Creating A Profitable Betting Strategy For Football By .
Creating a Profitable Betting Strategy for Football by Using Statistical ModellingNiko MarttinenM.Sc., September 2001Department of StatisticsTrinity College DublinSupervisor: Kris Mosurski
AbstractOur goal was to investigate the possibility of creating a profitable betting strategy forleague football. We built the Poisson model for this purpose and examined itsusefulness in the betting market. We also compared the Poisson model against othermost commonly used prediction methods, such as Elo ratings and multinomialordered probit model. In the thesis, we characterized most of the betting types butwere mainly focused on fixed odds betting. The efficiency of using the model inmore exotic forms of betting, such as Asian handicap and spread betting, was alsobriefly discussed.According to market research studies, sports betting will have an increasingentertainment value in the future with the penetration of new technology. Whenmajority of government-licensed bookmakers are making their transition from onlineterminals into the Internet, the competition will increase and bring more emphasis onrisk management. In this thesis, we investigated the benefits of using a statisticallyacceptable model as a support of one’s decisions both from bookmaker's and punter'spoint of views and concluded that it would have potential to improve theirperformance.The model proposed here was proven to be useful for football betting purposes. Thevalidation indicated that it quite effectively captured many aspects of the game andfinally enabled us to finish the season with positive return.i
12345Introduction . 11.1Structure of League Football . 21.2Betting on Football. 31.2.1Pari-mutuel Betting . 31.2.2Fixed Odds Betting. 41.2.3Asian Handicap (Hang Cheng) . 51.2.4Asian Handicap vs. Fixed Odds . 81.2.5Spread Betting. 91.2.6Person-to-person Betting . 101.3Betting Issues. 111.4Return Percentage . 121.5Internet Betting . 131.6Taxation. 181.7Scope of the Thesis . 19Literature Review . 212.1Maher-Poisson Approach . 212.2Alternative Prediction Schemes. 262.2.1Elo Ratings and Bradley-Terry Model . 272.2.2Multinomial Ordered Probit Model. 302.3Betting Strategies . 312.3.1Unconstrained Optimal Betting for Single Biased Coin . 322.3.2Unconstrained Optimal Betting for Multiple Biased Coins. 342.3.3More on Kelly Criterion . 35Data Description and Model Formulation. 373.1Data Description . 373.2Poisson Regression Formulation. 383.2.1Assumptions. 383.2.2Basic Model . 413.2.3Separate Home Parameter Model. 473.2.4Split Season Model. 503.2.5Comparison among Poisson Models with Full Season Data . 503.2.6Odds Data and E(Score) Model . 513.2.7Poisson Correction Model . 533.2.8Weighted Model. 553.3Comparison among Poisson Models Week-by-week . 583.4Elo Ratings . 603.5Multinomial Ordered Probit Model . 623.6Comparison of Approaches . 64Betting Strategy and Model Validation . 654.1Value Betting . 654.2Betting Strategy . 664.3Money Management. 664.4Validation on Existing Data . 67Discussion . 715.1Implementation of the System . 715.2Applications of the System. 72ii
5.2.1Bookmaker’s Point of View. 735.2.2Punter’s Point of View . 736Summary and Future Work . 756.1Summary. 756.2Future Work. 756.2.1Residual Correction . 766.2.2Other Types of Betting . 766.2.3Bayesian Framework . 79Appendices. 80Appendix A . 80Appendix B . 81Appendix C . 82Appendix D . 83References. 88iii
Chapter 11IntroductionIndependent forecasters predict an explosive growth in global online betting.Ernst & Young (2000) claim in their market research paper that the driving forceof Internet and digital technology will open up mass-market sports betting bydelivering live entertainment, news and information to Internet linked PC’s,mobile phones and interactive television. More and more people have access tothe Internet, which has evolved the sports betting business among other ecommerce businesses. It is inevitable that this change will bring new forms ofbetting into the picture. For example, so far the only live action betting has beenspread betting. The spread betting firms accept the bets made “in running”, whichmeans that the bets can also be placed while the event is going on. If the playernotices that one has few bets going against him/her, those bets can be sold inorder to minimize the losses. The only reason why spread betting has not fullytaken off is its complexity. In order to attract casual punters, the game formatneeds to be quite simple. Balancing between simplicity and people’s interestrequires a lot of creativity. Recently introduced person-to-person betting haseffectively captured both these criteria. Punters can take each other on in severaldifferent topics and the gaming operator monitors and settles all the bets.Whether it is fixed odds, tote, spread or person-to-person betting, wagering willbe much faster in the future and the requirements for the system operating thisincrease accordingly.Security, speed and pricing are the most crucial issues that will distinguish theprofitable Internet sports books from the failing ones. Technology providers areresponsible for the first two, but odds compilers mostly cover the pricing issues.1
Currently, the odds compilers work in teams of three or four experts, with onehead odds compiler making the final decision about what prices to release topunters. The alternative is to buy the odds from a consultant. Usually, oddscompilers use several ad hoc techniques and their expert opinion in compilingfinal prices. In order to manage risks while competing with better prices in themarket, a proper statistical tool should be developed for gaming operators. Thepurpose of this thesis is to create a model that is capable of predicting results offootball matches with reasonable accuracy and to compare it to other forecastingtechniques and the odds collected from a bookmaker. We investigate whether it ispossible to create a profitable betting strategy by using statistical modelling. Thepricing issues are thus examined both from the punter’s and the bookmaker’spoint of views.In order to create a profitable betting strategy, one must be capable of estimatingthe probability of each outcome accurately enough. How accurately, depends onthe level of the opposition. The opposition could be either a bookmaker or otherpunters. The goal of our study has been to establish a proper method for thisestimation. The focus is in the football betting market. In this chapter, we firsttake a brief look at the structure of league football and the betting market.1.1 Structure of League FootballThe reason for our focus on league football is because of its simplicity and dataavailability. Cup matches and international tournaments create problems due tothe variability of participants and lack of consistent data. The most commonformat in the league football is a double round robin tournament, where each teamplays against each other twice, once at home and once away. This way it ispossible to eliminate the bias of a home advantage. Most of the major leagues inEurope are played in this format. Different variations are used in some countries,such as round robin and playoff combination or single/triple round robin, but we2
restrict our attention solely to double round robin tournament because of itssimplicity and popularity. A match outcome, in a round robin tournament, isconverted to points that reflect the value attached to each outcome (3 points for awin, 1 for a draw and 0 for a loss). These points accumulate during a season andthe team with the highest number of points wins the league.The teams’ ability changes over the course of a season due to things such asinjuries, transfers, suspensions, motivation, etc.Therefore, determining theprobabilities for each outcome in a particular match is not that straightforward.Lots of things need to be taken into consideration before the final conclusions canbe made. Many of these things are hard to quantify and difficult to use in anumerical analysis.1.2 Betting on FootballFootball is the most popular sport in the world, and also the most popular sport inbetting. The most traditional bet is to place money on the outcome of a match.Whether the match will end to a home win, a draw, or an away win. Also, correctscore, halftime/fulltime, handicap, total goals and future outright bets (f. ex.betting on the winner of the championship) are popular. In addition, there arenowadays numerous exotic variations of football betting, especially in spreadbetting where punters can bet on bookings, shirt numbers, corner kicks, etc.during a match. We take a look at the different types of betting in the followingsections.1.2.1 Pari-mutuel BettingIn pari-mutuel betting the bookmakers take their money off the top, and the rest isdistributed equally among the winners. A punter is competing against otherpunters in this type of betting. The more familiar name for this betting type is the3
Tote.The odds are purely a function of betting volume’s reaction, so thebookmaker is playing safe in pari-mutuel betting. This is very common in horseracing, but also football pools work in this way.Out of certain number ofmatches the punter is required to pick one or more choices for each match. Veryoften, the home win is denoted as 1, the draw as X, and the away win as 2, andhence football pool is synonymous to 1X2-betting. On the coupon of twelvematches, the punter usually needs to predict ten or more outcomes correctly inorder to receive any payoff. This is probably the most traditional football bettingtype. For a professional punter, though, it is not as exciting as other types listedbelow, because of the low return percentage. Some of the correct score and futureoutright bets are also based on pari-mutuel structure.1.2.2 Fixed Odds BettingFixed odds betting has increased its popularity very rapidly. There are morechances for profitable betting because the return percentage is greater than infootball pools (sometimes even as high as 95 %). The bookmaker offers odds foreach possible outcome in a match and the punter will determine which ones areworth betting on.For example, in a match Liverpool against Chelsea thebookmaker offers the following odds:Home team Away team Odds home Odds draw Odds awayLiverpoolChelsea2.002.603.00If the punter has chosen to back Liverpool with 10 and Liverpool wins thematch, the punter will get his/her stake multiplied by the odds for Liverpool’svictory. In this case the punter’s gross win would be 20 and the net win 10. Ifon the other hand the match had ended to a draw or Chelsea’s victory, the punterwould have lost his/her stake.4
In Great Britain and Ireland, the odds are the form x/y (say 1/2, where you need tobet 2 units to win 1 unit). On mainland Europe, the more common way to presentodds is the inverse of a probability, called a dividend as in the example above.The traditional odds are converted to dividend odds by dividing x by y and addingone. Thus, 1/2 means 1.50 in European scale. The table of conversions ispresented in Appendix A.Some bookmakers do not accept bets on a single match. Instead a punter needs topick two, three or more matches on the same coupon.The matches areindependent events, so this way the bookmaker decreases the return percentage tothe punters. For example, if the bookmaker returns 80 % of the total moneywagered and requires punters to pick at least three matches, the theoretical returnpercentage diminishes to 0.83 51.2 %. Fortunately from the punter’s point ofview, increasing competition in the betting market forces bookmakers to offerbetter odds and ability to bet on single events or they go out of business. We takea closer look at the return percentage later on in this chapter.In fixed odds betting, the odds are generally published a few days before theevent. Internet bookmakers can change their odds many times before the matchtakes place responding to the betting volume’s reactions. Their job is to keep themoney flow in balance and thus guarantee the “fixed” revenue for the gamingoperator. For the traditional High Street bookmaker altering odds on a couponrequires enormous reprinting efforts, whereas for the Internet bookmaker ithappens just by clicking a mouse. Other popular fixed odds bets are correct score,first goal scorer, halftime/fulltime and future outright bets.1.2.3 Asian Handicap (Hang Cheng)In Far East, handicap betting is more popular than traditional fixed odds betting.The approach, derived from the Las Vegas sports books, has expanded its5
popularity to Europe as well. In Asian handicap, the bookmaker determines apredicted superiority (a difference between home goals and away goals). Oneteam gets, let’s say, 1/2 goal ahead before the start of a match. Thus the draw isnormally eliminated in Asian handicap and the odds are set for two outcomes.The fundamental idea is to create even odds in a match by means of a handicap.With Asian Handicap, there is a much better chance of profit, due to the fact that apunter may get his/her stake back (or at least parts of it, depending on thehandicap). In fixed odds betting, one would lose money if wagered on somethingelse than the correct outcome. You can bet on teams which you really do notbelieve will win the match, but due to the handicap, your team may still provideyou a value opportunity.Asian Handicap betting also provides much moreexcitement, as one single goal in a match counts much more than in fixed oddsbetting. The worst thing in Asian Handicap, in our opinion, is a rather complexway of figuring out the return. You will also need an account with companiesoffering Asian Handicap, as not all bookmakers offer it.Below, we offer few examples of Asian handicap bets.Example 1:Milan-JuventusThe handicap is:Home team Away team Odds home Handicap Odds awayMilanJuventus2.000:½1.85Bet on Milan: If Milan wins the match you will win stake x 2.00, otherwise you will loseBet on Juventus: If the match ends in a draw or Juventus wins you will win stake x 1.856
Example 2:Arsenal-LeedsThe handicap is:Home team Away team Odds home Handicap Odds awayArsenalLeeds1.9250:½1.975Bet on Arsenal: If Arsenal wins the match by two goals or more you will win stake x 1.925 If Arsenal wins the match by one goal you will win: 1.925 x 0.5 x stake stakeBet on Leeds: If the match ends in a draw or Leeds wins you will win stake x 1.975 If Arsenal wins the match by one goal you will win stake x 0.5Example 3:Barcelona-Real MadridThe handicap is:Home team Away team Odds home Handicap Odds awayBarcelonaReal Madrid 1.9250:11.975Bet on Barcelona: If Barcelona wins the match by two goals or more you will win stake x1.925 If Barcelona wins the match by one goal you will get your stake backBet on Real Madrid:7
If the match ends in a draw or Real Madrid wins you will win stake x1.975 If Barcelona wins the match by one goal you will get your stake back1.2.4 Asian Handicap vs. Fixed OddsThe advantages of two different ways to bet on a football match:Asian Handicap Normally eliminates the possibility of a draw If a quarter handicap match ends in a draw, you only lose 50% of yourstake Entertaining when following a match live - one single goal is likely tochange everything When playing multiple matches, the number of outcomes compared to1X2-betting is reduced from 27 (3x3x3) to only 8 (2x2x2)Fixed Odds A very wide range of bookmakers to choose from It is possible to bet on "secure" matches, which might be suitable foraccumulator bets Much easier to find value bets. You only need home-draw-awayestimations, in Asian Handicap it is required that you are able to predictgoals scored8
1.2.5 Spread BettingHarvey (1998) and Burke (1998) both conclude in their books that in spreadbetting there is a great volatility, which provides excitement but exposes thepunter to risks of substantial losses, as well as rewards. It is one of the fastestgrowing areas of gaming.It all s
more exotic forms of betting, such as Asian handicap and spread betting, was also briefly discussed. According to market research studies, sports betting will have an increasing entertainment value in the future with the penetration of new technology. When majority of government-licensed bookmakers are making their transition from online
Other Betting Systems There are many other betting systems out there including football betting systems, tennis betting systems, cricket betting systems and many more. As with horse racing systems, these systems attempt to identify a strategy that gives you an edge over the bookie - or to put it another way - over other gamblers.
'Masters of Football Betting' - Exotic Betting Welcome to this advanced guide through which we will be sharing knowlegde we hope will elevate your betting and provide you with advanced practical insights, knowledge, tips and strategies to advance your football betting. This guide will be focusing on Exotic/Multiple betting. We will:
the idea that evidence of match fixing can be found in available data from a popular international betting exchange market, Betfair. Sports betting is a growing industry and has become an integral tool for profiting from fixed matches. According to the European Gaming & Betting Association, regulated betting accounts for
betting line and use the formula (adding the two end numbers) to ascertain the next wager. Again, when the total of the betting line reaches 5 or less then you have closed the betting line and you start over and repeat the process. And again, it is mathematically impossible to lose as long as you close each betting line that is played.
Sports betting market overview - growth and trends Methodology Methodology Regulation Key Findings Taxation Proportion of Matches Affected Product Types of Markets Offered (Primary v Secondary) Integrity Location of Corrupters (Inside v Outside Markets) Advertising Pre-Match v In-Play Betting Betting v Non-Betting (Sporting) Corruption
can use to make both your betting & trading more profitable. Itʼs based on 10 years of front line experience gained as a professional sports investor and full time sports betting advisor, delivering profits in a wide range of markets including horse racing
the term betting industry refers to the market of bookmakers with focus on gambling on sporting events, while the term betting is sports gambling. The betting industry rests on the con icting interest of bookmakers and customers wanting to earn money, respectively. In Chapter 2 the structure of sporting event betting is introduced, and the
Additif alimentaire : substance qui n’est habituellement pas consommée comme un aliment ou utilisée comme un ingrédient dans l’alimentation. Ils sont ajoutés aux denrées dans un but technologique au stade de la fabrication, de la transformation, de la préparation, du traitement, du conditionnement, du transport ou de l’entreposage des denrées et se retrouvent donc dans la .
