Since the launch of Betfair's betting exchange in 2000, online gamblers have been able to trade the outcome of sporting events, that is, to place more than one bet on the same market at different odds, either to ensure that some profit is made, or to cut losses early when things aren't going to plan. Cricket, especially test cricket, is an excellent sport to trade, as there are often dramatic swings in matches which can provide excellent opportunities for traders to capitalise on.
To provide a step-by-step guide on how to use a betting exchange, and to hopefully give you another string to your betting bow, I'll talk through the example of the Ashes 2015 Series Winner market below. Going into the first test in Cardiff, before a ball had been bowled in the series, the market looked something like this:
England: 5.25 (19%)
Australia: 1.46 (68.5%)
Draw: 9.2 (10.9%)
I've included the implied probability for each result here, as understanding what the odds represent is crucial to successful trading. Essentially the market was pricing the chance of Australia winning the series at just under 70%, and I felt that this was an inaccurate representation of the true probability of Australia winning three of the five tests, and, therefore, that laying Australia at these odds offered value.
Why did I think that Australia's chances of winning the series were less than 68.5%? Well this was more of a gut feeling type bet rather than anything based on quantifying statistics. Although England's form had been very poor over the last year or so, the sacking of coach Peter Moores and the appointment of Trevor Bayliss seemed to me to bring a freedom to England's cricket. The drawn series against New Zealand earlier in the year, the first since Moores' sacking, saw England play some excellent cricket, and I felt that any replication of this against the Australians would make life very difficult for the visitors. The fact that it's a home series for England also indicated to me that the Australian's wouldn't have the easy ride the market was pricing in, and I made their chances of winning the series closer to 50-55%, and so layed the 1.46 on offer.
My intuitions on the standard of cricket England would play were proved right during the first test at Cardiff, and, although my bet was nicely positioned at the end of this game, I was keen to remove my risk from the market, as I was happy that my initial assessment was correct, and I felt that Australia under-performed in this test, and were likely to up their game in the remainder of the series. I therefore backed them at 2.54, a price I felt represented fair value at the time, leaving me with a level profit across all three outcomes.
Of course, given that there were four tests left in the series, if I had different risk preferences there were other options I could have taken. I could have backed Australia with all of the profit for my lay bet, meaning that I would have had no liability in the market, and essentially a free bet on Australia, or I could have done the opposite, covering my liability on Australia leaving profit on England and the draw, making this a free lay of the visitors. Should the result have gone the way of Australia, and England had reverted to the type of cricket we saw during the previous Ashes series, I would have been able to back Australia, at shorter odds that I layed them, which would have meaning I would have taken a loss, but a smaller one than if I had just let my bet run until Australia had won three tests and the series. Having this control over your bets is why so many gamblers prefer to trade on exchanges, rather than with traditional bookmakers.
The charts below show the price movement of this market up to the start of the fourth test, and, as you can see, there have been some dramatic swings in the pricing over the three previous test matches.
There are two very important concepts mentioned above, namely understanding the odds and identifying value, which it is essential to understand as a gambler, and I have gone into a lot more detail on these here. I hope the example of my trading on the 2015 Ashes Winner market gives a good illustration of how to use these concepts to generate profit from sports betting. If you've got any questions, leave a comment below or get in touch on twitter.