I’ve been betting professionally for years now, but back when I started I had a very different understanding of how Bookmakers operated. Now that I am a bit older and wiser with years of experience in and around the betting industry I can blow the lid on how the business model of the traditional Bookmaker has changed to be one that I believe is now unethical. Very few people understand this and even fewer people care.
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In Australia we have nanny state politicians like Nick Xenophon going on a crusade against gambling but gambling in itself is not the issue. We don’t need a blanket ban. If we need any regulation at all then what we need is to go after some of the unfair and unscrupulous trade practises of some gambling operators who prey on the weak and the stupid. The sort of trade practises that would be illegal in the financial markets. They are the ones who give the whole industry a bad name.
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Most average punters are of the view that the Bookie is not a bad bloke. He’s always a bit chummy and you’ll see Bookies on TV during the break in sports, talking like Old Mate from the pub. I suppose that is just marketing and there is nothing wrong with that. But the common perception (that they perpetuate) is that these Bookies are slaving away behind the scenes trying to figure out the statistics and probabilities to provide the punter with fair markets. When they are wrong they take a hit to the hip pocket and when they are right they make a few bucks. It all seems fair game and in Australia very much a part of our culture. But the truth is a bit different…..
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Most Bookies, both big and small, don’t give a rats if the market prices for bets are accurate or even fair. They are interested in 2 things above all else. The first is, they want to balance their book if possible. If there is 2 sporting teams going head to head and they put them both up at 1.90 and take $1 million in bets on each….then they have guaranteed themselves a $100,000 profit regardless of the outcome. So they are more interested in the market DEMAND for backing teams or horses, rather than the actual chance of them winning. In the NRL there are often teams that have huge fan-bases who like to back their teams. This is important to the bookie because all those extra bets need to be balanced so they might skew prices toward that team – regardless of that teams actual chance to win. In Australia many Bookies just wait for the TAB to put their prices up on a Tuesday night and then just copy them. It’s a lot less work for them and they reduce the chance of being hit by the professional bettors or arbitrageurs early in the week.
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The second thing (and here is where I have the big issue) is that because they are often putting up prices that are out of line with teams actual chances of winning they are vulnerable to the sharp bettors (professionals) who can hit those prices at over-the-odds and make a decent living out of it. So instead of putting the work in to sharpen up their lines, they just take a policy of shutting down winning accounts. They might take your promotions away as a warning shot, then maybe heavily restrict your bet stakes, or they might close your account outright. They don’t even have to explain why, it’s always in the fine print of their terms and conditions that they can cut you off at any time. I personally have lost dozens of betting accounts purely because I win too much.
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At the end of the day, modern Bookmakers have a business model which is specifically designed to strip mug punters of their hard earned cash. They do very little actual analytical work and they copy odds from others. They then kill off any accounts that win too much….and this is a business model that works. They make a ton of money and nobody cares, except for the professional bettors who can’t get a decent bet on. In the old days we had trackside Bookies who HAD to take bets up to a certain amount. If you walked up to them with $20K in your pocket, they HAD to take your bet at the price that was quoted on their board. Those days are gone now and the Online Bookies are in charge.
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he sort of trade practises that would be illegal in the financial markets. They are the ones who give the whole industry a bad name.
You are adding no value by copy pasting my own words. If you keep commenting and self-voting my posts without even the courtesy of upvoting the original post or making some effort with a meaningful comment I am going to start flagging you. Stay away!
Didn't know all this, and always assumed regardless of country that sports odds were calculated with real accuracy. I even used to trust them to just look at, not bet, to see where games or sports events might go. Now I know a lot more!
So my question is, how about Blockchain and decentralized betting exchanges - can they be the game changer? How about Scorum in Australia, are you aware of this project and how it might go down with gamblers there?
Followed you - excellent post really interesting
Not familiar with Scorum, but very interested in decentralised betting exchanges as the next generation beyond centralised betting exchanges like betfair.
Whichever block chain project cracks that nut first will make a motza and for a while I thought it was going to be Peerplays. But so far I see a lot of over-promise and under-deliver across the whole sector.
Yeah the odds are stacked against you whenever you make contract (bet) with a bookie. They are called bookmakers because they do their calculations based on dutch book theory where fore the most part they can't really loose unless they do their dutch books wrong or someone knows how to use the odds they offer to their own advantage.
A few years ago I made my own dutch book based spreadsheet to help balance the odds in my favour and it worked, just like you I've had several accounts with bookies terminated because I kept beating the crooked bastards.
My spreadsheet allows me to bet on many horses for a win and still turn a profit if the odds are favourable.
Maybe I should make a post and offer it to anyone who wants it.
Definitely make a post. I'd be interested to take a look at your spreadsheet for sure :)
I'll have a look for it @buggedout , it's buried in a pile of usb drives somewhere.
Punters CalculatorI just made a post with spreadsheet if you want to check it out @buggedout
Thanks. That was an interesting article. It was great to read the thoughts of a pro. I have done a bit of sports betting over the years although these days I tend to just do tipping/draftstars type competitions (and usually just the free ones) and leave the gambling to crypto and the stock market 😉
I find that I fluctuate on how I feel about betting (both the way the industry currently operates and the bigger philosophical view). On one hand they are offering a service and if people want to spend their money on it then the government should only regulate as much as to ensure there is no cheating and funny business. On the other hand, I have sat in the plush offices of a big sports betting company and talked to their data scientists. I have also seen the sad looking blokes in the local TAB. When I make this contrast it feels like it is an industry designed to take candy from babies (which is reinforced whenever they have the tv adverts with the average bloke thinking he is so smart for cashing out his multi or whatever the current promotion is).
I have felt similarly. After discovering betting exchanges like betfair I've come around to the thinking that betting markets are basically the same thing as mainstream financial markets or "prediction markets" as they are often referred. I think it's legit, and you could argue many financial markets are designed to strip the mugs too, but I think we just need some standards and ethics applied and then it's fair and all up to the individuals choices.
I learned things about gambling that I didn't know. I knew the odds changed, but I didn't realize it was just to keep the balance. I would have figured they would take into account the probability of one side winning. Then again, if you have a guaranteed take if you keep the sides balanced, there's no need for them to gamble.
Absolutely. In the old days the big bookies were alongside the other punters and many of them were really just BIG punters. Some of those larger than life players have been squeezed out over the years though and the corporate bookmakers have moved in.
You're 100% right!
An unethical might be an understatement... their behavior is downright scummy.
At the first sign of you being a serious player they'll start to limit the amount you can place on a bet, soon to be followed by the termination.
These days my bankroll is rather small and I'm placing bets for the play money, but from 2011 to 2013 my main source of income was betting. Then they started limiting and terminating my accounts left and right. Once I've run out of friends and family willing to open an account I scaled my betting way down.
Sounds like a pretty similar experience to me. In 2014 I tried a tipsters blog to effectively outsource my betting to get around the terminations, but it flopped. Nowadays I stick to a handful of options for big bets like Betfair, Pinnacle and even the TAB will still take a decent sized bet, but I'm running out of bearded accounts too.
The bookies you talk about is what we call Euro bookies. Very soft lines and rather easy to exploit their lines and late odd movements, but this is all just temporary.
I mostly bet on Pinnacle or asians because they don't limit winning players. The downside of these bookies is that it's harder to beat them and their selection of games and bets aren't that big.
Which sports do you bet most? If I'm not mistaken Pinnacle offers NRL.
I do bet Pinnacle occasionally but often prefer Betfair. The problem here is that, yes, the lines are sharper but also the markets they offer are very limited or have limited liquidity. NRL and Cricket are my main sports these days but I've been scaling back my analytical workload on them since getting into Cryptos.
Yes, only a few markets they offer on both sports. And mostly only the top leagues which are also harder to beat. I have no idea about the liquidity in such sports as I don't often bet them, but I guess on gameday we are talking about 200-400 euro per click?
Does betfair offer much more markets/events? In Belgium we aren't able to enter Betfair so I don't have any idea.
And seems like a smart decision to put some more time in cryptos ;-)
If I have a good strategy I don't have to bet online because my account will be blocked if I win too much but I will rather place my bet in a betting shop.
I think you can just read between the lines with the modern bookie. The catch more flies with honey thing is true here as the friendly face speaks out the TV like the shark at the pool room. If someone is chummy and there is money involved I generally assume they are looking to swindle me, which is a common feeling.
Yes, it's a cynical way to live but I've been a cynic for a lot of years now.
Thank you for the explanations all around the betting industry. The business model to kick off investors making too much money is also practiced on day-trading platforms in the stock market and on Forex. They do only want the sheep.
I did not know that. Have you got a good source or example of this? Maybe I just haven't been winning there enough....yet! :p
Interesting read, i am not a huge gambler but your points definitely make a lot of sense, i know who to come to now for any tips on teamaustralia haha
Well, now I know you're into rugby but I don't actually follow the Super Rugby.
Why is it any surprise to you that bookmakers might lack a bit of ethics? they've entrenched themselves into an industry that has ruined (and ended) countless lives.
I'm not necessarily advocating for a blanket ban, but I'm not surprised that others are.
I guess it is not a surprise. Just disappointment that the puritans are so misdirected they aren't forcing the industry to clean up or even shaming these bad practises, they are just pissing in the wind pushing for senseless bans.
The bookie rarely loses, it is all rigged to those running the bets. I never met a bookie that wasn’t ahead in the game.
My experience is that bookies tend to always have terrible odds and usually bad lines. You are better off using a site like 5dimes or bovada. Or call me old fashion I still like cashing my slips at the window.
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