In part two of his article on pricing in the betting industry, Jeevan Jeyaratnam of Super Soccer GPS highlights some of the mistakes that occur because of the way trading rooms work these days, and the implications for the customer.
Confidence in some large scale price providers is low, and rightly so judging by a couple of ‘early shows’ we’ve witnessed this season. On the 14th November 2015 Airdrieonians played Dunfermline. The early 1X2 show went up on the 9th November with Dunfermline at around 2.25.
Myself and the other Super Soccer compilers had provided an early tissue price for our retail coupons. We had priced Dunfermline at around 1.60… From our perspective looking at the historical market data for games featuring the two teams, there was no way that the 2.25 would be the ‘football SP’ come 14th November.
However nearly all the major fixed odds firms “tracked” onto the 2.25 and as such everyone had an inaccurate price on display. Sharp players notice this sort of error and wagers at 2.25 no doubt ensued. There is little movement in the market as everyone is happy that they are in line with everyone else (the ‘if so many have the same price how can it be wrong’ mentality).
Yet when the Asian Handicap (AHC) market priced the game up, Dunfermline opened as 1.69 favs. What followed is a round of trading where punters who have ‘got on’ look to trade out of their positions. After some market correction, Dunfermline’s football SP ends up at 1.80 – still a huge 0.40 goal move from a weak opening show.
A poorer show materialised just days later. The game was Montrose v Queen’s Park on 17th November. Queen’s Park were available as big as 3.60 pre-AHC market- they went off at 2.20. That kind of erroneous compiling is anathema to traders, who are left in an impossible position.
Markets do move, there are all sorts of reasons why, but those two examples, adopted by large swathes of the market were plainly wrong to anyone doing even the most limited of study beforehand. They are costly aberrations and cause issues for bookmakers and punters diligent enough to realise the original show looked misguided.
There was another blatantly wrong price around that time in the Dutch Eredivisie. On 5th December 2015 Excelsior Rotterdam played FC Twente. Rotterdam were made 2.75 underdogs despite Twente’s well publicised financial problems which had seen them struggling at the basement of the division. Again, the price couldn’t possibly be correct and sure enough their ‘football SP’ came out at 2.00.
These three examples are just ones that I have noticed personally; it follows that there must be many of them every week. Lower Scottish and Dutch football may not be popular markets but if you are going to offer prices then there should be some confidence that you aren’t too far wrong. Using these centrally supplied prices, there can never be any confidence that the prices you are laying aren’t going to completely flip round when the ‘real market’ emerges.
The thing is punters are penalised for acting upon this kind of apathetic data aggregation. These markets aren’t deemed important enough to focus on in-house, but punters playing them will be treated with the same disdain as insider traders.
The term ‘arb’ has become colloquial in trading rooms but while there will be active traders within every client base, the majority of fixed odds firms simply don’t have big enough limits for full-time ‘arbers’. Fifty pounds on Excelsior Rotterdam at 7/4, when the price should have been closer to 11/10 isn’t a trading position. It is highly unlikely anyone will go to the effort to lay a trade like that off, it is simply a bet. Yet £50 on a move like that is enough to mark you down as a ‘bad guy’ and likely have future business restricted.
The punter is penalised and may end up taking his/her business overseas or, worse, create a number of alias accounts, profit again from the ever crazier ‘new customer sign-up’ offers and start the cycle again until they are linked and weeded out.
Betting companies spend so much money on PR and yet risk upsetting segments of their clientele with behaviour like this. Any firm will shut down successful punters, that is fair enough, but you don’t even need to be winning to be closed down in this age.
Automated bots are a scourge but their behaviour is relatively predictable and should be easy to spot from honest wagers. Clients using bots and other underhand methods to try and scam bookmakers should be singled out and closed but the curtain is drawn far too wide at present and too many are being painted with the same brush.
The relaxation of TV advertising laws has helped fuel an unsustainable marketing rush where ‘new’ account sign-ups are seen as the Holy Grail. I’ve spoken with head traders who despair at handing over chunks of their margin to marketing gimmicks. I believe these loss leaders are one of the chief reasons behind increasing intolerance to sharper punters. The industry seems to be at a crossroads with serious punters becoming less and less accepted.
The betting exchanges have shifted the goalposts but in the embryonic stages of market creation the exchange markets are very weak. They are often led by the first shows in the fixed odds market, therefore it’s incorrect to blame the exchanges for the ebbing away of independent compilation. A shrewd firm with skilled assessors would look to turn the early stages of pre-AHC market to their advantage by quoting a more accurate initial show.
On 30th January, Stirling were due to play Montrose (the game was postponed and played on 9th February). The early show was absurd, with one prominent company notorious for not originating their own pricing, offering 2.15 about a home win. I had the home win at 1.60, based simply on their record with the AHC market.
Put simply Stirling are highly rated and Montrose aren’t. Montrose are considered the second weakest team in the division and are opposed every week. It doesn’t take long to research and that’s what makes these shows so frustratingly bad. Sure enough the AHC went up at -0.75 1.95 and was supported into -0.75 1.75- roughly translated to 1.57 in old money. Anyone taking some of the 2.15 early show would more than likely have found themselves restricted the next time they wanted a bet.
All this is so easily avoided by allowing the traders time to look at the fixture themselves and not rely on an inferior odds supply. Examples like this are commonplace and somewhat embarrassing for an industry that considers itself cutting edge.
I’m proud to say that clients using our Goalscorer Prices & Settlement (GPS) service are among the smart ones, they know that each player is assessed and analysed by a dedicated trader. It is frustrating when those prices are “scraped” or “tracked” by less astute bookmakers but I’m confident that those books will be hoovered up in forthcoming market consolidations.