
Beating the bookies – how the online sports betting market is rigged - zeristor
https://arxiv.org/abs/1710.02824
======
ChuckMcM
"Send enquires about this paper to our newly acquired private island in the
Bahamas." :-)

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

~~~
downandout
_the casinos simply ask you to leave if you win too much._

I was actually backed off from the first place I went to after I learned how
to count cards while I was _losing_. If the pit boss or dealers know how to
count themselves and identify you as a counter, they want no part of it. In
most cases, they'll either "flat bet" you (tell you that your initial bet is
your maximum), or they'll tell you that you cannot play blackjack there.
Actual barrings usually don't occur until the second or third offense.

~~~
iopq
That's only if you vary your bet size. That's a definite tell.

~~~
DennisP
How do you profit from card counting without varying your bet size?

~~~
darepublic
I guess you could always count from the sidelines and bet only in advantage
spots. Not very practical I suppose but card counting in general seems pretty
implausible these days

~~~
DSMan195276
One strategy I know of is to have multiple people. One person sits at the
table and always bets low, the other always bets high but only sits down if
the person at the table signals to them that the odds are good (They can be
off doing other stuff while the low-better is doing the counting, so they're
not just standing around waiting).

You're still right though, the odds aren't that great and once they get a hint
you're doing something weird you'll get thrown out.

~~~
mateo411
That's what the MIT blackjack team did in the 90s.

------
utnick
There has to be more to this story. I would like to hear the bookmakers side
of this. Perhaps the researchers were scripting or triggered some other kind
of security tripwire.

Winning $900 split across several different bookmakers is absolutely nothing
in the sports betting industry.

William Hill, one of the companies that the researchers claim restricted them
is a multi billion dollar company. They aren't sweating small time bets like
this.

EDIT: I noticed that the screenshots they used as proof their bets were
restricted are for bets on very minor football leagues (Australian semi pro
football), its common for betting limits to be lower for games that don't see
a lot of betting action & is not proof enough to me that the bookmakers
lowered their limits globally

~~~
mason55
My guess is that it’s the manner by which they were winning. Thirty $50 bets
per week over five months is over 500 bets. That’s not the long run but
winning at an 8.5% ROI over that many bets is probably enough for the house to
realize they’re somehow a winning player even if the stakes aren’t huge.

~~~
utnick
Sportsbooks in general don't mind winning players though, especially big ones.
They make money off the vig and move odds to get equal money on each side of
the bet so that they'll make money either way.

~~~
valuearb
They hate “sharps”, winners who win through skill exploiting lines, they love
those who win by chance. Sharps will continue to bleed them, the lucky fish
often become whales whose luck fades over time.

~~~
nasredin
In casino games the "luck" stays the same. One or two percentages (or more)
lower than 50%.

~~~
valuearb
You are confusing luck with expectation. Luck is the deviation from
expectation. I've seen terrible poker players win a big tournament, or crush
cash games for months on end, and quit their jobs because they mistakenly
believe they are skilled at poker. Their positive deviation above their actual
expectation (their "luck") soon evaporates, and they moan constantly because
their results begin to actually match their expectation, or even worse, they
get "unlucky" and their losses are greater even worse than their expectation.

~~~
ZephyrP
> You are confusing luck with expectation. Luck is the deviation from
> expectation.

you're actually thinking of the square root of luck there.

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

~~~
flashman
Maybe you could find a sport where injuries are logged or can be inferred from
other data? For instance if a racehorse performs far slower than its typical
pace, its odds of losing the subsequent race might be higher.

~~~
oreo81
The whole point is that computers can't use injuries as a data point. This
strategy won't work in any sport that can have the injury factor calculated by
a computer.

------
conistonwater
> _A few weeks after we started trading with actual money some bookmakers
> began to severely limit our accounts, forcing us to stop our betting
> strategy._

Isn't this like literally one of the oldest tricks in the book? I remember
reading _Reminiscences of a Stock Operator_ , which talks in part about early
1900's bucket shops, and the same stuff was there even then. Similar stuff is
also mentioned in market microstructure textbooks with market makers on one
side and informed traders on the other side.

Is _rigged_ even the right word here? It might be, but did the bookmakers have
a responsibility to keep accepting their bets? Is it different from claiming
that casinos are rigged?

~~~
agilebyte
Same here. If you have a strategy that wins you money overall, bookmakers
either send you a nice email saying your account is closed as they do not
welcome professional players or they just severely limit your stakes (think
$20 a bet).

(Will Hill, Interwetten, Betway are exactly the type of bookies that will
close your account as soon as they catch on)

Yes, the odds can be exploited and there is a whole bunch of services offering
picks, but eventually the sportsbooks catch on and close your account. The
sportsbooks that welcome professional players are few and far between and
their odds are on point.

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

~~~
dogruck
Easier said than done.

Suppose your book is balanced, and you have $25,000 on each side. Then a new
bet comes in, size $250,000, on one side of your book -- what to do?

Or, more simply, when you set your initial line, what do you do when a known
sharp immediately wants action on one side?

~~~
CamTin
You open things up to select sharps earlier than the general public, with
limits. They get the benefit of potentially better lines and you get the
information benefit of what the pros think the fair price for any bet is,
allowing you to adjust the line before allowing bets from the general public.
That's how a lot of the offshore sportsbooks handle it, but it may not
actually be legal to do so in Vegas. I don't actually know.

~~~
dogruck
One other factor is sometimes you actually are willing to take principal risk
-- like when there are hoards of people willing to place bad bets on the local
team -- you're willing to run an unbalanced book.

------
antouank
Yes, of course you can beat the "popular" bookmakers.

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

Try beating a betting exchange.

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

------
psynapse
"Retail" bookmakers are only interested in mugs. If your betting patterns
indicate someone who is wise to the market, you will be limited or shown the
door. Be prepared to have arbitrage positions pulled out from under you. The
game is rigged insofar as the book decides if it wants to entertain your
position.

If you want to make money you have to bet against, and be able to beat the
books that know what they are doing - The high limit, low margin books like
Pinnacle, SBO, IBC et al will happily take you on.

------
mherdeg
Not mentioned in the abstract is that they also used real money:

> During that period we obtained an accuracy of 47.% [sic] and a profit of
> $957.50 across 265 bets, equivalent to a 8.5% return (Table 1, Figure 3).

For some reason the "ok but how much did you ACTUALLY MAKE?" is always my
favorite part of this kind of business or economics literature.

------
au_gambler
> A strategy intended to beat the bookmakers at predicting the outcome of
> sports games requires a more accurate model than the ones bookmakers have
> developed over many years of data collection and analysis.

I disagree with this assumption and I think they have painted themselves into
a corner because of it. To illustrate, imagine charting win rates against bins
of price-implied-chances. $3 horses win roughly 33% of the time, $4 horses 25%
for example. It resembles a noisy 1:1 linear relationship. Do the same for
your selections and your line will be noisier, but crucially you're not taking
bets where the price is worse than your estimate. This can leave a window of
profitibility when you subtract the two, even when you are less 'accurate' as
measured by win rate or KLD or other measures.

The goal is profitibility, not accuracy. The problem with including the odds
you are betting against as a feature for your ensemble is that it dampens that
window. If you're right about your selections, you'll bet less and win less. *
If you're concerned about the volitility that comes with being less accurate,
there are better ways to address that.

I've been doing this for a couple of years and in many ways it's a dream side-
project. Location independent, no customers, automatable, and in some
jurisdictions tax-free. It can be a little lonely at times though. I would
love to chat with anyone else applying tech/math to beat the bookies. Sorry
for the throwaway, I'll put a contact in my profile.

~~~
Bromskloss
> I would love to chat with anyone else applying tech/math to beat the
> bookies. Sorry for the throwaway, I'll put a contact in my profile.

How's that contact information coming along? :-)

------
andr3w321
What the authors are doing is “chasing steam” and most books will ban or limit
you if you try this. This should come as no surprise to people with experience
in the industry. The books aren’t limiting/banning them for winning - it’s the
way in which they were winning. They are betting slow moving books’ lines.
Their strategy only works at poorly managed books as long as they can bet
quickly. I doubt they made any bets at a sharp friendly book like pinnacle.

If anyone would like to collaborate with some model building get in touch. I
already have a large db of most of the stats you’d ever need and some okay but
not amazing models for most major sports.

~~~
LittlePeter
How would I go about contacting you?

~~~
andr3w321
Contact info is in profile but andr3w321 at gmail

~~~
phillc73
People say their contact details are in their profile, but I never see contact
details in any profile I view. Am I missing something?

~~~
bckygldstn
If you view your own profile you can see your email, but some people don't
realise it doesn't show up in your public profile.

------
au_gambler
A couple of suggestions to improve on this method.

The authors' regression left an intercept or 'adjustment term' of 3.4% - 5.7%.
For a perfect bookmaker, this intercept term would be equal to the overround.
The number calculated unfortunately averages that overround between different
bookmakers and at different times (overrounds often decrease over time). It
might be more effective to adjust for the actual overround of each market
sampled, i.e. divide each price by the sum of the inverse of the prospects.

They appear to use a flat betting strategy, and the threshold to bet or not
was selected based on profitibility. I was simplifying in another comment when
I said profitibility should be the goal. In reality it's utility you should be
optimizing for. Nobody wants a ultimately profitable system that reads like an
EKG, they want a high sharpe ratio. The paper's results are actually very good
here, but the trend could be lifted and stabilized further by betting
proportionally to expectation, or by explicitly optimizing for such.

~~~
shakedown1
Interesting. Are you refering to kelly criterion?

~~~
au_gambler
There needs to be some degree of risk aversion given the uncertainties in
estimating your edge. I am thinking more along the lines of a CRRA utility
function - something a little less aggressive than kelly.

~~~
qwtel
in your opinion, is there any practical benefit over just using half kelly?

------
scwoodal
Link to the code used from the PDF:

[https://github.com/Lisandro79/BeatTheBookie](https://github.com/Lisandro79/BeatTheBookie)

------
maaaats
They claim the market is inefficient. I worked for a company that to some
extend fixed that. Can't remember all the details (I worked on a different
part), but something like this:

Most big betting companies were customers. They all continuously sent their
updated odds to us, and we would broadcast to the other companies. They would
react to the change based on certain rules and send new updated odds back to
us. This would then converge.

The inefficacy comes from promotions, company X always wanting to have odds .1
better than company Y etc.

Edit: Not sure how it works now, but:
[https://www.betradar.com/](https://www.betradar.com/) and
[https://mts.betradar.com/](https://mts.betradar.com/)

~~~
repsilat
Haha, this exactly describes arbitrage. My old company was "sent ... updated
odds" (well, we scraped their sites often...) and "we would broadcast to the
other companies" by betting on those other companies' sites when the lines
crossed, and "This would then converge" because one of the bookies in the arb
would move the odds after we hit them (or after we hit them a second or third
time...)

~~~
maaaats
Yeah, but with the difference that they pay a flat fee for the arbitrage
through a third party, not leaving money on the table for others.

------
johnzim
Just like the rake or the edge the house advantage of making the rules has
always been the reality of betting. Online or offline. Forever. Get too
successful and you’re no longer invited to bet.

Asymmetry of information has never been the bookmaker’s most powerful weapon.
The book is.

Those who are successful at it accept this reality. They grumble and make
peace with it - paying the super taxes and liquidising markets where they’re
asked to.

Ultimately however, while it’s interesting to see how they do some of this
(and there are plenty of practices not covered in the paper, I assure you)
it’s a bit like complaining the DM won’t let you do something in dungeons and
dragons - you’re dicing with the god of your domain so the rules can change at
any minute.

------
glenjamin
I used to work for a popular UK online bookmaker. The thing that a lot of
these comments are missing is that bookies aren’t going to sell a product at a
loss. They’re also not even selling the product you think they are (something
akin to an investment).

Bookmakers sell excitement / entertainment - the thrill of the potential win
is the product, and costs approximately 10% of what you can afford to stake.

------
alkonaut
The most interesting thing was left out: how did they find this data? Both
historical and realtime is pretty hard to find. Ten years of odds from a dozen
bookies looks like a massive task.

Next: how do you mask this behavior to not be obvious. Once you have a betting
stratetgy the real difficulty is turning it into one that isn't obvious.

------
SubiculumCode
I don't see why we cannot have completely distributed betting platform using
para-mutual betting strategy that collects and distributes bets and winnings
on the basis of publicly reported sports results with no take-out.

I prefer para-mutual rather than a house deciding the odds. It is a more free-
market approach. It has been used in horse racing, but the takeout has been
too large which makes it hard to be profitable.

~~~
dogruck
Yes -- customers don't like it because it's too hard to win.

Said another way, customers will choose to place bets with market makers,
instead of some paramutual operation.

~~~
razwall
Why is it harder to win?

~~~
au_gambler
In paramutuel betting the prices are not fixed, so you cannot leverage
differences between the odds on offer and your estimate of the prospect's
chances. The final odds you receive are equal to the total stakes placed on
that prospect divided by (sum of all stakes less the operator's take). You
can't formulate an optimal staking plan with unknown odds, and you're forced
to compete on win rates rather than price ineffeciencies.

~~~
SubiculumCode
I don't think your reasoning is correct.

A bookmaker setting the odds presumably would hire the most accurate
handicapper analytics team to set the odds appropriately, then take their cut.
In paramutual betting, you need only be better than the average bet..and there
are a lot of stupid betters. You know the odds pretty well by posttime.

~~~
au_gambler
My reasoning is that the 'invisible hand' of many less informed bettors leads
to market efficiency in aggregate, particularly in highly liquid markets.
Greater liquidity in parimutuel markets makes for odds that are less of a
moving target, but it leaves fewer mispriced prospects to capitalise on. So
not only do you have to beat a fairly efficient market, but you have to beat
it on average by a margin equal to the parimutuel operator's take. In less
liquid markets the unknown odds are more of a problem. That's not to say it
profits can't be made, just that it's harder imho. With fixed pricing, even
though the numbers don't 'add up to one' there either, you can lock in a
positive expectation long before price consensus is reached.

~~~
SubiculumCode
I can see what you are saying. I would say however that most $$ players in the
stock market have analytic teams, etc. If instead, a substantial portion of
the players in the stock market placed their bets on randomly chosen stocks,
the aggregate would be much less efficient and that could be exploited.

I've sat and watched people betting on horses for a long time. The majority
choose based on the name or color of the horse (sentimentalist), the going
favorite (risk averse), the longest odd (big paydayists). Many others play on
weaker signals (owner, jockey). A few bet on the advice of experts in the
daily form, and these probably do make the market more efficient. In
aggregate, from my own experience at Golden Gate Fields where the take-out is
14%, my average ROI was around -6 to -10%. This suggests that I was beating
the market, but the takeout was killing me.

So I've imagined that in a decentralized paramutual pool with minuscule or
zero takeout, and given a common population of betters, I'd make a steady
profit.

I should add that another advantage of paramutual over bookmaker odds is the
pool maintainers do not care if you are a winner or a loser, and won't freeze
your accounts on you.

~~~
Whiteskin_Kanye
It's closer to 22.5% in total. [1] But it also depends on specifics like race,
location, type of bet [2]. Looks like a conventional win, place, or show bet
has the least taken out of it

[1]
[http://www.calfairs.net/files/publications/14.pdf](http://www.calfairs.net/files/publications/14.pdf)
\-- check slide 5

[2] [https://www.scribd.com/document/84887435/CA-Authority-of-
Rac...](https://www.scribd.com/document/84887435/CA-Authority-of-Racing-Fairs-
Ten-year-Satellite-Report-2000-2009-Final-03-11-11-Compressed-Version) \-- An
Example for Northern CA breeds on page 10

~~~
SubiculumCode
I always focused on Win Place or Show betting becsuse if the lower take.

------
shakedown1
They could have reduced a lot of the work (calculating the mean across 32
bookmakers and applying a constant for the margin) by just taking the price
from a highly liquid exchange like betfair, which is pretty close to a 100%
efficient de-marginated line.

Although it still wouldn't have prevented their accounts from being limited.

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

------
watoc
I don't totally understand why the bookmakers would limit their accounts.

The bookmaker wants to balance his book for each game to make sure he makes a
profit no matter what the outcome is. To balance their books they might give
better odds for an outcome than what a statistical model might suggest.

But what difference does it make if the bettor who helps them balance their
books is a consistent winner or not?

Do they prefer to give these "good" odds to people who are losing money long
term?

~~~
dmurray
> The bookmaker wants to balance his book for each game to make sure he makes
> a profit no matter what the outcome is.

This part is not really true. Bookies will very often have an unbalanced book
and will be happy to keep taking action on the side that increases their
exposure, if the price is right.

~~~
watoc
That's fine.

Although the strategy works here because the bookie moves the line to make it
more attractive to bet on it. If he does not care about balancing the book,
why move the line? He could just keep increasing his exposure

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

------
greggarious
Personally I've come to find poker is the only reliable way to "beat the
house". But that's because you're not beating the house, but other players -
the house gets their rake.

If you play a tight-aggressive game in venues the pros avoid (anyplace with
less than $2/hour comps in Vegas) you can do decently. Not get rich, but make
a few hundred in an afternoon.

------
zeristor
Courtesy of slashdot:

[https://science.slashdot.org/story/17/10/21/1744218/data-
sci...](https://science.slashdot.org/story/17/10/21/1744218/data-science-
meets-sports-gambling-how-researchers-beat-the-bookies)

------
mherrmann
TL;DR: Researchers made $950 (8.5%) but say it wasn't worth the effort [1].

[1]:
[https://github.com/Lisandro79/BeatTheBookie](https://github.com/Lisandro79/BeatTheBookie)

~~~
brucen
They really should have automated the bet placement from the outset, which
would have made it worth the effort. Could probably make a few thousand $
before getting cut off, per person. Definitely a worthwhile venture,
considering you could probably then sell off the software after using it for
some more profits.

Sites like [https://www.oddsmonkey.com/](https://www.oddsmonkey.com/) are kind
of on this track already.

~~~
mherrmann
I've qualified my comment - thanks.

------
Zaita
Wanted to post this a few days ago, but life got away on me.

I worked for a monopoly bookmaker and spent a fair amount of time looking at
how they work. Our turnover was $2.6bil/yr with $150mil profit in a country
with less than 10 million people.

So, Some things to give you guys a bit more context. 1\. There are two types
of bets. Fixed Odds and Tote. \- Tote is a pool based betting system where the
odds can change after you have placed your bet. The odds are calculated
automatically based on the distribution of bets on the options available.
Typically the house will keep 50%+ of the total pool as profit and distribute
the remainder among the winning punters. This is a very high profit betting
system that the book keepers are trying to keep alive. It's dying off at a
pretty rapid rate though. \- Fixed Odds Betting (FOB) is where you get payment
on the odds you lock in at the time of placing your bet. Most betting now is
FOB.

For the sake of responding to various points other respondents have made I
will focus only on Fixed Odds; especially as Tote is only used for horse/dog
racing.

2\. How do the odds work? For us, we had university students who'd manage the
books. They had software that showed them how much risk/leverage they had and
what the guaranteed profit was. They can set "bet limits" and manually approve
(or deny) any bet that was greater than the bet limit. Most of the time they
would have open websites from other bookies and copy the odds from theirs as
they change. It's quite popular for bookies to just copy each other manually.

For Live/In-Play betting the book keepers will watch the event and manipulate
the odds as things occurred. Either using their own knowledge or copying from
other gambling sites. Again, the process is completely manual at the back end.

There is a move for organisations around the world to consolidate on their
sources of odds (e.g. using a common back-end odds distribution platform); but
ultimately there is still a large manual component to changing the odds,
especially during live play.

3\. How do they make money? On Tote, they take 50%+ of the total pool before
creating dividends.

For Fixed Odds, they balance the books. They change the odds to always ensure
it's in the houses favour. We always aimed for 10-15% profit on events with
fixed odds bets. Home players/athletes will always have much lower odds
because of people's tendency to bet with the heart.

They deny bets. The bookie doesn't have to take your bet. For large bets they
will often push back an offer to you at a lower rate than advertised to ensure
their books stay balanced. For live/in-play bets they'll delay your bet until
that odd is no longer available ensuring your bet is not accepted.

They have A LOT of different betting options where only a few will actually
win. People tend to bet with their hearts and the number of options are setup
to basically ensuring the bookie is profitable.

If you win too much, they shut down your account. They have no obligation to
deal with you. Their goal is to make money and they see your gambling as a way
you "enhance your enjoyment of the event", not an attempt to make money. So
there isn't a large tolerance for people who do make money.

4\. How do I (the punter) make money? Surprisingly, you can consistently make
money gambling.

Don't bet on Dogs/Horses. Even the top 1% of punters barely break even.
They're profitable because of the kick-backs the bookies give them for having
high turnover (>$1mil/yr).

Find a sport you know a lot about that supports in-play betting. It's going to
be you vs a person. So if you have indepth knowledge of the sport you'll be
able to see changes in flow and make winning bets before the bookie notices.

FWIW, I bet on League of Legends. During the LOL Worlds I can make 2500% with
>90% win rate. Now, I'm only winning a few $k total so nothing significant.

That's all I can think of at the moment. Happy to answer any questions you
have.

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

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

------
PaulRobinson
A bookmaker's tissue prices (the initial market prices they offer up), are not
intended to be a measure of probability. They are meant to be a measure of
expected Weight of Money (WoM).

A bookmaker's job is not to accurately reflect odds of occurrence, but to
ensure a balanced book of liabilities. There are many books covering this
going back hundreds of years and is the principle discovery of those who
gathered at Tattersalls coffee shop on the Strand and invented modern
bookmaking (via horse racing), and for whom there is named an enclosure on all
55 British racecourses to this day.

The tissue has to be "over-round", (i.e. the probabilities they represent have
to add up to over 1.0, or 100%) because sometimes a market will look at the
prices, see that the odds are very much in the favour of a selection and act
accordingly. As such, the WoM causes a market to move.

This is not news. If you have a reasonable idea of true odds and you are being
offered different odds, Kelly (who worked with Shannon - the creator of
Information Theory), established the optimal stake to bet at each stage. A
substantial amount of research has been done on Kelly Criterion and its
application because it underpins many a hedge fund strategy: it works for
fixed odds games, fiscal markets and bookmaker markets just as well.

There are trading opportunities here, and there is a wide community of people
who look to exploit inevitable market moves using exactly this technique:
establish average industry odds, look to where betting exchanges are and bet
accordingly, moving out of the market when a profit comes to you.

The bookmakers don't care - you've helping get turnover up, and they know
increasing turnover through the market is the best way to get balanced
liabilities.

On a horse race, they might offer prices that give up an over-round of
110%-130% most days, but on Premier League Football which has a much, much
higher turnover, and WoM is far more predictable (due to team loyalties coming
into play), over-rounds can be as low as 102%.

These markets are therefore more likely to provide value to the authors'
methods, however I note they are making the majority of their bets between 5
and 1 hours before a game, and therefore to some extent are able to factor in
team selection and some of their results might be the result of a market
inefficiency: team line-ups aren't announced until 60 minutes before kick-off.

Now, here's two major downsides:

1\. Bookmakers will eventually end up closing their accounts, because winners
are never welcome long-term.

2\. There is a reason why successful gamblers don't publish. Even Thorpe who
invented card counting and blackjack basic strategy realised publishing (which
was his academic need) ultimately caused him to need to do something else: he
ended up privately and quietly running a hedge fund.

These guys are probably finished within 2 weeks of this paper going around,
and what's more because now a whole ton of people will go to implement this
method, bookmakers will adapt and simply move from tissue to industry average
as quickly as possible, whilst limiting even more players to reduce liability
exposure (as has been the style in recent years).

EDIT: I only skim-read the paper when I wrote the above. Now I've read it a
little more closely I am even more convinced there is nothing to note here,
and also, their accounts have already been limited or closed.

~~~
watoc
Interesting.

You say: "The bookmakers don't care - you've helping get turnover up, and they
know increasing turnover through the market is the best way to get balanced
liabilities."

And then: "1\. Bookmakers will eventually end up closing their accounts,
because winners are never welcome long-term."

Is there any rational behind bookmakers not welcoming long-term winners?

It seems like a bookie is very similar to a market maker on the stock
exchange. Why would a market maker care if an investor makes money as long as
he can flatten his positions every hour or so and make profit with the spread.

Isn't it accurate to say that bettors are competing against each other and the
bookie is just taking a fee for making the market?

~~~
PaulRobinson
Over the short-term people adding WoM and bringing the book into line with
other bookmakers is welcome, because it means the market is becoming more
efficient.

At the micro level then, turnover is welcome. But as the old adage goes
"turnover is vanity, profit is sanity"

At the macro level somebody has to say "how do we maximise profits or at least
minimise losses?" and picking off accounts that are costing you money is an
easy step to take.

The ideal client for a bookmaker is an idiot with a strong view. They don't
want people who will consistently win, because it's taking up WoM for other
customers who could be invited with those more generous odds and who _don't_
consistently win.

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

~~~
downandout
"Rigged" is the wrong word. What it essentially says is that all of the data
that a professional could reasonably analyze is already baked into the odds
that bookies initially set, and if those odds stayed the same until bets were
no longer being taken on the event, sports betting would be consistently
unprofitable because of the 10% "juice" that most bookmakers charge. However,
the odds do not stay the same. Once they are posted and bets begin to come in,
the market takes hold and begins swaying the odds one way or another, because
bookies change the odds in order to try to balance their books such that they
have little to no actual risk. It is in the swinging of the odds by the
market, which has many unsophisticated participants - people betting on a team
simply because they live in that city etc. - where money can be made, because
there is an incredibly large amount of "dumb money" in the sports betting
market.

~~~
mikkom
No, rigged is exactly the right word. From the paper:

> Our strategy proved profitable in a 10-year historical simulation using
> closing odds, a 6-month historical simulation using minute to minute odds,

> _and a 5-month period during which we staked real money with the
> bookmakers_.

>

> Our results demonstrate that the football betting market is inefficient ‒
> bookmakers can be consistently beaten across thousands of games in both
> simulated environments and real-life betting.

> _We provide a detailed description of our betting experience to illustrate
> how the sports gambling industry compensates these market inefficiencies
> with discriminatory practices against successful​ ​clients_.

~~~
downandout
The fact that they limit the accounts of successful bettors doesn't mean that
it is "rigged". It simply means that they reserve the right to do business
with whom they choose.

~~~
pocketsquare2
They are artificially manipulating the market. That's about as textbook
rigging as putting three masts on a ship.

~~~
Spivak
If you consistently lose money whenever you transact with someone then you're
going to stop doing business with or try to limit how much you lose. They're
not rigging the actual game in any way. But if they're not throttling you it's
a pretty good indication that you're not coming out ahead.

If there was an obscure way to play craps that made the house advantage
negative they would either change the rules or ban the practice. You could
call it rigging but by that token every game is rigged, that's the whole
point, you're playing in the hope of beating the odds. The rules and odds are
completely transparent, 'rigging' would be like using weighted dice.

