As well as being a football writer for the Racing Post, Kevin is author of The Definitive Guide to Betting on Football
Your only reasonable hope of winning money by gambling is to bet at odds that are bigger than they should be. A coin is as likely to land on heads as on tails. It is an even-money chance. A bookmaker would offer you less than even-money. If somebody offered you more you would have a good bet — though if that happened I would suggest you examine their coin.
Good bets are easy to define but hard to find.
For every event bookmakers calculate what they believe to be the correct odds and then offer you a bit less. And they do that very well.
William Hill are a large bookmaker founded in Britain. In 2015 they won £1.6 billion on bets. They added up all the stakes of their customers round the world, deducted how much they paid back in winnings, and what they were left with was £1.6 billion.
Nearly everyone who bets loses. If you do what others do you will get what others get. And when you are betting, you do not want what others get.
John Maynard Keynes was a famous economist. Unusually for an economist, famous or obscure, he was also a successful stock market investor. When he died in 1946 his share portfolio was worth £480,000, equivalent to perhaps £15 million today.
Keynes wrote: “Investing is the one sphere of life and activity where victory, security, and success is always to the minority and never to the majority. When you find anyone agreeing with you, change your mind. When I can persuade the Board of my Insurance Company to buy a share, that, I am learning from experience, is the right moment for selling it.”
Not the only sphere: investing is like betting.
Most gamblers bet on things happening. On over/under lines for football matches they bet high on goals, corners, bookings, everything. “We never take a bean on unders,” says a senior odds-compiler with a leading bookmaker.
Why? Most people like to watch their bets, and watching is more fun if you have bet high. You are never beaten until the final whistle. Even if you have bet high on goals and the score is 0-0 near the end, you can still hope for a sudden flurry of shots. It is agonising to watch a football match hoping that not much will happen, praying all the time that the ball stays near the halfway line.
Money can move markets. Consequently you will sometimes be offered good odds on low totals — still not very often, but sometimes.
Imagine you are in a shop. On what product would you get the best deal? The one everyone else is falling over themselves to buy — the one the shop can sell as fast as they can replenish the shelves? Or the one that is almost unnoticed gathering dust in a corner? The questions should answer themselves.
Bet low and do not watch.
Successful bettors play the percentages. They think probabilistically. Before a football match the ex-pro in the television studio is asked: who will win? Nobody should ask that question and nobody should answer it. Either team could win, or neither. There are no certainties, only possibilities.
In every betting market each outcome could occur. As Dan Gardner put it in a book called Future Babble: “The most that we can ever hope to do is distinguish between degrees of probability with reasonable accuracy.” The question you should try to answer is: what is the chance of that happening?
It leads to others. Which factors might influence the event and by how much? In practice the next step will often involve looking at statistics from the past and using them to try to predict the future. To do that well you need to think about what the statistics might mean. The future is not an exact replica of the past. Even in the film Groundhog Day the next 24 hours was never quite the same as the last.
Nobel Prize winner Daniel Kahneman said his favourite equation is: “Success = talent + luck.” It has implications. A football team’s results will be attributable partly to skill and partly to luck. Whatever skill they had yesterday they should still have today. But if they were lucky before they might not be lucky again.
Results may not do justice to performances. In the English Premier and Football Leagues about two games out of every three finish with no more than one goal separating the teams. The ball is touched more than two thousand times. One touch can turn a defeat into a draw or a draw into a victory.
A team can easily run up a sequence of results that do not reflect their performances. And performances may not reflect their ability. Players can over- and under-perform.
At any stage in any season, teams near the top of a table tend to do less well in the next game than in previous games, and teams near the bottom of a table tend to less badly in the next game than in previous games.
The results of football teams generally move back toward their natural level, for all of them it is different, but for all of them the best indicator of what it is now is probably an estimate of their current wage bill. For most teams that means moving closer to the middle of the pack — but not all of them.
Michael J. Mauboussin, managing director and head of global financial strategies at Credit Suisse, wrote a book called The Success Equation. It was subtitled: Untangling Skill and Luck in Business, Sports, and Investing. Mauboussin wrote: “Statistics are widely used in a range of fields. But rarely do the people who use statistics stop and ask how useful they really are.”
He said that useful statistics have high reliability. In this context, reliability means that what happens in one period corresponds with what happens in another. If there is a strong correlation for a statistic between seasons, or from one part of a season to another, it has high reliability. If there is a weak correlation it has low reliability.
Goals in a football team’s matches have low reliability. Average goals per game in the English Premier and Football Leagues most seasons is around 2.6. No matter how many goals are scored in a team’s games in, say, the first half of a season, the average per game in the second half of the season tends to be much closer to 2.6. The best estimate seems to be about four-fifths of the way between the average for that team in the first half of the season and 2.6.
Bookmakers know these things, but sometimes they make a wrong allowance for them. Perhaps sometimes they do it deliberately.
John Wright was once senior sports odds-compiler for Coral bookmaker. He said: “The whole point with odds-compiling is that when you price up a football match you are taking three main factors into account: what prices you think the outcomes should be based on form, what prices you think the other bookmakers will be, and what prices you think they should be based on how the market will react.”
Most gamblers bet that what happened recently will happen again. So bookmakers are more likely to underestimate than overestimate how much things might change. When they do make a mistake, that is.
And that is not often, as I have said. So when you think a bookmaker is wrong what should you do? The right answer is to recognise that you should be only halfway to a bet. Somebody has made a mistake. It could be the bookmaker, but it might be you. More likely than not, it is you. Remember how much profit bookmakers make.
When you bet you are saying that your opinion is right and somebody else’s is wrong. It is a strong claim to make at any time, and you should never make it without being as sure as you can be that it is justified. We all know less than we think we do, and we are wrong more often than we like to admit. Profitable betting, in part, is discovering as many of your mistakes as you can before parting with any money.
Your hypothesis that the bookmaker’s odds are too big is a theory that you should test like a scientist. Has the bookmaker noticed a potential influence on the outcome that you have missed? Do they perhaps know something that you have not yet learned? Try to prove your theory wrong. Only if you cannot prove it wrong do you accept the possibility that it might be right. And it is still only a possibility. As Clark Griswold said in the film National Lampoon’s Vacation: “Nothing worthwhile is easy.”
I started by saying that a good bet was getting more than even-money about the toss of an honest coin. If I took leave of my senses and offered you 2-1 about heads, the coin could still land showing tails. Good bets can lose and bad bets can win — over a short time, at least, though it can seem like a long time while it lasts. Profitable bettors still have losing runs and unprofitable bettors still have winning runs.
Eventually, though, the law of large numbers should kick in. If you bet on things that are genuinely more likely than the odds suggest, then over time you should win money. So concentrate on trying to make the right choices. Amarillo Slim, a World Series of Poker winner, counselled: “Decisions, not results. Do the right thing enough times and the results will take care of themselves.”