Tipping Services

Tipping is surely a mug's game. All you get is an instruction to back an event but with none of the logic that brought someone to make the decision to issue the tip. Without the logic you can't determine the probability of the tip winning nor determine the edge of the odds over the probability.

However, I can understand why someone would want to set up a tipping league, that's simply an attempt at the Wisdom of the Crowd. In Wisdom of the Crowd you are collating the collective knowledge of a large number of people (the league members) to determine an average value, which will in turn give you probabilities.

For example, a village fete has a Guess the Number of Sweets in the Jar competition. What is the best way to win the competition? Simply, wait until the last moment and find the average value given by all the previous entrants and that is your value. You could well have the closest guess. A single person will probably make a bad guess but the wisdom of the crowd will find the correct value. That's precisely how betting markets work. Each person places their bet at a price that they think accurately represents the future outcome of the event. A single bet is unrepresentative but many thousands of bets will average out at approximately the correct price. Efficient Market Hypothesis shows this to be true.

In the case of a horse racing tipster competition you collate all the tips handed in by the competitors and back the horse most favoured. A scam can also be derived from a tipster competition by selling on the tips of your more successful tipsters. Some of the best tipsters are right at some point or other and so if you arrange the tipsters into combinations of tips then a portion of those tips are going to be good ones. Some people subscribing to the tips service will receive a winning run of tips via email (the way to cover up that you send different tips to different people) and they will want to remain paying for your service.

Another scam is just to make tips up. If you have enough people subscribing to your service then you just issue every possible combination of tips (e.g. for a football match, tip the home win, away win and the draw to a third each of your subscribers). Over time a very small percentage of your subscribers might actually make a small profit and continue to subscribe. Derren Brown, the television magician, used that particular scam in a show called The System.

The ideal no-lose scam for the scammer is to force the subscriber to place a small bet on behalf of the tipster, in addition to their own, in order to get their email of tips. If the subscriber loses the bet the scammer loses nothing, if the subscriber wins then the tipster reaps. I have seen quite a few websites with very low subscription fees, to entice the punters but with the bet proviso (easy to code into a website these days).

Be it an exercise in Wisdom of the Crowd or a tipping scam, none of the tips have attendant logic that brought someone to make the tip. Therefore, there is no probability associated with the tip and no judgement can be made on the edge over the odds being offered. All such tips are worthless. Instead, if I received a full odds line for an event then I might be interested. At least you could analyse the tipsters history and determine if they are providing a positive edge. Until then, avoid tipsters, learn statistics and probability and work it out for yourself.

Further Reading - How to Find a Black Cat in a Coal Cellar

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