I Am Son of Gamblor: Week Ten

IF you have any genuine desire to make the step up from being a casual punter to a more professional gambler, be prepared to absorb a lot of information from this article. I don’t profess to be an expert, nor am I even the greatest punter in my own house, but I do know what has worked for me over the last decade.

Previous Gamblor entries have dicussed the decisions based on the factors which affect the outcome of a match. We’ve looked at how difficult it can be to convert those variables into a meaningful percentage chance of a team winning a match. I’ve previously hinted that the Sportsrated.com beta platform has helped me in this regard.

However, what is the solution for those looking to compile thier own odds? Using a modest maths and statistics education, this will be broken down as simple as possible. You might never need to pay for SFL bets again.

 

Question One:

How can I compile my own odds for football matches and then take advantage of value on the market?

In a game of football played out over 90 minutes, there are three possible outcomes: a home win, an away win or a draw. The percentage chance of the three events must add to 100%. In a match where all outcomes are as likely as each other, the percentages would look like this:

  • Home win 33.3% recurring
  • Away win 33.3% recurring
  • Draw 33.3% recurring

That is a “book” for the match, with all of the outcomes the same.

You might notice that bookmaker prices do not add up to 100% – they have to add in their profit margin, called an “over-round”. If a bookie were to take a level amount of money on all outcomes in a book where there was an over-round of 10% (i.e., a 110% book) they would make £10 profit for every £100 of turnover.

When compiling our own prices, it should therfore be noted that a 100% book is slightly too keenly priced – I’d make my prices combine to around 105% (if you want to know the specifics on this, please ask me on Twitter or leave a comment below).

Having created our own 100% book in the evenly matched game, we need to distribute an additional 5% across the events. For this example, we will do it evenly:

  • 5% divided by 3 = 1.67%
  • Adding this to each of the outcomes leaves 34.9999%, rounded up to 35% each

Now we need to convert the percentage to fractional or decimal odds to compare them to the bookmakers’ prices.

There is a formula (which can be too much like hard work), but here is a ready-made Ready Reckoner which you can save and print off:

We can see from the Reckoner that a 35% chance equates to a fractional price of 15/8 for each outcome:

  • Home win 15/8 (2.88 as a decimal)
  • Away win 15.8 (2.88)
  • Draw 15/8 (2.88)

To summarise what we have done:

  • We started with a football match played over 90 minutes
  • We distributed 105% of possibilities in the way that we found most appropriate among home/away/draw outcomes
  • We converted the percentage of each outcome to fractional and/or decimal prices

 

Question Two:

Now I’ve found value, how much should I bet?

In order to answer this, there are a few things which need to be considered – most importantly what our staking plan is.

I use a plan which was worked out by a chap named Kelly. The Kelly criteria is popular among professional gamblers to maximise long term profits. It is a quite aggressive staking plan and can be diluted by dividing the ultimate answer by a factor of two or even four if you are feeling less adventurous.

The formula is:-

  • Stake=((odds*percentage) -1) /(odds -1) *100
  • Odds =odds offered by the bookmaker in decimal terms
  • Stake =optimal size of stake
  • Percentage =estimation of percentages for each event shown as a decimal fraction ie. 35% = 0.35

This produces a % figure, which is the suggested % of your starting bank that you should bet with.

The Sportsrated.com engine has an in-built Kelly calculator but you can find others by a simple online search for “Kelly staking plan calculator”.

Using our previous example where all events are 15/8, we will imagine that the betting market has a home win at 4/1.  The starting bank is £10,000.

Using the Kelly formula :

Stake =((5 *0.35)-1) /(5-1) *100 = 18.75%

Taking into account the starting bank, we should bet 18.75% on the home win –  an eye-watering £1,875 on a home win.

Congratulations on your first “professional bet”.

 

Real World examples

This weekend sees a match between Queen of the South and Alloa Athletic.

We have to allocate our 105% among each of the three events. Using my own brief research into the match, I will allocate the outcomes as follows:

  • Queen of the South – 58%
  • Alloa – 23%
  • Draw – 24%

Using the Ready Reckoner, those percentages are converted into the following:

  • Queen of the South – 8/11 (decimal price of 1.73)
  • Alloa 100/30 (4.33 recurring)
  • Draw 63/20 (not a price you would often see in a bookies but with a decmial of 4.15)

The best prices at the bookies for this match are:

  • Queen of the South – 6/10
  • Alloa – 4/1
  • Draw – 100/30

Looking at the current betting market, we can see that there’s some value on Alloa. The Kelly formula shows that we should have a bet of 3.75% of the bank. This would mean we bet £375 on Alloa at 4/1.

More dramatically, let us have a look at Wednesday night’s prices for Rangers and Motherwell. This is a very subjective match in a gambling sense – some people still think Rangers are as big as their name suggests. Personally, I like Motherwell for this match and would position my 105% as follows:

  • Rangers – 30% – 9/4 (3.25)
  • Motherwell – 45% – 5/4 (2.25)
  • Draw – 30% – 9/4 (3.25)

As at Tuesday afternoon, the best prices in the market are:

  • Rangers – 6/4 (2.5)
  • Motherwell – 15/8 (2.88)
  • Draw – 13/5 (3.6)

We can see the market prices Motherwell far more generously than I would.

Using the Kelly formula:

((2.88*45)-1/(2.88-1)*100=15.7%

Of our £10,000 bankroll, the formula tells us the bet size is £1570 at a price of 15/8. It is going to be an exciting Wednesday night.

 

I urge you to look at this article as the beginning of something that will unlock the secrets to successful betting, which so many of us have been led to believe is beyond us. There are websites which can help with more technical aspects, which should be coupled with your own opinion which is as good as anyone’s.

 

If you have any particular questions or topics you would like David to cover, contact him via Twitter at @sflpunter.

(Neither Tell Him He’s Pelé nor David Copeland accept responsibility or liability for any losses which may be incurred by any reader from the use of this website.)

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1 Comment

  • Reply February 27, 2013

    mid-table

    There are a few basic errors in this article. To highlight two;
    “If a bookie were to take a level amount of money on all outcomes in a book where there was an over-round of 10% (i.e., a 110% book) they would make £10 profit for every £100 of turnover.”
    That is not correct, they would make £10 profit for every £110 of turnover.

    “5% divided by 3 = 1.67%
    Adding this to each of the outcomes”
    To create a 5% overround you wouldn’t add 1.67% to each implied percentage, you would multiply each implied percentage by 105/100

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