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Ref: arxiv. Could they simply have got lucky? Skip to Content. Their method is straightforward. Ordinary punters cannot always bet on closing odds, which can vary significantly from the odds given in the run-up to a game. And they call on governments to properly regulate the gambling industry and to prevent this kind of practice in the future. They calculated the average odds, found any outliers, and then worked out whether a bet would favor them or not. The bookies always ensure that the odds are in their favor. Kaunitz and co say this process also creates an opportunity for anybody able to spot it. Kaunitz and co next work out how favorable the outlying odds are. So bookmakers can hedge their bets by offering more favorable odds on the opposite outcome. This is important because it allows them to check whether the quoted odds are actually available with an online bookmaker. Then it is a simple matter to analyze all the odds being offered and to find the outliers. During that period, their bets paid off Eagle-eyed readers will notice that the number of bets they placed was significantly less than during the paper trading period. An important question is whether this result could have been pure chance. The team points out that this kind of practice could be illegal. This gives the average odds, which Kaunitz and co say is a remarkably accurate reflection of the real probabilities. In that way, it guarantees itself a profit. This simulation paid out 44 percent of the time and delivered a yield of 3. The way odds vary in the run-up to games is not publicly available, so the team created a bot that collected these odds from betting websites around the world from September to the end of February Then they tested their approach in this data set. But setting these odds is harder than those for roulette because the calculations are trickier. Whether this will work is not clear. But their work comes with a serious caveat. Indeed, they discovered that about 30 percent of the time, the odds had changed by the time they attempted to check online. They start by assuming that bookies themselves are good at setting odds and that the prices they offer are an accurate reflection of the real probabilities of a win, draw, or loss, plus their own margin. But despite this sophisticated approach, there is a weakness in the way bookmakers work. They typically employ teams of statisticians to study historical data for a sport like soccer and then develop sophisticated models to determine the appropriate odds for each game. But their story comes with a sting. So the team compared their results to 2, simulations in which they placed bets randomly on the same games. If they are good enough, then the bet should pay off, at least in the long run. That gave Kaunitz and co good reason to think their method would work in the real world, but there was a problem. Latest content Load more.{/INSERTKEYS}{/PARAGRAPH} In that case, the bets paid out 39 percent of time at a return of That allowed the team to calculate the likelihood that their first result was a fluke. In that case, the bookmaker is set for a large payout if that outcome occurs. Is it possible to come up with a better way to calculate the odds, and thus beat the bookies? But the strategy was still profitable. So Kaunitz and co decided to simulate this, too. Sometimes large numbers of people can bet on a particular outcome for reasons that are unrelated to the oddsโ€”that team might be more popular than expected, for example. They built a Web crawler that gathered the odds offered by online betting companies on soccer games around the world. In that case, a good measure of these probabilities is a simple average of the odds offered by all the bookiesโ€”a kind of wisdom of the crowd. Today we get an answer thanks to the work of Lisandro Kaunitz at the University of Tokyo and a few pals, who have found a way to consistently make money from the online betting market for soccer. {PARAGRAPH}{INSERTKEYS}The clearest example is roulette, where there are 36 red and black numbers plus the green numbers 0 and in the U. The results were even better. In those cases, they discarded the bet. And that raises a tantalizing possibility. In this way, they attract bets that cover at least some of the potential losses. Gamblers have long toyed with schemes to beat the odds, but success is rare. Their bets paid off Curiously, a random betting strategy on the same data yielded a return of 0. Kaunitz and co say that as soon as the bookies became aware of this success, they prevented the researchers from betting further. After three months of paper trading, their bets retuned a profit of 5. Kaunitz and co say that as far as they know, nobody has been able to beat this system by developing superior statistical models.