Arbusers

Dear Arbusers,

I have quite decent access to a few soft bookies that frequently offer odds with, say, 5% EV. However, I do not have an unlimited risk tolerance or bankroll. I want to increase my profits.

Here's an example:

Asian odds: 2.00 / 3.80 / 3.4
Probabilities: 47.3% / 24.9% / 27.8%
Bookie's odds: 2.20 / 3.25 / 2.90
I have 4.05% EV on 1.

Now, when these odds are nice enough to form a surebet, there's no need to hedge anything - at that point, you usually have 20% EV or more, so you can just place a few hundred on it and that's that.

But if you're doing this with 5% EV, either the variance will kill you, or you'll be placing ridiculous stakes that are frankly not worth the time.

So: My question is, is there a way to lay off risk cheaper than the Asian bookies (Pinnacle, BetInAsia, etc)?

For them, it should be profitable - the bets I am placing are all -EV, so they shouldn't run a loss in having me as a customer.

Here's what I've thought of

• Parimutuel (pool style) betting.
  • With a low enough rake, this would work fine.
  • However, I haven't found anyone offering it other than LMAO% vig toto places.
• Bookies that would offer really great odds, on the condition that I accept the closing line unconditionally, no matter the odds. So, I inform them 24h in advance that I want to place $100 on X outcome, and then they tell me what the odds I got once the match starts.
  • This is basically identical to parimutuel, but on slightly different terms.
  • I'm not pulling enough volume alone to make it worth their while to make special accommodations, so I'm afraid this would have to be a service which exists.
• Betting exchanges where I could offer odds on the opposite, and only place the bet on the soft bookie if I get matched.
  • I'm not sure if any place has the kind of liquidity to make it worthwhile after trading fees
  • I need REALLY good odds to make this worthwhile.
  • Considering all the sharps are probably on brokers, does it matter which exchange as long as they have the league in their list and is available from MollyBet?
  • Is there any 'one weird trick'/discount code to get a lower commission, assuming I only add liquidity, never take orders, and place -EV bets?

Do any of these services exist? (If not, why won't someone make it? I would be willing to pay money for it, and it shouldn't cost that much assuming everything is done on the cheap. 2000 users doing $2500/mo @ 0.5% commission = $25k/mo, which is not nothing.)

Thankful for any advice!

Hello Mirage,
Probably temporary workarounds for you, until you find out the right places and approaches for your business:

- If you have access to BF Exchange and love Horse Racing, you may get a promotion of 0% or a very low commission. That way your profits won't be reduced by fees. The next step is to play on Betfair's Starting Price markets - you enter the desired amount to wager and at the beginning of the Race, you get the BSP Odds, much better than the bookie's agencies. Check if better Exchange's SP vs industrial SP is worth it. I mean calculate if the bigger hypothetical profit on the Exchange vs the Bookies may beat the fee on the Exchange when the low fee promotion expires. Check if other exchanges (BETDAQ, etc) offer SP and zero or low commission at a decent level of liquidity, acceptable for you.

- Access to SBO and IBC via Asia. Sometimes they have some unique markets and unique odds. But that's very hard, indeed. Beware of untrustable shady agents, beware of voiding bets, etc.

- In your post, you said, that at the level of 5 percent positive expected value, the stakes and variance are not worth your time.
There is another possibility - at constant monitoring of the risk level by your side (risk level is not strongly connected to the probabilities/odds if you do fundamental analysis), you may pursue geometric growth of your capital. Therefore sooner than you think, you'll have more capital. But the quality of the risk management is leading when opening a position.

Just my two cents.

arb12 wrote: ↑

Sat Jun 11, 2022 2:28 pm

Hello Mirage,
Probably temporary workarounds for you, until you find out the right places and approaches for your business:

- If you have access to BF Exchange and love Horse Racing, you may get a promotion of 0% or a very low commission. That way your profits won't be reduced by fees. The next step is to play on Betfair's Starting Price markets - you enter the desired amount to wager and at the beginning of the Race, you get the BSP Odds, much better than the bookie's agencies. Check if better Exchange's SP vs industrial SP is worth it. I mean calculate if the bigger hypothetical profit on the Exchange vs the Bookies may beat the fee on the Exchange when the low fee promotion expires. Check if other exchanges (BETDAQ, etc) offer SP and zero or low commission at a decent level of liquidity, acceptable for you.

Thanks, this is the kind of stuff I want to pursue. Do you know if anyone has extended the idea of 'starting price' to football yet?

- Access to SBO and IBC via Asia. Sometimes they have some unique markets and unique odds. But that's very hard, indeed. Beware of untrustable shady agents, beware of voiding bets, etc.

I've looked at some Asian bookies, and they all charge large-ish vigs save for on the Premier League etc. I think it's just not possible to run a fixed-odds bookmaker cheaply enough (I have all the sympathy for their business), so either you need to restrict clients (e.g. tell people they can only use it to hedge, not to place valuebets), or you need to accept odds at "fair" (but good) prices (e.g. BSP).

- In your post, you said, that at the level of 5 percent positive expected value, the stakes and variance are not worth your time.
There is another possibility - at constant monitoring of the risk level by your side (risk level is not strongly connected to the probabilities/odds if you do fundamental analysis), you may pursue geometric growth of your capital. Therefore sooner than you think, you'll have more capital. But the quality of the risk management is leading when opening a position.

Just my two cents.

Very true, at current rates I really shouldn't complain anyway, since being small also gives you a lot of opportunities that are out of reach later. The Kelly criterion says that 5% EV at 2.00 gets 5% of bankroll. For such a bet, my expected bankroll growth is something like 0.25%, so at some point it's probably worthwhile to place them straight without bothering to lay anything.

Thanks for advice!

@ Mirage,
Glad to communicate with a person with extended thought patterns, willin' to develop. Some short ideas, hopefully helping you to research and develop desired things further:

- Is it possible by your side to construct a "Starting Price" for football/soccer?
If you have some enhanced experience with how is moving the price from the Opening moment to the Kick-Off moment, and how is the price influenced by various factors, you may build several probabilities for several Extreme Values in the time interval "Opening - KickOff". Further, when you're much experienced with the written above, you may load probabilities for reasonable Extreme High Prices in that time interval, or load probability for reasonable Closing Price, at the end of that Time interval. Which of these is valuable to your strategy? How to place that/these in the market, maximum close to the equivalent of "Starting Price"?
Additionally, I strongly encourage you to explore the possibility of developing your own approaches for Horse Racing, and later the "Starting Price" for Horses, if that is your strategy. The Horse Racing is the second most liquidity sport worldwide after the Cricket. Soccer is in third place.

- Assure you, that if you watch the agencies' odds, margins, limits, and so forth regarding Asian agencies from outside Asia, and if you have access from these from let's say, Southeast Asia & Asia Pacific, some things may be different. But some shady practices are blooming there and you must avoid the pitfalls.

- My advice about the Kelly Criterion, research if the Geometrical approach is most valuable for you at that stage, and if yes, then the Kelly Criterion is to be only one of the basic ideas for your own developments. Five percent of the capital wagered on one position in most cases is very rude behavior toward your own hard-earned amount so far. That's also rude behavior toward the business capital on your disposal in the future, due to hypothetical decapitalization at the present moment (wrong calculated risk and Expected Value). Not to mention Ralph Vince's observations when Kelly Criterion in some conditions in leveraged accounts imply over 100 percent stake in one position, that's absurd!
In my view, Kelly Criterion is only one of the jewels in the development of your own-built approaches. There are lots of much more elegant geometric system approaches, and even more profitable in the long run.

Wish you a lot of profits.