The (Fictional) Abusive but Lazy Bookmaker: Could you make a profit?

[F.]

I made up the following situation because I hope to raise some interesting questions. This thread requires some suspension of disbelief.

Let’s say that a greedy but lazy SOB decides he will enter the bookmaking business. But he is so lazy he doesn’t want to bother setting up odds for every match in the English Premier League. His “solution†is to offer the same odds for all of the Premiership matches using the average pct. of home wins, draws and away wins to come up with the numbers. These are stats he uses:

2001 - H:42.37% / D:26.32% / A:31.32%

2002 - H:48.95% / D:24.47% / A:26.58%

2003 - H:44.74% / D:28.42% / A:26.84%

2004 - H:45.79% / D:28.95% / A:25.26%

2005 - H:50.26% / D:20.53% / A:29.21%

2006 - H:47.89% / D:25.53% / A:26.58%

TOTL - H:46.67% / D:25.70% / A:27.63%

FAIR ODDS – H:2.14 / D:3.89 / A:3.62

To lock in his profit the Abusive But Lazy (ABL) bookmaker decides he will use a huge overround of 30% evenly distributed among all the options. So the final prices he come up with are:

LAZY - H:60.67% / D:33.41% / A:35.92% (130% total) ABUSIVE ODDS - H:1.65 / D:2.99 / A:2.78

In order to enlarge the pool of available matches to bet on please assume the bookie applies this same strategy for all the main leagues using the corresponding percentages.

Some (initial) questions for you: 1) Would you open an account with the ABL bookie? Or is the overround simply too big? 2) Do you think you could find value for some EPL matches at these odds? 3) Is there a strategy that could beat the ABL bookie over a series (100+) of bets?

However, there are some constraints for this fictional exercise: - You CAN’T use the ABL odds to arbitrage with other bookies. - You CAN’T compare the ABL odds to other bookie’s odds, current or past.

That is, you must determine if there’s value for any given match using the ABL odds exclusively and you have to profit placing bets only with the ABL bookie. Why these constraints? I want to foster a discussion about if it’s possible to beat a big overround in the long run if I think there’s value in those odds nonetheless. Therefore I don’t want answers such as “I would arbitrage using the ABL odds†or “I would place bets when ABL odds are above Betfair oddsâ€.

I know this is a very artificial situation and that’s why it requires some suspension of disbelief. I welcome your thoughts on this issue.

F.

[Datapunter]

Re: The (Fictional) Abusive but Lazy Bookmaker: Could you make a profit?

I want to foster a discussion about if it’s possible to beat a big overround in the long run if I think there’s value in those odds nonetheless

There is no discussion, if there actually is value you will make a profit over time. Doesn't matter how big the overround is. Of course the bigger the overround the more difficult it will be to find any value, and indeed maybe you won't find any value ever. The only course in that case is not to bet.

you must determine if there’s value for any given match using the ABL odds exclusively

You do not use anybodies odds to find value. First you determine what the odds should be according to your own method. Then you check if you can get a price bigger than your own estimation. Maybe i'm stating the obvious but nevertheless; the bookies odds only come in at the end, not at the start, in the search for value.