Australia Sports Betting

One of the first things I learned as a sports better was to bet based on the value of the odds rather than bet on a particular outcome.

Due to bookmaker margins, if you bet on every sporting event at random you would receive roughly $91-95 for every $100 placed. If you repeatedly bet your winnings and you get back 95% on your bets, your account balance will dwindle from $100 to $95 to $90 to $86, and so on, until you lose the last of your funds.

Fortunately for us sports betters, unlike casino gambling, the odds provided by bookmakers reflect their estimated, rather than known, outcome probabilities. Usually they get the odds right, but occasionally they get them wrong, and on a few occasions, very wrong. The lesson I have learned since I started sports betting is to only bet when I disagree with the odds on offer, and base the size of my bet on my level of confidence regarding the inaccuracy of the available odds.

Take for example the Monday Night NFL game between the Houston Texans and Tennessee Titans. The ESPN commentary panel was very divided on who they believed would win. An ESPN survey of American option also suggested a 50:50 split between who was predicted to win. Based on this and further research regarding the respective forms of the two teams, I determined that my expected odds were about 1.85 for the Texans, and 1.95 for the Titans, after factoring in a typical bookmaker margin. I looked at the Sportsbet odds and saw they offered 1.43 for the Texans and 2.70 for the Titans. While I expected the Texans to just edge out the Titans, due to the discrepancy between my perceived odds and those offered by the bookmaker I took up a bet on the Titans. In my own perception, I was taking up an outcome with a 49% probability of success and a 51% probability of failure, while the odds on offer meant there only had to be a 1/2.70 = 37% chance of success for it to be worthwhile betting on the Titans. My expected outcome for the bet was a (2.70-1)*49% + 0*51 = 32% return on investment.

As it so happened, the game was very tight, with the teams locked at 17-17 in the fourth quarter, suggesting that the American public got the odds right. Luckily for me, the Titans defeated the Texans 20-17, so I won the bet, but given how close the game was, I would still have felt I made the correct bet had the Texans won. This is because if I can regularly pick events with positive expected returns on investment, I can defy the bookmaker’s advantage and make consistent, positive gains in the long run.

My tip is to look at an event, determine what you deem to be fair odds, and then look at what is offered by the various bookmakers. If you agree with the bookmaker’s odds, don’t bet! Due to their margins you will lose out in the long run. While it is difficult to resist temptation to renege on this system, on paper, it is a successful long run strategy, and it is one that has worked for me.

I’m used to seeing discrepancies in odds between bookmakers, but there are some massive inconsistencies between bookmaker odds for the 2010 football World Cup winner at the moment.

I mentioned in a previous post the substantial variation in odds for the Miss Universe 2009 competition. Well, there are currently discrepancies on a similar scale for the 2010 football World Cup winner. For example, why bet on Australia to win the tournament with Sportsbet with 51.00 odds when you can back Australia with Betfair at 130.00 odds? North Korea has odds of 501.00 on Sportsbet and 920.00 odds on Betfair.

This highlights the merits of shopping around for the best odds before you make any bet. I find that the longer the odds, the greater discrepancies that exist between bookmakers.

Arbitrage opportunities

Such odds discrepancies do offer occasional arbitrage opportunities. This is where having accounts with numerous bookmakers comes in handy. One bookmaker in particular that suits arbitrage betting is Betfair because of the ease with which you can bet against a particular team rather than for a team. Last week you could back Ivory Coast with Sportsbet for 30.00 odds and bet against Ivory Coast for 26.00 odds. Say you bet $100 for Ivory Coast with Sportsbet and against Ivory Coast with Betfair. If Ivory Coast wins the tournament you pay out $2,600 in Befair but receive $3,000 from Sportsbet. If Ivory Coast does not win then you lose $100 in Sportsbet and pocket $100 from Betfair. Note, due to the Befair fees you would need to adjust the bet amounts accordingly if you want to guarantee no net loss.

Betting on odds changes

 
One thing you can count on before, but especially during, the tournament is changes in odds over time. Prior to the tournament team odds will vary based on sentiment and the group draws. During the tournament, the odds will move drastically as results come in and as teams progress to the knockout stages.

I have been selecting teams for which I believe the odds will shorten in the future. Using Betfair, I bet money on these teams, and if and when their odds shorten, I place corresponding bets against them to lock in a risk-free profit. Note this isn’t arbitrage betting because if the odds don’t move in the direction I want then I am left exposed to the actual end result of the tournament.

Likewise you can bet against teams for which you believe the odds will lengthen. If the odds do get larger, you can then bet on them and lock in a safe profit.

For whom could the odds change? Obviously every team, but some that stand out to me are:

Odds to shorten:
South Africa – as the host nation South Africa will be seeded so only one other seeded team will be in their group for the round robin stage. When the groups are determined their odds (currently 101.00 on Sportsbet, 120.00 on Betfair) could fall if they get the likes of New Zealand or North Korea in their group. Remember, both South Korea and Japan got through their respective groups in 2002. South Korea made it to the semi final!
Other teams worth considering: France (currently 17.00 on Sportsbet, 18.50 on Betfair), Portugal (currently 17.00 on Sportsbet, 21.00 on Betfair).

Odds to lengthen:
Any team that has little or hope of winning, and that is unseeded, such as New Zealand and North Korea.

Caveats

 
One caveat is the Betfair odds I’ve mentioned represent the best available price, and some of these prices aren’t backed by a substantial amount of depth. For example, if you want to back Australia to win the tournament you could get $47.00 at 130.00 odds. To bet more than that you would only get 120.00 odds for the next $104 placed, and so on.

Also, you need a large amount of money in your Betfair account to bet against a team with high odds. While you can be assured New Zealand won’t win the tournament, to lay a bet against them you would need $4,995 in your Betfair balance to accommodate a $5 bet on New Zealand by an opposing punter.