Friday, 13 May 2016

How To Find Value Bets In The Champions League

You might have heard of Elo ratings but what is it exactly and how can they be applied to betting to increase your winnings? A must read for anybody planning to bet on the second leg matches of the UEFA Champions League semi-final phase.
Originally invented as an improved chess rating system by Hungarian-born American master level chess player and physics professor Arpad Elo, the Elo ratings is a way of comparing the skill levers of players in competitor-versus-competitor games.
The method has since been adapted for several sports and is now widely used in assessing the performance of soccer teams. Here’s how Elo ratings work with examples from the upcoming Champion League fixtures.
The theory
When applying the Elo system in soccer, every team has a rating for each point in time and the higher it is the stronger the team. The ratings are constantly re-calculated in order to include the outcomes of matches between rated teams.
The winner takes points from the loser, with the total number of points at stake depending on the rating difference between the opposing teams.
The essence of Elo ratings is that the winner takes points from the losing team. The number of points in the total pool for each match depends on the difference between the ratings of the teams.
When a high-rated team wins against a low-rated team only a few ratings points will be deducted from the losing team, whereas if the lower-rated team scores an upset, a proportionally larger number of rating points will be transferred. In the event of a draw, the pot is shared equally.
The basic maths
Here’s how the basic calculation for Real Madrid vs. Manchester City, playing on Wednesday 4th May for the second leg of Champion league’s semi-final. The teams are both within the top 10 with 2074 and 1861 points respectively, according to the ClubElo rankings.
By calculating 5% of their respective ranking, Real Madrid will be risking 104 points and Man City 93, the total pot contains 197 points. Therefore, here are the three possible outcomes:
1.              Real Madrid wins (1.518*). Their ratings increases by 93 to 2167 and Man City’s rating decreases to 1768.
2.              Man City wins (6.86*). Their rating increases by 104 to 1965 and Real Madrid’s rating decreases to 1970.
3.              Draw (4.64*). The pot (197) is divided equally between the two teams 98.5:98.5 resulting in a slight increase to 1866.5 for Man City and a slight decrease to 2068.5 for Real Madrid.
Including other factors
The above calculations demonstrate the basic mechanics behind the Elo values in soccer. However, anyone with a basic understanding of soccer would guess that there is a major problem. Crucial factors, such as home advantage, are not taken into consideration. 
In the above example, it is obvious that a draw of 1-1 between the two sides in Madrid is a clearly better result for the Englishmen than it is for the Spaniards, considering that the first game ended in a goalless draw, and it is therefore irrational for Real Madrid to walk away at full-time slightly penalised for failing to progress to the Champions League final. 
For that reason the calculation for Elo values in soccer is usually adjusted to include major factors such home advantage, goal difference, two-leg matches etc. Below are the Elo ratings of the top 10 teams according to ClubElo:
Top 10 Elo ratings 
Team
Elo value
Real Madrid
2074
FC Barcelona
2060
Atlético Madrid
2017
Bayern München
2011
Juventus
1940
Paris SG
1894
Dortmund
1887
Villareal
1872
Manchester City
1861
Bilbao
1844
Updated on 04.05.2016
Using Elo ratings in betting
The main limitation bettors should keep in mind when referring to Elo ratings is the fact that the calculations of Elo values are based exclusively on past performance. With no account for individual players, it can be argued that the Elo system may lose some of its predictive power when certain circumstances - such as injuries, new manager/players, tactics etc - arise. Elo will only respond to such changes over time.
Despite that, the Elo system is widely used by sharp bettors as a reliable tool in the search of value bets, i.e.bets with positive expected value, because it provides a solid statistical foundation for calculating the probabilities of the different outcomes with great accuracy. This is particularly the case when a competition progresses towards its final stages, like the Champion League round of 16, as the weaker teams have been eliminated and it is getting harder and harder to predict the winners.
Ready to find value bets in the Champions League? Pinnacle Sports is the Nr.1 for Champions League semi-final odds, meaning you win more on every game.  



Friday, 8 January 2016

Is The Labouchere Betting System Profitable?

To be profitable in sports betting, staking strategy is as important as finding value odds. With many progressive betting systems, such as the Labouchere betting system, promising almost infinite wealth, are they a good idea to follow? Here’s the academic answer to the question.
The Labouchère staking system is a progressive staking method acording to which a bettor continues to bet until a particular winning amount is reached, and is traditionally used for Roulette.
The Labouchère staking method in sports betting
Labouchère can be easily extended to sports betting and the steps involved in applying this staking method are the following:
1.     Decide how much money you want to win. Let's aim, for example, to win $100.
2.     Determine how you will split this money. Say you split it up over five values: $10, $20, $40, $20, $10.
3.     Place a bet that would win the sum of the first and last numbers. If the European/Decimal odd is 3 (+200American/MoneyLine) for example, you would stake $10, so as to win $20 back (the sum of the first and last number).

4.     If you win, you tick off the first and last number. Otherwise, you add the amount of the stake you made, so that you need to win this back. In this case, you would have $10, $20, $40, $20, $10 and $10.
5.     Repeat steps 3 and 4 until you win the amount you are aiming for.
The rationale behind this strategy is that you tick two items off the list when you win, but you only add one; so you are ticking it faster than you are adding. Below I discuss why this doesn’t make sense.
To recommend or not to recommend?
While it is fun to deal with, I would not recommend any progressive staking methods. In essence, they suggest you bet and bet until you win the desired amount, without heeding the amount you afford to bet. Let ‘s assume you are betting on even odds and have a run of four losses. The next bet would then be $50, even if you had already lost $100.
Unlike the Kelly Betting strategy, no consideration is taken to the size of the portfolio.
It is important to remember that the key decision in sports betting should be whether the odds represent value, rather than how much can be won.
A similar progressive system is the Fibonacci strategy, where you increase your betting stake according to the Fibonacci sequence 1, 1, 2, 3, 5, 8, 13, 21 etc.
The academic answer
From an academic perspective, there have been three good papers discussing the use of this strategy to bet on draws. In 2007, Archontakis and Osborne stated that betting on draws at an odd of 3 using a Fibonacci Strategy would result in wins, if applied to World Cup Finals data.
Yet they didn’t use real data, so another team of researchers focused on real odds for draws and simulated the results (Is the soccer betting market efficient? A cross-country investigation using the Fibonacci strategy). They found that in 95% of the cases, the worst case scenario is to have to stake up to 43, if the Fibonacci strategy is used.
More recently, however, Lahvička debunked the theory of succes behind these methods by finding that all tested versions of this strategy eventually result in money loss. I would expect any progressive system to provide similar results.
So, tread on with caution. Progressive systems are fun, but only while the fun lasts.