Greg Gordon's Betting Experiment

Sports Betting and the Public Perception

"There is no doubt however, that sports betting is still seen by the majority of people as somewhere on the spectrum between frivolous and immoral."

Many of us entertain the idea at some stage or another of becoming a professional gambler, and indeed some of us, as our interview series demonstrates, have actually made that career choice.

There is no doubt however, that sports betting is still seen by the majority of people as somewhere on the spectrum between frivolous and immoral. Furthermore, the idea that it can be a sound investment strategy would be ridiculed by the same majority.

Enter the Fourth Estate

"Greg Gordon has been running a series of articles in the national media on sports-betting as an investment strategy"

Interestingly, for the last 6 months, Greg Gordon - a highly respected journalist has been running a series of articles in the national media - covering a year long experiment he is running on the use of sports-betting tips as the basis of an investment strategy. As the experiment reaches it half-way point, Punters-Paradise has offered to cast an independent eye on procedings and give its' views.

Greg is currently in profit to the tune of a very respectable £4000, based on the results of three sports betting advisory services. During the 5 months or so the test has been running, Greg has typically staked £100 per bet, at an average of about 12-15 bets per week. The above figures do not take into account the tipster service fees which range from about £50 to £125 per month.

First Things First

The first thing we need to do is to have a look at the performance of the tipsters involved and get some basic figures. We can then use these figures for a more detailed investigation where we will look at the risks and rewards involved. There are four key metrics we need to assess any system or set of bets:

1. Number of Bets
2. Number of Winners
3. Yield (percentage profit on investment)
4. Bet Frequency

Other related quantities (which can be derived from the above) include:

1. Strike Rate (the percentage of bets that win)
2. Bank Growth (how much your starting 'bank' has grown by)
3. Robustness (the probability that the system is genuinely profit/loss making and not just on a good/bad run)
4. Average Odds

There are 3 pay services that Greg uses (two of which have two subcategories each) and his own football tips. The performances are as follows:

Service	Bets	Winners	Yield, %	Bets per month	Robustness
Sport4Profit - Golf	133	12	-27%	18	76%
Sport4Profit - Singles	48	30	14%	7	71%
SLH Private	78	26	72%	11	99.8%
SLH Premium	17	6	5%	2	12%
The Mathematician	49	15	10%	7	35%
Gregs Football	74	28	21%	10	78%

"In this business there are many unscrupulous entities who will claim fraudulent records."

The figures above are based on the results Greg has used in his column. In the absence of any further records or information, the above is all we have to go on - although several of the services have information claiming longer term profitbality.

As a general rule (and without casting any doubts on the particular tipsters above) we should be very sceptical about published past performance. In this business there are many unscrupulous entities who will claim fraudulent records. All bar one of the above are in profit - the exception being the golf tips.

However, it should be noted that the nature of this betting (betting on tournament outcomes where the odds are invariably above 30/1) will inevitably lead to long losing streaks. This illustrates the importance of the robustness metric, which in this case is telling us that there is a 76% chance that this is a fundamentally losing system. However, one would like a much higher figure before having real confidence - statisticians would normally look for 90%, 95% or even 99%.

"The SLH service is showing quite an incredible yield - currently at 72%"

The SLH service is showing quite an incredible yield - currently at 72%. In simple terms this means that for every £1 you bet, you can expect £1.72 to be returned. In comparison, in the industry in general anything above 10% yield is considered exceptional. While the high robustness figure indicates that this is truly a profitable system, the high certainty is with regard to whether it is profitable and not whether it is profitable at this level!

I would expect the yield to drop over time, but Steve Lewis Hamilton should still be congratulated! His premium service has a very low robustness, simply because of the low number of bets to date.

We will conclude this article by commending Greg on the performance of his own tips, which stack up well against those of the professionals.

In the next article in this series we will look at how we can use the above information to explore the risks and find a suitable balance between these risks and the profitability of the experiment.