Identifying Value on Core Markets

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Updated: 14 July 2020

Okay, so you’ve learnt about the different skills required and bet types available and their uses. Now how do you find a bet?

Ratings System

I have dealt with many smart punters and traders of various major sports around the world over the past five years, and there is one thing every one of them has in common when pricing up matches and outrights in their codes – a ratings system.

Ratings systems are simple, effective ways of pricing up matches consistently and accurately. It is easy for anyone to come up with ratings; the skill is being able to set them accurately. To be able to set more accurate ratings than a liquid market is a very difficult task, as on all major codes there are countless predictive models, experienced professional punters and experienced traders feeding information into the market to get it where it needs to be. One person sitting at home and putting together a few ratings based on watching 3-4 games on their couch and reading reports of the others has very little chance of beating such an efficient market – but it’s not impossible.

Ratings System

How do ratings systems work?

Ratings systems are very simple. In most sports (one where each team scores simultaneously and accrues points across a match, such as basketball, football, rugby, rugby league, AFL and many others) it involves rating teams against each other in terms of the points difference between them. For example, the top four I have in AFL currently are;

Collingwood – 0
Richmond – 4
West Coast – 8
Port Adelaide – 8

This implies that Collingwood are the best team, 4 points better than Richmond, who are 4 points better than Port Adelaide who are equal with West Coast. This is based on a neutral ground – when the markets are set for the weekend’s matches, injuries, home ground advantage, weather conditions, player availability and any other relevant factors are added to these ratings to produce the handicap for the match, which in turn produces the head to head price.

Home ground advantage varies between sports and competitions, but most major codes have plenty of publicly available studies detailing quantitatively analysed home ground advantage for different leagues and often broken down by team and opposition, which is a super helpful tool for any punters looking to further their knowledge. In the AFL, home ground advantage typically ranges anywhere from 2 to 12 points, depending on both the home side and who their opposition is. If West Coast were to play Collingwood at West Coast’s home ground, assuming a home ground advantage of 10, the line would be 8 – 0 – 10 = -2. So West Coast would be 2 point favourites despite being rated 8 points worse than Collingwood.

It is crucial to use a ratings system if you are planning to bet on any core markets to ensure you are objectively and consistently setting prices each week. Without it, you are likely to have unconscious biases seep into your pricing system, and your betting will suffer for it.

Betting on core markets

If you are going to bet on core markets, such as head to head, handicap/line, total game score, margin and others, there are a few factors you should consider if you wish to be profitable. One of these is that the market is at its most efficient in the minutes leading up to the game. By then, all the professionals and other sharp customers, tipping lines and predictive models have fed information in the form of bets into the market, shaping it to where it sits. If you are betting regularly in the last couple of hours before a match, you will struggle. Conversely, when the market first goes up it is at its least efficient. At that stage, it is based on the opinion of only one or two traders rather than the litany of factors listed above. There is also plenty of missing information, such as team news, weather conditions and potentially form and injuries if the competing sides have any matches to play before the game in question. These all provide inefficiencies, which an astute punter can capitalise on. Sounds easy, right? The only problem is, as a punter, all this uncertainty impacts you as much as it impacts the bookies. So how do you use this to your advantage?

Betting on team news – One easy way to get a consistent edge over the market is to bet as soon as team news is released and before markets have adjusted. This does require a high level of attention. You need to be quick to beat the bookies to a price move, and you also need to know what the price was before the news to make sure you weren’t too late. You also need to know how much a player of that calibre will move the price – if it is only 1-2 points, it may not be worth betting on.

Looking for inconsistencies – Inconsistencies in early markets are quite common. One way of finding these is to compare lines for each game that round and use these lines to come up with what the ‘market’ ratings are (remembering to account for home ground advantage). When the round is completed, you can compare the lines for the next week against the ratings you have put together. If one team had a good win and another team lost, yet they are playing each other the next week and their implied ratings haven’t changed, there is likely to be an error there somewhere. This is where expertise in the league is crucial. You need to know there aren’t any other factors at play, like a returning player from injury or an injury sustained on the weekend.

Betting on core markets

Outrights – You can then use these implied market ratings to identify value in outright markets. Remember that come gameday, the market is at its maximum efficiency, so it’s safe to assume that the ratings at that point in time will be more accurate than your own. Particularly late in the season, you can start playing around with these ratings and equations to identify value in outright markets – things like regular season winner, top 4/8 and even premiership winner often offer value late in the year if you know what to look for. To do this requires a strong understanding of implied probability, although that is the case for being a profitable punter in general.

Summary

The one thing the above three examples all have in common is that they are quite objective in their identification of value. The best and most consistent way to find value, particularly early in your betting career, is finding inconsistencies using the market information provided on gameday. This is a far more reliable and much easier method of profiting than trying to beat a very solid market.

Once you have a couple of years’ experience in betting on your sport in a disciplined manner, you might be ready to start finding your own bets on core markets by beating the bookies, though you will likely still need to bet early to have any real chance of profiting.

The other option available to novice punters that offers a good chance to turn a profit is focusing on niche markets. I will delve deeper into what these are and how to find value on them in my next article.