Probability and Expected Value
Have a guess
The more I read, watch and listen to, the more I learn and can shorten your journey to some valuable conclusions I've been able to draw. This is a shared learning experience and I reserve the right to adjust my position especially when it potentially comes to saving you money. You also reserve the right to disagree, you're a grown adult and it's your money.
Probability isn't an exact science. I mention that now because I've probably over emphasised it up until this post you're now reading. It's an opinion in the same way that one person may give another person disparaging looks about what they're wearing, whereas the next person thinks they look utterly fabulous. In terms of probability for a potential result in a given match, you should think of it as simply a series of best guesses based on past examples. If the same event was played ten times under the exact same conditions, how many times would you guess this one given outcome happens? Let's say for example you give it a score of 7 out of 10? OK well that's a 70% probability and the odds before the bookmakers added margin are 1.43 on the decimal. Or if you think that might be difficult for you to determine, how about If I asked you if you thought Manchester City would beat Ipswich Town and you agree and I ask you to express that guess as a percentage, what would that number be? Without a ball being kicked in the season your answer today should be very different from if I asked you the same question in December. You might say 60% today and reason Manchester City are the current Premier League Champions whereas Ipswich Town have had back to back promotions and the Premier League is potentially a step too far, especially against the current Champions but caveat your guess with the fact no one's kicked a ball yet. However Ipswich have had two extraordinary seasons so there's a chance they could win. Importantly you're by now looking at reasons for and against your best guess. Come December as an example City are top, Town are second bottom with no win in 8 games and you say yes again and make it 90%. Those probabilities as odds would be 1.67 before the season starts vs 1.11 in December. That's bookmaking in a nutshell - a value expressed from their best guess at the outcome.
Are you familiar with the expression that something is only worth what someone is willing to pay for it, which is especially true of property. What's that got to do with betting? Well like the estimated value of any given property, any odds are an estimation. It doesn't mean either is correct. There are no guarantees in betting. There are no guarantees a property will fetch the estimated price it's on the market for sale at.
In an efficient betting market such as the EPL, that estimation is driven by algorithms. It takes in hundreds if not thousands of data points and it goes - here's some numbers, from which the bookmakers create their book which you can now bet on. For all those data points it is still a guess. There are hundreds more data points it can never put into a calculation; Maybe team B's goalkeeper has a sick child who's kept him awake at night most of the week. Maybe team A's Star striker is having girlfriend issues and his mind isn't fully on the game. Multiply those worries or issues throughout a side and there's no algorithm in the world that can tell you those impacts on a game. If your bet loses they're not going to play it again another nine times to see if the result matches your guess that it would happen every seven times out of ten. For every Luton Town 1 - Manchester City 5 which achieves a perceived outcome (best guess that City will win prior to kick off) you'll find a Wigan Athletic 1 - Manchester City 0 which goes against the same perceived outcome. Shit happens.
With all this being said whilst the expected outcome is supported by a huge body of evidence, you're not betting that James Bond doesn't get the girl in the movie are you? Football and movies are both entertainment but only one is scripted whereby the actors involved are heading toward a predetermined outcome.
Betting by the very simplest of definitions is no more than one guess pitted against another guess on a given outcome. For every opinion you have it will cost you more to see if you're right. The bookmaker can have lots of guesses in the meantime and only has to pay you if you're right. Usually most people will have only one guess on a game. If this was a game of cards the bookmakers would have 51 cards to your one. Just know there are very few times you'll ever have the advantage.
It's Sunday evening and you look at the weather forecast for the following Saturday to see if it will rain as you're making plans. The weather forecast says there's a 25% probability of rain. What use is that number? What's the average lifespan of a cloud? Taking into account all the different types of clouds, atmospheric conditions, height they're floating at et al apparently the answer is just 9 minutes. I can see what's happening outside now but that's going to change a multitude of times over the next week. Want to know with any real degree of certainty what the weathers doing then you'll have to simply wait and stick your head out the window the following Saturday morning. If you're in the UK even if there's no clouds in the sky and its glorious sunshine the advice is still to pack an umbrella. Creating a probability of an outcome in football can be done with more data points giving a better guess than a comparison with the weather for the chances of rain but both are still just guesses.
So we've determined that a bet is one guess against another for a financial reward or loss. If you've ever watched a video on YouTube on betting you'll realise there's a lot of people who make it sound more complicated than that. You've ones which promise schemes to make you get rich quick. I'll save you the time - they don't exist. Then you've schemes that do work - arbitrage betting - those will get your account closed by the bookmaker. Then you have the videos talking about expected value. To be successful in betting you need to find that edge, that EV. Or do you? Why would people tell you that? Do they have something to gain? Are they telling you the truth when they say it will help you beat the bookmaker or are they maybe waving a piece of paper with the left hand for you to focus on whilst trying to open your wallet whilst you're distracted with their right?
Expected value
Now I've sat through a lot of videos about expected value. The first one I watched basically set the expectations for every single one I watched after, before drawing a pretty firm conclusion in that whenever someone tells you that EV is really important to long term success, it's actually more important for them financially that you believe this. Go back to the previous post in the guide concerning betting affiliates as a warning of how if something seems too good to be true then it usually is.
I won't name the service but the first video I watched was going through an online service which highlighted EV bets. I can't be bothered to explain what EV betting is. If you're interested Google it and then ignore it. The first example was of a game being played at the time the video was filmed. I think it was Chile vs Paraguay and the perceived EV was on a bet for Paraguay with decimal odds of 4.20. They didn't go into too many details, it was basically a case of - this would be a good bet. Make enough of these bets over time and you'll have an edge over the bookmakers long term and win. Well if you're still reading these posts in sequence you'll know something priced 4.20 on the decimal is a bet you should probably avoid. A bookmaker may price a market wrongly but rarely do they get it that wrong. The average 1-2% variation in price only really becomes applicable when you're betting big numbers on an annual basis. If you use a Ladbrokes bet boost on a small stake, if the starting odds are odds on it will move the decimal maybe by 0.01. Not enough to even change your expected returns. Only when it's already high odds against will it move by more and that's because they think the bet doesn't stand any chance of winning as it is. 14 times 0 is 0. So offering you 15 times of 0 just makes them appear more generous before they in all likelihood still take your money. You will see an increase in your possible returns however before placing the bet.
Now me being me, the first thing I did was look up the result of the Paraguay game and it will come as no surprise to learn the perceived good EV bet lost. Then I looked at the site and it requires a fee to be paid to access the data. In fact every video on YouTube I watched before I gave up was affiliated to some sort of paid for service to help you find this magical EV they all tell you that you need if you want to be a successful long term bettor.
All these services figures of ROI are around the same mark. They might go we've got a turnover of £1 million and you might go wow but turnover doesn't mean anything. It's that ROI I keep going on about that's important and by now you should be able to tell me the figure without me having to tell you. But for those with a bad memory or this is the first post on the blog you're reading I'll go over it again. Listen to any football betting podcast / watch any YouTube video and people will tell you their 'paid for service' will give you an ROI of maybe 3.5%, 4% or if you're really fortunate 5%. Some suggest it's as much as 6 - 8% but most are honest to say it's between the 3-5% mark betting on markets less efficient, that is to say where your knowledge could actually give you an advantage such as in La Liga Segunda. If you're new to this blog and you're going I don't know what that means, let's do the maths one more time. Once you've learned that, go to the menu and start reading from part 1 of the guide to betting on football.
Whatever your currency of betting (£, €, $) as an example if the ROI is 4% then for every £1 bet let's say or 100 pennies to make it easier, you'd expect to make 104 pennies back or £1.04. If you've read the first part of the guide you're now presumably going 'but my tax free ISA is giving me 4.9%.' Football betting won't make you rich. EV betting might work over the long term but to find it by yourself is a fuck tonne of work (pardon my French) and to have that work done for you, you're going to need to pay for that information. Information with no guarantees attached to it either.
Ask yourself the following questions;
Would you be willing to pay for that information? Would you be willing to pay for that information knowing the ROI is most likely worth less than just saving your money at the time of writing and putting it away in a fixed rate ISA? If the answer to both is no but you still want to bet on football then know that firstly you need to always bet on the data and not on the team name. Just because you feel Manchester United are going to win doesn't make it so. So you look at the data and see if your feeling can be backed up. You need to express both sides of the bet. Finding 10 reasons why they'll win is great, but there might be 12 better reasons why they might lose which you're deliberately choosing to ignore. What is critical when looking at the data is that the amount of preparation time you do must hold a relevant value. Time is the most precious commodity in the world. There's no point in doing ten hours worth of research on the weekend's fixtures if your stake and potential returns don't reflect the time it cost you. You can't nip down the shops and buy time. Imagine you're divorced, living alone and never see your kids because you were too busy trying to work out whether United were a good bet on something that could return you £20 rather than spending quality time with them all. Remember there are no guarantees in sports betting.
Doubles, trebles, fourfolds and accumulators are inventions by the bookmakers as a way of extracting more money from you. It used to be if you wanted to bet on football the closest you could get would be to do the pools. Then came the coupon slips in the bookmakers where if you fancied City to beat Luton at home you could only bet it as part of a fivefold of all home wins. At least if you wanted City to win away you'd only have to pick another two away wins to get a bet on. There were no singles markets on games. 1X2 was not a thing. Now as we know the world is your oyster. There are more markets on every game than you can shake a stick at.
Say you place a treble on the outcome of three football matches, how many different outcomes can happen in those games bearing in mind you need 3 of those outcomes to all happen to win the bet? This is when paying attention in maths classes as a kid will help you later on in life. Have a guess. Got one? Great, remember that number.
This is just the entry level figure before the maths starts to get really wild by the way for each additional game you might add to your bet. Anything a double or above is an accumulator or a parlay bet in American betting parlance. It seems simple enough if someone says you just need to guess one outcome from 3. Forget the perceived strengths and weaknesses of teams, will the result of this one game be a home win, draw, or an away win? Each has a relative chance of 33.33% compared to your 50/50 coin toss on a non weighted coin of its landing heads or tails. Once you've done game one, repeat the exercise twice more. Then the carrot gets dangled of financial reward and you're hooked and in. Please take my money because I'm utterly convinced I'll be taking yours back in 90 minutes time.
So what was your guess? If you said 27 then well done you paid attention in maths. You're betting your best guess of 3 results out of 27 combinations of possible outcomes.
There's a tale about a Knight who promises to protect a King from the threat of a dragon to his empire. The grateful King asks 'what would I have to pay you?' and the Knight says I want paying in grain and for every square on a chessboard I want you to double the amount of grain starting with just one grain in the first square. The King does quick maths looking at the board; 8 rows across he goes that's 1,2,4,8,16,32,64,128 grains. He thinks to himself - How stupid of the knight, this is a great deal. The King shakes the knight's hand, the deal is done. The Knight goes off to kill the dragon and the King sits there looking smug. He sends for his grain keepers to start to make the grain ready for payment. At the end of row one the King is still convinced he's made the greatest deal I'm the history of the world. It cost him 255 bits of grain. By the end of row 2 those 8 increases have cost him 65,280 pieces of grain plus the 255 bits from squares 1 to 8 and now the full horror is now finally dawning on him. This is two rows in, there's another 6 rows to go. I won't carry on the maths for each row because you can see the King has been royally fucked and left at a massive disadvantage. He'd have been better off giving his entire reserve of gold to the knight because he'll have nothing to feed his kingdom with and they'll all starve to death or just letting the dragon attack and taking their chances.
You know where I'm going with this don't you.
If you placed a 12 match accumulator remembering that the total possible outcomes for a 3 game accumulator was 27, and taking into account the tale above about the knight and the King, does anyone want to hazard a guess how many possible outcomes there are for a betting each one of a 1X2 over those 12 games correctly? 10,000? 50,000? 100,000? 250,000? Surely not. Channel your inner Bruce Forsyth and shout HIGHER. You're going to have to accept the working out of a mathematician and not me here, but I'm led to believe the correct answer is that there are 531,441 possible outcomes based on just a either a home win, draw or away win in those 12 matches. At least you may now be feeling better as to why your accumulators never win.
So to conclude betting on any sports is a bad idea financially but if you're doing it purely for entertainment purposes a £5 bet is still cheaper than going to the cinema.
The expected returns for betting on football is frequently worse than putting your money in a fixed rate ISA and that's if you're as good at winning as professional punters. If you're not you've an equivalent stocks and shares ISA and your investment could easily end up in the red.
For all the data bookmakers have they're still making a guess as are you when placing a bet. They have a lot more riding on the outcome of the guess than you do which is why they put more research into their guesses.
EV may be important (I can't be arsed to work out how important, but will happily point out not very at all in my opinion) but it will cost you to find out in money or time and even if it is, it's again worth no more than putting your money into that cash ISA.
You might as well have £1 on the lottery than have £1 on a 12 team accumulator. Sure the odds are 1 to 45,057,474 but you're trying to find 12 needles in a haystack of 531,441. You might have a magnet in the form of data which helps you find 4 or 5 easily but you need to find all 12 to win.
Just for shits and giggles the outcomes on a 17 game accumulator are 129,140,163 different possibilities. If you do manage to pick 17 of those possibilities from the 129 million plus remember the odds won't be representative either. There will be something in the terms and conditions about payouts being capped.
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