Hacker News Reader

Comment by mason55 | Hacker News Reader

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.

View on HN

I'd suspect it was less to do with the edge, which isn't especially huge especially over the short run, and more to do with the authors' unusual selection of bets entirely overlapping the bookies' ad hoc analysis of bets they've mispriced. Particularly since the bookies watch each others' odds (as do scripts sold to wannabe arbitrageurs on the internet). Having a subset of winning betters with an information advantage may even help bookies overall if they know who those people are, but they'll want to limit how much they pay out for that information. Especially if the limits are market specific, and the section of the paper highlighting betting limits shows a screenshot of an attempt to place bets on Australian youth association football...

But $900 is pocket money bookmakers are willing to give away: around the time this study collected it's first data points I made more from fewer bookmakers just from intentionally +ve expectation welcome bonuses (and that was after they'd responded to the first wave of people pocketing welcome bonuses by eliminating them... for people from Denmark)

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.

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.

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

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.

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

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

The "vig" comes from "vygrysh" which is "winnings" in Russian (IIRC).

As someone who has worked in the sports betting industry, it depends a lot on the bookmaker. UK retail bookies hate anyone with any savvy, and will ban their accounts fast. Ditto "weird" betting that looks like it might be machine-run. Their business is taking old folks pensions from them.

OTOH, exchanges love all kinds of gamblers and won't ban you for winning any amount. "Smart money" Asian bookies will bet against anyone because their job is to have a better model than you. (Of course, there is a max bet on any offer, and the odds will move if you hit them hard enough.)

Also, everything in the abstract of this article is either old old news (strategy-wise) or plain wrong in light of the actual business of sports betting. "Implied odds" has been around forever, and real companies make real, consistent returns from arbitrage and "statistical arbitrage" on implied PDFs and have for years.

The books rarely balance up though, especially for markets with more than two outcomes. Football/soccer has win/lose/draw (and you can never get enough money on the draw, as hardly any amateur is going be watching a match cheering on a draw!)

Horse racing is even worse for the bookies, with multiple runners, their books will rarely balance, and the standard outcome is a loss if the favourite wins. Any outsider winning a race is a ‘turn up for the books’. (n.b. this is for UK style horse racing betting, where the bookies offer fixed odds. Pari-mutuel or pool betting doesn’t have the same problem)

They're not a "winning player" in the usual sense. The casino wants players to bet on a certain outcome in some cases (in order to reduce risk, presumably) and therefore hands over the winning strategy on a silver platter.

I feel like the casinos just want those kinds of bets to be small. They don't want to over-correct in the other direction. By limiting these players that specifically make these kinds of bets, they reduce the risk of a big amount of money being bet in a short amount of time on the "winning" strategy.

Reply on news.ycombinator.com