Gaming Betfair?

Recently, I was approached by a journalist looking for information and a few quotes. During the conversation, the term "gaming" cropped up. The journalist wanted to know if it was possible to game Betfair. In other words, is it possible to make money on betting markets using non-traditional methods.

What is the traditional method of winning in a betting market? Until the advent of exchanges, the only way to profit from betting was through form following and the statistical arbitrage of incorrect prices.

Today, Betfair and similar exchanges allow for trading on both sides of the back/lay spread, which gives rise to technical trading of sports. In a way technical trading is a  legitimate form of "gaming" a market because at a basic level no knowledge of form is required.

At its simplest, technical trading can involve pure and bonus arbitrage, which are mechanical ways of profiting from an exchange. However, these arbs are not entirely risk free. More  complex methods of technical trading involve an understanding of market structure and psychology. I go into more detail on this in Betfair Trading Techniques.

In other gambling arenas, for example, we see gaming in online poker. Online, players are able to multi-table online poker games, which they can't do in a casino. Enterprising coders have developed the HUD (head up display) for online poker so that a player can look at a realtime database of the players they are playing against, with notes and statistics so that opponents can be played against with the optimal strategy.

Messaging software allows online poker players to collude, which is not possible in a live game. Artificial intelligence has created poker bots that play heads-up (one on one) poker at a high level to almost guarantee a win against unaided human players.

Other than the basic rules of the game, online poker is now a different game altogether when compared with the live version of the game, requiring a new skill set with which to profit. Some might call it 'gaming the system', the lazy might call it cheating. I prefer to say that the better equipped will always win in the long run.

Are there other methods of gaming Betfair? Being a middleman​, offering a service, is a way to game Betfair. Disreputable tipster services act as an addition to any commission paid by traders. Some tipster services operate by simply covering every eventuality in an event and using survivorship bias to sell fake tips to the unwary.

Any service or information offered to traders has to be evaluated for its effectiveness and the cost of that service or information deducted from trading fees - as commission would be - to determine value.

Another way of gaming a betting market is through the use of "fake news" in order to create a movement in the spread so that a stat arb can be employed before the spread is corrected, once the true facts are known. Recently, Megarain reported false information being given about a cricket match, which might have affected the odds long enough for a stat arb.

Match fixing and insider information also permit people to game the markets with superior knowledge. Curiously, insider information is not always frowned upon as it is in the financial markets. Such activity has always been part and parcel of horse racing. Fixing though is generally reviled because it affects television ratings and thus advertising.

In conclusion, yes gaming the system is more than feasible and all part of thinking outside the box in order to gain an edge in whichever gambling activity you pursue.

1 comment:

  1. A better anology from poker would of been Seating Scripts what is the trading equivalent of front running trades which is something used to legitamely "game the system” in both domains. HUD’s are a advantage but only a statistical one and now at the time in writing everybody has one, So you have no edge in using one, I believe poker both live/online is a adaptative game where you have to constantly adapt to stlyes/stack sizes very often, so it could be argued a HUD could also be used to your detriment. I have a little background in soft futures and the better prop traders had access to high def satellites and always received that information first. My honest opionion is people in search of insights through search engines will never believe how ruthlessly competitive trading is, thus those that win consistantly would not even share that edge with their grandmother.

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