Posted: Wed Nov 01, 2006 7:05 pm Post subject: aye66's musings on football punting.
'ello all.. i've always wanted to write my thoughts on football punting in general... i thought that maybe now's a good a time as any so I should get blogging away over here (rather than my other blog which is sooo disorganised). This is not a system blog, but a rather "normal" type of blog where i just post ideas, and philisophical thoughts garnered over the years on football punting.
The ideal audience is just about anyone... but i think i'll target horse racing punters who would like to know more about football punting. The reason for this is because i hope one day a horse racing punter will write something similar for me cos i've no clue abt the horses! lol!.
Anyhow, I thought the first thing i should write about is the main question:
"Is it possible to make profit in football punting?"
So that will be my next post...
till then,
GL in your punting!
aye66
ps. feel free to post comments or start a discussion abt some points you don't agree about!
Is it possible to make profit in football punting?
I reckon this is the first question anyone should ask before they dive into the world of football punting... well here are my thoughts.
Let's go back to the very basics and talk about "value". Most of you know what i'm talking about.. some may think it's pure nonsense, while the uninitiated will be scratching their heads...
A very very basic discussion on value
Let's take the classic case of a perfect coin... perfect in that there is no bias with perfect symmetry etc. etc. If you flip this coin randomly, you'll end up with a probability distribution of 50% heads and 50% tails. This corresponds to odds of 1/1 on both heads and tails.
So, if given this hypothetical situation, a bookmaker will try to earn a living by offering less than evens on both selections (i.e. heads and tails).
If a bookmaker offers 4/5 on both heads and tails, and assuming that the money is evenly split between heads and tails, then the bookie will pay out £1.80 for every 2 pounds accepted in bets. He'll keep the 20p as the profit for "setting up the market". In this situation there is no value in participating in this sham at all as you are bound to lose in the long term.
If a bookie is offering 2/1 on heads, then there is value on betting on heads all of the time as you are bound to win in the long run.
So, the very basic conclusion is: Only bet when the odds are in your favour
What! Odds are in my favour?
Ok... so that's the basic theory.. then why are approx 98% of punters losing in the long run if they can grasp this simple concept?
well, things aren't as simple as the basic coin flip though I wished it was. Is it possible to predict probability so accurately? Unlike some casino games whereby it is easy to predict odds if no bias exist (e.g. roulette with an unbiased dealer and wheel), some say this is not true for sports betting. Sports betting doesn't follow a specific pre-determined probability because there are so many factors in play in any given sports event. These people argue that it's all about your precieved odds against the bookie's offered odds. If you think that an event/selection has a higher chance of happening than the bookie, then you should bet on that selection and you'll win in the long run. Now, if everyone was that good then everyone would be winning! So, something is amiss here.... obviously everyone isn't that good at predicting odds.. but is there something else?
Does value exist in the first place?
Well, that's the first question i would ask.. If you're a part time punter, you're going up against a bookie with employees whose full time job is to set odds. I would guess that it's an acceptable assumption that they are better at setting odds than a part-time punter. In that case, it is theoretically possible that they have set the odds in such a way that there is no value to be gained in the long run i.e. the coin toss example. Their overrounds (or the 20p profit margin) could be high enough to eliminate all possibility of value existing. So is this really the case?
The concept of the "efficient market"
Unfortunately, i would have to talk about some economic theory which i think is important to footy punting.
There is an economic theory of the efficient market. An efficient market is such that prices are fair in the market because they reflect the collective opinion on the price of a commodity. As you would have realised from the coin toss example, when you win from a bookie, most of the time you're really winning from punters who have placed losing bets. Logically, if this was not the case, most bookies would have gone bust by now. After a bookie has set the odds for a particular book (e.g. Arsenal v Man Utd), the odds will vary according to the weight of money placed on either selection. So if everyone lumps on Arsenal, then the price of Arsenal to win will shorten and that of Man Utd will lengthen. Wikipedia states this about an efficient market:
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The efficient market hypothesis implies that it is not possible to consistently outperform the market by using any information that the market already knows, except through luck or obtaining and trading on inside information
So, if the football punting market is really efficient, then we are all doomed for cos there's no way of making profit in the long run. In other words, the prices are such that it is impossible to find value.. which goes back to the coin flip example.
How can a market be "inefficient" then, one might ask.. Only if there is a bias in the market, or if it is possible to have insider information or more information than the majority of the market.
Is the Football Punting market an efficient market then?
Well, remembering that it would be theoretically improbable to find long term value if the market is efficient, football punters should be wishing that the market is in fact inefficient. We have to hope for biasedness in the odds or for more (possibly insider) information than the odds settor (be it the bookie or some other punter on Betfair).
Biasedness in 1X2
Well I cite some academic research into this question first... Cain, Law and Peel did some research into this and published a paper titled "The Favourite-Longshot Bias and Market Efficiency in UK Football betting". I have read the paper and in it they proved that there is a bias in the bookie's prices for the 91/92 season. It seems that heavy favourites in a football match are consistently under valued by bookies (i.e. it is possible to win on 1X2 if you keep betting on heavy favourites). This somewhat dispels the (popular) belief that it is better to consitently bet on long shots because you're getting a generous price.
Another person who agrees with this analysis and has done further research on this is Buchdahl in his book "Fixed Odds Sports Betting: Statistical Forecasting and Risk Management". I would recommend this book to anyone who is starting out in football punting because it teaches things that I've had to learn the hard way.
So.. these papers/publication proved that there is bias in the 1X2 market... let's take a quick look at some other markets.
Biasedness in Correct Score
Walk into a high street bookie and you'll see a 1X2 football coupon for the day's fixtures. If you want to bet on correct score, you would have to flip the coupon around to find the odds. You do this by looking at a table that matches the odds of the team to win/draw with the corresponding correct score. So in essense, Correct score odds follow some type of formula which is totally dependent on 1X2 odds. Any 2 teams with the same 1x2 odds will have the same correct score odds to win their respective matches. Obviously something is amiss here... Let's imagine 2 teams win the same amount of matches by the same margin, but team A wins 1-0 all the time while team B wins 2-1 all the time. Both are playing against similarly weak opposition for this weekend. They would end up with the same odds for their respective matches and their correct score odds for the match. But surely there is a flaw in the correct score chart then... 1-0 should be lower for team A while it would be higher for team B. There is, therefore, a biasedness towards certain scorelines for correct scores because of the pre-determined odds used in the correct score chart at the back of every football coupon.
More information than the odds settor
Well, obviously if you are somehow connected to the football club you're betting on, you would have more information than the odds settor and therefore the market is inefficient. Most punters do not have such avenues to privy information though. If you do punt on football which is not televised much (e.g. the lower non-league) and you do watch the games, chances are you might have more information than the odds settor. The more air-time a league has on TV, more punters are going to have in-depth knowledge about it, and therefore the market tends towards an efficient market (information wise) making it difficult to gain an edge.
Still, let's remember that the bookmaker has to publish his odds as early as he possibly can if he wants to gain enough market share. Most of the time, this means days before the match has taken place and sometimes even months (for the case of the World Cup!). They set their price without knowledge of the team's lineup which can influence factors such as tactics or last minute injuries. Lineups are usually revealed only 1 hour before the match and even then, i've noticed that prices do not change much for most matches. This means that most punters (since it's really the other punters you're doing battle with and not the bookies) do not bother to factor in lineups. If you think that lineups are important in influencing the results of the match, then it would make not much sense to disregard them. Waiting for lineups can, therefore, give you additional information over other punters required to create an edge. You do need, however, to understand the relative importance of each player in the team to take advantage of such information.
Summary
Well, i've tried to examine and discuss the economic theory of market efficiency to show how football punting can be profitable in the long term. The concept of market efficiency and the more common notion of value punting (used as a foundation for long term profitable punting) are closely related and I think it's important to understand their interdependencies.
nice lecture aye. found that quite long and difficult to digest at first go.
so, what is the answer to the initial question of "is it possible to profit from footy punting?". Conclusion appears to be a big "No" unless one can find Value in the bet, correct me if i am wrong.
i think it would be good if u can summarise how to spot that value. i find it hard enough to bet on my own team (which i know most about, i think), it would be almost impossible for a part time punter to know so many teams from so many leagues inside out.
Theoretically, the more information u have the higher ur chances of a win. However, in real life, u get information overload nowadays.
1) there are numerous times when everything points to an easy win say for Liverpool but somehow the odds for MU keep dropping, i.e. there appears to be some info favouring MU. It is natural to think twice and question ur initial pick as u are unsure who has the better info, other punters or yourself? Most of the time, it is the other punters who have the winning info rather than urself.
2) using the above example, Liverpool should be the value bet but i would bet >50% of the time it would not win based on my previous experiences. So, it is not value if it loses in the end.
What i am saying is, many footy punters are willing to follow the leader (others) who they think have inside information, even though there appears to be no value in the bet, as they think it has a higher chance of coming in. Strangely, i find it to be a winner most of the time.
i am just curious if u have any statistics on whether this is true, i.e. what are the chances of a bet winning if the odds drop drastically before a game. Would be interesting...
Joined: 10 Feb 2005 Posts: 878 Location: Sunderland, Tyne and Wear
Posted: Thu Nov 02, 2006 11:34 am Post subject:
Solid stuff Aye and much appreciated.
I particularly like the point about bookies giving value on heavy favourites in 1X2 - now if we apply that reasoning to the better odds that are usually there on Betfair, hmmm definite food for thought!!
Thanks Ipoh and Swift for the replies. Much appreciated.
I'll try to post some thoughts on your comments over the course of the day based on my effectiveness on skivving today haha!
well swift, I find it somewhat true about the favs/longshot bias. I have a selective memory sometimes but i can remember that famous man utd v exeter cup tie 2 years ago? Exeter was the huge longshot, and there was no value on the Man Utd win. In the end it was a draw. So even though there was a heavy bias on Man Utd, if there was no value to be had on the heavy favourite, it would still be unwise to bet on them. Exeter was such a long shot because the bookies rightly thought that there was no way for them to win. So in that unique scenario, there was almost no value for all 1X2 selections. However, taking a look at chelsea last season, websites such as football anorak prove that you would make a profit just by backing chelsea on the 1X2 all the time, but would not if you back sunderland.
But in the wider sense of things, this made me question certain views on tipping. Sometimes, peeps have a biased opinion on tipster who regularly tip selection which are lower than 1.5 odds. Instead, they seem to notice peeps who win the occasional 100/1 longshot. I reckon that there is an intrinsic biasedness towards the former e.g. "oh! anyone can tip on anything less than 1.5 odds and win!"...... honestly, they should look at the long term records for both tipsters before passing such judgement. Tipping consistent winners who are less than 1.5 odds is a skill as well.
Very interesting Aye. Your time and effort is appreciated.
There is undoubtably some bias in the odds that are set, and I would perhaps add the draw to that list as well. I suspect that punters are biased towards a decisive result rather than a stalemate.
One other bias I have thought of is the "they won last meeting" bias. Last night proved that if the same two sides play each other within a week or two you may not get the same result - e.g. man utd/copenhagen You are perhaps old enough to remember in the 90s that Leeds played Man Utd 3 times within a month (FA Cup, Worthington Cup/League I think) and got a different result every time !!
As for making a long-term profit on "the beautiful game" I have personally given up football punting, as my P/L on the sport (on here and more importantly in real life) is embarrassing.
As for making a long-term profit on "the beautiful game" I have personally given up football punting, as my P/L on the sport (on here and more importantly in real life) is embarrassing.
I think there's some life in the footy punter in you yet alfie... who knows? I've seen you had some choice winners on the Asian handicaps if i can recall.
Ipoh:
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so, what is the answer to the initial question of "is it possible to profit from footy punting?". Conclusion appears to be a big "No" unless one can find Value in the bet, correct me if i am wrong.
You are correct, in my humble opinion. Finding value comes from comparing your percieved odds on an event against the bookmakers odds. Because so many punters are losing in the long term, I would assume that most of them have difficulty in calculating true odds accurately.
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Theoretically, the more information u have the higher ur chances of a win. However, in real life, u get information overload nowadays.
Hmm... I would clarify this by saying "the more meaningful information you have over most punters in the market, the higher your chances of a win". The 2 key points here are meaningful information, and that you have information which most punters in the market do not have.
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1) there are numerous times when everything points to an easy win say for Liverpool but somehow the odds for MU keep dropping, i.e. there appears to be some info favouring MU. It is natural to think twice and question ur initial pick as u are unsure who has the better info, other punters or yourself? Most of the time, it is the other punters who have the winning info rather than urself.
I usually eliminate these doubts by waiting for the lineups to be published. That way, I feel I have all the meaninful information required to make a pick and with the lineups, and I would then doubt anyone has an "information" advantage over myself. The downside of this approach is that the value in the odds might have disappeared because I waited too long to bet. This is a risk/cost i'm willing to take. After all, if i don't bet the only thing I lose is the opportunity for profit, and not real money. Call it calculated opportunity cost if you will.
If you, however, have all the information and you still lose in the long term.. then there are 2 plausible reasons. 1. You are betting in a league which is riddled with match fixing... this is possible but improbable most of the time. 2. More people are better than you at finding value... if it's a one off loss, then it's just a minor setback.. but if you're losing long term using a consistent method in calculating value, then your method is not working.
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What i am saying is, many footy punters are willing to follow the leader (others) who they think have inside information, even though there appears to be no value in the bet, as they think it has a higher chance of coming in. Strangely, i find it to be a winner most of the time.
i am just curious if u have any statistics on whether this is true, i.e. what are the chances of a bet winning if the odds drop drastically before a game. Would be interesting
No, unfortunately i don't have any statistics to prove if this is true or false. Anyway, I suspect you're using "bookmakers" such as IBC over in your part of the world, so the market movement there would be different from our European bookmakers. If the punter(s) you're talking about truely have insider information, then it would be worth it to follow their tips. But I do suspect that it could just be that they are punters with a good reputation (e.g. there's a tipster called "pricewise" for horses in the UK and a lot of peeps follow him blindly thus pushing the prices down). If you want to evaluate this objectively, you should start keeping records and then examine them at the end of the season. Maybe you could uncover something profitable.. I wouldn't rule out that possibility.
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i think it would be good if u can summarise how to spot that value.
Yeah. I'm planning to talk about such things in the future.. couldn't squeeze everything into one post!
Joined: 21 Feb 2005 Posts: 1890 Location: Berkshire
Posted: Thu Nov 02, 2006 5:30 pm Post subject:
Blimey Aye - good stuff. I've had to print it out to take and read this evening Although I immediately agree with the need to find value. Be back later with more comments.
If the punter(s) you're talking about truely have insider information, then it would be worth it to follow their tips.
not exactly what i meant, i was referring to the overall market movement, i.e. Betfair or any bookies odds. If there is a big movement a few hours before the match, then there appears to be a consensus that the "odds dropper" will come thru, i.e. win, and very often it does.
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If you want to evaluate this objectively, you should start keeping records and then examine them at the end of the season.
i would very much like to do this over here, but my hands are usually tied when weekends come. A bigger hinderance is the time zone difference making it difficult for me to post such picks before the match, unless i so happen to have some time, after making my real money bets.
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You are perhaps old enough to remember in the 90s that Leeds played Man Utd 3 times within a month (FA Cup, Worthington Cup/League I think) and got a different result every time !!
Yeah. I'm planning to talk about such things in the future.. couldn't squeeze everything into one post!
