The three key questions you should ask a tipster before you consider paying anything for his tips;
- If your tips are so good, why don’t you just back them yourself?
- What is your edge? How do you find value bets?
- How can I bet decent stakes on your tips, so that I can make a meaningful profit?
Unless a tipster can give you a good answer to all 3 of these questions, don’t even think about paying him a penny.
LEARNING A HARSH LESSON AS A ROOKIE INTERNET TRADER
“Patrick Veitch, Murray Swan, Tony Ansell and Barney Curley. Don’t fuck around with these guys under any circumstances. They’re too good”.
This succinct advice was part of my Trading Room instruction in Coral’s Barking head office trading room. It was 1999 and I had just moved down on an internal transfer from Scotland where I had been running betting shops.
Coral had just bought Eurobet, a pioneering internet based sports betting business, back when such a thing was a novelty. I had made the move down South to get where the real action was, to do odds compiling and trading for Coral’s UK website (eurobet.co.uk in those days, coral.co.uk today), working out of Eurobet’s posh office in Surrey. And this was my warning about who my worst enemies were going to be, from the grizzly bears in Essex.
“Yeah yeah, no problem, don’t worry. I know what I’m doing. It’ll be fine”.
The first weekend we went live online was bloody exciting. I was used to busy shifts like Grand National day in the shops, but this was different. There was just a few of us, and we had created this little baby – our own website. With horse racing, and the full eight league UK Coral football coupon on it, though not a lot else initially. But it was out there, on the world wide bloody web! That first Saturday we took a few hundred bets, and won about a grand on the afternoon racing. Everything hunky-dory.
Then about half past five we had to settle the football bets. Results looked pretty good. Man United and Celtic had only drawn at home. In the shops this would have meant virtually all the coupons were beat – easy red pen job (pre EPOS days these) to knock them all out. We typed in the results for the eight leagues, pressed a button and waited for the machine to tell us how much we had won. Another grand maybe? That would be good.
What the fuck! That can’t be right? Forty five grand down on just a few bets. Surely some mistake.
We looked through the list of winning bets and there they were. A dozen bets, all of them trebles, four-folds and up, on the same seven Scottish 2nd and 3rd division Aways.
Various stake sizes, but all taking out at least a few hundred quid, some a few grand.
Head in hands I looked at the list of bets, and the names of the customers next to them. Top of the list, the bet with the biggest take-out had the name ‘Tony Ansell’ next to it. Ansell. I knew that name from somewhere….
Then I remembered. My Barking trading briefing. ‘Veitch, Swan, Curley and Ansell. Don’t fuck around with them’.
Shit, shit, shit!
This is bad. Tony Ansell’s just taken our trousers down. We’ve done 45 large on our first weekend, and the boys in Barking are going to go absolutely fucking ballistic!
Shit, shit, holy fucking shit!
Now, in the grand scheme of online betting businesses these days, a £45k hit is a drop in the ocean. But back then it felt like a disaster. On closer inspection though it could have been a whole lot worse. Only five of the seven Aways had copped. We did our sums and quickly figured out that if six of them had gone in the losses would have been up in the several hundreds of thousands. If all seven of them had copped then we would have just about bankrupted the firm. On our first weekend!
Holy shit! I’m in over my head here. This ain’t like the shops at all! Who is this Tony Ansell character?
A bit of research on Sunday turned up that apparently Ansell was an agoraphobic ex-accountant who was now a full-time sports bettor and tipster. He ran a tipping website called winonsports.com. The gaggle of punters who had followed him in were his clients. Not a guy to fuck around with.
We had to stop him, get our defences sorted. So on Monday morning we got to work (feel free to cue up the ‘plan coming together’ A-Team music at this point if you wish…).
HOW WE CLOSED DOWN TONY ANSELL AND HIS WINONSPORTS CLIENTS
The first thing we did was to add text notes to all the Ansell accounts. For Mr A himself; “Tony Ansell: Professional gambler. Tipster (winonsports.com). Do not lay under any circumstances”.
We set his maximum bet (without approval) to £1. If he came on for a bet over a pound it would come up on our Bet Monitor (this ran on a dedicated PC in the office) for us to accept/decline/adjust. Of course we would decline anything he asked for, but for a short while he might keep coming back, and we would get a nice bit of cheap consultancy on a weak price(s) we had on the site.
On all the other accounts; “Winonsports (T Ansell) client. Do not lay Ansell tips. Lay with caution other business for time being”. On these accounts we would set the system so anything over £20 would come to the Bet Monitor. We didn’t want to automatically get rid of them like Ansell himself. They could still be ‘mug’ punters. Bookmaker trading rooms, you may not be astonished to learn, are not hot-beds of political correctness. Clients we would refer to as ‘genuine punters’ in public, were generally ‘mugs’ or ‘total mugs’ in private.
Some of these guys would have the odd dangerous bet like the ones put up by winonsports, but were often totally harmless on the balance of all of their business. They would do ‘mug’ things like chase losses, play fixed odds games, casino or lottery. Have more on short prices and less on big regardless of value, take short prices about fashionable things, bet on big events rather than on good prices… We didn’t want to chase them away unnecessarily.
But some of these customers were definitely no good – you could tell by their ability to always beat SP, or by the fact they only bet when we were top price. We would put a tiny maximum bet limit on them too. All of these accounts got tagged so we got alerted straight away whenever they had a bet. Our jungle-drums early warning system started to evolve.
We got a budget to subscribe to winonsports, and any other tipping services we thought would be dangerous. We opened a winonsports account in the name of one of our young Customer Service guys. Sure enough, we saw the weekend Scottish lower league Aways bet. We went back through the other tips that Tony Ansell had put up in the last week (carelessly he left old tips up on the site for anyone to read). We cross referenced accounts that had backed at least two of these tips and marked up any clients we found, even if they hadn’t been on the Scottish Aways.
We only ever found a handful of tipping services that actually had any sort of edge. Winonsports was the only one that looked at ‘sport’ and there were a couple on Horse Racing. We subscribed to them using our young Customer Service lad’s name so we knew what they were tipping, and could slash the price before we layed any of it. We marked up with notes the accounts of anyone who backed their tips, and restricted the ones who looked like they were unlikely to be profitable.
We adjusted down the maximum liabilities for the smaller leagues, and the restrictions made sure nobody could get anything too dangerous on during the night when we weren’t around to monitor things.
So by the time the next weekend’s fixtures came around we were well prepared. Ansell and his winonsports guys had had their fun, but within a couple of days they found we were one step ahead of them. They couldn’t get more than a few quid on any of his tips, even if we hadn’t already slashed the prices. Which we normally had, because we were now his ‘clients’ too.
This was in the early days of the internet. No social media back then. These days, if a big punter suddenly appears, a bookmaker’s traders will look him up on Twitter, Facebook and Linkedin to see if he looks like a pro or a large staking mug. IP address checks will tell them if he’s placing bets from the same location as another client who is restricted or closed (probably a dangerous duplicate account).
Traders can use the home address on the account to look up Google Earth to see what his house looks like. Big house and it could just be a wealthy guy who just likes to bet big; no problem. If it’s a smaller place then much more likely he’s looking to just play arbs, and he’s no good. If it’s a bogus address – probably some pro trying to sneak through a duplicate account.
Give or take some details, this is pretty much how all European bookmakers operate. There are millions of ‘mug’ punters out there. It just makes sense to get rid of the pros, the dangerous punters and the guys who will follow the few smart tipping services. Restrict them so they go away, or outright close their accounts. Why bother with all the hassle of dealing with the minority, when all your profit comes from the majority?
Punters do a load of moaning about risk averse bookmakers restricting and closing accounts. Obviously I’ve experienced this from both sides. I restricted plenty of accounts in my time as a trader, but then suffered frustration at the same techniques being used on me when I became a professional gambler. It is certainly true that most big UK firms are too quick to use account restrictions as a lazy alternative to doing quality odds compiling, trading and customer profiling. As big businesses with a wealth of resources at their disposal, there is no excuse for a lot of them not to be a lot smarter and a bit braver in the way they compile and trade.
But punters have to remember that bookmakers are not the NHS. They don’t exist to provide a service. They are businesses who exist to make money, and they are pretty much free to do it in any way they want. Any shrewd value-finding gambler who advertises the fact that he has the aspiration to actually win money from the bookies (by backing selections of high profile tipsters, or only playing arbs) is naïve to think the bookmaker is going to stand back and let him do whatever he likes.
Common gripes from restricted punters is that their account isn’t even in profit, or that they have only had a small number of bets. To a trader making a defensive trading decision on behalf of his employers, these things are not all that relevant. What matters is the customer’s profile, and how likely they look to be dangerous. Just a couple of bets placed by the punter that the trader knows have been put up by a quality tipster is enough to neutralise the account. It’s just smart business for them to bolt the stable door before the horse bolts.
At this level the contest between a profit seeking punter and the bookmakers is a game. And it’s a game in which the bookmakers hold the upper hand, because of the defences they can erect. If a punter wants to make money off a bookmaker then he needs to be cunning to get round those defences to get bets on, as well as smart enough to find the value betting opportunities in the first place.
The reality is that if bookmakers simply opened their doors and let every punter bet any prices they wanted for whatever stake they wanted, then 99% of punters would still lose. But the 1% would win so much that every bookmaker would be bust within 6 months.
Most bookmakers concentrate on providing a decent rounded high margin service to the 99% of recreational punters, and are ultra defensive against the 1%. Pinnacle are different, and they are a terrific business. But if you fancy having a fun each way Yankee on Cheltenham Gold Cup day they aren’t any use to you.
WHY BOOKMAKERS LOVE TIPSTERS
At Eurobet we looked into loads of different tipping services, both online and telephone versions. The vast majority were totally harmless. Usually the grander the claims the more harmless the tips.
It’s a truth about tipping services that generally the quality of the service is in inverse proportions to the size of the boasts they make about how good they are. Like with punters, the ones who make the most noise are generally the ones who have the least to actually shout about. It’s the quiet ones you need to watch.
These days winonsports exists only as an occasional ante-post service, having found (unsurprisingly) that its clients couldn’t get on regular market tips any more (although I don’t imagine they will have any more medium-term success getting on ante-post tips than ‘day of race’ markets). Tony Ansell probably makes a decent margin for himself betting on exchanges. He is an excellent analyst, though he always had the profile of a flat-track bully who concentrated on lower profile markets like athletics, rugby union and lower league football where ricks aren’t too hard to find. But liquidity is. But he isn’t discreet or smart enough to run a tipping service for clients at bookmaker prices. He was backing the tips he gave his clients in his own name! I would have been livid about that if I had been paying for the winonsports subscription with my own money. He can’t help himself boasting and after-timing on Twitter, with his ‘full Patridge’ handle ‘The Godfather of Betting”. It’s the quiet ones you need to watch.
But in the main, bookmakers love tipsters because like most punters, most tipsters don’t actually understand the fundamentals of profitable gambling. They are guessers who don’t make a long term profit. Most tipping service business models involve always looking out for fresh meat, attracting gullible punters who get seduced by their claims of brilliance, profitability or ‘inside knowledge’. They are snake-oil salesmen.
To read the adverts of these outfits you would think that bookmakers hated tipsters. In truth, the opposite is true. Bookmakers love tipsters. Almost all tipsters are useless at finding value. But they are good at marketing. So they are really useful in helping perpetuate the myth that it’s easy to win money off the bookies, which is exactly what bookmakers want punters to think. Tipsters peddle the tale that it’s all about ‘finding winners’, and they fabricate stories about how much their existing clients are making. Hard to buy that quality of advertising. It’s like the Lottery saying over and over ‘It Could be You!’ – when in fact it almost certainly won’t be.
Bookmakers don’t worry about customers who are knowledgeable about a sport. Even genuine ‘experts’ in a field can be among the biggest mug punters. There is little correlation between knowing lots about a sport, and being good at betting on it. This is sometimes referred to as the Green Lumber fallacy.
Lots of people know huge amounts about a sport, but are useless at betting on it, like many jockeys and professional footballers. This is because successful gambling in NOT about predicting what is going to happen. Neither is it about knowing what happened in the past and expecting the ‘form’ of these events to be repeated. So ‘knowledge’ is, of itself, useless.
Knowledge only becomes valuable when it is married to an ability to gain actual insight. In betting that means turning knowledge into numbers, and specifically being able to tell when a price is ‘value’ or not. The people who are best at doing this tend to be the people who understand numbers, not people who understand sport.
THE ILLUSION OF PAPER PROFITS
So the fatal flaw in the plan of a punter thinking of using a tipster to make a profit from sports betting is that even if the tipster is actually any good, the punter’s account will quickly get spotted as being ‘hot’ and it will either get restricted or closed.
So all the fancy claims from tipsters of “X no. of winners”, “Y% profit margin” and “Z% return on investment” are pie in the sky. A newspaper tipster claiming to have had ’15 consecutive seasons of profit’ is boasting about nothing more than a theoretical edge. He hasn’t actually made a profit for 15 straight seasons. It’s like me saying I’m the best golfer in the world, just because I can hit it well on the driving range. In reality It counts for nothing.
These boasts are irrelevant, because finding value bets is only half the battle. Getting the bets on, and in a size that adds up to a significant total turnover to generate a meaningful bottom line profit, is the other half. If you follow a good tipster who also gives his tips to other people or backs them himself then your European accounts WILL get restricted or closed. If all of his clients are trying to back the tips on an exchange or with a firm like Pinnacle then the prices will disappear in the blink of an eye because they are all chasing the same limited liquidity on the price that represents value.
If only it were as simple as these tipster websites and adverts made out! You just need to find a tipster who knows how to find value, and then keep backing his tips until you became a millionaire. Simples! There’s a reason why you have never heard of this actually happening, why it has never actually happened, and never will happen. That reason is that in the real world of sports betting (indeed any market based investing) paper profits count for nothing.
Take half an hour out of your life to browse the web and look for evidence that making a profit from betting on sport using tipsters is possible. You’ll see plenty of ‘evidence’ that it’s not only possible, it’s positively easy!
You’ll find a seemingly never-ending supply of ‘professional tipsters’ with ‘a genius system to beat the bookmakers’, ‘guaranteed returns’, ‘spectacular ROI’, ‘100pts profits in the last 6 months!’, ‘hot tips’!.
The reality is that 99% of this is twaddle. Almost all of it is snake-oil salesmanship, a deception to lure in the unwary and the naïve. They use tricks and mis-direction, like the con artists who do fortune-telling and claim to speak with the dead. In the same way mystics use cold reading and confidence tricks to convince marks of their ability to see the future or converse with long departed grandparents, tipsters use hyperbole, survivor bias scams, and often outright lies.
Undoubtedly there will be a few genuinely talented tipsters out there who are helping a small number of clients make a decent profit from sports betting. But by definition, they need to fly under the radar of bookmakers, so they won’t have a high public profile. I wouldn’t expect to have heard of them. If I knew who they were, there’s every chance my old colleagues in the trading rooms would have heard of them too – in which case they would no longer be under the radar.
I only know of one tipster who is genuine, smart, and whose (small number of) clients made a consistent profit by using his service. He doesn’t run his service any more, so it is ok for me to mention his name. He is Russell Clarke. He was a pro horse punter initially, and then ran a successful horse tipping service. He and I were partners in betting on football on Betfair for a few years. The reason Russell doesn’t run his service any more is the old issue that his clients were finding it impossible to all get on at the value prices he tipped, despite the fact that he had only a small number. His conclusion is the same as mine, that giving tips exclusively is the only way to ensure clients get a genuine crack at getting on at the prices.
There will always be a trade-off between the level of liquidity in a market, and how efficient it is. In other words, the more people bet on something, the more the prices will be knocked into shape, squeezing out the value. This is the wisdom of crowds effect. So for any tipster or gambler it will generally be much easier to find value on less liquid sports and markets, but much harder to get decent money on. On the most liquid markets like Asian Handicaps,1X2 or the horse-racing win market in the ten minutes before the off, the market has lots of liquidity so you can bet big if you want, but the prices are much tighter so far less value stands out.
A sport like road cycling has a few tipsters and serious punters focussing on it. Much more so than most sports, a really good knowledge of cycling is genuinely a huge advantage when pricing it, because of the need to read the topography of each stage, and to anticipate likely team tactics. It’s just a niche sport for the bookmakers so they don’t invest much time or effort into odds compiling, and there isn’t enough liquidity in Betfair for them just to copy the exchange prices.
There is masses of ‘paper profit’ to be made by these tipsters and punters undoubtedly, but the reality of actually making decent money from the bookmakers on cycling is very different. Bookmakers aren’t stupid. They know their cycling prices are vulnerable so they will be extra cautious and defensive with punters who want to bet decent amounts on cycling, and it’s not hard for them to identify clients of the smart tipsters who are knowledgeable and can spot value. Clients of cycling tipsters paying for tips will almost certainly get great ‘paper value’, but they’ll need to be virtual miracle workers in order to translate that into actual profits they can spend on a new bike.
THE ‘WAR’ BETWEEN BOOKMAKERS AND PUNTERS
Last year UK bookmaker’s clients lost over £1b betting on sport (that’s £1,000,000,000 if you want a long form perspective on all the 0’s).
People who talk about the contest between bookmakers and their clients as a ‘war’ or a ‘battle’ are talking drivel. Punters and bookies aren’t engaged in a war. It is a one-sided slaughter of the innocent.
The reality is that almost all punters lose. Bookmakers win because they have the odds in their favour when they take bets. That’s it, it’s that simple. The only punters who win are the select few who manage to consistently turn the odds in their favour.
They are rare, and they shouldn’t really be called ‘punters’, because ‘Investors’ is a better name. They bet ‘expecting’ to win over a long term, treating sports betting investment as a business. They have statistical probability on their side. And they have the means and the patience to let this probability deliver a meaningful profit over time.
Recreational punters bet for the enjoyment they get from the process. That’s fine, it’s a hobby. But they shouldn’t ever bet with more than small stakes, and they definitely shouldn’t every pay for tips. A recreational punter isn’t a ‘mug’ unless he gets delusions of grandeur and thinks that he can win. If he falls for the glitzy promises of tipsters, losing money on tips as well as to the bookies, then he is a mug.
DERREN BROWN AND THE SURVIVOR BIAS DECEPTION
A lot of what you see when you look at tipster’s marketing is a variation on ‘survival bias’ deception. Derren Brown did an episode on a survival bias scam called ‘The System’ that explains quite nicely how it works.
The film shows Brown giving horse betting tips to a woman. The first tip wins. Then the second. Then the third. And then the fourth. By now he’s really selling it, claiming that he has a ‘100% guaranteed system’ for picking winners. Which, on the face of it, now looks plausible. Maybe he’s really cracked it?
He gives her a 5th tip. It wins too. Now she is hooked, and so are many of the viewers watching. It looks like magic, it’s incredible!
He gets her to use her own money to back a 6th tip. She scrapes together £4k. She’s been convinced by the claims of Derren’s ‘system’. All of the tips have been given to her before each race. They all won. They were all genuine races. It’s all on the level, he hasn’t told any lies. It isn’t a scam.
Except of course it is. The tip in the 6th race loses, and Derren Brown explain that there never was any system (obviously) but that she’s just fallen for a classic Survivor Bias deception.
You see Derren’s production team started off by giving tips to 7,776 different people, evenly covering every horse in a six runner race. Then they kept repeating this technique on future races, but only giving tips to those who had been tipped the winner of the previous race.
After 5 races there were just 2 of the 7,776 original people ‘surviving’, having been tipped the winner of each of the five races. He invites them both to the racetrack for the 6th race so he can film the denouement of The System.
Derren then just had to make two separate bits of film at the track on the day of the 6th race to ensure he’s got VT of the system failing on the 6th race, and a crestfallen sucker seeing their savings going down the drain. Of course he rounded off the show with a dramatic flourish, using a bit of sleight of hand to slip her a bet on the winning horse (his production team having backed all the horses in the race) so that she didn’t actually lose her £4k.
The secret of the Survivor Bias scam is to make sure you start off with a big sample. Among that big sample, once you start making bets there will always be some outstanding looking run of winners over a short/medium term. Not because of any predictive power or system, but just because of the law of big numbers.
To make a good TV show you just show the lone survivor out of 7,776 original ‘marks’. The way tipster sites often run this scam is to show only their ‘survivors’ on their home page. They can make it all look really professional, with nice pics of ‘senior’ tipsters wearing company t-shirts for example. The clever/sly thing about the survivor bias scam is that they don’t have to tell any outright lies, they are only committing the sin of omission. So these sites can show the actual tips that these guys gave, and the impressive looking yield% figures that they have generated.
But what you’re being shown are the survivors. Guys who have had a good recent run with their picks. But these runs are probably no more down to skill than a guy flipping a coin and getting four heads in a row (part of the Derren Brown show demonstrates how getting a run of winners on coin flips is no more than a matter of patience – nothing to do with skill) . What they don’t show you is all the other tipsters who have made a loss recently. Like the vast majority of the 7,776 people Derren Brown used to generate his big sample size, the losers get hidden from your view, inviting you to focus on the ‘winners’. And the yield% is only based on a paper profits anyway.
A lot of the marketing of tipster services is based on some variation of the survivor bias scam. You get shown only the tipsters who happen to have had a good recent run. Or the profit stats the service displays are based on starting to count at some arbitrary point (immediately after a big win naturally) in the recent past.
HOW TO FIND A BLACK CAT IN A COAL CELLAR
Before anybody considers paying a tipster any money for tips I can recommend they read ‘How to Find a Black Cat in a Coal Cellar’ by Joe Buchdahl.
Joe runs a couple of really good sports betting websites (football-data and sports-tipsters), and a tipster proofing service. Tipsters send him their tips so that he can verify how good they are. He has been doing this for around fourteen years, and he knows how to collate and present the data, and how to weed out the total scam artists. The results will be a real eye-opener for anybody who is inclined to believe the fancy profitability claims of tipsters.
I don’t know the guy personally but Joe seems like a decent lad. He’s honest enough to concede that in order to profit from the bookmaker affiliate business he runs via his websites, that overall he needs the punters he refers to bookmakers to lose money. As an affiliate he gets a cut of that take. But he doesn’t claim that he can make people win. He just presents the evidence on the tipsters he proofs, offers links to bookies, and lets punters use them as they will. That’s fair enough.
You should read the book, but if I had to offer a five word summary of Joe’s findings in ‘How to find a black cat…’ they would be; ‘almost all tipsters are shit’.
Joe is slightly more constructive overall. More generously he describes the majority of tipsters as ‘dart-throwers’. They throw lots of darts at the board with little or no skill. Their tips don’t show a long term profit. Instead, the real skill in making a business out of offering a tipping service is in the marketing. The standard trick is to wait until they get a cluster of high scoring ‘darts’, and use this cluster to ‘prove’ their brilliance.
They might list the winners that they’ve tipped, and always show some statistical ‘evidence’. ‘+100 points profits’. ’£25,400 profit in the last 90 days’. ‘Stunning ROI of 23.8%’.‘If you had only been subscribing these last few weeks, you’d be rich by now!!’ Etc. Etc.. This form of advertising appeals effectively to human nature and clearly works.
But success in investing is not defined over a short term. It’s about accumulating a profit over a long term. So short term success is irrelevant in the bigger picture. Joe is good at making this distinction and explaining why it is so.
Most of the returns tipsters show are no more impressive than what you’d get by feeding bets into a random number generator. If you always back ‘Black’ on a spin of a roulette wheel you will get the same sort of occasional run of great results. Just like times when your darts will happen to land in some high scores, even if you throw them with a blindfold on. It doesn’t ‘mean’ anything. They are running version of the survivor bias scam.
And of course, even the small number of tipsters who are in ‘profit’ are only showing an edge on theoretical paper profits. If I had a criticism of what Joe does, it would be that he doesn’t give enough attention to the reality that paper profits are not anything like actual profits. That ‘getting on’ is half the battle.
THE TRUTH ABOUT ‘PEERLESS’ PRICEWISE
Probably the most famous tipster in the UK is ‘Pricewise’ in the Racing Post. The column is currently usually penned by Tom Segal, though it has been around for ages. In addition to the main column in the paper on big race days, Tom also does a ‘Pricewise Extra’ service online.
Tom Segal is more than a ‘dart-thrower’. He knows his stuff, a real knowledgeable racing guy. He’s not just a guesser. If you were to back all of his tips at the advertised prices then there’s a very good chance that you’d show a profit over a long term like a year.
But that’s a very, very big ‘IF’.
The key phrase is ‘at advertised prices’.
Professional investing is not really about what you back/buy, but rather the price at which you go into the market. If you back all of the Pricewise selections at the advertised prices you will probably show a profit. But if you back them at SP you will definitely show a thumping great loss over a period like a year. Guaranteed.
This is because the ‘value’ in what Pricewise does is to identify horses that are over priced in the morning market. By the time the race starts the market has adjusted. And because of the influence of Pricewise it will certainly have fully adjusted on his selections. At the advertised prices Pricewise selections are good value. At SP they are very bad value. It’s not what you back, it’s the price that you get.
So the key question therefore is ‘can I get on at the advertised prices?’. The short answer is ‘No’. For the very simple reason that bookmakers read the Racing Post too! They know what he has tipped and can defend themselves accordingly, even more easily than we defended ourselves at Eurobet against Tony Ansell.
So it is impossible for a medium/high staking aspiring profitable punter to consistently ‘get on’ to Pricewise horses at advertised prices. Bookmakers would be incompetent to allow it. Incompetent bookmakers go bust, so there aren’t any around. Bookmakers use Pricewise as a form of consultancy. If he puts up a horse at a price they are advertising, they can be pretty sure they have made a mistake, so they cut the price.
Laying £0 at an advertised price is a recipe for bad PR (not to mention really bad form) so bookmakers will probably lay some bets at a Pricewise tipped advertised price. But they won’t be big bets and they certainly won’t be to customers they know are likely to make a long term profit from betting with them.
So we have the significant difference between Paper profits and Actual profits. The Racing Post have often done their own snake-oil selling and marketed Pricewise by listing previous winners (always showing advertised prices, not SP of course) and showing +pts or ROI figures for Pricewise tips. But these things are worthless to anybody who has an aspiration to make a decent long term profit from betting.
You can only ‘get on’ if you’re small staker who isn’t going to generate a meaningful profit in terms of actual £s. Or if you are a mug who the bookmakers know is going to be a long term loser. So the ‘profits’ that Pricewise generates are illusory. You can’t actually make the profits that the Racing Post marketing claims suggest that you can. They are Paper profits only. Fine in theory, but the reality is very different. For the Racing Post to claim that Pricewise has made +Xpts ‘profit’ this season is a bit naughty, they should know better.
The example of Pricewise demonstrates several truths about tipsters, and about professional gambling.
- Paper profits are NOT the same as Actual profits.
- Almost all claims made by tipsters are worthless.
- It doesn’t matter what you bet on. The only thing that matters is the price that you get.
- Almost everybody who bets loses. If you follow the crowd, you will lose too.
- Being an ‘expert’ in a subject/sport is NOT the same as being able to make a profit from betting on it.
- Bookmakers are neither stupid nor incompetent. They won £1b+ last year. To beat them you have to be pretty smart. And cunning.
THE GAPS IN A BOOKMAKER DEFENCES
The example of Pricewise DOES however actually offer some room for optimism for anybody with aspirations of making a profit from betting on sport.
At advertised prices Pricewise WILL show a profit. So while bookmakers are not stupid or incompetent, neither are they infallible. They make mistakes. The market that forms with the prices that they offer is far from being perfectly efficient. If you know where to look, and how to price markets accurately yourself then you can spot these inefficiencies. And with a bit of cunning you can exploit them.
The key to Pricewise’s ability to identify value bets is that he is looking at the early markets. The bookmakers send the Racing Post their Saturday morning prices on Friday afternoon so that they can be published in the paper (in the pricewise box, and in their adverts). So Pricewise has the significant advantage of being able to cherry-pick from prices that are set by the odds compilers of the bookmakers, and haven’t been shaped by the operation of the day of race market. These prices are much less efficient than those as the race is about to start. There are inevitably going to be a good few mistakes in there that Pricewise can exploit.
So while Tom Segal is a smart and knowledgeable guy who writes well, the reality is that he would actually need to be seriously incompetent NOT to show a paper profit on Pricewise tips at morning prices. What he does is not all that hard, even though he does it well.
Knowledge of horse racing is actually less important than an ability to interpret the evidence of what the pattern of a bookmakers collated prices can yield. If you know how to read markets. Any professional football gambler, or green lumber trader could do what Pricewise does, even if they had zero pre-existing knowledge of horse racing.
Imagine though for a minute that instead of publishing his articles in the Racing Post for everybody to read, that Tom Segal worked exclusively for you. He got the next day’s morning prices the afternoon before, found his value tips and gave them to you and you only. Could you turn the paper profit that Tom can make into an actual profit that would be cash in your bank? Yes, that is possible, certainly. Your exclusivity gives you a good chance.
It’s still not straightforward though. Because in the bookmakers’ offices at some point the smart traders will start to notice that you are consistently beating SP by a distance. And you only bet with them when they’re top price. Eventually your account will come under scrutiny, though not nearly as quickly as if you are one of several big punters trying to get on the same horses.
There are other ways round the defences though. You can bet in cash in betting shops or at a racetrack. Spread money around multiple accounts. Use ‘putters-on’. Bookmakers are big and strong, but they are slow and cumbersome. There are ways to hurt them if you’re quick and smart.
Patrick Veitch has a really good line about what it takes to be a professional gambler in is book ‘Enemy Number One’. He says that the ideal professional gambler has a split personality; he’s part ‘brain surgeon’ and part ‘axe man’. The brain of a surgeon is required to do the forensic analytical job of finding value. The axe man needs to be ruthless and cunning in getting bets on. That’s spot on.
SO WHAT IS THE PROBLEM WITH MOST TIPSTERS?
Well, the flippant answer is to say that the problem with almost all tipsters is that they’re shit!
But let’s try to be a bit more constructive.
For tipsters who charge nothing, and make no grand claims of their ability to generate an actual profit for their followers then there is actually no problem at all. Most people who bet on sport do so as a recreation, as a hobby. They do it with small stakes. The circa 10% of their stakes that they lose over time has no material impact on their standard of living. So if they get enjoyment from having some bets, and they have some good winners and some near misses they can tell their mates about – well, that’s job done. That’s a hobby. No problem.
The price these punters are paying for their hobby is the 10% of their stakes that they give to the bookmaker in losses. This is where the bookmakers’ £1b comes from. If following a tipster makes the process of selecting bets more enjoyable, if the punter gets a thrill from the idea that they are getting some sort of inside information or ‘expert’ advice, then there’s no harm in that. The tipster is helping to provide entertainment.
If they do a good job of writing up their reasons for giving the tip, the punter’s enjoyment factor can be raised. An example online of such tipsters are in the Bettingzone site attached to Sportinglife.com. And most of the tipsters in the Racing Post fulfil this role. Their job is to provide entertainment. They are harmless to bookmakers, and provide harmless fun for the people who follow them, so long as they treat their betting as a small stakes hobby.
The problem with tipsters who charge for their tips can be summed up like this;
First – most tipsters are rubbish. The vast majority can’t even generate a paper profit. They fail because they are guessers (‘dart-throwers’ as Joe Buchdahl would say) who don’t have any edge to find value. But they seduce unwary punters through tricks of deception (mostly based on survivor bias) into thinking that they can make a profit by following them, when they won’t.
Secondly – for the minority of tipsters who are good enough to make a paper profit, there is a huge difference between the purely theoretical profit that they say can be made, and the reality of a punter actually getting decent sized bets on to make a meaningful actual profit over a long term like a year. If a tipster is any good the bookmakers will soon be on to him and his clients. The prices will get slashed, and the client accounts will get restricted or closed.
The idea of there being a successful tipster, with lots of clients, all of whom are making a big profit, is an impossibility. It can’t happen. It never has happened, and it never will happen. Anyone who tries to tell you different is lying. The only way for a punter to make a profit from the advice of a tipster is to get the information on an exclusive (or near exclusive) basis. Nothing else will work in the medium or long term.
The tipster industry is unregulated. You don’t need any qualifications or a licence. Anybody can decide at any time ‘I’m going to be a tipster’, start calling themselves a tipster – and hey presto, they are! Often they will add the word ‘professional’, as in ‘professional tipster’ just for effect, though it doesn’t really mean anything. Some of these tipsters are genuine people with honourable intentions, but there are plenty who are not.
If a tipster gives his tips away for nothing, and doesn’t make any grand claims about their ability, then that’s fine. If a tipster writes an entertaining preview of the event they are offering a tip on, then there’s no problem with him getting paid for providing that service. But where a tipster starts looking to get paid for providing tips, on the basis that the person receiving them will make a profit on the tips, thereby recouping the cost of the tips as well as making a profit on top – well, there we start to have a problem.
The point of selling the tips is to make money. But if making a profit from these tips was so easy, why don’t they just back their own tips? The truth is that most of these tipsters can’t make a profit from their tips because their tips are shit. They lose money, even when measured on paper profits.
For the remaining few who are good enough to show a paper profit on their tips, the harsh reality of professional gambling hits them in the face. The reality is that professional gambling is only half about finding value bets. Half of the job is getting bets on at the prices that represent value. If a tipster is good, and is giving his tips to more than one person, bookmakers will quickly cut the prices, mark up or close the accounts. If the tipster’s clients are using betting exchanges then they will all be chasing the same liquidity on the same side of the selection, forcing the price down.
The only way for a punter using a mass market tipster to fly under the bookmakers’ radar, and to consistently get on at the value prices, is to bet in very small amounts. At £5 a bet you are not going to get restricted or closed, and it’s possible to consistently get on at the prices.
But at £5 a bet, even if you manage to find 100 bets a month, that’s only a monthly turnover of £500. That’s £6k a year. So even if you manage to hold an impressive 10%, your annual profit is £600. That’s not nothing, but it doesn’t qualify as a second income or a ‘meaningful’ profit. Especially if you have to deduct the cost of buying the tips in the first place. The tips will cost a lot more than £600 a year if they are from a tipster good enough to make 10% paper profit.
So really, there is NO way to make a meaningful profit from a tipster, unless you have some sort of exclusivity. With exclusivity you have a chance to get on at the prices, and to keep your accounts open.
THE PROBLEMS WITH TIP PROOFING
There are plenty of places that offer to ‘proof’ tipsters bets. On the face of it this sounds ideal. If a tipster is genuinely able to consistently find value, then it makes sense for him to prove it by sending his tips to a proofing service at the same time as his clients. Then there is hard evidence of his ability. Makes sense, right?
Well, in reality there are several issues with tip proofing;
- The biggest issue is that proofing services can only measure paper profits. The proofers can do some checking to make sure that the price the tipster claims is ‘available’ with the bookmaker, but there is no way of them knowing how much money a client could actually get on at that price, if any. Making ‘paper profits’ is only half of the battle remember.
- Often when proofing services display the ‘results’ of a tipster’s picks they will use far too small a sample size. They could proof a roulette wheel, and show that after a hundred spins ‘black’ was showing an impressive strike rate and a sensational ROI. But it doesn’t mean anything. Success at betting is judged over the long term.
- Using small sizes is a form of the ‘survivor bias’ scam. Tipster proofing services who highlight impressive small sample size stats, and omit to mention all the losers, are as guilty as the tipsters themselves of survivor bias deception.
- If the tipster is exploiting a current recurring ‘systematic’ market inefficiency, then sending these tips to the proofing service is alerting them to the edge. Most if not all tipster proofers will be punters themselves. Even if they don’t back the tip this time, they may look to get on it themselves the next time a similar opportunity comes around, getting the price before the tipster’s client can.
- If a tipster sends his tips to a proofing service he is taking a lot on trust. He is trusting that the email won’t go astray, and fall into the wrong hands. He is trusting that the recipient won’t ‘misuse’ or share the information. The people who own these tipster proofing services may be totally scrupulous, but could employ people who are not. Bearing in mind the importance of exclusivity, sending out tips into the ether via email is a risk.
- On Asian handicap bets, almost all bets by quant system based tipsters like me will be generated by a rating model or ‘engine’ that quantitatively measures the ability of the opposing teams. By sharing tips based on these models you are giving the proofer privileged clues as to how your model is currently assessing teams. If the proofer shares details of your old tips then he is advertising this information for the whole world to see.
- Sending tips to a proofing service takes time. When exploiting market inefficiencies (i.e. pouncing on value prices) timing is of the essence. You need to move fast. Very few big value bets stay around for a long time. So even if it just takes less than a minute, the time that a tipster spent sending tips to the proofers would probably have been better spent looking for the next tip for his clients.
- There is a difference between making a betting profit from a ‘system’ and from a ‘model’. A system might identify a recurring inefficiency in the market. E.G. 0-0 scorelines in the French Ligue 1, or low drawn horses on the all weather. Tips based on this inefficiency will show a healthy profit in the short term. But the market adjusts. No ‘system’ like this goes on delivering profits forever, because bookmakers aren’t stupid. A proofing service doesn’t let you know if the profits came from a transitory ‘system’ or if the tipster has a genuine ‘model’ which generates accurate fair prices, and is therefore future-proof.
- Flying under the bookmaker’s radar is essential if a tipster’s clients are going to be able to ‘get on’. Being on a tipster proofing service means it’s easy for bookmakers to find tipsters who are apparently very good, and to check them out and put up defences against their clients if they are genuinely talented.
The reality is that the best way for a prospective client of a tipster to make an informed decision about whether a tipster can actually help him to make a profit from betting is to listen to his answers to the Three Key Questions. The tipster should be able to back up his claims with logic and demonstrable experience and expertise. He should probably also provide some numbers, preferably some record of profitability from his own betting. But as we’ve seen, in the wrong hands, raw statistics can be twisted to tell all sorts of damned lies.
So while I’m usually a passionate advocate of favouring hard objective data over softer subjective judgements, in the case of assessing a tipster, what he says is more important than what numbers he can show. If he doesn’t convince you with his answers to the 3 Questions, then walk away.
The only true test of the success of a tipster:client relationship is in the long term net profit that the client makes. But in making the decision to go with a tipster, a client should ask the Three Key Questions and see what answers come back.
SO WHAT ARE MY ANSWERS TO THE 3 KEY QUESTIONS?
If I was to run a tipping service, and I got asked the 3 Questions, these would be my answers…
1. If your tips are so good, why don’t you just back them yourself?
Very simple answer. I did. For around 8 years I was a full time professional gambler, betting on sport, mostly football. I made a consistent profit from backing my own tips, making a good living over those years.
So why stop doing that and start selling tips now?
Well, I prefer (and I’m better at) the ‘brain surgeon’ bit of the job (finding value) than I am at the ‘axe man’ part (getting on). All of my bookmaker accounts are restricted or closed, and I’m liable to pay Premium Charge on Betfair.
And my kids are now old enough that they get asked the question ‘what does your Daddy do?”. I would prefer them to be able to a say “a businessman’ rather than ‘a gambler”!
2. What is your edge? How do you find value bets?
My approach to finding value on any sport can be summed up in the acronym D.A.M.M.
D – Data
A – Analysis
M – Model
M – Market
Data – This is always the starting point. Data can include the evidence of my eyes, but in general I much prefer for my methods to be based on hard objective numbers. If you base bets based solely on the evidence of your eyes then you are just asking to be fooled by randomness. In an even vaguely efficient market this approach will never deliver a long term edge. For different sports and different events the sort of data that is relevant varies, but in the internet age there is plenty of it out there if you know where to look. On football for example I retrieve data on shots on and off target, plus corners and red cards. This data gives me something a little extra to work on than others who only look at results, league tables or numbers of goals.
Analysis – Data, no matter how much of it you have, it is useless unless you have some skill in interpreting what it means. It is essential to understand the fundamentals of the sport you are analysing (you don’t need to be a total ‘expert’, but you must have a good grasp of the basics) so that you can put the numbers in context. A good example of context is the difference in the way teams perform at home and away.
Model – Randomness is present in everything that happens. So simply knowing what happened in the past is not an edge. You need to be able to do analysis that gives you an insight into how to project how likely things are to happen in the future. The aim of doing analysis is to get sufficient insight that I can build a model that helps me to set my own prices on any event. I much prefer the idea of creating a ‘model’ which is future proof than finding a ‘system’ that might work just now, but will become obsolete when the market adjusts.
Market – The other three elements are irrelevant if there is no way to get bets on. Professional gambling is ultimately about exploiting market inefficiencies. By far the best way to find these inefficiencies is to have your own prices (which should add up to 100%) for an event and compare them to the market prices. If you do this, and you do it well, the process of finding value bets becomes very simple. It is simply a case of backing when an available price is greater than your price for the same selection, or laying when a price is less. But you have to have ways of getting on.
3. How can I bet decent stakes on your tips, so that I can make a meaningful profit?
In a word; exclusivity.
One tip, one client. One client only gets each tip. This gives my clients the best possible chance to ‘get on’ at the price and not get restricted or closed. My service is restricted to a small number of clients so that I can maintain this exclusivity.
The deal with my tipping service is different to what almost all the other tipsters promote. I don’t make any grand claims about how easy it is to win, or how much money clients will make. I just make a single promise;
The tips I will provide will be ‘value’.
That is, they will all be prices at which I believe the odds are in our favour, not the bookmakers’. They will show a paper profit. And because I will provide them exclusively, clients will have a good chance to get on at the prices I send, and to keep their accounts open, letting them turn paper profits into actual profits. I’m happy to offer a guarantee that the tips will be value and show a paper profit – money back if they don’t.
The arrangement I am offering is more like a 50:50 partnership than the traditional tipster:punter arrangement. My side of the partnership is to provide the tips. Your side is to get the bets on.
A way of looking at it is to say that I am in charge of production, while you are in charge of distribution. I make ‘em, and you sell ‘em. You pay me for the ‘product’, then it’s up to you how much of it you can ‘sell’.
If we say that on average as a client you bet on 50 tips a month and your staking is based on a notional starting bankroll of £50,000. On average you risk 2% of that bankroll on each bet.
That’s 50 x £1,000 = £50,000 turnover a month. Let’s project a 5% margin. That’s £2.5k gross profit a month. Minus my tipster service fee of £500, leaves £2k net profit a month. Or £24k annual bottom line (tax free) profit.
That is what I would call a ‘meaningful’ profit and it’s a fair, rough projection of what is reasonable to expect from running your own sports betting ‘business’, as a client of my service.
The exciting (though challenging) part is that there is loads of scope for this profit figure to be significantly bigger. My tips WILL deliver value. So the only limiting factor in how much you make, is how much money you can get on.
Getting on is not straightforward, especially as you start accumulating profits and your name gets known. But it is possible to get past the bookies defences and to grow a betting bankroll into something that generates serious profits.
It is my confident expectation that every one of my clients will make a profit on their betting while they are subscribers to the service.
My hope is that every long term client will have a year where they make £100k+.
And it is my ambition that at least one of my clients will make £1m+ from betting on the tips from the Soccerbrain Service.