Kelly Horse Race or Ziemba Roulette

[lansdale]

Originally Posted by thaskalos

That's a tall order, IMO. In an ultra-competitive game with a heavy takeout...this sort of edge is impossible to maintain. Unless, that is, we confine our wagering to 60 bets a year.

Hi Thask,

Just came across this post. I think you realize that I was just using this an example to make a point - the edge could have been 2%. But it's obvious that this notion of someone of having a double-digit or larger edge is something of a hot button for you. As you say, only an extremely small percentage of players is likely to achieve this with high-volume play - but some have proved that it's possible - Benter and Woods are two. Dick Schmidt (maybe he can confirm, if he stills lurks here) claimed that he and Brohamer were at that level and higher when they were playing professionally. An academic guy using a technique allied with TM's hierarchical Bayes has documented a 38% edge for a large sample of play in HK. In every area of endeavor, I think it's safe to assume that there are always at least a few people performing at a very high level - higher than most might imagine is possible.

Cheers,

lansdale

[whodoyoulike]

Originally Posted by flatstats

Yes that sort of happens here too. But it mostly happens to filthy arbers and Pricewise type sheep followers.

Basically, the bookies do not like punters who take prices that are then plunged on. It scares the hell out of them and that's why they restrict you near enough as soon as you join. But the first restriction is usually the loss of Best Odds Guarantee.

No such problems with the exchanges. Bet as much as you want if the liquidity is there.

A couple of years ago I did get banned from Betfair's SP Multiples market but I can still bet with the exchange and at Sportsbook prices.

Originally Posted by flatstats

He is the semi-pro lone wolf. He tripped algorithms, which have changed in recent years to catch more punters and place them on the restricted list. When the first email arrived he should have changed his method when betting with the other bookies rather than then tripping their algorithms too. ...

So the lone wolf needs to change their tactics; to stay under the radar.

So, let me get a better understanding of where you're coming .... you do agree with Steveb that bookies will cut you off if you're a winning player.

But, why do you call them filthy arbers and Pricewise type sheep followers?

I'm unfamiliar with those terms but they both appear to be derogatory comments towards the bettor who just wants to get a price on their wagers.

Is it because the bookies's algorithms were able to suspect and act on the bettors play and one needs to always be one step ahead of them?

[flatstats]

Originally Posted by whodoyoulike

But, why do you call them filthy arbers and Pricewise type sheep followers?

I'm unfamiliar with those terms but they both appear to be derogatory comments towards the bettor who just wants to get a price on their wagers.

I think you have (what we say here) got the wrong end of the stick there.

Maybe I should have put "filthy arbers" in quotes because those terms are what bookies use to justify banning punters. They don't like arbers and they don't like punters who manage to beat the prices or plough onto horses that will take a lot of money and cause price drops.

And I only agree with steveb that bookies will ban winning punters. But they also ban losing punters and they will quite happily allow some winning punters not to be banned. You just have to not "piss them off" and "keep your nose clean" if you want to keep using them.

[thaskalos]

Originally Posted by lansdale

Hi Thask,

Just came across this post. I think you realize that I was just using this an example to make a point - the edge could have been 2%. But it's obvious that this notion of someone of having a double-digit or larger edge is something of a hot button for you. As you say, only an extremely small percentage of players is likely to achieve this with high-volume play - but some have proved that it's possible - Benter and Woods are two. Dick Schmidt (maybe he can confirm, if he stills lurks here) claimed that he and Brohamer were at that level and higher when they were playing professionally. An academic guy using a technique allied with TM's hierarchical Bayes has documented a 38% edge for a large sample of play in HK. In every area of endeavor, I think it's safe to assume that there are always at least a few people performing at a very high level - higher than most might imagine is possible.

Cheers,

lansdale

Hi landsdale,

Yes...there are "geniuses" in every endeavor...so the assumption must be made that there must be geniuses in gambling too. But we still must endeavor to separate rumor from fact, IMO. I can't comment on Benter or Woods, or even the "academic" guy with the huge edge in HK...because these guys operated in a locale that I know nothing about. I know NOTHING about the game as it's played in other parts of the world...and have no idea whether or not the methods that Benter and Woods used could be profitably applied today.

But I do know a little something about the game as it's played in THIS country...and am reluctant to accept that such a huge edge is attainable in this part of the world. Can you imagine what an edge of that magnitude would amount to in "dollars and cents"...with the number of races that we have at our disposal here on a daily basis? You mention Dick Schmidt and Tom Brohamer. I have diligently read the work of BOTH these gentlemen...and have been dutifully impressed. But I couldn't help but notice that they are both entirely out of the game...and I can't bring myself to believe that anyone with this sort of edge would ever leave the game...and search for "greener pastures".

Our game has CHANGED in recent years...and the profit margins have shortened considerably. But the rumors of "huge edges" still persist...even as horse racing's most "renowned" players flee our game for "greener pastures". This somehow makes little sense to me.

Please don't misunderstand me. There isn't a jealous bone in my body...and the mere THOUGHT that such a huge edge is possible is enough to motivate me to apply myself in the game with renewed vigor. But rumors run wild in gambling...and, at this advanced age that I find myself, I need something a little more substantial to hang my hat on.

Best regards,

Thaskalos

[whodoyoulike]

Originally Posted by flatstats

I think you have (what we say here) got the wrong end of the stick there.

Maybe I should have put "filthy arbers" in quotes because those terms are what bookies use to justify banning punters. They don't like arbers and they don't like punters who manage to beat the prices or plough onto horses that will take a lot of money and cause price drops.

And I only agree with steveb that bookies will ban winning punters. But they also ban losing punters and they will quite happily allow some winning punters not to be banned. You just have to not "piss them off" and "keep your nose clean" if you want to keep using them.

Okay, you're coming across a little clearer. I thought that was your opinion(s).

A new question, what situations or why would bookies ban losing punters?

I get the stay under their radar idea but why is it necessary if that's the business model of being a bookie (a rhetorical question)?

[flatstats]

They would ban losing punters because their algorithm told them to.

There is an example of a punter who opened an account with one of the Big Four bookies. Soon after opening the account he was assigned 'platinum status' (high roller, VIP type). In the next 3 months he had a few big losing bets, which resulted in him having a net loss of £37,000. He then lost that platinum status and then shortly after he got totally banned.

This is an unusual example because the punter was at a net loss with the bookies so they should have courted him. But they chose to drop the concessions and then stopped him from betting with them. From what I gather the punter was bona fide and not crooked so it seems that an algorithm had identified the punter as a threat to future profits and thus got him banned.

We do not know the extent of these algorithms. We do not know if they are now detecting 'sleeper accounts', which are setup to try and fool the algorithms. It could be the case that the £37,000 loss punter exhibited patterns that the beancounters had seen before and thus determined that he would be back for his money plus much more.

[whodoyoulike]

Originally Posted by flatstats

They would ban losing punters because their algorithm told them to.

There is an example of a punter who opened an account with one of the Big Four bookies. Soon after opening the account he was assigned 'platinum status' (high roller, VIP type). In the next 3 months he had a few big losing bets, which resulted in him having a net loss of £37,000. He then lost that platinum status and then shortly after he got totally banned.

This is an unusual example because the punter was at a net loss with the bookies so they should have courted him. But they chose to drop the concessions and then stopped him from betting with them. From what I gather the punter was bona fide and not crooked so it seems that an algorithm had identified the punter as a threat to future profits and thus got him banned.

We do not know the extent of these algorithms. We do not know if they are now detecting 'sleeper accounts', which are setup to try and fool the algorithms. It could be the case that the £37,000 loss punter exhibited patterns that the beancounters had seen before and thus determined that he would be back for his money plus much more.

It would seem to me that they would ban a loser if they didn't pay up or something similar. Difficult for me to believe they would ban a consistently paying loser.

[flatstats]

Yep. Difficult for a rational, human mind to ban someone under those circumstances. But this is the age of the algorithm, where programmers type the code, the computer spits out the report and the suits "follow suit" and take the appropriate action.

It's not just bookmaking where this phenomenon exists. Call up your credit card company and they already know why you are calling them and you are thus put through to the right person to maximise / deal with your situation.

"if you want to know if you are heading for a divorce" then call your credit card company because they already know.

[thaskalos]

If the bookmakers are so scared...shouldn't they get into another line of work?

[lansdale]

Originally Posted by thaskalos

Hi landsdale,

Yes...there are "geniuses" in every endeavor...so the assumption must be made that there must be geniuses in gambling too. But we still must endeavor to separate rumor from fact, IMO. I can't comment on Benter or Woods, or even the "academic" guy with the huge edge in HK...because these guys operated in a locale that I know nothing about. I know NOTHING about the game as it's played in other parts of the world...and have no idea whether or not the methods that Benter and Woods used could be profitably applied today.

But I do know a little something about the game as it's played in THIS country...and am reluctant to accept that such a huge edge is attainable in this part of the world. Can you imagine what an edge of that magnitude would amount to in "dollars and cents"...with the number of races that we have at our disposal here on a daily basis? You mention Dick Schmidt and Tom Brohamer. I have diligently read the work of BOTH these gentlemen...and have been dutifully impressed. But I couldn't help but notice that they are both entirely out of the game...and I can't bring myself to believe that anyone with this sort of edge would ever leave the game...and search for "greener pastures".

Our game has CHANGED in recent years...and the profit margins have shortened considerably. But the rumors of "huge edges" still persist...even as horse racing's most "renowned" players flee our game for "greener pastures". This somehow makes little sense to me.

Please don't misunderstand me. There isn't a jealous bone in my body...and the mere THOUGHT that such a huge edge is possible is enough to motivate me to apply myself in the game with renewed vigor. But rumors run wild in gambling...and, at this advanced age that I find myself, I need something a little more substantial to hang my hat on.

Best regards,

Thaskalos

Agree with almost everything you say here. No question the game in the U.S. is tougher than ever, and many have dropped out. As Dick Schmidt as made clear, he's moved on to currency trading after his edge began to decline. However, I think the 'large edge' issue owes less to foreign tracks than the use of mathematical models; after all players like TM, Rook, and sjk, who have all claimed a double-digit edge, are using such models to play only U.S. tracks. I think what you're really saying is that possibilities for traditional handicappers, who comprise the vast majority of all players, are more limited now - I think this is true.

But edge isn't everything. Ernie Dahlman claimed an edge of 3% *including rebate*, and an income of ca. $750,000. As I've said before, I know blackjack players who have built a net-worth of low eight figures, starting from nothing, based on the typical 1% BJ edge. It's possible, but certainly not easy. The same is true for poker, which, as I think everyone agrees, is much easier than horseracing, but still far from easy money.

[Hoofless_Wonder]

Originally Posted by flatstats

..."if you want to know if you are heading for a divorce" then call your credit card company because they already know.

How right you are - though data analytics is still in its infancy, and not always being properly applied.

This offshoot of the thread demonstrates the limitations of fixed odds wagering if and when it ever gets to the U.S., and adds to the sequence of actions - handicap/find overlay, calculate wager amount, find mechanism to offload wager.

[steveb]

here is something i read on another forum today, about those parasites.......
this one though i think is home grown(not pommie)
sorry that format is wrong.

just happy that my day is done.

........


HERE’S A CLASSIC(BET)! The NSW Government licensed Classicbet really do hate winners. Here’s what they are asking for if they suspect that you might be somehow inclined to back more winners than losers: —————– After consideration we have decided to re-open your ClassicBet betting account subject to the satisfactory completion and return of important probity requirements. In accordance with this, your account has been temporarily suspended pending the receipt of these documents required by the ClassicBet Compliance team. Please complete the attached terms of trade with a Statutory Declaration as to the bona fides of your betting account. The completed Statutory Declaration must include the following information and documents all of which must be verified by an authorised party: a. Your full name, address, date of birth, and occupation; b. ClassicBet pin or account ID; c. Details and supporting documentation as to whether you operate your betting account for yourself only, or on behalf of someone else; d. Details of how you are funding your betting account; e. Certified copies of the evidence of the source of funds deposited to your ClassicBet betting account; f. Certified copies of your last three tax assessments; g. Certified copies of documents evidencing your current income e.g. your last 3 employee payslips; h. Printout of the IP address(es) for the computers used to operate your betting account; and i. Details of the mobile phone numbers used to operate your account. Where a certified copy of a document is required to be attached to the Statutory Declaration, you will need to have those documents certified by a Justice of the Peace, Solicitor or Commissioner for Declarations. Upon receiving the above information your account will be unsuspended and available for betting. Kind regards, ClassicBet Compliance team

[steveb]

and another, and this one does not and never has arbed.
and how does one 'arb' anyway on a horse race, unless they use a betting exchange for the lay side?
.....

I re-joined Ausrace for the day to post on BET365,"One of the worlds leading online gambling companies" with holdings of around £20 billion per year (is that really $A35 billion?). I opened a BET365 account 2 weeks ago and I made 260 $50 place bets in 11 days out of 509 races; most of the races I did not bet had <8 runners (83 races) or BET365 did not offer early markets. I bet on every meeting on which they offered early markets, every day, although not on every race. Almost all bets were placed between 9am and 11am, before the first race anywhere and always for the level stake $50, whether the price was $1.06 or $21.00. If BET365 opened their market after 11am, I sometimes noticed that and bet then. BET365 employs many young, clever whiz-kids to set their racing odds; I am an age pension-aged man living out my twilight years in Indonesia; I have no "inside information", collaborate with no-one, take no notice of what anyone else tips, keep my own counsel, make my own decisions and don't place bets on anyone else's account . Yet after just 11 days, BET365 restricted my bets to Mickey-Mouse amounts, as if $50 was not Mickey-Mouse enough. Eg today I am allowed to bet $3.13 on Stawell Race 3, Xaar Hawke for the place, and 38c on Mackay Race 1, trifecta 1-2-3, which I figure will pay about $10. Saying 38c @ $10.00 is Mickey Mouse demeans the rodent. (I did not bet on a trifecta, I was just checking what restrictions have been placed). I am apparently too good for their young, clever whiz-kids! They should hang their heads in shame; and BET365 should get some balls or decent analysts. They put their cue in the rack after 260 small bets from an aged lone punter. Then their pathetic mealy-mouthed wording: "….. we regret to inform you that we are no longer able to offer you our telephone betting service and whilst our online service remains available to you, betting restrictions will be applied on any future bets placed." If one made a decision after careful consideration, one should have no regret. If one has regret, one should reverse the decision. I thought all decent people operated that way, but I'm living in the past I guess. BET365 are so pathetic that rather than allow me to say they closed the account, they restrict me to 38c bets, thanks to the corrupt NT government's contemptible new minimum risk law. Still, better to make a little from them than nothing I guess. Will they cut me back to $2.05 the place and 23c the trifecta? And how magnanimous of them: " ….. it does not affect your ability to play and claim bonuses in our Gaming products".

[erikeepper]

Originally Posted by whodoyoulike

It would seem to me that they would ban a loser if they didn't pay up or something similar. Difficult for me to believe they would ban a consistently paying loser.

They would not ban if they knew for sure he would be a loser IN THE LONG-RUN. But when they don't know it for sure they listen to their algorithm.

For example let say you played only 5 games, lose all of them, but make big bets, and in all of those 5 games you placed a bet for the team who's odds had to be dropped because of the late money -> you were "in the right side" in all of those matches -> you are one sharp cookie even though you happened to lost -> you are a pro -> BAN!

[erikeepper]

Originally Posted by lansdale

But edge isn't everything. Ernie Dahlman claimed an edge of 3% *including rebate*, and an income of ca. $750,000.

Exactly! I think players in general focus too much on ROI. $$ (or euros in my case) are all that matters. If you have positive edge, you can make a fortune if you make enough bets, keeping your volume high.

I think that if you indeed had a 38 % ROI, you might be leaving lot of value to the table and could probably make more money with lower ROI, higher volume