Three Club Monte

Three Club Monte is a golf format that requires the players to pick just three clubs to use during their round. This makes for an interesting game but I do worry when I hear commentators suggesting traders play three club monte in the market! Playing three club monte isn't a problem if you are playing on a level playing field. But if you play this against somebody with a full bag of clubs your competitor will thrash you, at best, and on a bad day you could fail to get off the first tee. When we designed and pioneered the core elements in Bet Angel several years ago, we took a good look at the markets and realised from our experiances that while some strategies worked some of the time, they definately didn't all of the time. Using all the features in Bet Angel will give you a full set of clubs!

For example, scalping the market is fine, but just adopting that one strategy will leave you a few 9 irons short of the green as you miss out on bigger trades or more counter intuitive trades. That is while I flip and flop my strategy depending on what I expect to see. In this next example I have performed a swing trade. I didn't pummel the market with directionless scalps I used the charting on Bet Angel to help me decide when to get in the market and when to get out. We are about to significantly upgrade the charting on Bet Angel so this will give you an even better chance of catching some of the nice moves.

Where opportunties are created...

17:30 Thirsk today

Sir nod and Toy top are racing with pretty much the same coloured silks. So much so that the commentator makes it clear to viewers to look at the horses and not the silks. Near the off Sir Nod starts messing around and it's obvious he will not load. Off they go without Sir Nod. Bizarrely the commentator messes up and calls Toy Top as Sir Nod. On this occasion there wasn't a great opportunity but on another day the wrong call could have made astute watchers a small fortune.

Clash city..

I'm not referring to the 80's pop group more the incredible balls up at the start of this evenings racing. Three UK races, two Irish, somehow four of them all conspired to go off at the same time for various reasons, what a mess! The fifth only failed to join them by 2 mins. OK, I know I may be biased in wanting nice gaps between races but what a mess. Remarkable that it could happen at all.

By the second round of races it looks like my evening session is completely sunk. Things are getting worse, not better, the timings are all over the place. Not everything is lost though, I have a new build of Bet Angel to test so I will get on with that now.

Financial spreads vs. Betfair

As you know I spend quite a bit of time nosing around the financial markets. If you have never touched financial markets it's worth having a look at some point.

Each morning I spend a lot of time browsing company reports and reading up on companies, industries and all manner of things. Today I was looking at IG index and the spread betting industry. IG are an interesting company and one I have held shares in twice. The report makes interesting reading.

Click here for the IG Index annual report

IG is a spread betting company that started in 1974. It offered spread bets on gold back then but now it includes sports as well as financials. In comparison to Betfair it is booming, it's also a lot more profitable.

Click here for the Betfair annual report

IG's earnings for 2008 were £97m vs. £20m for Betfair but it's the growth that is the most interesting aspect. IG's revenue is up 50% year on year compared to Betfair's 25%. Most of the growth at IG has come from financial spread bets as opposed to sports betting. When I joined Betfair this is where I thought Betfair could completely clean up. I felt the exchange model they had could really make inroads to traditional financial spreadbetting. However Betfair never gained acceptance into the financial community and perhaps FSA accreditation may have helped there? It's interesting to see how fast the financial spread betting market is growing. Dominance, it would appear, hasn't turned out to be the case for Betfair and they recently hived off the financial markets to London Capital Group as a white label product.

Click here for the LCG annual report

This doesn't appear to have worked either as volumes on Tradefair are very low and none of the really big financial traders I know use them, they prefer, despite their flaws, companies like IG. I think one of the problems is that city firms very often make a market in financials and as a market maker they are almost impossible to beat. No sooner have you submitted a bet than the market moves and your value is swept up before you even knew there was any there. That's a killer. I guess this will always be a flaw of these types of markets, it's an uneven playing field.

The wedding speech and Jim McGrath

When I got married, quite a few years ago now, I struggled to find inspiration and eventually found it from the comedy series Blackadder. The peak of my speech was the rather corny, 'Life without you is like a broken pencil', long pause ensues.....'Pointless'. I also remember my embarresment years later when I encouraged the children to enjoy this particular type of black comedy. One episode ends with the immotal line, 'Duck that rhymes with F' at which point the episode ends. Try explaining that to three children!

No need to worry about expletives at the end of old TV episodes, you could just watch At Th Races instead. I was watching the lead up to the 19:50 at Windsor this evening with my daugther who was due to head off to the school disco at 20:00. Jim McGrath was trying to explain a busy betting market and accidently slipped out an expletive not once but twice.

'The price has fluctuated a lot' he said, well actually he didn't, apparantly 'The price hadfu....ated a lot'. A rather embarrssed McGrath came on a few seconds later to correct his error. But it all gave us an enourmous laugh on a rather dull evening session. Thanks Jim.

Recession proof?

More evidence today that people do cut their spending on gambling during recessions. Of course Betfair is still growing in and outside of the UK gaining market share at the expense of rivals. This should dampen the decline IMHO but there is no doubt that people do cut back on gambling. This probably shouldn't be a surprise as it is a "leisure" activity.

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Gaming revenues in Nevada continued to slump throughout the month of May, according to data released by the state's Gaming Control Board. Statewide, casinos earned $969.94 million in gaming revenue in May, a 15.2 percent decline compared to the same period a year ago. Gaming revenue from casinos on the Las Vegas Strip felt a 16.4 percent decrease in gaming revenue to $513.45 million.

Gaming revenue at the 11 casinos in Atlantic City, New Jersey fell to $373.6 million in June, an 11 percent drop compared to the same period last year, according to Atlantic City's Casino Control Commission. "It's brutal," Carlos Tolosa, head of Atlantic City operations for Harrah's Entertainment, told NJ.com. "I believe it bodes ill for the rest of the year. I think we're in for tough times."

The Open golf lottery championship

I'm a pretty moderate golfer but do ok around a championship course, I enjoy the spoiled walk that is golf. There is no doubt that a professional would make complete mince meat of me. It is for that reason that I enjoy watching professional make mince meat of a course. They play shots I can only imagine and make putts with a consistency I can only dream of.

Watch the Open though or a number of the other top contests and it's all become a bit of a lottery IMHO. The courses and conditions are often so tough that it makes it hard for even a professional to play a reasonable game. Worse than that a lot of them are coming around to the fact that in order to win these contests it often makes sense to play very defensive shots. For me this reduces the golf as a spectacle. I would like to see players attacking the greens and being tempted into aggressive shots not the dull defensive play that seems to becoming more common.

All that said, turning golf into a lottery makes the prospect of somebody blowing up from what was a good score much more likely, so laying leaders in the early days is probably an increasingly effective tactic on difficult courses with bad weather. Also understanding the playing style of competitors can also help. Mickleson is known for trying the impossible often and this is considered a flaw of his game. When queried on this he clearly stated that the day he started playing boring golf he wouldn't enjoy it and his intention was to enjoy playing first ahead of winning. Ah, that'll be a lay then in a difficult situation. I have to say, if I was Mickleson, I'd probably be the same.

Whether you agree with it or not I don't think the R&A are going to change tack any time soon.

Oaks Double

I always remember when the Epson Oaks is, as it coincides with Betfair's birthday. It also coincides with my Betfair birthday, I joined them almost as soon as their doors opened way back in June 2000. Over the years I've slowly got better at getting something out of the Oaks but this year I went one better and did the double.

I'll often trade overseas races if the market is strong enough. I've even bothered to get up in the middle of the night to do the Melbourne cup, but most commonly Irish racing presents the next best opportunity next to UK racing. Often the liquidity isn't as strong as the UK but on the feature events there can be quite lively betting markets. This was the case with the Oaks this year. On June 6th I did the UK Oaks at Epsom and netted a useful total.

A few weeks later and we move onto the Irish Oaks. A bit of a problem for me as it was on a Sunday and I try to make sure I get at least one day off during the week. However on this occasion I made space for the Irish Oaks. To my surprise I beat my Epsom total, the first time I have ever managed that.

Is the gambling industry recession proof?

It's a question I have seen pop up on several forums and to be honest I don't know the answer. During the last recession I didn't have much focus on gambling companies, but one thing for sure is that a recession is generally not good for consumer spending. Whether punters turn to gambling when the chips are down isn't certain, but there will certainly be less disposable income around. I can see how irrational gamblers are though, through the markets; but I'm not sure if this will extend into the market when a recession bites.

The Irish economy is in trouble at the moment and slightly ahead of the UK's curve. It was recently reported that on-course bookmakers in Ireland have seen a 14 percent drop in turnover in the first six months of 2008, compared with the same period in 2007. These figures were in a report from the Irish Examiner. It mentioned that Bookmakers took in 82.7 million euros in H1 2007. So far in 2008, figures are at down to 69.4 million euros. The Tote's revenue has also declined 279 thousand euros, in total turnover for the period to 25.7 million euros.

The director of racing for Horse Racing Ireland told the newspaper that the figures weren't shocking given the state of the economy. 'It been an ongoing trend for a while given the slowdown in the economy and the half-year figures reflected that situation.' Mr. Morris said the decline may also be related to bettors' trend toward Internet betting.

Without online figures its difficult to estimate the true impact. You would guess that the continued migration to online betting is still growing, so you can discount some of the decline to that. But one thing for sure is that the economic slowdown in Ireland does not appear to be benefiting the Tote or on course market.

Obama in illegal gambling scandal

OK, maybe not a scandal then but quite funny how you can fall foul of the law. The national campaign for Barack Obama altered a fundraising opportunity on its Web site this week to avoid a violation of Minnesota's gambling laws.

The contest, which originally offered 10 supporters who donated $5 or more, and their guests, the chance to meet Mr. Obama at the Democratic National Convention on Aug. 28 in Denver, now does not require a donation after campaign officials were informed that the contest constituted illegal gambling.

The Minnesota Gambling Board was tipped off anonymously on Monday about the contest and the board turned the matter over to the Department of Public Safety, the Minneapolis Star Tribune reports. The Department of Public Safety gave Mr. Obama's campaign two options on Tuesday: invalidate the contest in Minnesota or make the donation optional. Covering all bases, the campaign chose the latter.

Minnesota authorities said they would not pursue the matter any further.

Betfair's SP mechanism is flawed

I've spent a lot of time looking at Betfair SP and trying to find a useful way to utilise it. Having found a couple of useful ways of putting it to use I also discovered a fairly critical flaw. It turns out that SP or "starting price" to give it its full name is actually nothing like a starting price it should called an early furlong price.

The issue revolves around the time delay between a race getting underway and Betfair suspending the market and resolving the SP. There is a 4-6 second gap between the race starting and Betfair suspending. On shorter races where a horse misses the kick, has a problem or unships its rider it is possible to horribly manipulate the SP price. I first noticed this when it happened to me. I put a small bet in on SP to trade out in play it the SP returned at a price that was way off the last traded price, I lost £100. Of course this happens using conventional mechanisms but the problem is easy to solve, you simply exit your position a little bit earlier say when the second horse is due to load. Use SP however and the price will only be resolved when horses are about a quarter of a furlong out. Coupled with other issues, more about that some other time, this represents a pretty nasty flaw.

The colour of money

One of the things I do often is get a grip on the colours and numbers of a horse. The reason I do so is because if one of them bolts I would like to know very quickly which horse it is. I would have thought in running punters would do the same but it doesn't appears all of them do. Of if they do they let a quick profit cloud their vision.

Last night at Windsor the commentator called the wrong winner and like lemmings a number of people piled in on the mentioned horse, Brazillian Brush, pushing it to 1.01. Unfortunately for them they didn't realise their error and £102,000 was matched at 1.01, ouch!

I must admit I didn't see it as I was making a cup of tea, doh! But a couple of frantic calls alerted me to the situation, by then it was all too late. I am surprised that people didn't know their colours especially if they were betting in that manner. I guess it may have been a rush of blood that created the error. There is no doubt that gold dust is valuable but if it gets in your eyes it tends to obscure your vision.

Steaming summer

You could be forgiven for thinking that I was talking about the summer weather, then again if you are from the UK you know that I couldn't possibly be talking about the weather! What I am referring to is the enormous amount of gambled on horses we have seen recently. I can't remember anything similar in recent memory. Most days there are some significant moves and some days its almost as though every other race contains a big mover.

This can be a problem for me as I tend to be contrary. But given the frequency with which these moves have been occurring lately it has been almost impossible NOT to get on the right side of one. In the illustration, you can see the price of a horse move from 11's to eventually start the race near 3.85. Backing even at 6's and laying back at 4's would have netted you a 200% profit on your stake. This is just one of a huge number that have occurred recently. Until we get the data through I can't comment if this is unusual or just an optical illusion but it has been a very noticeable trend recently. I hope you have caught a few.