Monday, 30 August 2010

Kuchar Falling Star

A decidedly average weekend finally took off on my last action of yesterday. In PGA's ‘The Barclays’, I layed Martin Laird at 1.08 on BETDAQ, while he was 1.1 to back on Betfair, and 25 minutes later, after a sudden death play-off, Matt Kuchar was the winner. The lowest price matched on Betfair was 1.1 and liquidity on BETDAQ for golf isn't too shabby these days, with over £1.7m matched on this event.

Football Elite had a down weekend, with the one Recommended Bet, St Pauli, losing to an 87th minute goal versus TSG Hoffenheim. Their Short-List bets also lost overall with just one winner in Sampdoria at 2.26. Blackpool and Bolton drew, while Blackburn Rovers and Udinese both lost.

While there were some matches that went to form in the top leagues, the Bundesliga defies all logic. Never the most predictable of leagues, of nine matches this weekend, just three favourites won. Beaten at short odds on were Bayern Munich (1.5), Nuremberg (2.0), Schalke 04 (1.41), Wolfsburg (1.64) and Bayer Leverkusen (1.43). 10 Away wins to 7 Home wins, with 1 draw so far.

The English Premier League was better, with just the results at Tottenham Hotspur and Sunderland off by much. Manchester United were -3 on the ratings and won by exactly that, and draws were predicted at Aston Villa and Fulham. On for two there.

In France, four draws were expected, with just the one at Bordeaux coming in. Caen couldn’t, losing to two late goals, and Lille at 1.58 failed to beat Nice.

A good early strategy would appear to be ‘lay the favourite’, especially in Germany.

Scott at Sport is for Betting commented that Andrew Black’s measures the impact of players by results. For example, they have this to say about my favourite Italian team:

Cagliari have also failed to make any impact in the transfer market, although the return on loan of striker Robert Acquafresca should be a big boost with the Italian having made a major impact in his last spell here in 2008/09 when he played 26 of their 38 games with a PPG of 1.50 compared to 1.17 without him. If this 28% improvement were applied to their points total from last season it would have them challenging for a Europa Cup spot.
There are some great statistics there, but much of the site’s contents are not free. Any happy or disappointed members out there? The cost appears to be £20 a month for unlimited access. Not too bad, but better, I’m sure, with a referral / Promo Code (hint, hint).

I spent some time looking at the teams who perform significantly better on home soil or away. It’s an interesting list – more teams than I would have expected pick up more points away from home than at home – Crystal Palace, Dundee United, Lazio, Racing Santander, Nancy, Werder Bremen, Wolfsburg and Cologne to name a few of the top teams.

OK, so top teams and Crystal Palace.

Some of the top teams playing far better at home than away are Fulham, St Mirren, Genoa, Udinese, Bari, Mallorca, Atletico Madrid, Espanyol, Villareal, Almeria, Mainz 05 and Borussia Moenchengladbach.

Which brings me neatly to tonight’s Atletico Madrid v Sporting de Gijon tomorrow, and Gijon are not good away. More accurately, Gijon are just not good, but they under-perform on the road. My ratings have Atletico Madrid -1.25 and Atletico Madrid -1,-1.5 has been taken at 2.21. The risk is that Atletico will be a little flat after their heroics on Friday night.

Just two more days to go in a shortened trading August, and for the third consecutive month, it appears my P&L will be in three figures. This happened just four times in the previous three years, so to hit three in a row is unusual. Summer is always quiet, but this is even more quiet than usual. I suppose I could always try cricket, but it’s not a sport that interests me, and after today’s News of the World exclusive, that’s not likely to change.

Things typically pick up in September though, with football becoming more settled, and the NFL getting under way in the US. NFL also stands for Not For Long because once the season starts, it just flies by, but in October the NBA starts up, and then before you know it, another year is in the books and the whole cycle starts over.

Sunday, 29 August 2010


After some basically reserve teams were put out by some of the Premier League clubs in midweek’s League Cup matches, I mentioned that I had made the decision not to include these results for Premier League teams in the Elo ratings.

I received a great comment, Anonymously, which said:

It seems reasonably fair to cast aside many of those Carling Cup games. But there are still some worthy of inclusion e.g. Wigan and Sunderland. You have information on these teams - use it.

Ignoring teams with weakened teams raises another question. What do you do when teams are forced to play League games with teams weakened to various degrees by injuries and suspensions? Adjustments need to be made. You can't rely on ratings which steadfastly ignore what strength of team has been fielded.

Say, for example, Chelsea had to play their next 10 games without Drogba. As far as I can tell from what you've said about your ratings, this wouldn't show in your ratings.

It's not easily done (accurately) but there are ways and means. When he is absent you should be tweaking your workings so Chelsea's results without him are achieved with a lower Elo rating.
These are all valid ideas, but the problem is that there just isn’t the time available, and more importantly, they require adding a lot of subjectivity to the ratings. The suggestion to exclude say Blackpool’s result because they made 10 changes to their team, but include Wigan’s and Sunderland’s results means that a line needs to be drawn somewhere. What number of changes invalidates a team’s result? If it is reasonable to exclude a team after they make 10 changes, should I exclude a team making 6 changes or 4? It seems better to me to treat these matches as nothing more than friendlies.

As the poster says, I do not adjust the ratings if a star player is absent from a team for some reason. Again, it’s too subjective. No one would deny that Drogba is a key member of the Chelsea team, but if he doesn’t play, someone else replaces him so evaluating his absence becomes fraught with problems. If he is replaced by a youth team player, that’s one thing, but if Chelsea loan a £30 million player to fill in, that’s quite another.

The comment continues:
It's similar to the type of change you need to make if a team has a numerical advantage for part of a game. I presume you already do this. Playing the best part of a game with 10 men makes an enormous difference.

Likewise, what should you be doing if a team signs a player who clearly, and immediately, improves their team. You need to up their rating appropriately. Your weighting of results alone will not be enough to capture the effect (there are players who fit this bill and won't need bedding in time)
I do not adjust the ratings to account for red cards. Again, the problem is that it is subjective. One of the most misleading headlines in football is “10 Man Team Beats Other Team” and then you read the report only to find that the sending-off was after 83 minutes or something. A sending off in the 90th minute is clearly less influential than a first minute dismissal.

The approach I take to “special situations” such as if a team makes a significant change, managerial of players, or undergoes another significant change such as relegation or administration, is to continue to update the ratings objectively per the results based formula, but flag the team as “on probation” meaning no bets, or maybe small ‘interest-only’ bets.

As the writer says,
To try and do those things for all the Leagues you maintain your ratings for is a near impossible task. You would need immense knowledge of European football and there wouldn't be enough time. You would need to know every player in every League and take time analysing every match and line-up.

Which is why it's important to concentrate on Leagues you know well and can follow properly.

There will be experts in every League who help shape the markets and will take in all these factors and many more besides. Ratings purely based on results are not enough to beat the markets long-term and anyone who thinks they are is simply kidding themselves. Specialisation into certain markets and expertise and knowledge in these markets is key.
It’s hard to disagree with the statement that one needs to specialize, and anyone who chooses to bet on football markets is up against a lot of competition. There is so much press coverage of the top leagues, and the markets are so efficient, that the implied probabilities are usually pretty accurate, but it is by no means impossible to find an edge as evidenced by the success consistently achieved by Football Elite.

Here is someone who specializes in the top leagues of England, France, Germany, Italy and Spain and season after season makes a profit. I am not familiar with his selection process, but he starts with certain filters, and after further analysis the end result is that he finds selections that are value. Very few selections in fact, and perhaps that is the key right there.

For me, my ratings are the first step, with the ‘on probation’ flag the next filter, with my ‘subjective’ research the next step. Football is not my main interest on the exchanges, (specialising on less popular sports works better for me when it comes to real money), but it is a fascinating challenge. At first sight, it seems like finding value should be a simple matter. Two teams, three possible outcomes. How hard can it be?

Well, five years on, and while the losses have been staunched and last season was profitable, there’s plenty of room for improvement. Matches are not decided on paper or in the computer as results like Tottenham Hotspur 0 Wigan Athletic 1 remind us almost every week, but winning at sports betting is a marathon and not a sprint. Some days it seems that nothing goes right, yet on other days, everything follows the script. September may be close, but most leagues still need a few more rounds of matches before I have the same confidence in the ratings that I had last season.

Friday, 27 August 2010

Yes We Caen

Still in August, and so still very little form to go on, but looking ahead to the weekend there are some interesting matches which if we were further into the season, would be worthy of an investment.

The Premier League throws up four teams expected to win by two or more goals, and the prices reflect this. The Elo ratings have Chelsea -3 over Stoke City, and the Asian Handicap at -2.5,-3 is around 2.2. Manchester United are also -3, with Tottenham Hotspur at -2.5. On the Asian Handicap, Spurs -1.5,-2 are 2.0. Liverpool are -2 versus West Bromwich Albion. Favoured by 0.5 goals are Wolverhampton Wanderers (2.5) v Newcastle United, and Bolton Wanderers (2.22) v Birmingham City.

In Germany, newly promoted teams Kaiserslautern and St Pauli both play their opening home games. While the former have a tough game tonight versus Bayern Munich, St Pauli are available at 3.35 and in front of their notoriously enthusiastic and politically sound fans, and after a good start last week, they look value to beat Hoffenheim. Other stand-outs are Schalke ’04 v Hannover at 1.41 and Nuremberg v Freiburg at 2.0 and Stuttgart (2.36) versus Dortmund.

La Ligue looks to have a lot of close games, with only Lille (1.58) v Nice and newly promoted Caen (1.97) v Brest expected to win by one goal or more. Caen won their opening home game 3-2 v a strong Lyon team, and this price looks value to me.

In Scotland, Aberdeen at 1.99 v Kilmarnock look value based on the ratings, and in Italy, Serie A gets under way tomorrow, with very little form to go on. As with Spain, just a couple of European games and tonight’s UEFA Super Cup for which Inter Milan look value at 1.98 incidentally. If the form from last season’s Serie A were to carry over, (big if), Bari at 4.4 v Juventus would be tempting. All three promoted teams here start with away games.

And finally, in Spain, La Liga starts with again very little form to go on. The three promoted teams all start with home matches. Hercules are 2.72 v Athletic Bilbao, Levante are 2.08 v Sevilla and Real Sociedad are 3.5 v Villareal.

There was a good comment on adding a good measure of subjectivity to Elo ratings which I will respond to in the next couple of days. Life is a little busy right now.

Thursday, 26 August 2010

Coming Soon - LMAX (Tradefair)

From the Wall Street Journal:


David Yu is in his element. The chief executive of U.K. online betting company Betfair is standing in front of a digital presentation re-running this year's Cheltenham Gold Cup. Four horses: Imperial Commander, Kauto Star, Cooldine and Denman are being tracked in a digitized bar chart that shows their odds throughout the race. It's a slightly surreal experience as the race is being relayed in slow-motion. Even more so as Mr. Yu, whose background is in the dot-com world of Silicon Valley, has no real interest in the race. His interest is in the platform.

"I think this is Britain's greatest dot-com success story," he says pointing to one of the many price indicators showing the live trading on the race. "On the surface we are very much a betting company, but what I see is a technology business. When I think about the business we wouldn't be here today if it weren't for the technology platform. Like other great internet businesses, whether it is Inc., eBay Inc. or Google, they all rely on their technology platform. Technology is at the core of this business."

Attention turns to the race as the favorite, Kauto Star, makes a mistake at the eighth fence. Immediately, his price falls as the odds on him winning drop. This is Betfair's unique selling point: the ability to allow punters to bet after a race has started right up to the finishing line. It has revolutionized betting on British horse racing and enabled the company to grow from one that took just 36 bets at its launch in June 2000 to one that now processes more than 5.5 million trades a day—more than on all European stock exchanges combined.

"Ten years ago, betting was a really inefficient market and was not a good deal for customers," he says. "The prices were inefficient; there wasn't the chance for customers to express their view on what the real value should be. There wasn't the ability to bet in play and there was nowhere to trade your positions.

"We changed that by inventing the exchange. A lot of people who were quite sophisticated and knowledgeable about sport were sitting on the sidelines because there was no facility for them to bet into. Now we have more than 1 billion page views per day and on average £3,000 is deposited every minute via our site."

Later this year, Betfair will move beyond the world of sports betting and into finance, with the launch of LMAX [London Multi-Asset Exchange], a financial trading platform that will allow punters to trade on the movement of a company's share price without actually owning the underlying stock.

Based in London, LMAX will hold a separate management team under the direction of Chief Executive Robin Osmond, a former senior investment banker.

Mr. Yu says the launch of the financial exchange, of which Betfair is the majority shareholder, fits the company's long-term goal of diversification. "We have built a high-performance, highly reliable transaction engine and we have applied it to sports betting." The LMAX business, he says, "is going to be bringing those advantages into the financial trading world so we can extend the use of our core platform into other domains over time."

Betfair, which is privately owned, chose to publish its results earlier this year, posting a 29% jump in earnings before interest, tax, depreciation and amortization to £72 million in the year to the end of April, from revenue up 27% to £303 million.

It was the decision to publish its results that helped fuel speculation the company is preparing to float on the London stock market, joining a sector that already boasts PartyGaming, 888 Holdings and Sportingbet. It would also provide a large pay-out for its founders, Andrew Black and Edward Wray, who hold a combined 22.5%. Japanese telecommunication company SoftBank owns a further 21.5%, with the rest owned by private equity, private investors and employees.

"There was a lot of noise on their prospective IPO early this year," says Nicholas Batram, a gaming industry analyst with KBC Peel Hunt. "Cash generation is very strong and they have no debt. The market is a distinct possibility for Betfair."

"I think the rumors have been going ever since I started," says Mr. Yu. While he is reticent on the subject of a potential IPO, which analysts say could happen as early as this year, he doesn't dismiss it outright.

"If we think that it [an IPO] is the right thing for us then we will certainly consider it," he says. "We are in a great position because we do not have to go public. The company has no debt and is very cash-generative. We have a very strong balance sheet, therefore a lot of options are open to us. But we will continue to look after our shareholders, their best interests and monitor the market at all times."

An IPO would also rule out a move offshore. Betfair has tentatively suggested in the past that it might move all its operations to Malta if the disadvantage of paying tax in the U.K. worsened.

"If a company is offshore they pay less tax but can still advertise and still address the U.K. market just the same way we do. So it [being based in the U.K.] does in its current framework put us at a commercial disadvantage," Mr. Yu says.

At present, offshore gaming companies can target U.K. gamblers online and not pay U.K. tax. Betfair is lobbying for a change in the law so that every company that provides betting to U.K. gamblers has to be licenced and therefore pay U.K. tax.

"So we embrace regulation. We think it is good for the industry," he says. "Italy is a good example. Not that long ago Italy was trying to prohibit online gaming, now the government has a licensing framework for betting companies that want to enter Italy.

"The government found the best way to control and regulate consumers is to have a well-regulated framework. We want a regulated environment because it is then a level playing field and it ensures companies can operate fairly and consumers are protected."

One option for developing the business in the U.S., a market with which Mr. Yu. is familiar, as he grew up in Silicon Valley and started his career in technology working for start-ups before AltaVista brought him to the U.K. in 2000.

Last year, Betfair bought an interactive horse-racing betting business, TVG, for $50 million, a move spurred by renewed hope that U.S. lawmakers will lift the ban on internet betting. In July, the financial services committee voted by 41-22 to approve a move to repeal the Unlawful Internet Gambling Enforcement Act, paving the way for legal gambling in one of the world's biggest potential markets.

"The U.S. is an interesting market as it develops," Mr. Yu says, noting that TVG's business — online betting on horse races — is the only legal form of internet gambling in the U.S.

But he insists that though there is potential in markets such as the U.S. and Asia, there is still enormous growth left in the U.K. and Europe, away from the traditional sports like horse racing.

"Horse racing is such a deep, traditional sports betting model," he says. "But what we are seeing is that more people are coming in and having their first bet on football as the game expands globally. Over time, football could certainly be bigger than horse racing."

Jumbo Jet To The Golden State

A change of heart since the post saying that I would be updating the ratings with League Cup results, albeit with reduced ratings. Well, it was true in a way, but the adjustments for games involving Premier League teams will be zero. Having looked at the teams that several clubs put out, there's just no point in counting the results at all.

Sampdoria almost took care of business on Tuesday by taking an early 2-0 lead over Werder Bremen turning a 1.29 lay into a nice green. They then went 3-0 up and had the tie in the bag, before allowing Werder Bremen back into the game with a 90th minute goal and ended up losing in extra-time.

On the subject of disparity in today's Premier League, Ian Plenderleith has this to say:

The Premier League has become a long-haul jumbo jet. A few of the elite are in First Class, then there are a handful of First Class wannabes in Business (also known as Europa Class), while the majority of passengers stoically walk by on their way to Economy, coping with a flush of envy before fighting for a bit of legroom with all the other undesirables who are making up the numbers. They’re all in the same machine, but no one’s pretending they’re equal, because what can you do? Economy Class doesn’t complain, because it can’t afford to. And, sigh, did you see those beautiful reclining seats they have up front? You’ve got to admire it, Guy, absolutely first class.
My Californian wife was excited to read the following news item yesterday, not the horse racing bit, but the other part
Legislation to raise takeout rates, supported by tracks and horsemen, has been introduced in the California state legislature. Although without much fanfare, the bill -- AB 2414 -- also would allow exchange betting in the state, and naturally has the support of the giant Betfair.

The English-based betting exchange already has established a strong California presence with its acquisition of TVG, the all-racing television network.

Tuesday, 24 August 2010

Czech Liszt

This story isn't really anything to do with betting, other than the importance of paying attention to detail perhaps, but it amused me. The book "The Checklist Manifesto" by Atul Gawande, relates how David Lee Roth of Van Halen used to insist that before all their concerts, a bowl of M&Ms (American Smarties, but not as good) be provided backstage, but with every single brown sweet removed. If this condition was not met, the band reserved the right to cancel the show with full compensation to the band.

Van Halen followed through at least once, canceling a show in Colorado when Roth found some browm M&Ms in his dressing room. But there was more to this than a celebrity going power crazy and making silly demands for the sake of it.

Roth explained in his memoir Crazy From The Heat...

...that Van Halen was the first band to take huge productions into tertiary, third-level markets. We'd pull up with nine 18-wheeler trucks, full of gear, where the standard was three trucks, max. And there were many, many technical errors - whether it was the girders couldn't support the weight, or the flooring would sink in, or the doors weren't big enough to move the gear through. The contract rider read like a version of the Chinese Yellow Pages because there was so much equipment, and so many human beings to make it function. When I would walk backstage, if I saw a brown M&M in that bowl, well, we'd line-check the entire production. Guaranteed you'd run into a problem.
Roth's brown M&Ms were just a test.

Reminds me of my Dad and his trick of occasionally putting the toothpaste on my toothbrush for me at night without telling me. Off I went to bed, and either through laziness or forgetfulness would occasionally fail to brush my teeth, but there was the evidence when he came up later. That's probably considered abuse these days!

Blues And Blucerchiati

A pleasing end to the weekend's Premier League matches last night, with Manchester City comfortably defeating Liverpool, and replacing them in fourth place in the Elo ratings.

One question for any sensible people out there is what price were Newcastle United at kick-off? I had them at 3.35 on Thursday and didn't notice the price after that except that when Football Elite tipped them, the best price noted on the e-mail was 3.3. According to Smarkets, the price on Newcastle had plummeted to 2.5, which if true, is quite remarkable. The price clearly dropped. Matt's weekend summary e-mail recorded the price at kick-off as 2.75 and expressed some concern that perhaps this was the result of more money backing Football Elite's selections. His other recommended bet, WBA, also dropped from 2.56 on Thursday to 2.2 at kick-off. Something to keep an eye on over the next few weeks.

A final word on the "-2.5 goals away from home debate", and I had a comment that "Results inform statistics; statistics do not inform results" supporting my reasoning that just because it hasn't happened before is no reason why my expectation should be summarily dismissed.

I did also get a very well reasoned, and polite, argument that while agreeing there should be no reason why 2.5 goals should be an invalid prediction, went on to say...

I have a number of different ratings systems for the PL and have never had a "top to bottom" difference of anywhere in the region of 3 goals. Off the top of my head, something like 2.25 goals is around the maximum I can recall at any moment in time. I suspect Blackpool are likely to get close to surpassing that number at some stage this year but, for now, they haven't.

The spreads and Asian markets for this match I think had Chelsea as around 1.75 goal favourites which can be used as a good guide to the "correct" number.

If your ratings made them 2.5 goal favourites then I would respectfully suggest you need to check your system for possible errors. To be 0.75 goals out compared to what can be considered a pretty efficient market should raise a red flag. It's a huge difference and, again with respect, the market makers and market movers are likely more accurate than a more casual bettor. It may be worth checking the spread firm's supremacy markets to get a good idea of how supremacies tie into prices etc.
Incidentally, someone took a £14k loss on this game after laying "no corners" at 1000. An excellent value lay, given that the true price is somewhere in the region of 26,781-1 give or take a few, but I doubt that the layer feels too good about that right now.

The League Cup starts for some of the bigger boys today, and while I shall adjust the ratings after these matches, the weighting will be much reduced. It seems that it's not just the really big clubs who don't make much effort in this competition these days, and to transfer too many points on a result that clubs don't care about isn't going to achieve anything positive.

There is one game that matters tonight though, Sampdoria v Werder Bremen. Last week, Werder Bremen had a 3-0 lead going in to the 90th minute of the first leg, but gave up a late goal to make the game tonight a lot more interesting. The ratings have Sampdoria as a 0.5 goal favourite and they are 2.19, but having traded as low as 1.05, Werder Bremen to qualify at 1.29 looks like a value lay. Sampdoria were unbeaten at home in Serie A last season, and failed to score only twice, while Werder Bremen conceded four first half goals on Saturday in a disappointing, and hardly morale boosting, loss at Hoffenheim.

Sunday, 22 August 2010

Berlusconi Trophy

Football Elite got the Recommended Bets for the new season off to a great start with both selections winning this weekend.

Promoted teams West Bromwich Albion (2.56) beat Sunderland 1-0 and Newcastle United (3.35) thrashed Aston Villa, a strong away team last season, by no less than 6-0. Matt's strategy of backing promoted teams in their first home games of the season continues to bring success. Blackpool play Fulham next weekend in their opening home fixture.

The one Short-List selection, Stoke City, lost to Tottenham Hotspur.

Only two games remain for this weekend so far as the Elo ratings are concerned, one in France later tonight, and the Manchester City v Liverpool game tomorrow night.

The Premier League positions don't change too dramatically, but the Championship is more volatile. Early risers from the start of the season are (no surprises) Cardiff City, Ipswich Town, Queens Park Rangers and Millwall. In League One it is Hartlepool and Oldham Athletic off to good starts and in League Two Shrewsbury Town and Accrington Stanley.

The Conference is always hard to predict, with a lot of former 'big' clubs trying to reclaim their place in the League. Luton Town are clear at the top of the ratings and tempting at 2.0 to win the league, but at this level, things can change in a hurry. Relegated teams often take a while to find their feet at the new level. For example, Grimsby Town lost 1-2 at home yesterday to bottom rated Hayes and Yeading United, who were coming off a 0-5 midweek defeat at Eastbourne Borough.

Big movers in Scotland are Hearts, Raith Rovers, Forfar Athletic and Berwick Rangers.

The Italian and Spanish leagues have only had their Super-Cups so far, although AC Milan go for their sixth Berlusconi Trophy in a row versus Juventus in a few minutes. With AC Milan at -1 on the Elo ratings, I have had a small interest on the Asian Handicap (-.05) at 2.23.

In France, Marseille and Lille take turns at the top, and in Germany after all of one game, the big movers are Bayer Leverkusen and the two new boys Kaiserslautern and St Pauli.

Barking On Simple Mathematics

With nine visits to the blog in the last 24 hours, Anonymous from Barking and Dagenham is one of my most loyal followers.

He's also a rather confused individual.

As some of you may have followed over the last few posts, Barking Anon has made some faitly dismissive comments on my assessment of Chelsea's superiority going in to the Wigan game.

As I said yesterday, "one game, especially one so early in the season, does not prove anything" but my point is that dismissing -2.5 goals simply because "no team has ever been 2.5 goal favourites away before" makes absolutely no sense to me. Sports and markets are constantly changing, and the Premier League today is certainly no exception.

Barking Anon seems to be suffering from cognitive dissonance. Having a set belief, such as that the maximum superiority for an away team in the Premier League is two goals, is dangerous. Failing to accept this results in misperception, rejection or refutation of the data, and the seeking of support from others who share the beliefs, and attempting to persuade others to restore consonance. I am not sure anyone out there also believes there should be a two goal limit on away team superiority, but perhaps Barking Anon will find some support among his "statistical expert" friends. Well, probably not.

Rather than respond to my reasoning with counter-ideas, the sour grapes result in this:

Such a poor post, in so many different ways.

Best leave the over-confident Cassini in the belief his ratings system is accurate despite being at odds with all statistical experts in this field.

I look forward to seeing Chelsea at -3.5 at home to Wigan later this season. It's pretty much the same thing. We'll see.
Leaving aside for the moment the fact that I clearly said "one game, especially one so early in the season, does not prove anything", hardly an approach suggesting any over-confidence, it should be more obvious to all that over-confidence is reflected in ill-reasoned (and self-described as "confident") comments such as "I can confidently state a team has never been a 2.5 goal favourite away from home in the Premiership. And nor are Chelsea this weekend."

More evidence that Barking Anon is confused can be found in these two contradictory comments:
[21.Aug 22:31] -3.5 at home is pretty similar (not quite the same) as being -2.5 away v the same team. There's such a thing as home advantage.
[20.Aug 21:03] And home advantage sure as hell isn't worth a whole goal.
2.5 plus 1 doesn't equal 3.5? I would suggest that Barking Anon is at odds with all statistical experts in this field [of simple mathematics].

Saturday, 21 August 2010

Wigan Atletic v Chelsea (-5.5)

I was a little more interested in the Wigan Athletic v Chelsea game this evening than normally would be the case, secure in the knowledge that if Chelsea failed to win by at least two goals, I would in all probability find a mailbox full of "I told you so" messages.

On this occasion I was right, or at least more right than anyone arguing that -2.5 was too high, but I am well aware that one game, especially one so early in the season, does not prove anything. I stand by my opinion that just because there may not yet have been an away team expected to win by 2.5 goals in the Premier League, times are changing and history alone is not a valid reason why Chelsea -2.5 goals should have been summarily dismissed -

Anonymous: I can confidently state a team has never been a 2.5 goal favourite away from home in the Premiership. And nor are Chelsea this weekend.
Confidence can be a good thing - over-confidence, not so much.

Again, this fixture was a rare event in that the visitors were the top rated team, with the second best "current" form in the league, while the hosts were the bottom rated team, with the fourth worst "current" form in the league. I do not expect the Elo ratings to throw up another prediction like this all season, and it's a pity the game came so early, because there was plenty of money still available on Chelsea -1.5, -2 at 2.05.

The esteemed Mark Iverson commented
I don't normally comment on football but a couple of things to consider:

1) Wigan did beat Chelsea at home last season.
2) To beat the 2.5 goal handicap Chelsea would need to score at least 3 goals. A feat they only achieved 4 out of 19 times away from home last season.

Granted, losing 4-0 to Blackpool was mighty disappointing but Wigan's players should be a little more focussed today.
True, Wigan Athletic did beat Chelsea less than a year ago, but is that result really relevant to today's game? Given how rapidly teams change these days, and that the game was a year ago, not a week ago, I'm inclined to treat the fact as interesting, but not relevant from a betting perspective. Statistics can be very misleading. "Chelsea scored three goals away 4 in 19 times last season" is indeed true, but all opponents are not created equal. Taken at face-value, that statistic suggests the 2.5 goal margin is too high, but if the four games were Chelsea's matches at the bottom four rated clubs in the Elo ratings, then this statistic would actually support the -2.5 prediction. (The games were actually those at Arsenal, Sunderland, Bolton and Portsmouth).

"Wigan's players should be a little more focused today"? True, they may have under-estimated Blackpool, but on opening day at home, one might expect a team to be about as focused as they can be. The trouble is that all the focusing in the world isn't going to help if the team are just too weak. After the promotion / relegation adjustments, the ratings had Wigan rated bottom, and while it is still early days, Barking and Dagenham Anonymous's dismissive comment that "Derby were a worse team than anyone currently in the PL" could well prove to be debatable.

But debate and differences of opinion are what this blog is all about.

Prem Away Shorties

My Chelsea -2.5 prediction at Wigan Athletic in the late game today continues to attract comment.

OK. I don't have records but let me know if you can find an Asian handicap price in the whole history of the premier league for an away team at -2.5 evens or lower.
I certainly don't have the records needed either, (as if I would be that nerdy!), but I do know that at 1.27, Chelsea are not even close to being the shortest priced away team in the Premier League all-time.

The shortest I know of was in March 2008, when Manchester United were 1.16 at Derby County (W 1-0). Other shorties away from home that season were United again at 1.22 at Wigan Athletic (W 2-0). Arsenal were 1.25 at Derby that season (W 6-2) and Chelsea were priced at 1.22 (W 2-0) for their visit.

The other point I would make is that the gulf between teams at the top of the Premier League and those at the bottom has never been wider than it is today. There has never been a season with so many 9, 8 and 7 goal thrashings as last year. Even if there hasn't yet been a -2.5 away team, it would be no surprise if there soon were.

With Bayern Munich's 2-1 win over Wolfsbug last night, my Bundesliga picks are 100% for the season...

Friday, 20 August 2010

Superiority Is Complex

Some mostly positive comments to my last post.

Anonymous said...

I can confidently state a team has never been a 2.5 goal favourite away from home in the Premiership. And nor are Chelsea this weekend.
I’m not sure about this. As I mentioned in my post, Wigan are currently the bottom rated team and in poor form while Chelsea are currently top rated and in good form. Admittedly the form carries over from last season, but if there is any game where my ratings will predict a 2.5 goal superiority for the away team, this is it. The 8-0 win at Stamford Bridge, and other extreme results, are all smoothed out, and the 8-0 win isn’t in itself a big reason why the calculation comes out at -2.5.
Also, something is seriously flawed if you have a team with an expected one goal superiority at 2.27 to win.
The average for teams with a one goal superiority is actually at 2.29 right now, seriously flawed owing to two factors – a low sample size and the start of a new season, meaning the Elo ratings do not accurately reflect the strengths of teams. I highlighted the number simply to illustrate why Elo ratings can’t be used at this stage of the season with any expectation of being profitable.

Danny makes an excellent point with his comment about the problems of ...
teams have very different home/away personalities; like Villa last year who were great on the counter attack when away but struggled to break down teams at home - they ended 3rd in the Away league table, 12th in the Home league table
I did think about maintaining two different ratings for each team, and may look to do this in the future, but for now I simply use an additional factor in an attempt to adjust for teams that perform significantly better either at home (think Mainz, Mallorca, Udinese, Lille, Fulham or Blackburn for example) or away (e.g. Racing Santander, Lazio, Werder Bremen, Wolfsburg, Nancy, Aston Villa).
How do you adjust for home/away form in your ratings? I'm guessing an away win is worth more?
Yes. A win away against an opponent results in more points being gained than a home win against the same opponents.

Thanks to Talkbet for his kind wishes. Crystal Palace’s signing of Edgar Davids is a little strange given that he’s not played in two years, but a pay-as-you-play deal is not a huge financial obligation for the club.

At worst, his presence should generate some interest and put some ‘bums on seats’ and at best, he is as good as ever and inspires Palace to promotion, and on to a Champions League place in 2012. I’m not investing too much cash on that possibility though.

Scaling Down

The Elo ratings are now caught up to date and, for reasons explained previously, the early results are mixed. One good sign is that the draw predictions in the top leagues of England, France and Scotland are hitting at 50%, but it's early days. Another two weeks or so should see results start to improve, but for now the policy not to bet seriously is the right one.

The Budesliga starts tonight with Bayern Munich hot favourites to win the league. If this was a mid-season game, Bayern would be value at 1.68 to beat Wolfsburg, but the latter have made several close-season signings which, of course, upsets the ratings. Cologne also appear to be value at 2.26 v Kaiserslautern, as do Borussia Dortmund at 2.5 v Bayer Leverkusen.

If I were forced to have one bet on the Premier League this weekend, the value bet would appear to be Manchester City at 2.42 to beat Liverpool. Also noted is that Chelsea have the biggest expected margin of victory this weekend at 2.5, and are 1.27 to win at Wigan. Chelsea -1.5 and -2.0 are available on the exchanges for big (four figures) money at 2.05, and are 1.78 giving 1.5. Wigan are bottom rated in the Elo ratings, and not surprisingly Chelsea are top.

In France, Ligue 1 are already into their third round of matches, and Auxerre and Montpellier at 2.32 and 2.27 respectively look value to win at home, as do Nice at 2.48 v Nancy. Lille at 2.22 should also win at Sochaux.

One of the advantages of my summer changes is that the predicted superiorities are now down to a 0.25 goal. No longer are all prices between 0.5 and 1.49 treated the same at 1. This allows me to more easily compare superiorities with the odds available in the perennial search for value. One early observation is that there is a huge difference in the average price of +1 teams and +1.25 teams. This should lessen as the sample increases, but right now the average prices are 2.29 and 1.72. It may be that I will need to reduce the scale yet further.

For interest, the predicted draws in the top leagues this weekend are the games at Birmingham City, Stoke City, West Bromwich Albion, Newcastle United, Kilmarnock, Hannover, Hoffenheim, Hamburg and Mainz.

Hamilton at 3.0 are way out of line when compared with the prices of other +0.5 teams, which probably means there's something going on that is not reflected in the ratings.

Wednesday, 18 August 2010

The Smart Money

Not the post-holiday restart to trading that I was looking for, with the Dodgers inability to hold a two run lead in the ninth on Monday night turning a would-be profitable day into a losing one, and the Cubs losing by one run last night. Just 16 trading days for me in August, and with football just getting started, and baseball still thin on liquidity, any profits are likely to be thin.

September typically sees profits pick up though, and I’ve learned to be patient. Limited opportunities isn’t all bad, as my day job promises to be extra busy for the next few weeks, and I need some time to get the Elo ratings caught up with the matches I missed while I was away.

I was also behind with my e-mails and missed the first few tips for the new season from Football Elite. No recommended bets yet, (hardly surprising given that there is no form to go on yet) and of five short-list selections, we have one winner at 3.38, with three draws and one loss. Early days, but this service has a good track record.

Back to the book I mentioned last post, The Smart Money, by Michael Konik, and a big part of the story (if not most of the story) is concerned with the issue of how to get bets on when the sportsbooks / bookmakers know that the source of the bet is a 'wiseguy' or a 'sharp' - in other words a 'knowledgeable sports bettor'.

Although the book talks about bets in the thousands, which is something most of us don't make too regularly, it seems that the bookies in the UK are making it ever more difficult for punters to get decent sized bets on. Not surprisingly, they know what type of custome they want and the type they don't. Reading the Betfair Forum, there are numerous posts whining about accounts being closed or seriously restricted.

It's nothing new, and one wonders why so many Betfair account holders would be betting with bookmakers at all. In a word - arbing - and it's not a surprise that bookies are now (allegedly) using ieSnare as a tool to identify such account holders.

It shouldn't be a sin to arb, but bookies are not charities. The bottom line is that they are in business to make a profit, and if they identify accounts that are unprofitable for them to maintain, they will close them down. As I wrote in September last year, when Ladbrokes wrote to me in 1992 to tell me that my account was being closed, I was rather proud of the fact. Not quite in same league as Joseph Jagger (the man who broke the bank at Monte Carlo) but it was a pleasing feeling on some level to have my business terminated, especially as my success had nothing to do with arbing, although I did compare the available prices across bookmakers using my Racing Post each day.

It was a time consuming hobby which soon fell by the wayside with the demands of a young family, and I moved on to other things. Then the Internet took off, and by being very selective with my bets, I managed to upset Mr William Hill and had my account closed in 1999 I believe. After that I messed about with trading options and futures and some shares before finding Betfair and other exchanges around 2004.

For all my bleating about the Premium Charge, Betfair really does offer a superb opportunity to be consistently profitable from Sports Betting for the simple reason that at least for now, they do not ban winners. They might charge them more, but I'd rather pay them 20% of winnings than make nothing. (For the record, it should be noted that I haven't actually had to pay the Premium Charge since March!).

In "The Smart Money", it is said that the sportsbooks in Vegas come up with their opening lines and allow a few 'sharps' to bet limited amounts into the line before the casino offers the line to the public. If all the 'wiseguy' action is on one side, the line will obviously be adjusted accordingly. One comedian on the forum actually came up with this gem of a story:

Then, in June 2006, I received the account-closed letter. I spoke to a "trader" who ummed and aahed over the reasons, but basically stated that in the past, my bets had been useful, particularly to the on-course reps, to find out what was fancied and what horses were "live" or being backed. "But now," he went on, "we've got Betfair, like, and y'know, well, your business isn't any use to us any more, like, sort of ..."
Er, this is William Hill we're talking about, a company with a revenue in 2009 of £997.9 million. Somehow, I find that story just a little hard to believe.

Companies such as Pinnacle Sports do post opening 'overnight' lines with smaller limits, which allows them to
shape their lines according to the betting activity of 'sharp' bettors without exposing the book. According to executive Simon Noble, these early, low limit bets ultimately allow Pinnacle Sports to offer betting limits with confidence as high as $50,000 or more on selected games with their low margin pricing model [-105/-104 ($1.95-$1.96) prices on head-to-head match odds and spreads, significantly undercutting the standard -110 ($1.91)].

Monday, 16 August 2010

Bettor Days

Getting married as an adult is expensive, but no complaints. After a fortnight of haemorrhaging money in all directions, normal life resumes today, and I'm hoping to recover the money spent before too long.

For the record, the ceremony was dry and sunny, and was followed by a reception in Lynmouth, coincidentally the same village that both sets of grandparents also honeymooned in many years ago. My parents only thought to mention this interesting tidbit to me on Saturday!

Anyway, after a few days in the beautiful Lynmouth area, we visited Clovelly, Port Isaac, Bodmin, Looe, Brixham, Dartmoor, Dartmouth Castle, Exeter Cathedral, Cheddar Gorge, Colchester Castle, St. Paul's Cathedral, (and other assorted City of London churches) and Hever Castle, as well as meeting up with old friends. A very enjoyable few days, and betting wasn't missed at all. Mrs Cassini had family over from the US and sometimes there are more important things in life than betting. So I'm told.

But life goes on, and I did manage to find time to finish reading "The Smart Money" by Michael Konik. It's an enjoyable read, but I was hoping for more of an insight into how the selections were made rather than just reading about how the bets were placed. It's encouraging to those of us who believe the sports betting markets can be beaten that behind the scenes in the book, there are a computer or two processing data and generating 'lines' which are often close to that of the the bookies, but not always.

There are also the occasional lines that ring true - this one for example:

It's a good day to be a sports bettor. And I'm learning to appreciate the fleeting triumphs, because depressing days of equal magnitude will surely follow. Up, down, profit, loss - it's all about grinding out an edge. As long as I'm in action, the short-term thrills and chills shouldn't really matter - but if you're human, they do.
I did also catch some of the football this weekend, albeit with no financial interest. I'm giving the Elo ratings this month to settle down, but my value selection for relegation mentioned a few posts ago, Wigan Athletic at 3.2, got off to the worst (or best) imaginable start and are now at 2.25 for the drop. Blackpool meanwhile, move out to 1.4 from a low of 1.23, something of an over-reaction to my mind.

In golf, now six new major winners in the last seven events, something that has never happened before. Laying the third round leader (Nick Watney) would again have paid dividends, but I didn't get a chance to check the price.

The regular baseball season looks to be one of the closest in years with the leaders in five of the six divisions less than four games ahead of the second placed team.