from Hacker News

Beating the bookies with their own numbers

by hemant1041 on 11/12/24, 4:40 AM with 58 comments

• by lurkshark on 11/16/24, 7:35 AM

  The strategy this paper seems to be describing is well known as “chasing steam”. You keep an eye on the odds at a “sharp” book, one that’s good at tracking which clients of theirs often win and adjust their odds accordingly, then find books that are slower to adjust their odds. There’s a long tail of “pay per head” bookies, basically your classic street corner bookie but with a SaaS for taking bets, and they’re often the slowest to adjust.

  The problem is that identifying this is very easy for a sports book. Basically “show me all accounts that consistently make bets right before we adjust the odds” and then they ban/limit those accounts. In practice the heavy lifting for winning sports bettors is building a network of “outs” or players that will place bets on their behalf. The idea is that you have a recreational bettor (i.e. bets for fun and usually loses) that puts down a bet on your behalf with your money, and if it wins they get to keep a slice. This masks the sharp bets with their personal bad bets.

  Really the strategy to beat the odds is one of the easiest parts of the equation. It’s good old fashion people management that’s the biggest part of what makes it work.

• by saxelsen on 11/16/24, 7:34 AM

  I'm not sure if you're aware of this, but this is literally how the market becomes more efficient: by allowing participants with more information and reducing the arbitrage opportunities.

  The bookmakers don't set the odds based on their own expectations, they set the odds compared to how the market bets and then add their own margin on top (the "vig"). Just like a stockbroker would.

  In sports betting, compared to financial markets, the general reason why people aren't wildly successful is that if they have too much of an edge the bookmakers find some way to limit their succes (limited bet sizes, banning, etc)

• by MacsHeadroom on 11/16/24, 4:04 AM

  Prediction markets like Polymarket solve this by not having bookies. Just bet against other players.

  Why bet against a house who takes an enormous cut even when you win when you could bet in an efficient market and keep 100% of your winnings?

• by TZubiri on 11/16/24, 6:08 AM

  I didn't understand, how would you use the information given by the bookie ( the prices) to find inefficiencies in that same information. Unless the bookie made arithmetical mistakes?

  From the abstract it sounds like maybe they are finding differences across different sportsbooks, i.e. arbitrage?

• by ano-ther on 11/12/24, 6:59 AM

  Interestingly, the gambling platforms restricted them after they got too successful.

  This is from 2017, so I am wondering if the strategy would still work (and how much faster they would be blocked).

• by injidup on 11/16/24, 7:05 AM

  The only gambling strategies that work are the ones nobody tells you about.

• by mannykannot on 11/16/24, 4:44 AM

  Given that the sports-betting population is not entirely rational, and perhaps in predictable ways, would it be surprising if the odds that maximize profit in the real world differ from those which would be optimal given only rational and informed punters?

• by vdvsvwvwvwvwv on 11/16/24, 7:48 AM

  > We provide a detailed description of our betting experience to illustrate how the sports gambling industry compensates these market inefficiencies with discriminatory practices against successful clients.

  Correct. I have written that code in a past life. Some clients get rate limited. Keep their bets as a nudge to check your odds. Poor big betters (these days called whales) get taken out to dinner.

  Also worked on the other side and you can avoid being shutdown by using 2 sided markets. Pools, betfair, crypto, for example.

• by 55555 on 11/16/24, 6:15 AM

  >> While several betting strategies have been proposed to beat bookmakers, from expert prediction models and arbitrage strategies to odds bias exploitation, their returns have been inconsistent and it remains to be shown that a betting strategy can outperform the online sports betting market.

  This is the most academic sentence I’ve ever read. There’s always been an industry of professional gamblers with various successful strategies. Some have become billionaires.