Beating the bookies – how the online sports betting market is rigged

"Send enquires about this paper to our newly acquired private island in the Bahamas." :-) One of the most depressing things I realized when I learned to count cards, and confer upon myself a small but meaningful advantage in the game of Blackjack, was that the casinos simply ask you to leave if you win too much. That put an upper limit on the rate at which one could win. The folks who figure out slot machines have a much…

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…

I take it bookmakers don't just balance bets and take a slice, because it's more profitable to "bucket shop" (an old stock market crime term) and in effect, bet a little of their own money against their customers if they think the customers are wrong, using better models/predictive systems than their customers have to know when to do this. But the bookies don't take (so far, anyway!) reversion to the mean into account; therefore they don't partially discount their most…