Beating Sportsbooks Odds Strategy Explained

Here is the link to the full paper discussing the concept: https://arxiv.org/vc/arxiv/papers/1710/1710.02824v1.pdf?fbclid=PAAaY5vOi3pvILBGmjTpyFZTAMuDPoZhzbDNeL6c5rNcGoz0wcLi8KtgPEVn8

Summary:

The online sports betting industry has grown into a worldwide $452 billion business. Bookmakers use data scientists to analyze sports data and develop accurate models to predict sports events. Various strategies have been proposed to compete with bookmakers, but there is no precedent in the scientific literature that consistently outperforms the market and shows sustained profit over the years. However, a new betting strategy has been developed that exploits the implicit information contained in bookmakers' aggregate odds to systematically take advantage of mispriced events. This strategy has returned sustained profits over years of simulated betting and months of paper trading and betting with actual money. The results suggest that the football betting market is inefficient. Bookmakers have a set of practical rules to compensate for these inefficiencies. However, the online sports betting system is rigged against successful bettors through discriminatory practices. The article also explains the betting strategy and the mechanism of how bookmakers operate.

Strategy Explanation:

First, let's talk about what betting means. When people bet, they are making a guess about what might happen in the future, and they put some of their own money on the line to see if they are right. For example, if you and I were going to race, someone might bet that I would win, and someone else might bet that you would win.

Now, let's talk about the strategy. The people who created this strategy wanted to make money by betting on football games. They wrote a computer program that would help them find good bets to make. The program would look at lots of different websites where people could bet on football games, and it would compare the odds (which means the chances of something happening) that different websites were offering.

When the program found a website where the odds were really good for a particular football game, it would tell the people who were using the program. Then those people could decide if they wanted to bet on that game too. The program would also make sure that everyone was betting the same amount of money on each game so that no one was taking too big of a risk.

To run this program, the people who created the strategy needed a special computer that could do all the calculations really quickly. They decided to use a virtual machine, which is like a pretend computer that lives on the internet instead of a physical computer that you can touch. The virtual machine was hosted on the cloud, which means that it was kept in a special place where lots of other computers are stored too.

The program was always running, which means that it was always looking for good bets to make. Whenever it found one, it would show the information on a dashboard, which is like a special website that only the people who were using the program could see. Then the people using the program could decide if they wanted to make the bet or not.

Summary of their Results:

The authors conducted a study to test a betting strategy by analyzing the odds and results of over 479,000 football games played in 818 leagues between 2005 and 2015. They applied the strategy to the closing odds of each game and simulated placing bets when the closing odds of a bookmaker complied with their strategy. The betting strategy reached an accuracy of 44.4% and yielded a 3.5% return over the analysis period. The authors confirmed the expected accuracy of the strategy and showed that the probability information implicit in the mean closing odds across bookmakers represents a powerful predictor for the true outcome of football games. The authors also conducted a more realistic simulation in which they placed bets at odds available from 1 to 5 hours before the beginning of each game, which showed that the betting strategy was still effective.