A little uncertainty is good for everyone

When it comes to sports betting, can you have too much form?

I read an interesting article earlier today about data driven decision making.

It was written by a featured contributor on the Forbes website  and the opening words were these…

“I believe data should be at the heart of strategic decision making in businesses, whether they are huge multinationals or small family-run operations. Data can provide insights that help you answer your key business questions… data leads to insights; business owners and managers can turn those insights into decisions and actions that improve the business. This is the power of data.”

Now I’m a huge believer in this approach…

Especially if you want to succeed in your respective area of business (sports betting, in my case – both personally backing myself, and operating a number of highly profitable betting syndicates on behalf of members).

Because more data leads to better informed decisions…

And quod erat demonstrandum (QED) better decision making = bigger profits.

Which is why I spend countless hours poring over spreadsheets of figures, studying past performance graphs, and plotting future profit models…

All with the aim of delivering top notch betting services like Racing Intelligence or Golf Insider.

But while reading this web article my thoughts spiralled off as I started to think about data (or “form” as we call it in betting circles) and the decision making process when it comes to selecting and placing bets.

Or, more to the point, the task of finding good value sports bets, in various different contests, races, tournaments or matches…

And especially events where there’s a ton of reliable data (or form) freely available.

Does too much data/form make value harder to find?

When it comes to locating profitable sports bets…

Put aside for a moment the argument – valid though it is – that you can have so much information at your disposal that you can’t see the wood for the trees.

Because, as you can well appreciate…

There’s an ocean of form out there to help you decide who’s going to win the 2021 US Masters, or the horse that’ll land the Doncaster St.Leger, or the team which will be crowned this year’s Champions League winners…

So much so, you can end up tying yourself in knots. The so-called “paralysis of analysis”.

As the famous American newspaper editor, George Horace Lorimer, put it…

“If there’s anything worse than knowing too little, it’s knowing too much! ”

No. My point is this…

If you have highly reliable form about a player or team, or a horse for that matter, it must surely have a huge impact on the pricing of that particular bet.

And…

This is what got me thinking…

Doesn’t it follow that the odds about this football team, or golfer, or novice chaser (either with regular bookies or on the likes of Betfair) are far more accurate, and so offer a much smaller margin of profit.

Or, from a bookmaking perspective, they present layers with the opportunity to squeeze out every last drop of juice from the price… leaving us punters scratching around for value – if there’s any left at all!

Yes, too much data can be a bad thing when it causes a major erosion of value.

What examples spring to mind…

When it comes to watching sport…

Many fans bemoan the fact that in certain events we see the same names winning time and time again. In effect, creating a higher “certainty of outcome” scenario which produces a smaller gene pool of potential winners, otherwise known as much more reliable form.

Take, for example, Formula 1… where currently Lewis Hamilton (or at the very least a Mercedes) tends to win every race/title.

Or tennis… and it’s going to be either Novak Djokovic, Rafael Nadal or Roger Federer picking up the next Grand Slam.

Or football… where in Spain’s La Liga it’s a coin-toss each season between Barcelona and Real Madrid (all football betting, in fact, is awash with performance data and result-predicting algorithms – meaning it generally produces a much lower Return on Investment (ROI) than other sports).

So from a betting point of view…

If you consider the likelihood of Hamilton winning the next British Grand Prix, or the chances of Nadal winning, say, the French Open, or the number of times the Spanish league title goes to one or other of the top teams…

And apply this to the markets…

Then you must surely get (i) short-prices, obviously, but (ii) prices you would generally consider as having little, or no, value.

Why? Because the outcome of these events is much more predictable, so it’s easier for the bookies to accurately predict the result, and so frame their books much more tightly around these highly probable consequences.

[By the way, I’m not suggesting for a moment there’s no value in short-prices. Or the fact that you can’t make money from backing them. In fact, often’s the time you can make more profit as you can get bigger stakes on these short shots – a point I made in my blogpost about ROI figures (read here). My point is that we value bettors, tend to find these favourite-dominated markets less appealing simply because our main interest concerns the presence of value in a market – not how liquid it is].

Of course, if the layers are able to predict the outcome more often, it stands to reason that punters can do the same.

But if everybody knows that Bayern Munich will win the Bundesliga, Aidan O’Brien will train the winner of the Derby, or the New England Patriots will make the SuperBowl… then you have to question how big a margin you’re going to see in these bets.

Also you have to doubt the influence of “inside information” if the outcome is clear for all to see.

After all, who needs a tipster or a betting service to tell you that PSG will win Ligue 1 in France? Or that Willie Mullins will saddle a winner at the Cheltenham Festival?

Again, a tsunami of information, or form, or data, about any particular sporting event dramatically reduces its appeal – certainly if your primary concern is “value”.

So is it better to have no form at all?

Flipping things on their head…

If the logic of the argument suggests that ultra-reliable form = no margin for punters…

Then it must follow that no form = greater potential value for backers.

And I can see some sense in this line of reasoning.

However, when faced with an absolute crapshoot… take the Europa League, or EFL Trophy in football… a golf tournament like the Belgian Knockout or Zurich Classic… or any horseracing “cavalry charge” that features during the Flat season…

Would you really prefer to bet when the winner could be one of a dozen (or more) possibilities? When the betting is wide open… and nobody has the slightest clue about the eventual result.

Are these the kind of sporting events that interest you?

I’m not so sure they should.

And even if you argue that such competitions, by their very unpredictable nature, are chock-full of value… is that much help when it comes to making money at golf betting or winning cash on horseracing, when you have no proven approach or strategical method to finding the winner.

For sure you might catch out the market makers every once in a while, and find a juicy winner, but betting needs to be more than guesswork.

I mean… EDUCATED GUESSWORK AT THE VERY LEAST!!

Otherwise you might as well focus your punting on the tables at your local Grosvenor Casino, trying to land the work’s Grand National sweepstake, or nailing the “guess the number of sweets in the jar” contest at the village fete.

And none of these is going to make you any tax-free cash anytime soon.

Maybe there’s a happy medium between the two…

As former US politician Henry Kissinger put it, and his words are referenced in the title of this article…

“A little uncertainty is good for everyone”

In this case, good for layers and good for backers.

But not too much, and not too little.

You want just enough of a grey area, a reasonable amount of doubt, a “Bermuda Triangle” of data, or form, to make the outcome one which is equally open to chance AND the application of incisive form (or data) study.

To give the bookmaker/punter contest a wide enough range in which to be played out.

And, sub-consciously, this was what had me thinking when I read the Forbes article. Because data is most definitely our friend when it comes to placing bets, or operating betting syndicates – as I do.

But it can become overbearing and counter-productive if we have too much of it…

Just as it can be utterly useless if we have so little information to work with that it makes no difference to our subsequent decision-making.

Now I appreciate when I quote examples like Lewis Hamilton or Novak Djokovic or Barcelona (just as you could list Stephen Hendry, Phil “the Power” Taylor, or Tiger Woods from years gone by) that a falsely short favourite can frequently create value further down the lists…
I get that.

But if said short-priced favourite keeps on winning, then, whether you’re on a value bet or not, you’re still not going to make much profit!!

 

OPINION: Between them, Djokovic, Nadal and Federer have won 52 of the last 60 Grand Slams. And it’s this kind of sporting dominance, this level of inevitability about the outcome, that got me started on this discussion about “how much data (or form) is the right amount”… and by that I mean the appropriate level to make the bookmaker/punter battle a fair one. Because I firmly believe you can have too much information, just as you can have too little, upon which to create markets and then select bets. Which is why the words of Henry Kissinger are so on-the-money. And strangely, in an industry where accuracy is so highly prized, it shows why we still need a degree of uncertainty to keep sports betting entertaining, enjoyable and profitable.