My Dad's crazy betting system

[TheWanderer]

My Dad has decided he has an easy system for making money gambling. I keep trying to find fault with it but I’m struggling to come up with anything.

His system is basically betting on Man Utd and Arsenal to win, only Premier League games, obviously not if they are playing each other. If one of them loses he increases his stake on the next match to cover the loss from the last match and make a profit. He has been doing this on paper since just after Christmas and says he is making £25 a week profit. I think his theoretical starting bank was £1,000. Next football season he is considering doing it for real with a starting bank of £10,000.

I have tried to come up with reasons why this can’t work. It sounds similar to the Martingale system for roulette to me but having read up on this the main risk of this system seems to be that you run out of money or that the house will limit the size of your stake. Both of these sound unlikely to be problems here - if he gets limited at one bookies he can just put the same bet on somewhere else.

Another problem I suggested was if either of those teams went on a Chelsea style losing streak. To counter this he says he will not start betting until half way through the season so that he knows how each team is playing, and that betting on two teams rather than one reduces the problem of one team going on a losing streak.

This system can’t possibly work. I haven’t spent hours/days/weeks reading about betting systems and trading just so that my Dad can come along and tell me that I should just bet on Man Utd and Arsenal. Please can someone who is brighter than me suggest the holes that this system must have?

[joeyboyuk]

It is the martingale system, but with a much bigger house edge than something like roulette as the odds on the top teams are normally pretty poor value! Chelsea were playing absolutely brilliantly at the start of the season and then went on that terrible run. Same could easily happen to United or Arsenal.

I'm guessing it would only take 2 or 3 losing bets to be completely wiped out.

eg £100 @ 1.25 loses
next bet would be more than £600 at similar odds to win back the losses.


Stop him from doing it basically

[TheWanderer]

Thanks joeyboyuk.

Thing about my Dad is, he finds it very difficult to accept that he doesn't know best, and while it would be good to let him learn his own lesson I don't want him to squander my inheritance anymore than he is already doing.

I have emailed your comments to him so will see what he comes up with in response.

Thanks again

[munk]

Maybe you could suggest to him that he re-runs his paper money version but instead use Chelsea instead of Arsenal/Manu. Actually do it on paper and work out how long it would have taken to lose the £10k, am sure it would have dwindled quite a lot by this point in the season given Chelsea's poor run recently. Like joeyboy says, could easily happen to Manu/Arsenal next season.

I actually did something similar with Manu last year. My experience was that yes, if they're on a winning streak that's all well and good, but it also means the price on them is very minimal and so the return is quite small. Additionally it means just two or three losses in a row can easily hit you heavily and knock your bankroll right down.

[srh1984]

My Dad's crazy....

[butty]

ask for your inheritance in cash now
should be able to buy the house back cheap in a little while

[netman]

This is a road to nowhere. And your father's bank will tend to zero.

[muntjack]

There's a very simple mathematical reason it won't work.

Bookies aim to set their odds based on the real probability of something happen, then round them down a bit to get their profit.

At Betfair, the wisdom of the crowd sets the odds. So those should produce a breakeven situation, but BF then takes their percentage. (BF staff claim that BF odds are actually accurate, which makes sense if you believe in the aforementioned wisdom.)

Your father's plan is therefore a guaranteed plan to line the bookies' pockets

[blowingbubbles]

Really its a chase your losses system but actually planning to do it beforehand! Tell him to do it, the bookies need to pay us somehow

[TheWanderer]

Ok so I have sent all your comments to him.

This is what he came back with (I know some of his calculations regarding implied probability are incorrect but it's more the logic behind it that I'm trying to analyse)

Odds of 1.4 imply a result that is expected to be close to 60% likely (plus the bookies markup). Odds of 1.8 imply a probabilty of only 20%. So 60% chance implies wins 60% of the time, 20% implies wins 20% of the time. ManU and Arsenal will most likely win more than 50% of the time so if you can get odds of 1.8 on either it seems a good bet.

I have told him that the only way you know if something is a good bet is if the odds offered are close to the real probability of that outcome happening.

But - I think - his idea is basically - Man Utd and Arsenal tend to win more than 50 per cent of their Premier League matches so as long as you get average odds better than around 1.9?? you will be in profit by the end of the season.

Combining the two teams' results from the 2009-2010, Man Utd and Arsenal won a total of 50 out of 76 matches, which is equal to 65.6%. So you would need better odds greater than 1.54, on average, to have a chance of making a profit.

What is wrong with this idea? My thoughts are:
Past performance is no guarantee of future performance and this scheme is really just gambling
The chance of wiping out your bank with a bad streak
The odds being less on average than 1.54

I'm almost embarrassed to say that I can't pick this idea apart any further than this.