How bookmakers track your every move & how to avoid it (from an industry insider)

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

Sometime back, Steve contacted me privately to write a piece for his ever growing and popular blog daily25.com. I apologise to Steve for the lateness of this as I’ve had a few personal items get in the way in addition to a little overseas trip I had to attend to, but here it is. I don’t usually do this kind of stuff (writing articles) but I can genuinely see that Steve means well in what he is trying to do, is an advocate for fairness, and I know from my brief discussions with him he is a genuinely good guy. That means a lot to me. Who knows I might take up my own blog if I enjoy writing material myself. I guess Steve will tell me if this is a hit.

To introduce myself, I’ve worked in the gambling industry for roughly 4 years here in Australia and am doing so currently for a major corporate. I have, and currently do a fair bit of sports punting myself so I can relate to both worlds very clearly. Sometimes I read tweets and blogs and articles on major newspapers like The Age for instance and get annoyed because only one side of the story is presented. I understand the perspective of the bookie – hey I’ll admit I wouldn’t have a job if losing punters (you guys) didn’t pay my wage, and I understand the frustrations of not being able to get a bet on and getting restricted and getting my account closed. On the flip side, if bookies don’t make profits, you the punter have less options to bet with and hence less promotions and offers. It’s a vicious circle.

Why Bookmakers Limit Winning Players

This brief article looks at how accounts get flagged and hence end up as a dreaded restricted accounts. The last thing any punter wants is to go enter in a stake and be told their business isn’t wanted. Why don’t they want my money? In short: yes, consistently winning punters are shown the door. But let’s understand why that’s the case before I go through typically how it happens.  A corporate bookmakers overall aim is to make profits, because that’s what the owners and shareholders are looking for, nothing else. You don’t make growing profits, you lose your job. Individuals within the organisation get greedy and in-order to meet their individual targets look for ways to make more and more of a margin, an easy way to assist with this is to remove business (punters) who look like they will cut into their margins.  Corporate bookmakers are complex beasts. Many hundred employees, across trading, marketing, IT, finance and so on. They’re all human, they all need to get paid, and so do the shareholders. I’ll be honest with you, there’s a culture of always trying to be unfair with the customer, and there doesn’t have to be.  In other words, trying to deceive the customer, the very guys who pay our wages. As a punter myself it annoys me, because I know other bookmakers are doing it to me. The difference is, I understand it.

 

How Bookmakers Identify and Profile Winning Players

Anyway, back to the point of this article – how accounts get flagged. The couple bookmakers I’ve worked with have complex risk teams who monitor all customer betting activity, betting trends and so on. When I say ‘all’ betting activity I mean ‘all’ betting activity. Below I will go through a few techniques:

  • IP Addresses are tracked at both an account level as well as a bet level. Even though you try and create a new account under your mums name, if there’s ever a bet or account that has the same IP Address these are flagged immediately. Things like MAC addresses and the like are captured but to my knowledge are not used for filtering purposes. Also if you and “your mum” start betting on similar sports at similar times, your profiles will match.

  • Unique accounts – just like any business there are rules in place to ensure that same people do not have multiple accounts. Things like date of birth, suburb, address, device id of your android or apple device are compiled, and compared against one another on an ongoing basis. When new accounts are created they are compared against to the existing database instantly are these accounts are grouped and monitored.

  • Cookies. No I am not talking about the bad boys your grandmother gives you. Every time you appear at the bookmakers website either logged in or not they know you are there. In Australia these are automatically placed on your browser and there’s not much you can do about it, unless you clear your browser cookies each time. There are no laws like the UK where you have to opt into such behaviour. Everything from time the site was visited, to clicks on a page, to hover over links, to session length is stored and then you are profiled. There’s no hiding. From here you are placed in “user profile buckets” where suitable marketing or promotions or offers are chosen to be applied to your account to keep you engaged.

  • Social media – the two bookmakers that I’ve worked at have complex CRM (Customer Relationship Manager) systems that are constantly evolving. Risk and Customer Service teams are constantly trolling Twitter, Blogs, Facebook, employees from other bookmakers as well, tipping service subscriptions and people with industry knowledge and these are all noted on the customer’s account. Reports are generated daily basis on all betting activity (bets placed, profit/loss and so on) and these people are closely monitored. People who tweet together are put into “pools” and are known as “syndicates”, official or not. This is why some accounts get banned the very few minutes after they create an account. It’s because they get flagged via mechanisms above before they even create an account. I’ve seen accounts pre-created for people and restricted just in case they turn up some day. My favourite is when people post pictures of their accounts/betting slips on Twitter, it makes the job so easy to flag accounts.

  • Staking – when you create an account everyone has the same staking level. Once you start “winning” on a daily, weekly, monthly basis (everything is reported) your staking level starts to change or get reduced. If you are really crap at a particular sport the amount you can stake increases. This can be achieved per bet type or sport, or competition or split between racing and sport. This is why you see sometimes you can bet big stakes on cricket (it’s because you constantly lose here) but small stakes on racing (because you constantly win here). Why ban you completely? Bookmakers might as well restrict or ban you when you’re winning and let you lose where you’re losing. Most of this is manually performed at the moment, however the intelligence to make the decision is all automated.

  • Trends betting – If you and a few of your mates are betting on the same type of selections at the same time of the day, it will be noted. One of the two bookies I’ve been involved with have an engine that compares bets (exact bets) between different customers and looks for trends. This runs 24/7. If a whole bunch of people bet at the same time on the same selection, it’s obvious they are from the same tipping service. Do you think that bookmakers aren’t subscribing to these services themselves? You’re a bit naïve if you think they aren’t.

  • Tipping – ah, another favourite. Ever created a personal tipping competition between your mates? Well it is your lucky day you have all been grouped together, similar to the staking item above, if one punter within the tipping group is really good at Sport X, this may reduce the amount that can be bet by any members of the group.

  • Betting Back – don’t be fooled into thinking that every “good punter” is restricted or banned completely. Why would any bookmaker do that? Most of the really good guys have their bet taken, then the bookmaker will place the same bet at a better price back into Betfair (or at least hedge it for a loss), or place the same bet onshore or offshore at private bookies. I’ve heard things like bookmakers have systems to check arbers on particular Betfair markets but I’ve never witnessed or are aware of this system myself.

 

Why Believing You Are Better Than the Bookmaker is a Bad Idea

Bookmakers have got really sophisticated in the past few years because they know the Australian market is growing and will continue to grow over at least the next 5 years. They all want a piece of the massive market share pie. Don’t be put off by the promotions and special odds, they’re all for show. When Tom Waterhouse tells you to “take him on” that’s because he knows with a high degree of certainty that whatever selection he’s offering the enhanced odds on will lose. These bookmakers have models and systems in place that will provide them the result of a race.  The guy sitting behind his computer at home has no chance against the 50 traders who work around the clock who do this stuff day in day out with complex modelling. You’ll never win. Bookmakers only exist if they take your money. On the other hand, they are not a charity, they’re a business.

How Bookmakers Will Identify Winning Players in the Future

The monitoring activities briefly listed above are just the tip of the iceberg. I’m sure in next to no time personalisation software will be able to map out every customer touchpoint or interaction that they have at any point so they can predict your next move before you even do it. My advice is – Big Brother is always watching. Do you want to keep out of the bookies eyes? Don’t make multiple accounts, clear your cookies, keep off social media or do it anonymously, throw the bookmaker off every so often with a really stupid bet. Everything gets reported. Everything is automatic. Everything gets monitored. I could ramble on all day really about a plethora of topics however I’ll leave it there. Hope to touch base again in the future.

End Comments by Steve from the Daily25. 

Firstly a big thank you to our industry insider. While this is not everything that is done, it is a very handy list to have. Now that you know some of the rules of the game, you can now take measures to game the system. Luckily for me I have a background in IT and have been in the punting arena for over 15 years (10 doing casinos, 5 with sports). Creating new clean accounts is a science and sadly a necessity in today’s world of limited accounts. If you really want to get a bet on you have to work pretty hard at staying under the radar. Things like IP and MAC address can be easily spoofed. Cookies can be turned off by using incognito mode in your browser. Social media is another issue, as if you or even a friend ever likes or follows a bookmaker, then the amount of information available is immense. My longest lasting accounts all have no social media presence.

I hope this article enlightened you a little about the amount of effort bookmakers go into to make sure no winners ever get a chance. They spend millions a year on staff and tech to make sure they only have losing accounts. So much for the Australia ethos of a fair go. As most of these bookies are British they don’t understand that concept and are slowly realising that it won’t stand here.

Written by a guest contributor at www.daily25.com. Reposted here with the permission of Steve from the Daily25 blog.  

Hedging Bets: A strategy for reducing your risk when trading sports?

Key takeaways

  • Hedging sports bets can enable you to reduce your risk, but it will also reduce your potential ROI. Therefore it is a tradeoff between risk and reward that you as a trader have to make.

  • Be aware of potential pitfalls such as bookmakers voiding your bets as they can leave you exposed with high risk and no upside.

“A hedge is an investment to reduce the risk of adverse price movements in an asset.” - Investopedia

Russian Premier League: Ural vs Rostov

Russian Premier League: Ural vs Rostov

An Example of Hedging a Sports bet in a Russian Premier League Game

As a sports trader you can reduce your risk by hedging a trade you have placed. For instance on November 30th, 2016, Ural played Rostov in the Russian Premier League. The opening odds for the game offered by Pinnacle is included in the table below. Rostov both being higher placed in the League and being a team that beat Bayern Munich at 15 in odds in the Champions League the week before was the favorite to win the game.

Soft bookmakers typically place their odds lower than the odds offered by the sharp bookmakers such as Pinnacle, because they have a lower payout rate. 2,5 hours before kick-off, November 30th, the Norwegian bookmaker Norsk Tipping (NT) offered the game at 2.95 for a Ural win. However at this point in time the odds at Pinnacle had dropped to 2.17 (removing their 2,5% vig, the true odds would be 2.26) resulting in a 30.5 % edge [ ((2.95 / 2.26) -1) *100% ]. Next, Norsk Tipping most likely noticing a large amount of money placed on a Ural win adjusted their odds to 2.6 resulting in the odds below.

However, this was still a 15% edge versus Pinnacle. I placed the bet at 2.6 on NT with a stake of 850 NOK or approximately 100 USD. If Ural wins I would get a return of 260 USD and a profit of 160 USD (Stake returned - Initial stake). After I had placed my initial bet, I kept monitoring the odds at Pinnacle, which kept dropping. With such a large edge I now had the opportunity to hedge my bet to completely eliminate any potential losses if Ural failed to win, while making a smaller profit if they win. This was achieved by placing a bet on Rostov to win on the Asian Handicap line of +0.5 at Pinnacle at 1.96 in odds about 20 minutes after taking my initial position. Meaning that if the match ended in a draw, Rostov would have a 0.5 goal handicap, the result being a Rostov win. By hedging on Pinnacle I would have a return on investment of 11,7% given a Ural win [ 1 / (1/2.6 + 1/1.96) ]. While breaking even on any other outcome (a draw or a Rostov win), so basically I was freerolling the game without any risk of potential losses. An important point to note is that hedging differs from arbitrage, because the bets take place at different points in time. This enabled me to get a much higher ROI while taking positions on both sides than what I would have achieved through arbitrage at the time I placed my initial bet. 

Odds for hedging my bet

Odds for hedging my bet

Expected profits after hedging my bet

Expected profits after hedging my bet

New Information in the form of Lineup Changes Made the Odds Drop

The odds at Pinnacle kept on dropping all the way until kick-off as new information became known to the market. Most likely due to Rostov resting several key players, the pictures below compare the lineup Rostov fielded vs Bayern on the left and Ural on the right.

 

Lineup comparison for Rostov in this game vs their last game

Lineup comparison for Rostov in this game vs their last game

When the match started Ural had become the favorite and Rostov the underdog. Pinnacle offered the following odds:

Closing odds at Pinnacle

Closing odds at Pinnacle

The vig-free closing odds offered by Pinnacle at a Ural win would be 1.76 [ 1.71 / 0.973 ]. (You can read more about why the closing line is a good approximation of the true odds of a game here). The closing edge versus my initial trade at 2.6 would have been a 47,7% edge [ ((2.6 / 1.76) -1) * 100%) ]. It is also worth to note that I would have had better odds on my hedge trade if I had placed it closer to kick-off.

The Pros and Cons of Hedging a Sports Trade

The game ended with Ural winning 1-0, giving me a profit of $60. However, if I had simply stuck with my initial trade of a Ural win at 2.6 in odds without hedging I would have made a profit of $160. This highlights the pros and cons of hedging sports. The advantage of hedging was that I managed to eliminate my risk on the game. However, the disadvantage was that I reduced my potential ROI.

Btw, the winning goal was incredible! (27 seconds into the video)

Now, because of Norsk Tipping’s specific rules, the Ural - Rostov game was not offered as a single, meaning that I had to match it with another game to form an accumulator. I ended up combining it with another team scoring 2 goals or less in another game at 1.01 in odds. They ended up scoring 2 goals, so it was a close call, that ended with the trade being good. However this also meant that in reality my hedge trade was not completely risk free. If the 1.01 game had not gone in, I would have ended up losing the $100 I placed through Pinnacle. Also, bookmakers often reserve the right to void bets where the odds is wrongly set. This could potentially have left me with a huge -EV trade. So if you are going to hedge your trades, make sure you are familiar with your bookmakers rules and practices. 

Lessons Learned from Hedging a sports bet

What did I learn from this experience? One can only make decisions with the information one has available at that point in time. I could not know whether the market would continue dropping in odds on a Ural win after I placed my initial trade or whether it would swing the other way. Therefore I made the decision to hedge my trade and freeroll the game for a guaranteed profit if Ural ended up winning. In hindsight, I would have made the same decision if the trade had been a single on NT. However if I come across trades in the future where there are hedging opportunities, but the game is not offered as a single I would rather run the risk with the potential upside of a larger return on investment

Key takeaway

To sum it up hedging a sports bet can enable you to reduce your risk, but it will also reduce your potential ROI. Therefore it is a tradeoff between risk and reward that you as a trader have to make. In addition, you should be aware of potential pitfalls such as bookmakers voiding your bets as they can leave you exposed.

By

Marius Meling Norheim