Sep
13

Arbitraging sports markets – NL West

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Evening all.  How is everybody keeping?

If you followed my baseball selections this season, you could be forgiven for thinking I have never seen a game in my life.

I would like to assure you that is most definitely not the case!  I have actually watched in excess of 1,000 games of baseball in the last ten years – a number far in excess of the number of football matches I have watched in my life!

I am aware the site has been a bit quiet since the EPL preview series and the frequency of my more detailed posts has dropped.  It still isn’t the best time to be diving into the football leagues yet and there haven’t been too many other things about for me to write about.

However, I stumbled across something tonight which I thought it was worthwhile sharing.

There is currently an opportunity to arbitrage one of the baseball division winner markets.

Arbitraging is one of those topics none sports bettors normally raise with me in early conversations about the world of gambling.

It’s a sexy subject; making money, risk free, doing very little.  Exciting and fun times!

But let’s be honest, it is about as common as the Queen.

One of my poorest bets of the season was my selection that the LA Dodgers would win the NL West.

As with my losing position on Dustin Johnson in the US Open this summer, the logic behind this bet was, thankfully, sound.  However, in an attempt to make this site “punter friendly”, I acted on my analysis quite poorly.

As the (brief) rationale in the comments of the original post state, my reason for backing the Dodgers was an analysis-supported belief that the San Diego Padres were being grossly over valued by the market and therefore priced short by the bookmakers.  As a result there was an opportunity to profit from inflated prices on their division rivals – namely the San Francisco Giants, Colorado Rockies and the doomed LA Dodgers.

Realistically, what any smart gambler should have done was to simply lay the San Diego Padres on the exchanges, however liquidity was probably lacking.

Given this fact and the punter friendly “back” focus of BOTW, I decided to back the team I felt was currently the most “undervalued” at the time, rather than who was most likely to win – again, a sound gambling approach.

I must confess that I do think I allowed my personal positions to influence my selections on the site somewhat which was a mistake.

I opened up a medium sized position on the San Francisco Giants back in February when the baseball ante post markets were first opened up at a ridiculous 4/1.

Those that know me well will already be aware that I am a huge Giants fan.  Of those 1,000 baseball games I made reference to, over 800 will have been Giants games.

The Giants “competed” in 2009, managing to stay in touch with the Rockies and the Dodgers until the seasons latter months before losing touch and finishing with a respectable 88 – 74 record.

For those that care, the Dodgers played some great stuff last year and finished with the best record in the National League.  Not that that gets us any of our magic beans back mind.

With the Dodgers expected to be weaker and the Giants boasting a clearly improved roster, going into the season the Dodgers were rightly favorites again, but the Giants were totally misread by the bookies at 4/1.

I apologise now as I wasn’t prepared to post this selection on the site, as unlike with Manchester United, I sometimes look at the Giants through somewhat rose tinted spectacles and lose sight of my usual rational approach.

As a consequence, I decided to give it a swerve on here which, in hindsight, may well cost the masses a healthy profit.

Anyway, due to me having this excellent position, I think I “upped the ante” a couple of points higher on the Dodgers bet than I would have done otherwise.  A small mistake, but a mistake all the same.

We are all human.

Anyway, back to the point at hand.

Earlier this evening, I was looking at the current “Postseason Odds” which are updated each day on the fantastic Sabermetrics site “Baseball Prospectus”.

Rather than looking to gamble, I was only doing this so I could enjoy wetting myself with excitement, as I was aware my beloved Giants would have moved into an “odds on” position to reach the post season for the first time since 2003 after beating the Padres on Sunday night to seal a 3-1 series win away from home.

When each season is 162 games long, seven years is a long time in baseball I can tell you!

As soon as I saw that all three of the contending teams had between a 25% and 55% chance of winning the division, my inner bookie slayer instantly smelt blood and I hopped straight over to Oddschecker – the greatest website known to man.

And low and behold, look what I found:


NL West winner market as @ 9pm on 13 September


Selection

Odds

Implied %

Stake

Profit

Net profit

ROI

SF Giants

31/20

39%

41.3

64.0

5.3

5.3%

San Diego Padres

9/4

31%

32.4

72.9

5.3

5.3%

Colorado Rockies

3/1

25%

26.3

78.9

5.2

5.2%

Total

95%

100


As you can see in the table above, due to the individual bookies different stances on the relative chances of each of the three contenders there is currently an opportunity to arbitrage this market across three different sites.

This is something that before the rise of Oddschecker a couple of years ago would have been almost impossible to spot.

Compared to the forecasts produced by BP’s “million times” model previosuly discussed, the current prices offered by a couple of the bookies for the Giants and Padres are slightly on the chunky side.

As a result, rather than your usual market “over-round” of 101-108%, this is currently a 95% market.

And whenever that happens, a market can be “arbed” using a risk based staking strategy to ensure a guaranteed profit.

As shown in the analysis above, you could split a £100 wager between the three selections to ensure a guaranteed profit of circa £5 – or a 5.2% ROI to be more precise.

Now I know this won’t get your hearts racing like Piranha 3D but you have to take it for what it is.

This is not a 1/20 punt on Arsenal to beat a League 2 team in the FA Cup.  This is completely risk free.

This is tying up your cash for 20 days for a 5% return - what your standard ISA will earn you in a year.

And if you could find such an opportunity over and over again you could turn £100 into £240 in a year.

You would even struggle to find a hedge fund specializing in foolproof NINJA mortgages that could promise you those sorts of returns.

You could obviously do this with more than £100.  And then it could get interesting…

The only health warning from me is to make sure you can “get on” to the required stakes with each and every bookmaker before beginning to place these wagers!

Or, given the schedules, you could just double down on the Giants who are almost a lock for the title now due to the respective schedules of the Rockies and Padres.

I told you the Padres would implode eventually.  And a 0-10 streak in late August is not going to cut the mustard.  That was the worst losing streak by a first place team in 76 years!

The Rockies aren’t the same team away from Coors Field either, and with 10 of their final 19 games on the road, they will also fall a couple of games short.

So get on the Giants and you can enjoy the victory with me next month :-)

* Puts down beer and removes rose tinted spectacles *

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