes, 100%, 50% and 30%. Just go to your profile, and it'll be an option.
What is sports value betting? Learn the essentials to understand how it worksRead More
No one is able to perfectly predict the outcome of every sporting event. However, this
does not imply that it is impossible to become a profitable sports bettor, nor that those
who are profitable are merely lucky.
The goal is not to win every bet, but to make +EV bets.
The goal when betting is not to win every bet you place, but to make decisions
that have a positive expected value (+EV). In other words, you want to place bets
that have a larger chance of winning than implied by the odds you paid for.
Beating the closing line equals + EV
As previously described, the sharp bookmakers’ closing lines are considered to be the
expected value. This means that If you traded at higher odds than the closing line, you
have made a +EV bet. On the other hand, if your odds are lower than the closing
line, your bet has a negative expected value (-EV). In that case, it’s time to revise
your strategy. You can read more about the closing line in this article.
Successful sports betting is a long run game
Over a small sample size of bets, variance will have a dominating impact on your
results. In other words, anything can happen. However, over a large volume of bets,
the variance will even out and luck is replaced with skill. In the end, only sports bettors
who are able to consistently beat the vig-free closing lines at the sharp bookmakers
will be profitable.
How can I make money from sports betting? Can I make a living from it? This article is for you! Start here!Read More
PART 2: SIMULATIONS & THE VARIABLES INVOLVED IN MAKING A LIVING FROM BETTING
THE STARTING BANKROLL
An important element is your starting point. Just like with more traditional forms of investing such as stocks or real estate, if one already has money it becomes easier to accumulate more of it. A common comparison in the stock market is to benchmark results versus an S&P 500 index fund. The S&P 500 is viewed as the market. Historically the average annual return of following the S&P 500 has been around 7-8%. Or in other words, if you are able to get a higher avg. ROI per year than 7-8%, then you are beating the market. If I had $1M to invest in an S&P 500 fund and given an 8% ROI I would make $80 000. My bankroll in October, when we launched Trademate was only $6000, so if I had invested it into the S&P 500 I could expect to make $480 in 1 year. The point being that the difference in starting bankroll on the results is quite significant. The good thing about value betting or sports trading as we also call it, is that it is possible to start out with a relatively small bankroll and build it upwards. Since October, I’ve made a $5,7k profit, or a 95% ROI in just 9 months. Because sporting events are a lot shorter than the horizons in the stock market, one can achieve compound growth a lot faster.
For the remainder of this article we will use 3 fictive characters with different starting bankrolls to examine what is possible to achieve with value betting. I will also factor in that they are Trademate customers in this analysis, and thus have to pay for a subscription.
Arnold is betting on the Europeans markets only. Starting bankroll $1 000. Using a Trademate Core subscription
Bob is betting on the European markets with a goal of eventually transitioning into the Asian markets. Starting bankroll $5 000. Using a Trademate Core and later a Trademate Pro subscription
Charlie is betting in the Asian markets. Starting bankroll $20 000. Using a Trademate Pro subscription
If I were to start over as a new customer I would go for a quarterly package, because that would bring down my avg. monthly costs. From a psychological perspective, it also forces me to commit to getting in enough trades that I can both cover the subscription costs and make a decent profit. Or in other words making sure I get value for my money.
HOW TO CALCULATE EXPECTED THEORETICAL EARNINGS BASED ON YOUR EDGE
The way to calculate expected theoretical earnings would be: Expected earnings per month = ( Starting Bankroll * Avg. ROI per trade ^ number of times the bankroll is turned over)
Trademate users have beat the soft bookmakers with an avg. flat ROI of 2.6% per trade from a sample size of +200 000 trades. Note that we do not consider using flat stakes as an optimal strategy when trading. But as part of the analysis to see whether we actually have an edge over the market it is important to remove the effects of stake sizing. The stake sizes inside Trademate are calculated based on the the Kelly Criterion, a proportional staking strategy. Following it 100% gives the highest potential profit growth, but the variance gets rather crazy You can read more about the Kelly Criterion here or watch this video. So in practice 30-50% is better. I use 30% myself. Now, by following a proportional staking strategy it is possible to achieve a higher avg. ROI per bet, than with a flat stake sizing strategy. Currently I’m running at 5.1% flat and 8.2% actual ROI per bet from a sample size of 1783 trades. My average closing edge is at 2.6% Read more on the closing line and why it is the most important benchmark in sports betting here. As a benchmark for what to expect, one should compare the avg. flat ROI vs the avg. closing edge. I’m running roughly 2x better than expected (5.1% / 2.6%). I have achieved an additional effect of 3.1% avg. ROI per bet from my stake sizing (8.2% - 5.1%). What we can deduct for this is that a) I’ve had some luck as I’m running better than expected and b) stake sizing strategy is very important and can have a large impact on the actual results.
RISK AND AVERAGE STAKE SIZE
If I know that I have a 2.6% edge on the market on average, my turnover will affect how much I can expect to earn. E.g. for every $100 bet, I could expect to make $2,60. However with regards to the stake size, there is a tradeoff between turnover and risk. To stay within reasonable risk levels, while still getting a decent turnover I would aim to on avg. place 0.5% of my total bankroll on a bet.
Assuming 0.5% of the total bankroll.
Thus a $20 000 bankroll would imply an avg. stake size of $100.
Thus a $5 000 bankroll would imply an avg. stake size of $25.
The smallest bankroll would have to go for it more aggressively for the results to be interesting, so let’s assume a 1% of the total bankroll in the beginning.
Thus a $1 000 bankroll would imply an avg. stake size of $10.
The actual stake size would vary if one follows the Kelly Criterion, e.g. one would place a higher stake on a 2% edge with 2.0 in odds than a 5.0 in odds. Defining an avg. stake size in this article is useful as it enables us to play around with the numbers to see what happens.
DISTRIBUTING THE BANKROLL
In practice, I would spread my bankroll over as many bookmakers as possible with a few constraints which are covered in this article. Especially for Arnold who starts out with a low bankroll of $1000, taking advantage of the signup bonuses to boost the bankroll is beneficial. If one has a very large bankroll one can increase the % of the bankroll distributed to the lower volume bookie by having more of them.
I use a password manager to save me time whenever I log in, as it saves my username / password. (I’m using Lastpass, but there are plenty out there).
NUMBER OF TRADES
Having a sufficient amount of bookies affects how many edges occur in the feed inside Trademate, which again affects the number of trades that one is able to get in on.
A casual Trademate weekend user might average about 100 trades per week. (8-10 hours). This adds up to 400 trades per month.
An active Trademate user average anywhere between 200-400 trades per week. (+20 hours). This adds up to 800-1600 trades per month.
The most hardcore Trademate users have done +600 per week. (+40 hours). This adds up to 2400 trades per month.
So with these numbers as our basic assumptions, I’ve run some simulations as to what the results might look like. The purpose of these simulations is to show what results are possible if these targets are achieved. There are no guarantees that this is what the actual results will be like. Variance and timing of swings will make the actual profits deviate from the theoretical profits. Stake sizing will also have a large impact. In our opinion these numbers are realistic as they are based on what our most successful customers have been able to achieve. In the simulations I have assumed that Arnold, Bob and Charlie have been putting in the time required to get a high number of trades, which really is what is required in order to make money from betting.
INTERPRETING THE SIMULATION RESULTS
First off, the starting bankroll has a very large impact on the results. This is particularly true for the Asians, given that the number of trades + potential ROI is relatively fixed or has limited room for improvement. Also, having a high starting bankroll enables a higher avg. stake size and thus higher turnover. Obviously you as a user of Trademate need to make sure that you have the appropriate bankroll to clear our subscription fee and get results that you are satisfied with.
A second aspect is that obviously the actual results and ROI will vary from month to month. In the simulation we have used 0.6% as the average results. So one month one could be running at 1.2%, another month at -0.8% and so on. When swings occur will have an impact on results. E.g. if they happen early it will have a larger impact on growth than if they happen later. Also note how the effects of compounding increase with time, so that even if one is getting in the same number of trades at the same avg. ROI, the results will improve thanks to compounding, and potentially quite dramatically so.
Third, if one is able to run at higher average ROIs than 2.6% like I have been doing, it will have a large impact on the results.
Fourth, note that if you can it is ideal to combine trading on the sharps with the softs, because the higher ROI on the softs can really have a huge impact on building the bankroll needed to make a successful transition versus just going straight into the Asian market.
Fifth, to make a living in 1 year one will need to have an even larger starting bankroll or take larger risks. Still I’d be pretty satisfied with a $20k profit in year 1. The next year I would keep going.
Finally note that turnover is key, especially in Asia. If one wants to make a profit in the millions one needs a turnover in the 10s of millions. If one wants to make a profit in the 100k class, one needs a turnover of millions and so forth. Turnover is impacted by the number of trades, stake size and starting bankroll.
You can make a copy of this spreadsheet and play around with the inputs to see how it affects the potential results.
In the 3rd and final part of this article series we will compare the results from the simulations with Jonas Gjelstad’s results in his $10k to $1 million run. We will also cover some further thoughts on what is required to make a successful living from sports betting.
How can I make money from sports betting? Can I make a living from it? This is the third part and final part of a series of three articlesRead More
This is not an article about HOW to do arbitrage betting (sure betting) or value betting. You can read more about what arbitrage betting and value betting is and how they are different in this article. If done right, both ways are betting methods that will quickly multiply your initial investment and these can be a carried out by someone with little or no experience with sports betting. For more information on arbitrage betting (arbing), I suggest an internet search, there are numerous good articles out there. For value betting, I recommend Trademate Sports’ free value betting lessons, which have a solid scientific approach. This article may guide you in case you want to start making money in sports betting, or if you’re already making money but consider changing your strategy from arbitrage to value. This article is about the pros and cons for each of the two strategies based on my personal experiences on the first two years of sport betting. All data presented in this article is real.
Although it sounds nice to multiply your investment, there is no such thing as guaranteed easy money (as far as I know). Being profitable at sports betting requires you to spend many hours with your computer/cell phone/tablet or at the local betting shop. If you already like spending time with video games and watching sports, this may even be appealing to you. There is another thing: due to limited liquidity in the betting markets, you can only invest up to a certain amount. Hence, if you are already a millionaire, it might be unrealistic to believe that your millions will multiply in a short time via sports betting.
Until August 2015, I had never before placed a sports bet, so I am no experienced bettor. I started with very small investments, in the hundreds – as things were starting to progress, I began to invest more, but I have never had more than EUR 5.000 invested. Today I have cashed out the initial investment plus another EUR 9.000 in profits. My overall profits have grown steadily, approaching EUR 22.000 and I even had months where I did not bet at all. This may seem like much money to some people, few money to others. It really does not matter, wealth is relative and up to a certain limit, one can choose any size of starting investment. I know that there are arbitrage bettors and value bettors who make much more money, people who have more money and more knowledge. In fact, there are sport bettors who make a living out of it. I am not of this kind and I still have my regular job, but sports betting has provided me with a solid second income and thanks to this, the balance of my family’s overall wealth has grown significantly and I have rewarded us with several extra vacations, instead of just being able to balance income with expenses without luxury.
I did arbitrage the first year, but then I transitioned to value last year. Today I am only value betting for numerous reasons. This does not mean that arbitrage is a worse strategy – in the end, the strategy of choice is probably whichever strategy is a good fit to your personality. Both strategies will give you a positive return in the long term. I will now go into reasons for choosing the right strategy.
First, let us have a look at my betting history, which will be the case study when evaluating both strategies. The overall profit chart provides us with an overview.
Turnover / 10: The turnover divided by 10 for illustration purposes.
Sum: The overall profit. Sum of Value, Arbitrage, Bonuses, Errors and Expenses.
Sum of soft books: If there had been no bets on sharp books, the sum curve would look like this.
Value bets: Profits from value betting.
Arbitrage bets: Profits from arbitrage betting.
Bonuses: Profits from bonuses.
Bank balance: The balance of how much that has been invested (negative) or cashed out (positive).
Errors: Balance of wins/losses due to wrong arbitrage bets, calculation errors and misplaced value bets.
Expenses: Cost of odds arbitrage and value services, transfer fees and commissions.
The overall sum (solid blue line) shows a steady growth of overall profits from sports betting. The three contributors to profit are Arbitrage betting (dotted purple), Value betting (solid purple) and Bonuses (solid green). Errors (dotted red line) and Expenses (solid red line) detract from the profit.
The sum of soft books (dotted blue line) is a hypothetical case to show the potential profit had I not been betting on the sharp books (more on this below).
I have been using 4 sharp books and 18 soft books for the betting. For arbitrage betting, there has been one sharp book and one soft book involved in almost every bet. For value betting, there has been only soft books. A more detailed presentation of this is located in the table below.
I am not naming which soft books I use, as I would not like it to be possible for any soft book to identify me as the author of this article. Generally, for the case of my betting, soft books are profitable and sharp books are unprofitable as expected. There is an exception with SBObet, generally considered as a sharp book, which has been profitable to me. Maybe this is due to variance, since I have not placed many bets there, only 159. Book5 is a soft book exception. This one has not been profitable even after thousands of bets, but very close to break-even. This soft book is probably not so soft after all, but it is a rather rare case among soft books.
ROI, TURNOVER AND STAKE SIZE
When looking at the overall profit (Sum) in the graphic presentation earlier, it seems that it has been quite steady, resembling a straight line, except from a dip and a rise this year. When looking at the columns for turnover however, it seems evident that there is more wagering during arbitrage, than with value betting. The following schematics confirms this.
Obviously, there is a high ROI for betting involving getting your bonuses, but these are only initial and not expected to give you continuous profits. Value betting seems to give you much higher ROI than arbitrage betting. The reason is simple: when an arbitrage opportunity occurs, one part has usually not adjusted the odds according to market value. In almost every case, this is the soft book, so during arbing profits at the softs starts to increase while deficits at the sharps start building up. These deficits are the price to pay for having guaranteed profit in every bet. So betting on sharp books in arbing is a sort of insurance to avoid losing money in the short term. In the long term, this becomes very expensive. Today I am simply betting on the soft side of an arbitrage bet. This is my value bet. Had I had the confidence and knowledge to do this right from the beginning I would have had 50 % more profits today, as seen in the graphic presentation earlier (dotted blue line). However, in sports betting variance is huge, so it takes some time to realize that you are pumping money into the sharp books. Look at the Pinnacle balance for instance:
Relying on the data alone, I would still be in doubt after 1000 bets, whether Pinnacle is profitable when arbing. Ultimately, after a sample size of 1500 bets, I am convinced that Pinnacle is sharp, and I have the feeling that I have spent 5.000 EURO at Pinnacle for the sake of my own comfort, money that I wish that I had not spent. It would be great to be part of the elite that bets on Pinnacle and is profitable in the long term, since Pinnacle does not restrict winners. However, this is does not seem possible with regular value betting and definitely not with arbing.
In summary, arbing comes at a price. You need larger turnover and stakes to compensate for the price of the insurance. The soft books will eventually limit or exclude any person who is profitable in the long term. They may do it based on “inappropriate betting pattern”, “suspicion of arbitrage play” or anything else written in their terms and conditions. These are all just phrases with one common goal: to reduce your possibilities as a profitable bettor, so that you are no longer a threat to their business. I do not blame the soft books, in fact their behavior is quite rational. The betting industry is funded only by people losing while (hopefully) having a good time, so any consistent winners are counterproductive and must be stopped with any means before they grow too big.
From the perspective of the soft books, it makes no difference whether a player is arbing or value betting, both methods bet on favorable/wrong odds and this is unprofitable for the bookmaker. In case of limiting, value betting has an advantage. Larger turnover and larger stakes will get you limited faster. So value betting with smaller stakes, while achieving the same ROI will keep you longer in the game. Once limited, you can continue to value bet, with smaller stakes close to max limit. It is still cost effective, since arbing takes much more time to do. My average stake size for value betting is only a quarter compared to arbitrage for that particular reason, but profits are at least the same. On average, it would take me 2 minutes to do an arb, because I would need to calculate stakes and bet at 2-3 different places, and many confirmation steps. It takes me only 20-30 seconds to do a value bet, because it is one bet and just a short mental calculation of the stake. Value betting can be done anywhere, for instance via the cell phone when waiting for the bus, it is like playing a video game on the cell phone, which most people do anyways. This is not so easy with arbing. If you use a betting service such as Trademate Sports it is really easy to register the bets you placed and keep track of your betting history.
The main reason why many people choose to do arbitrage is to avoid the unpleasant feeling of losing money. Arbitrage betting, or “surebetting”, gives you guaranteed profits on each bet regardless of the outcome. Well, this is not the same as completely risk-free, as surebets are quite sensitive to errors. Errors may occur when I accidentally place two bets on the same losing outcome without noticing, or when I cover one side of the bet, but the other bet has vanished in the meantime, when one bet is voided by the bookmaker, etc. Usually, arbing has larger stakes to compensate for the low ROI, so when something goes wrong it has a large impact. This happened to me 5 times in January 2016. Each time I was unlucky to lose money and each time I had the feeling that many hours of betting was lost. It took around 40-50 surebets, several days of work, to make up for one error. Still, for the experienced arbitrage bettor who makes fewer errors, the arbitrage strategy is quite risk-free.
In value betting, one has to accept, that although the overall tendency is upwards, there may be swings up and down, just like an index at the stock market. It is great when things go in your favor, you may get the feeling that you are on the road to become a millionaire next month. When things go bad you may get the opposite feeling, that this activity will eventually bankrupt you and you seriously start doubting whether there is something fundamentally wrong with your strategy. In both cases, emotions (rather than rationality) may have taken over. While emotion may be what motivates and drives people, it may be your enemy when you hit the winning streaks and losing streaks. You have applied a money management strategy, but still these unpleasant emotions may hit you, although you already knew that this is part of the game.
This is what happened to me when I first started betting. I had actually considered both strategies and I decided to value bet. Things were going great, but as soon as I got some downward swings after 50 bets in late August 2015, I felt uncomfortable and decided to begin my betting career doing arbitrage instead.
This behavior was emotional, because I was abandoning a strategy I had already chosen, which had even given me two-digit ROIs, for a less profitable strategy, which I initially had decided not to do. I was definitely not losing at the time, but the motive was still to remove the uncomfortable feeling of losing a bet.
I later switched back to value betting. Since then, I have punched the pillow and slammed the door during some of my losing streaks, but when looking at the overall profit graph in the first chart (solid blue line) some losing streaks are hardly noticeable, they are very small dips in the overall picture. Some people are naturally adept in being rational, while I am not. The cure for me is exposure, which in return gives me robustness. I have also found out that a method that works for me is to glance at my profit graph every now and then. That is where I realize, that although I just lost wagers during the last four days corresponding to half a month of salary on my regular job, this is just part of the game and the tide will turn eventually. I could also stop following the games, just bet and forget - but on the other hand, I like sports and the games are quite exciting to watch, especially when you have bets on them.
As goes for any other profitable bettor, every soft book will eventually give me ridiculously low limits or exclude me, so I am continuously considering the step of the evolution as a sports bettor. Luckily, some soft books are quite winner friendly and do not shut you down immediately and new companies emerge all the time, so value betting on soft books may continue for some time.
The logical next step will be value betting on Asian bookmakers. These bookmakers have much sharper odds, but do not have a reputation of systematically excluding winners. To my knowledge, there are little to none arbitrage opportunities here, but there are still value bets to be found. The Trademate Sports Pro product find value bets by comparing the Asian odds to the true probability of an outcome. Obviously, with sharper odds, ROI is lower, but a larger bankroll and larger stakes compensate for this.
When it comes to profitability, value betting is superior to arbitrage betting, since there is no “insurance fee” to the sharp books. If there was no such thing as limits, arbitrage betting could be more profitable, since stake sizes can be larger than with value betting, when there is no such thing as variance to compensate for. However, stake sizes are not scalable towards infinity, limits exist and they will happen to any successful sports bettor, so this makes arbitrage harder to do in a limited environment.
As both strategies are profitable, one then has to consider whether the reduced profits and much accounting on arbitrage is worth it, in order to avoid the unpleasant and inevitable losing streaks. This would be up to each individual to evaluate and experience. The choice of strategy will probably have to do with the sports bettor’s personality.
Written by a guest contributor who calls himself Vida in the Trademate Slack. If you have any questions, you can ask him there.
Sports Betting 101
Understanding the Kelly Criterion is key for any bettor with a goal of becoming a professional sports bettor and do sports betting for a living. This video explains the following topics
What is the Kelly Criterion?
How to apply it when trading sports and betting.
How it relates to profits and risk.
Why the Kelly Criterion is superior to flat stake sizing for bankroll management.
It is hosted by Marius from Trademate Sports.
This post originally appeared at www.daily25.com and has been reposted here with the permission of Steve from the Daily25 blog. It is written by Matthew Trenhaile who has worked as an odds compiler for many years and is now out on his own taking on the bookies. You can follow Matthew on twitter @CrazedAlchemist and he also has his own blog. Over to Matthew.
In the following article, I will be looking into the subject of profiling. I will discuss and analyze the process and how it has changed over time, rather than just looking at the business- and morale-perspective of it. In my fourth article I will look at account restrictions, as I wish to explore and explain all relevant elements of the case.
In this article, I will also be looking at take a closer look at how tipsters work, in addition to take a closer look at how they influence the trading decisions at bookmakers and their management of risk. Bookies will a lot of times profile tipsters to some degree, rather than profiling the actual clients themselves.
Profiling in the olds days
Bookies are known to have profiled bettors on a consistent basis throughout the years, be sure of that. For example, when betting at the racetrack, bookies had the option of rejecting your bets, change the place terms, only allow stakes that they were comfortable with, or even lay off bets to another bookmaker to have the liability change hands. There were definitely differences between tracks and areas, as they would demand different behaviors from bookies. This did not change the fact that they might have forced you to play at worsened odds, as they wished for you to change bookmaker to someone else. The knowledge of each bookmaker and their ability to identify the profitable bettors were extremely important back then, just as the situation is today. In the old days, they had to recognize people that were playing on behalf of the profitable bettors.
There is a chance that it was easier to place a great bet of a decent size, due to the approach of some bookies. Bookmakers used this information to create their own books the way that they wanted to. This was at the cost of the liability of the accepted bet, but also to over hedge the bet with another bookie at the same track, before they understood that someone placed a smart bet and that this could destroy their odds.
This way, it was sensible to earn smart money in manageable stakes early, rather than to get picked off in the future, when the opportunity to hedge the bets where a lot lower. At a certain point, this attitude changes and was abolished at European and American bookmakers, with the exception of a few that still remained in the Asian markets. If anything, as the number of bets have risen in the whole world, the hunger for early smart money in Asia has increased, as the fight to become the smartest and quickest has become something of extraordinary importance. So what happened to the rest of them?
Profiling with The Rise of Online Betting
Bookies in Europe and in America understood that when the online betting-markets were on the way up, there was a great amount of money to be made. However, when there is an unsatisfied need in a market, a lot of competition will arrive, and that quickly. As the world of online poker had a dramatic increase, the market saw a betting boom. “Everyone” made a lot of money, and as a result there was a possibility of making money of Sharp betting and bonus-bagging, or even Arbitrage betting for a while. This was, of course, before anyone noticed and closed their accounts. Unfortunately, when the market stabilized itself and in addition was struck by the collapse of the US poker market, the job for bookies became a lot harder.
Customer acquisition-cost became a lot higher, due to the increased number of competitors, all trying to get a hold of the current pool of clients. This was increasingly important, due to the decrease in poker revenues. At this point, the bookmakers had to lower their restrictions and limitations, to make sure that they kept customers. Profiling was now driven by odds compilers, who were able to see bets laid, due to the vast improvements in technology at the time.
I cannot speak on behalf of other compilers, but there were situations where the relationship between I and the bettor became personal, and I would pressure for a limitation or restriction of an account. This situation also happened in the opposite direction, as sharp clients betted once the market was settles, and in a moderate stake on a decent market.
Sometimes I would like the relationship between myself and the clients that played smartly, as long as they stayed “honest”.
As far as the online industry goes, the increase in Arbitrage Betting and the exploitation of bonuses took its toll on the bookmakers. This saw an extreme increase in how many clients were turned away from betting, just as much as how many they managed to get in. To the bookmakers it was all about becoming, and staying successful.
Risk Management Departments
To some bookies, it came as a huge surprise when they realized just how many of their bettors were making money from their sites or exploiting their bonus offers. This realization only came around after they started to analyze their figures. This effectively meant that the common odds compiler did not have the time or the ability to do all of the profiling. Therefore, risk departments appeared at every major bookmaker.
A risk department is a team of people, who are rewarded if they manage to keep out the players that manage to turn a profit at their sites, meaning that the bookmakers lose money. As risk departments are paid after how many bettors they manage to keep out, there will always be people that look to exploit this, and take it too far.
Risk managers in the United Kingdom used to have the greatest tool available for them. This was because Betfair was available to them, and was advantageous because odds compilers weren’t able to beat Betfair at all markets every time, and therefore they knew that bettors that played at higher odds that at Betfair, would have to be sharp bettors. This assumption continued and escalated, to the point where there was a consensus that compilers couldn’t beat Betfair on any market.
The high focus with Arbitrage Betting in the United Kingdom betting industry was mainly aimed at backing the bet at the bookie, while at the same time, laying the bet at the Betting Exchanges. This was in place of placing three separate bets at the different bookies, for a guaranteed return. It is necessary to point out that there is still some risk involved.
People that work with odds compiling do not like traders that focus on Arbitrage, but will in some situations tolerate a sharp trader. This is due to the work ethic of certain sharp bettors, as they have to put in the time necessary to be able to calculate the results of matches and events. An Arbitrage bettor only has to worry about placing a bet after receiving a notification on a site, and cash in on the opportunity. In many compilers` eyes this eliminates the competition between opinions and knowledge, and therefore, they are less respected among odds compilers. Some compilers will the you that the work is mentally and physically stressing, and takes a toll on them.
Arbitrage Betting actually did a lot of positive for the risk departments, as they informed them about how the markets work, in addition to have them realize that the Pandora’s box was opened by sites that compared odds. It was also useful to understand that copying already established sets of odds in the market was efficient, and it was also a factor in being able to decrease Arbitrage Betting-opportunities and certain types of sharp betting.
The situation in the present is that there are entire teams and departments that are concerned with surveillance and monitoring bettors on a constant basis. This is because the bookmakers want every client to be a part of paying for the excessive budgets in marketing and advertisement, in addition to affiliates. If the bettor doesn’t generate a profit of some sorts to the bookie, it is more than likely that the bookmaker will take action, and either limit or eject the account. By now, it has become clear that is very difficult and complicated to beat a widespread arbitrage across all the markets, without changing the prices, and therefore these accounts get flagged.
If you don’t change the prices along with the market, there is a clear chance that when you have the best price at any outcome, there will be an Arbitrage opportunity with another bettor in a place somewhere. In this situation you will end up having the best price, even if it was unintentionally. This is if you don’t change your prices, including when you haven’t struck a bet yet.
The bookmakers have completely gotten rid of the thought of potentially losing money on a client of theirs, even if it was to make money on other clients. When we look at it like that, they have rejected the thought and concept of making a book. In reality, it would be very difficult to make a balanced book without the assistance of the Pinnacle Model, due to the high number of bookmakers one can bet with. The bets that are most often struck on a market are Arbitrage openings, and on some occasions Tipster selections.
Books that end up lopsided are a reality that is hard to avoid for most bookies, because of the fact that square money has a tendency to bet exclusively one way, in addition to betting at a different time compared to the sharp bettors. In some cases, however, they tend to bet the same way as the sharps, only at a changed price and at a new time. The latter of these bets are the best bets to take, even though they will be a part of creating a one-sided book. It is important that, when you have to cheer on a particular outcome, you make sure that it is one that the worst bettors have placed money on.
What do they look for when profiling?
It is important to note that risk departments aren’t exactly the same at all bookmakers, but there are a few things they look for in general, that apply to most of them;
Is the account profitable? As crazy as this might seem, this is the reality of the situation. If your account is profitable, you will get noticed. It is impossible to hide from this fact.
Is the account considered to be sensitive to prices, and has the account placed a bet through a medium that is considered to be price sensitive? This might, for example, be a site that compares prices. Sharp bettors are considered to be price sensitive, and as a result they are not wanted.
When was the bet placed? If it was placed earlier than a day before the match or event will signal that something might be “wrong”, and raise attention to your account.
Is the price to be considered an Arbitrage price?
Did the price decrease greatly following the placement of the bet? The closing price is a lot more accurate than what the opening price is.
Did the bettor only place one bet, or did the bettor place a series of bets? This point might be debatable, but the common bookies like to see you place more than one bet at a time. This is because they want you to want as much action as possible, and for them to be able to profit at a maximum from you.
Have you made withdrawals rather than deposits? Bookies do not like to lose money.
Did you use an E-wallet when you had plenty of options that are more directly connected with the bookmaker available? This could be recognized as betting sharply, as you give the impression of wanting to move your money in fast fashion. This could also be mistaken as money laundering, which might lead to having your account flagged, regardless if you are or not.
If you haven’t used the casino, you should consider doing it.
Bookmakers don’t like bettors that place bets at niche markets, and don’t play the events that they highlight themselves?
Bookies also don’t like high stakes, as they make more money when people bet “for fun”. This is usually synonymously with placing low stakes.
Consider using the mobile platform that the bookie suggests. If not, be vary when changing IP Address.
Bookmakers actually raise their eyebrows when a woman places a bet, as they are not thought to be the “conventional” client. If they do, the bookmaker might suspect that they are going to exploit Arbitrage opportunities, or are a bowler account.
Do your bets match your demographic? Bookmakers are more thorough in gathering of background information nowadays. In the old days, the bookmaker might only want rich clients, but in the present they even accept students.
Do you allow their cookies on the site?
Have you placed bets at the same time as other bettors? Or have you placed bets at the same time as Arbitrage Bettors or Tipsters?
Never bet on a match that is fixed, or that might be considered to be fixed. This will flag you whether it was intentional or unintentional.
Never establish yourself in the industry of tipsters, don’t associate yourself with the industry, don’t be friends or follow people in social media that are associated with betting.
There are probably other factors that play their part as well, but the list above works like a pointer, and if you follow these tips, your accounts might be safe. If you end up being limited or cancelled, ask yourself if you followed the list.
In the closing paragraphs, I will discuss the subject of Tipsters. Most of the time, bookmakers aren’t concerned with Tipsters (when considering the sharp betting perspective). Most bookmakers have a very high number of clients that follow the tips of Tipsters blindly, and therefore they don’t instantly inspire fear. Again, Steve has expressed his thoughts on Tipsters, as they in no way are a guarantee of a profit. Tipsters contribute to creating markets that are heavily weighted on one of the sides, which is unfavorable in the smaller and most liquid markets. Tipsters might also create overlaps with the points in the list above.
In general, a Tipster will try to tip at the best price and a long time before the event starts. Often, Tipsters are the reasons for why prices collapse. If some of their subscribers place high stakes at the exchanges, they might make other bettors look like Arbers (Arbitrage Bettors). This collapse could trigger those who bet on prices that are currently dropping, to push the market even lower, leaving the bookie with a negative and horrible result. This result would be difficult to turn into something positive, as they weren’t quick enough when changing the price. This is why bookmakers follow Tipsters closely.
I, myself, have signed up for trials at Tipster services, to see and to understand the angle the Tipsters were taking, and if I had overlooked anything. Generally, compilers respect Tipsters that appear to be compiling their own price further, before they eventually tipping a selection. A compiler that knew what he/she was doing, would always use the Tipsters to learn, if they had a great merit and history. Compilers will quickly dismiss Tipsters that don’t have any results that are verified, that don’t seem to have a clear strategy, and the ones with inflated ROIs beyond what they deem to be likely.
Said in other words, we as compilers, were trying to do the same as the punters are doing in high volumes nowadays, in addition to seeing who we should take seriously.
Websites that were related to betting, with useful stats and calculations of models were of high interest for us. Most of them were checked, but as it turned out, we were already sitting on the information from the past.
In practice, I would spread my bankroll over as many bookmakers as possible with a few constraints.
I always want to max out a deposit bonus. Deposit bonuses vary from anywhere between $100-$500. Before depositing at a bookie with a $500 bonus, I’d wait until I’m able to max out that bonus.
I want to spread my bankroll disproportionately, where I have a larger % at bookies with a larger number of trades and a lower % at bookies with a lower volume of trades. E.g, I might place 2/5 of my bankroll on higher volume bookies. ⅕ on lower volume bookies. And keep ⅖ in reserve in my bank account or e-wallet until I get a more clear picture of which bookies I get the highest volume of trades in and also in case I run bad at a bookie and tap out there. The goal being to eventually get my entire bankroll in play in order to maximize my turnover.
The bookmaker needs to accept customers from your country. This is something you will have to check yourself.
This post originally appeared at www.daily25.com and has been reposted here with the permission of Steve from the Daily25 blog. It is written by Matthew Trenhaile who has worked as an odds compiler for many years and is now out on his own taking on the bookies. You can follow Matthew on twitter @CrazedAlchemist and he also has his own blog. Over to Matthew.
Matthew's background as an odds compiler
My name is Matthew Trenhaile, and I have worked for six years at the UK Sport Spread Betting division of the IG Index, as an odds compiler. Steve was kind enough to allow me to utilize his blog to show my abilities in writing, through a series of articles from someone who has actually worked with a major bookmaker and in the industry. To begin with, I’d like to address some phrases I am going to use continuously throughout these articles, as the names and nicknames for different situations are different from nation to nation;
Jolly = Favorite to win
Rag = Underdog to win
Sharp = Smart punters
Square = Losing punters
Books = Bookmakers
Bowler = An account in another person’s name, used to place bets
When I describe my odds it will be in decimal (European) odds, and when I am referring to an amount of money, the currency will be Pounds (UK).
A lot of the articles I have read lately, in addition to television pieces, have generated a lot of debate. This is completely fine by me, as long as it has good intentions. These are my opinions, and I respect the ones of others as well.
An evolving betting industry
In all of the following and future articles, I am hopeful as to tackling subjects from the past, present and future perspective. To begin I will take a look at odds compiling and how this has changed over the years, with my main focus on the last fifteen years. I will also be looking into how bookies copy their prices off each other, which is a topic that is relevant in the industry today. The industry concerned with Spread Betting stands responsible for every change that is of any significance in odds creations of the last 25 years. This is also where my perspective and experience comes from.
I would advise readers that aren’t familiar with Spread Betting to read at Sporting Index`s site and go through their training section to get an idea of what’s involved in this. In sports Spread Betting you could oppose an outcome before you could lay on Betfair, and you could bet in-running online at the spreads before any of the fixed odds bookies. The doomed to be a failure product Extrabet, with the dreaded close out button, was also created by IG Index. Even though this doesn’t necessarily mean that I am extremely great at compiling odds in comparison with others, it definitely means that I was at the center of advancements in technology in the sport betting industry. This was the reality back then, and the sports spread betting industry is still the leader. This goes through the employees, who devise the models of other bookies. It can also happen through firms such as Sporting Solutions, a spin-off from Sporting Index, where in-running prices towards bookies is the product. It is a clever move by fixed odds bettors to take a look at the spread betting firms prices, as their secondary check or backup before actually placing their bets.
How Odds Compiling Works
Databases, Statistics and mathematical models all play an increasingly large role in compiling odds, rather than personal experience, intuition and feel. When I worked, I was fortunate enough to work alongside odds compilers that worked in the “old” way, and that had watched thousands of hours of horse racing, and could distinguish the smallest of nuances of how the horse was ridden and of the strategies of the trainers. I also worked with people who broke down sports into their fundamental inputs and turned those inputs into probabilities. This was done before and ruing races.
Initially, odds compilers were split on the prospects of Betfair, and especially on its uses with regards to compiling prices. When I started working, Betfair had only just reached liquidity levels that were significant, and couldn’t be ignored due to the fact of the increasingly large number of arbitrage bettors. After 6 years, we priced all horse racing products after our Betfair API, only using one person to oversee that the process was correct. This was an extreme contrast to back when I started, where we had one trader for every horse race and a room filled with 40 traders, even though the number of sporting events and matches were only a tenth of what we have now. As a result of being a subsidiary of a large financial firm, was that we were paid more than the remainder of the industry, and our resources topped every other bookmaker.
Our resources were ploughed into trading at more events in-running and to develop more complex models to generate odds in-running, at an increasingly high rate. Generating these odd provided us with liquidity to the betting exchanges, and in turn generated a significant secondary revenue stream for us, in addition to providing these odds for our clients` sake.
Creating Statistical Models for Sports
The statistical odds compiling mostly consisted and originated from the counting of how often an event had happened previously. If we were compiling data from two football teams, we would for example look at how many times the home-team had won in their last 20 home-games, and how many times the away-team had won in their last 20 away-games.
This was prior to my time. In the old days, the edge was found by bookmakers, simply by studying the game more than the bettors and comparative odds knowledge. In other words, if a bookmaker found a 50% chance for a team to win its home games, and decided to put up a 1.85 odds, the bookie could trick the punter the next time, by putting up a 1.75 odds. This is just because the bettor remembers what they played, and places the same bet the next time, regardless of what the odds is. The bookie will then have extracted value from the bettor, just by knowing what punters have played recently.
Odds compiling used to be more focused on the bets on the punters, rather than the probability of the outcomes. To this date, this is the very difference between bookmaking and punting. The bookies` job is to understand where money will flow, as opposed to the punter, who has to understand the probability of outcomes and recognize value.
In the world we live in today, the odds will reflect probabilities of an outcome more and more precisely, and is lesser concerned about the opinion of the public. The upspring of in-running betting is what stands behind odds compilation through mathematical modelling. This meant that it became too difficult for people and compilers to recognize prices in multiple markets for multiple events in-running, only through the use of a pen and some paper, rather than computers. Bookies had a need for automatization, preferably running through models.
The Possion Distribution for Modelling Sports
Almost every model for sports betting can be found on the internet, and have been available for quite some time. These models have been improved over a number of years, making the data greater. “Poisson” distribution led the way as the best football-model, because of its accuracy, as a result to being improved, in addition to being easier to add time decay to the inputs.
Each team has their goal inputs, and for every minute the game goes on, the model decreases. This means that as the simulation continues, the odds is recalculated, and changes a little bit every second, even when not significant enough to be visible. In the beginning, Poisson distribution was the only way, but we later changed to custom distribution for every league, and from goals scored to the expected number of goals based on shots.
These days, compilers measure the overall quality of the shots being taken, in addition to measure the individual players impact on the shots, to create a better understanding, and to create highly improved shots-models. Or are they actually doing this?
Every sport has a model that reminds of this model, and all can be improved as the level and amount of information and data are made obtainable. The important point to focus on for bookies, is whether or not they wish to go down this road. Do they go through with the payments to secure this information, and to they pay people to work for them and maintain it? Or do they hire someone else to do it for them?
Multiple firms are already in use of the same price from the same provider of in-running football, for example. How good would your odds need to be to bet the average punter, if you only used in-house compiling? Can great management of risk hide a multitude of sins just by letting the best of the punters move the prices so that they have the best outcome for you?
It is sad to say, but only a small number of bookies allow that style of management of risk, or for the investment in greater pricing. Compilers are now understanding that a pound spent on advertisement and marketing can initiate a greater profit than the pound they could have invested in improving the quality of the software or on staff.
In general, any bookmaker has a goal of beating the 98% of all punters with the lowest number of staff possible. If we go into greater detail, bookies are most cost efficient when hiring young and inexperienced staff, in addition to give optimization of software little or no thought. This is seen as a better option that hiring experienced odds compilers.
How Bookmaker's Business Models and Views on In-House Odds Compiling has Changed
You might be convinced that since odds are the product served by bookies, they would be better off with focusing on developing their product. However, in the world we live in today, this is not correct.
For example, you wouldn’t base the choice of your hotel based on the cost of a beer in the bar compared to other hotels. Bookies look at odds at about the same level of importance as the price of that beer. The real product they are selling is entertainment, and not the intellectual contest between the bookie and the punter. It would be foolish to think that they have ever sold the product of this sort of competition. The product bookmakers sell is a rush of adrenaline, and those who still believe that characters competing with punters, and playing against each other in betting rings concerned with horse racing is what betting used to be, are greatly mistaken.
All punters have a different story and feeling towards how sports betting and bookies used to be. People I have spoken with remember the taxes in the UK, large margins, only a choice between a few bookies, refusal of payment when trying to withdraw money, and in some cases threats of violence when trying to get paid. I do not know where the image of a gentleman-bookmaker comes from. Over the years, bookmakers have taken bets and they have refused bets, they have allowed high stakes and they have refused them, and some have filed for bankruptcy and some haven’t. This has been the truth for square and sharp punters.
Every bookie expects to win in almost all cases, no matter what the quality of their odds are, and to improve channeling of their efforts in getting punters in the door, rather than having a cheap price in the bar when buying beer. I do not care much for this model, but I believe it is going to stick.
There can only be one Pinnacle
Now, let’s dive into the compulsory paragraph about Pinnacle. Why doesn’t every bookie operate such as Pinnacle?
Well, the simple answer to this question is that there can only be one company at a time with the business model that Pinnacle possesses. Some might use parts of it in some areas of their business, but the model that Pinnacle uses, isn’t easily duplicated.
Pinnacle`s tagline is that they openly welcome winners, and has stated that this is due to their wish to beat all square book with the best proprietary trading models that the market can offer.
Having the greatest employees (including odds compilers), betting on tiny margins, welcoming arbitrage- and sharp traders, in addition to changing the odds according to how sharp they are, the odds at Pinnacle will be the best representation of the probability of any outcome at sporting events.
Start with your limits low, and increase them according to the increase in your price. Not a penny will be spent on marketing, but everyone’s allowed to use the affiliate banners, in addition to giving your API to everyone you can. This especially includes arbitrage and services that compare odds. The low margins result in you being at the other side of arbitrage trades. The square bookie your price is up against is so bad at placing the price that you must be getting the value side of the arbitrage bet.
Actually, you will be getting this scenario again and again, but will always end up moving your price to make sure that you get every bit of value every single time. This ends up with you becoming the greatest punter that William Hill, Ladbrokes, Bet365 and every other bookie has, without the need of opening even just one account. The risk management group that are in your possession are almost fully automated, and you need the services of an investment bank. To be able to set up- and use this kind of model must be doing so with smaller margins than you, in addition to having a greater risk management and a lot of capital. The only example of someone giving this a shot at the moment, is Marathon, and they are still nowhere near the point where they can afford to keep winning accounts in their books.
But what about the Asian bookies that keep accepting winning punters?
- Well, as long as they see a great amount of money coming in, they are happily accepting them to play. This is the case in football, certain American sports, and in the more known tennis-matchups.
The Asian Handicap Model was designed to function at a low margin, move quickly, have a great volume of trades, in addition to not working with the sharp money, as they is some cases were irrelevant. In some cases, it was designed to play at early and low limits, just like Pinnacle, while the market still forms. This should result in the risk being low.
Still, they don’t directly run a Pinnacle Model, but they have large enough square volume to use some of the same features of it, and handle a loss comfortably. This is IF the books as a whole result in a positive profit.
The Future of Odds Compiling
So where do I personally see the future world of odds compiling going?
In the end, I think that compiling of odds will strictly become an outsourced function for bookies. Companies that specialize compile the odds, both pre-match and in-running, will arise. Already, multiple companies provide this option, in addition to there being companies that provide liquidity to the betting exchanges. Homogenized pricing is also something that will occur more often.
The reasoning for why you see a lot of similar pricing in today’s market, is that the liquidity in certain sports betting markets is of such a high volume, that we can see something that reminds us of a market price, similar to the financial markets. It doesn’t make sense for bookmakers to have deviating prices from each other in football that can be categorized as top-level. Trust me when I say that substantial studies have been completed, and that they conclude with the fact that trading against the market in a liquid sport is a loss in the making as a bookie. When you are going to provide thousands of odds over a very high number of events, it is easier and better, to simply just follow the market.
Though, this might not be the case for a punter.
An increasing amount of companies will look at a market and tell you that the combined price from a liquid Betfair, Bet365, SBO, IBC and Pinnacle easily can be put together, and function more than well enough. These operations are not going anywhere, and see a very high amount of trades, which helps maintain the prices at a correct level.
“Why do they put up arbitrage opportunities, even in the liquid markets?”
- The answer is that we are in a period of time, where the industry as a whole is in transition and sees changes. Some are still trying to understand and accept that the price of the market should be set from the flow of money, rather than the opinion of a trader.
I predict that bookies will have a growing confidence towards these consolidated feeds. They will eliminate arbitrage opportunities, or at the very least, with sharp sources, they will be cheap in use. I also believe that bookmakers will outsource all of the risk management tasks. There will forever be exotic markets attached to the core liquid ones, and if the bookies have any sense they will increase the limits at the core ones and decrease the limits at the exotic. This should be at a level of a 100 pounds takeout, which is a great amount for punters that are in this for the entertainment of it.
When focusing on horse racing, I have few predictions to come with. It might go in the direction of Starting Price only. I actually think that pari-mutuel betting with very low margins could be the way forward, making it into a universal Betfair with Starting Price. This type of pool betting has not been prevented in Asia, not with punters or professional bettors.
The problem that we have with the UK is the high amount of bad racing. Who knows what would have happened if bookies had pooled tickets, and if Betfair and the Tote had shared the profits, maybe it could have resulted in something valuable for everyone. This could potentially also have put pay to some of the bad Starting Price rigging that is happening.
Betting will become just as much about beating the market as a whole, and not picking off the sick and the weak prices from the books. This will lead to a requirement towards punters and tipsters to understand the weaknesses and the strengths of the markets they work in, just as much as the sports themselves.
As a final word, I would like to say that you shouldn’t concern yourself with how the prices and the odds are set and compiled, or whether bookies show the same prices, as the only thing you should concern yourself with is to beat them. There will always be flaws and edges to be found in every sport, even though they get harder to spot, and shrink in size.
Written by Matthew Trenhaile
You can follow Matthew on twitter @CrazedAlchemist and he also has his own blog.
This post originally appeared at www.daily25.com. It has been reposted here with the permission of Steve from the Daily25 blog. It is written by a guest contributor at the Daily25 blog. He works at one of Australia’s biggest bookmakers but does love his job so wishes to remain anonymous. Being one of many sportsbook insiders I converse with on a regular basis, I shall cleverly name him Spinsider. I email with a number of people who work at sportsbooks, they have all stumbled across this site and contacted me. You can imagine that we have a lot in common and a lot to talk about. I have found that all the workers of these big corporations are great guys. I always feel a tinge of guilt when calling out sportsbooks, as I personally know workers there, but it is not the workers who are the issue, it is the way the owners have created a culture in each company much like those seen in the wolf of wall-street. The goal of all employees is to make as much profit for the company as possible and this sometimes leads quite nice people into doing reprehensible things in the name of profit.
This article will give a small glimpse into the lengths that bookmakers go to profile every single customer and then weed out any that may one day make a profit. This is a major issue in our little sports-betting world, and an important story to get out there to the general public. I’ll hand it over to the Daily25 Spinsider and I’ll be back at the end of the post to add some of my own opinions.
From inside a corporate bookmaker
A while back, Steve reached out and wanted me to write an article for his increasingly popular blog, daily25.com. As I have had some personal things to settle and an international trip to complete, but finally, here it is. Normally I would not be writing an article like this, but in this particular situation I can relate to Steve trying to educate others. This will work towards a fairer world of betting, and I have understood from my previous conversations with Steve, that he is a genuine and a great person.
Who knows in the future, I might enjoy writing so much that I will publish my own blog. Hopefully Steve will give me some feedback on whether that would be possible to do or not.
A little about me; I have worked in the industry and world of gambling for about four years now in Australia, and I am currently working for a large corporation. Previously and currently I have done quite a bit of sports betting, and punting, and therefore I can relate to the two sides of sports betting. I have read articles, in papers such as The Age, that have annoyed me due to the one-sided nature of their writing. I have complete understanding for the bookie – and I will be the first to admit that I would not have a job if punters did not lose and paid my wages, but I also understand the perspective of the bettor, if their account gets limited or even closed. On the other hand, if bookmakers are incapable of turning a profit, you would, as a punter, have less opportunities to bet and exploit offers and campaigns.
It’s a circle. And the circle is of the vicious kind.
Why Bookmakers Limit Winning Players
The main objective of this article is to take a closer look at how betting accounts and profiles gets noticed, and the process of them being taken all the way to restriction and closure. No bettor ever wants to try to place a stake, and get rejected. “Why will they not take my money?” The short answer to that question: Yes, bookmakers limit or ban any consistently winning player. The most important takeaway from this article is how bookmakers profile players, but firstly, let us understand why they do it.
A corporate bookmaker has an overall objective of creating a profit for itself. This is the point of emphasis from the owners and the shareholders. If you are not able to create and increase your profits, you will be shown the door. Employees at the bookmakers look for ways to satisfy their individual targets and expectations set for them, and the easiest way for them to reach profitability and to increase their margins is to remove any punters that look like they might cut into these margins. Corporate bookmakers are not easy to understand and are a tough opponent to have. These corporations have a high number of employees, with different areas of expertise. All of them have a need to get paid, and the same goes for the owners and the shareholders. In my honest opinion, there is a culture of being unfair towards the customer on a constant basis, when there is no need for this. This means that bookmakers try to mislead and use the very people that pay their wages.
Personally it annoys me as a punter, because I know for a fact that they do it to me. The difference between me and other punters is that I understand how it works.
How Bookmakers Identify and Profile Winning Players
Now, let us get to the point of this article – how accounts are noticed. At the bookmakers where I have worked previously, we have had teams that work entirely with risk, and who monitor the activity of customers, trends in the market and at specific players, etc.
Below I will go through a few techniques the bookmakers use to profile:
IP Addresses are tracked for accounts and for bets. This means that even though you create a new account with the names of, for example, your family, it will not work. If you ever place a bet or use the same account that has the same IP Address, the account will be flagged in an instance, and will be under observation in the time going forward.
Another example is the MAC Address, as this is information that is captured, but to my knowledge is not used in the filtering process. In addition to this, bookmakers will notice if you and “your mom” begin placing the same bets, as your profiles will match each other.
Unique Accounts are put in place to monitor every person on the site. This means that the bookmaker has the information necessary to positively identify you, for example through date of birth, address, and so on. In addition, they get the device id from your computer or phone. Whenever a new account is created somewhere, it is run through a database of information, to check whether it matches information from existing accounts. These accounts will then be grouped and monitored.
Cookies are used to track your movement on their sites, whether you are logged in or not. In Australia, cookies are automatic, meaning that you don’t really have a say in them being placed in your browser or not. In Europe, however, there have been created laws to protect users from cookies. Every movement on the website is tracked, gathered and analyzed, and there is no way around it. The information gathered here is used to put users in certain categories, and to offer different campaigns and bonuses to them. These might be offered to exploit your weaknesses, or they might be used to make sure that you will stay and use their site.
Social Media – The two bookmakers I have worked with, have had intricate systems that are concerned with CRM, Customer Relationship Management. These systems are in constantly evolving. The teams that are assigned to working with risk and customer service are constantly monitoring bettors that are active in social media surrounding betting, bettors that have industry knowledge, employees from other bookies, in addition to tipping service subscriptions. This information is saved at the account. Reports are compiled daily, on all betting-activity of the user, and these reports are monitored closely. People with similar twitter-activity are pooled together, whether they are official or not. This is the reason for why some accounts are closed immediately after creation. Even before creation of the account, the person is flagged for any of the reasons in this article, and might not be able to gain access to the intended site. I have seen examples of accounts being pre-created and banned, even before getting signed up.
The easiest way to flag an account is when people post their betting-slips in social media, and are immediately removed from the bookmaker.
Staking – When an account is opened, the staking level is the same at every account. Once you start consistently winning over a longer period of time, for example weeks or even months, your staking level will be reduced to cut the losses they have on your account. However, if you seem to be a winning player in most sports, but for example struggle with winning in racing, your possible stake-amount will increase, only in this area. This can be done through shifting levels of staking between different bets, sports or competitions.
This is why you sometimes notice that you can stake very high on cricket (because you constantly lose here), and have a reduced stake at racing (because you constantly win here). The bookmakers are clever in this sense, and figure; “Why ban you completely, when we can still turn a profit from you?” At the moment, most of this is manually performed, although the data to make the decision is automated.
Trends Betting – This occurs when you and your friends bet the same types of games at the same time of day. This will definitely get noticed.
At one of the two bookmakers I have worked at, we had measures to collect data that would expose bettors that played the exact same bets, even across bookies, and ultimately looked for trends in the market. If a big group of people place the same bets at the same time, it is clear that they come from the same tipping service. Let me make one thing clear: Bookmakers subscribe to these services themselves, to make sure they are always in the loop of things.
Tipping – One of my favorites. If you and your friends have ever created a personal tipping competition, it is extremely likely that you have been grouped together. If one of the bettors in the “group” is great at recognizing what bets to take in one sport, the group as a whole is more than likely to have a reduced stake, due to this person’s expertise and probability of giving away this information.
Betting Back – Do not make the mistake of thinking that every bettor with a profit on the horizon will be removed, as the bookmaker’s eye yet another opportunity to make a profit. This happens by the bookmaker following their players’ bets, and placing the same ones at another bookie or exchange, and turn a potential loss into a potential win. I have heard somewhere, that bookmakers have systems to check players that utilize arbitrage betting on Betfair markets, but I have never seen or been made aware of this myself.
Why Believing You Are Better Than the Bookmaker is a Bad Idea
Since the Australian market has been in constant growth over the past five years, bookmakers have become highly advanced. Every participant in the market want a piece of the pie. Don’t be blinded by the offers and campaigns they swing your way, as these are all for show and work in their favor. When Tom Waterhouse challenges you to play the same as him with enhanced odds, do not take it, because of the high probability of losing. This is something he is very aware of.
Bookmakers have models that will give them an indication of who the winner of a race or matchup will be. Someone who does this for fun stands no chance against the fifty traders that do this for a living in companionship with highly developed models. You will never win.
A bookmaker will only survive if it manages to take your money. They are not anything alike a charity, they are a business.
How Bookmakers Will Identify Winning Players in the Future
The techniques listed above is just the most occurring ones, and there are plenty more. I am certain that personalization software will have the capability of pointing out every customer touchpoint or interaction that one has at any given time, so that they accurately can predict our next moves. Do you want to stay clear of the attention of the Bookies? – Well, Big Brother is always watching you.
- Do not make more than one account at each bookie, clear your cookies, do not involve social media in your betting, and throw the bookie off a little bit every now and then by placing a bad bet. Everything is automatically reported and monitored.
I could talk all day about an abundance of topics, but I’ll leave it there. Hope to speak to you again in the future.
End Comments by Steve from the Daily25.
The first thing I want to do is to give a great thanks to your industry insider, Spinsider. While the list is not fully complete, it will serve a purpose, as you have learned the rules of the game and you can take certain measures towards improving your abilities of setting up accounts and keeping them for a long time. I am in the fortunate situation where I have been working with IT in the punting-area for fifteen years, ten of them with casinos and five of them with sports betting. The harsh truth is that creating clean accounts is a difficult process, but definitely a necessity in today’s world. If you are dedicated to place the correct bets every time, you will have to stay under the radar of the bookmakers, for good.
Techniques such as following your IP Address and MAC Address is easy to trick and work around. You also have the option of turning off cookies in the browser, and this can be easily avoided by using the incognito-option in the browser. Social Media, however, is a difficult part to stay away from, as from something as unremarkable as a “like” or a “follow” will lead the bookmakers to a large amount of information about you and your friends. The accounts where I have succeeded in staying away from the spotlight have all had non-present Social Media activity.
I am hoping that this article made you a little bit more aware of how much time and resources the bookmakers put into making sure that winners are kept out of their service, and that their winnings are limited as much as possible. Every bookie spends millions every year on staffing and the latest technology, to make sure their customers are only the losing ones. So much for the Australian ethos of a fair go. As most bookies are British, they do not understand that this will not be able to survive over a longer period of time. At least not in Australia.