Archive for August, 2013

The Champ Bros see sports betting as one of the more likely ways of making a profit through gambling, as you can minimise your risk and maximise your chances of winning money over time through discipline, research and understanding the odds structures of the book makers, and most importantly, avoiding the ‘sucker bet’ (and the NRL on a Monday night).

Sports betting has its own pitfalls with the odds offered by the bookies being less than the true odds for the event, where a $1 bet on a head to head match between two evenly matched sides only returns $1.87 for either side to win (TAB) or $1.92 (Sportsbet), obviously less than $2 it should be in a perfect world.

This view of ours is the result of years of dabbling in other forms of gambling and betting and learning how the other types of gambling and games out there function.  The following is a brief analysis of what the punter is up against when playing the pokies or gambling in the casino, and why gambling and especially poker machines can easily lead to gambling addiction.

It must be noted here that gambling addiction is very real and that no punter at any level or in any form of gambling is immune from it.  Our approach is that gambling is supposed to be fun and a challenge, where we know what we’re up against and we are trying to find the edge that gives us an advantage over the book makers.  As mentioned before, we are low ball punters who are very disciplined in not deviating from our strategies or in how much we bet, which adds to the challenge and makes turning a consistent profit all the more rewarding.

Poker Machines

How Victorian Poker Machines Work

Poker machines (pokies) are a popular form of gambling, but make no mistake, pokies are designed to earn revenue for the venue operators and not for you. This is known as the ‘House Edge’.

Each machine has an inbuilt computer program that randomly generates 1000s of possible outcomes every second.  When you press the button:

1.    The machine will randomly pick one result from the many thousands of possibilities in a millisecond.
2.    The next second it will generate thousands more.
3.    It does this continuously, every second all day and night, without thinking or remembering.

The machine accepts any credits bet. If the machine determines a win, credits are paid.  If not, the machine continues to generate outcomes until the button is pressed again, each press completely unrelated to the last.

Bonus Features

Game bonus features are designed to give you the feeling that you are getting something for nothing or a second chance to win. However, everything that happens on a poker machine, including ‘game features’ and ‘free spins’ are included in the calculations made by the poker machine manufacturer. So even when it appears that you’re getting free spins, the fact is, you have already paid for them with the losses you’ve had already on the machine.

Surely some money must return to the players?

The ‘return to player’ setting is the average amount won by players as a share of the total amount bet. By law, Victorian poker machine venues and the casino must return at least 87 percent of the total amount that is bet each year to players.

It takes millions of games for a machine to reach its ‘return to player’ setting and it’s important to note that there is no legal requirement for any individual poker machine to return the expected rate (87%) in any given period of play.

In Victoria this is a minimum of 87 per cent. This doesn’t mean that every time you play you will get 87 per cent of your money back. It means that if you could play enough spins to cover every possible combination on a machine (about 80 million) then you could expect to get 87 per cent of your money back. This also means the operator can count on 13 per cent of your money. For this reason the operator doesn’t ‘cheat’ and the machines aren’t ‘rigged’, they simply have a built in advantage for the operator—there are many more losing combinations than winning ones.

Why are poker machines so addictive?

While there is little research actually taking place in Australia about this problem, there is some research from the USA about their slot machine epidemic and the role of dopamine in the brain, and I also have my own theories related to operant conditioning.

Dopamine

When dopamine is released in the brain, it can give a feeling of pleasure or satisfaction. E.g. Food and sex release dopamine.  These feelings of pleasure and satisfaction become desired, and to satisfy that desire a person will repeat the behaviours that release dopamine. Several studies have been conducted which targeted neural response to rewards. The results were unanimous in the fact that when someone performed an action over and over again, and was given a reward randomly, dopamine levels rose. If the reward was given consistently, i.e. every fourth time the action was performed, the dopamine levels remained constant. Finally, if no reward was given, the dopamine levels dropped. This also explains why eating new foods or eating food when travelling overseas is usually more pleasurable, and why having spontaneous sex is more exciting; the ‘freshness’ of the experience acts as an unexpected reward, releasing more dopamine into your brain.

These same random rewards can be seen in gambling and especially with poker machine payouts. Because the outcome is based on chance, a player does not know prior if he or she will win. Therefore, if the person wins (a random reward), dopamine levels increase.  From this it has been concluded by some that only people whose dopamine levels are naturally low become addicted to gambling.  When pokies players are on a losing streak though, their dopamine levels would drop (no reward being given) and this leads to them feeling miserable when they have lost their money.  Their solution? To play the pokies again trying to get the win (the unexpected reward) that will once again increase their dopamine levels.  This chasing of the pleasure and satisfaction dervied from dopamine is a losing battle though, as the brain won’t release as much dopamine when the action is repeated without something new happening, and the expectation of the reward also suppresses the release of dopamine.

This is a similar cycle that leads to cocaine addiction, as cocaine chemically inhibits the recycling of dopamine in the brain, causing a flooding of dopamine and intense pleasure in the user for about 30 minutes.  Tolerance soon builds though as dopamine is also released when something pleasurable and unexpected occurs.  Routine limits the release of dopamine, and as the cocaine user gets an expectation of the pleasure, the pleasure won’t be as intense as less dopamine is released with the similar action.

Interestingly, medications which boost dopamine can cause compulsive gambling. Parkinson’s disease results from a severe dopamine shortage caused by the death of dopamine-producing cells in mid-brain structures that are involved in bodily movement. Some Parkinson’s disease patients who received drug therapy to increase their dopamine levels developed gambling problems.  Soon after the drug therapy ceased, their gambling addiction also ended.

One patient, a 52-year-old who had only occasionally gambled before taking the Parkinson’s medication, became a compulsive player, losing $100,000 in casinos. A month after discontinuing the drug, his gambling stopped and his wife said she had her “old husband back.” Another patient who developed a compulsion to play poker machines said he saw a report on the strange side-effect of the medication on the Internet and had a “eureka!” moment. His desire to gamble vanished three days after he stopped taking the drug.

Operant Conditioning

I believe another factor at play when people become addicted to poker machines is a form of operant conditioning.

Operant conditioning is a type of learning that occurs through rewards and punishments for behaviour, where an association is made between behaviour and a consequence for that behaviour.

For example, a rat can be trained to push a button and get food as a reward, reinforcing the behaviour of pushing the button.  This is a Positive Reinforcement.

Now a rat in a cage will also learn very quickly that if the same portion of food is dispensed (say from a tube) each time the button is pushed, it can come back any time and push the button and the same amount of food will arrive.  In the meantime, the rat will sleep or go about its business without any stress worrying about its next meal.

An Intermittent Reinforcement is when the reward is given at random intervals, and/or the reward is a random amount.  It has been found that a participant is more likely to act when they only sometimes get what they wanted.  So when an action’s reward is unknown and not guaranteed, there is a greater response (no doubt related to the release of dopamine).

So if the rat in the cage pushes the button and starts getting random amounts of food at random intervals (not every time the button is pushed), it is going to be in a more agitated state as its next meal is not guaranteed.  The result?  The rat will keep pushing the button and waiting at the end of the tube for the food to arrive, as it no longer knows when it is coming or how much food there will be.  Does this action remind you of anything?  Why don’t they just get up and walk away…

If you push the rat one insidious step further and gave it a diminishing amount of food over time, say only 87% of what was delivered in the previous hour, what do you think would happen?

The rat would sit at the end of the tube and keep pushing the button until it starved to death.  And this is also the unfortunate fate of the poker machine player.

The poker machines pay out a random amount of money at random intervals, and this Intermittent Reinforcement of an action quickly leads to addiction.  And when you include the factor that poker machines only return 87% of what is invested over time, every addicted player will eventually go broke, starving to death while sitting at the machine and pushing the button.

Why do the people who are less well off tend to gamble the most?

I can’t answer this question definitively as it is a highly complex issue, but I can share a hypothetical scenario I used to present to my students when I was teaching at Swinburne University.  It was a simple proposal and it was always raised after the gambling lecture in the subject Popular Culture, when the students would inevitably want to discuss this very issue.

My proposition was that they could gamble their final grade on the flip of a coin.  They win and they get a high distinction, they lose and they get a fail.

After their initial shock and unsure laughter and then my promise that it was just a hypothetical and wouldn’t impact on their actual mark, there would always be at least one student in the class willing to risk a fail for the chance to win a high distinction.

The student would choose heads or tails and I would get another volunteer to flip the coin so there was no bias, and we would look at the result.  A win would often result in a fist pump and cheers, while a loss would be followed by a shrug of the shoulders and a, “I was going to be lucky to pass anyway” style comment.

The brighter students in the class would get my point straight away; that the ones most likely to gamble in this scenario were in fact the ones who had the least to lose.  It would be very unlikely that someone who is already heading for a distinction would risk that grade for a fail, undoing all their hard work and study on the flip of a coin.  But the same hypothetical is very enticing for a student who is looking at just a pass or a fail anyway, as they have just about nothing to lose in gambling their poor grade.

Now I understand that this analysis may be a fallacy when it comes to explaining why some people in the poorer demographics tend to gamble more than those in the richer areas, but I think for some people there would be a relationship between the respect you have for the money you’ve earned through time and hard work and the likelihood you would risk losing it all through gambling.

Casino Gambling

When you step into a casino to gamble it’s easy to be overwhelmed by the number of options in front of you. With rooms of pokies, card tables, dice games and spinning wheels it’s a good idea to find out how each game works before you play. Otherwise, you may find yourself losing more money than you imagined.

Each game has a house margin which is the overall percentage of money bet that is kept by the casino or house. Skilled players may be able to reduce the house margin slightly to be in their favour in games of skill, but in games of chance, the margin always remains the same.

Skill-based games are never an assurance of winning and the odds are always in favour of the house.  Just like the poker machines, this is how the casinos make their money.

BLACKJACK is a card game of chance and skill where players may improve their chance of winning by using a better strategy. After receiving two cards from the dealer, the player can choose to be dealt more cards so as to have a total score closer to 21 than the dealer’s total – without going over 21. Face (picture) cards count as 10, aces count as 1 or 11 and the cards 1 to 10 count as their face value. The house margin for Blackjack is generally less than 1% for skilled players.

CARIBBEAN STUD POKER is a game of chance and skill where an initial “ante” or “stake” is bet and players receive five cards face down. The dealer receives four cards face down and one face up. If a player thinks they can beat the dealer’s hand they must double their original bet. If they don’t think they can beat the hand, then they forfeit their original bet. The best poker hand between the player and the dealer wins. Jackpot bets are also available, but even with an allowance for the jackpot, the house margin is around 5.5 percent.

BACCARAT is a game of chance in which cards of 10 and below count as their face value, aces count as 1, and 10s and “face cards”, such as Queens and Kings count for 0. Two cards are dealt to each of the players and the banker with an optional third. The total of the hand’s value works by dropping the first digit (a hand totalling 15 would be counted as 5) the aim being to get a hand value closest to 9. Bets can be placed on the player’s or the banker’s hand, or on the hands being tied. The house margin for Baccarat is around 1.2 percent.

SIC BO is a dice game of chance in which three dice are rolled and players try to predict possible outcomes and totals of the dice rolls. Players can bet on the dice rolls amounting to particular totals, combinations of two dice, single numbers being rolled through to specific triple rolls. There are no betting strategies to reduce the margins of Sic Bo, depending on the bet placed the house margin remains between 2.8 and 16.2 percent.

ROULETTE wheels in Australia have 37 numbers on them, 18 red, 18 black and one zero. Double Zero Roulette has an additional zero to make 38 numbers. The wheel is spun and a small ball is sent spinning in the opposite direction. Bets can be placed on the ball landing on specific numbers or colours (red or black), on odd/even outcomes or on “low” or “high” numbers. The house margin is 2.7 percent for roulette and 5.26 percent for Double Zero Roulette.

PAI GOW is a chance-based game played with 32 tiles. 22 of these tiles form 11 Identical Pairs and the remaining 10 tiles form 5 mixed pairs. After the game has been dealt, each player and the Bank (house) needs to construct two separate hands with their four tiles called a Low Hand and a High Hand. The player’s hands and the Bank’s hands are then compared to determine who wins. Pai Gow has a house margin of 1.5 percent.

BIG WHEEL is a game of chance in which a wheel is divided into 52 compartments, each one showing one of seven different symbols. Players simply bet on a symbol and win if the wheel lands on that symbol. The house margin for Big Wheel remains consistently at 7.7 percent.

POKER at Crown Casino in Melbourne has become very popular since the dedicated room downstairs was started and the Aussie Millions is held there every year.  A lot of poker players believe they are playing the casino game where they have the most control over their fate, and that a good player can always make money.  In a pure cash game this may be the case, but at the casino there are some factors that make turning a consistent profit much more difficult.  With the hourly time charge and rake from every hand, the bottom line is that if players sat down with the same amount of money and no extra money was added to the table, the casino would end up with the majority of their money over time, with only one player having what was left.

As of 2012, Crown Casino in Melbourne takes the following rake per hand from the low limit cash game:

$1/$2 – 10% capped at $15 (plus $5/hour time charge)

Lottery Games

I’m not going to go into great detail about playing the lottery as it is a pure game of chance.  The following are some common Australian lotteries and the odds of your numbers actually coming up.

LOTTO draws are made on both state and national levels. 45 balls numbered 1 to 45 are combined and six balls are randomly selected to create the winning combination, with another two balls selected as the supplementary numbers. At least four games are played per Lotto card and your chance of choosing the six winning numbers and receiving the Division One prize with a single game is 1 in 8 145 060.

POWERBALL uses two machines each containing 45 balls numbered 1 to 45. Five balls are drawn at random from one machine, while one ball, the Powerball, is drawn from the second machine. You must play at least two games in a draw. Your chance of matching all five balls plus the Powerball is 1 in 54 979 155.

KENO is played in a registered venue such as a club, hotel or casino and consists of 80 numbers (1–80) where 20 numbers are drawn at random. On a $1 game players choose 10 or 15 numbers. If a player chooses between 7 – 10 numbers, a proportion of their bet is allocated to a jackpot. Your chance of winning the jackpot on the 10 number game is 1 in 8 911 711.

Beaner

References

http://www.gambleaware.vic.gov.au/know-odds/how-gambling-works

http://serendip.brynmawr.edu/bb/neuro/neuro05/web1/isiddiqui.html

http://www.addictscience.com/gambling/

The sure thing Monday night game let me down this week, along with countless others out there no doubt, killing my multi and ending my winning streak.  I blame Kenny’s entry about landing his white whale on the upset that ended my multi this week.  I didn’t want much, just a $20 profit on my $50 bet, but it was obviously too much to ask for with Ahab watching over.

10th August

NRL Sydney Roosters v Canberra Raiders

Sydney Roosters (Head to Head)

1.20 – WIN

12th August

NRL Canterbury Bulldogs v Gold Coast Titans

Canterbury Bulldogs (Head to Head)

1.17 – LOSS

$50 Multibet @ 1.404 = $70.2

Result: LOSS

This means I got to 11 wins in a row and lost on the 12th, a 1.17 fav at home in a match they were heavily favoured to win.  It also means I lose $50, my first loss since the 5th July, and this is a bit hard to take.  It’s bloody typical though, as soon as you start thinking the money is in the bank, you are guaranteed to lose.  And this is what I did once the Roosters won on Saturday; I started to work out how much I had won in the last few months (already counting this week as a ‘win’) and how the NRL is being kind to me and how not chasing big returns is a more reliable way of betting.  Losing though changes everything, as a $50 loss wipes out 2 x 40% profits ($20 each), so after winning for the 4 weeks and then losing 1 bet, the profit drops from $242.64 to $192.60, a reduction of just over 20%.

I was correct to steer clear of the AFL in Rd 20, as four of the five upsets I flagged last week got up (see On a Roll – Part 3).  The upsets for Rd 20 were, based on the mid-week odds, the Western Bulldogs, Collingwood, West Coast and Adelaide.  Tough tipping round, and anyone who picked 9 this week is either a guru or knows nothing about the game.  But hindsight is a wonderful thing, and when you analyse games on form over reputation, you often get a clearer picture of why some results unfolded the way they did.  As I’ve mentioned constantly and I’ll say it again, it is hard work trying to make money on the AFL on a consistent basis over time, as the games are hard to pick and the odds you get don’t reflect how close the game is likely to be, and you get crap odds on the sure things, who still are never over the line till the final siren sounds.

The sports betting focus is now going to shift to the EPL season, starting this weekend.  Soccer is an interesting betting sport, for altough there are 3 possible outcomes on each match and the odds on the favs to win are usually much shorter than the 3-1 break even odds, quite often two of the three options pay more than 3-1, and the draw almost always pays more than 3-1.  So to get odds of greater than 3-1 where there are 3 possible outcomes is a ‘good bet’, something all punters should be searching for.

Beaner

Thought I would start my Australian Sports Betting Blog entries on a positive note, rather than focusing on the negative with the losing streak I’m currently experiencing. A tale of winning may just reverse my present frustrations and generate some positive thinking. This post follows my largest collect on a sports bet. In 2009 we used the strategy of betting 50 bucks on a multibet over a weekend and if it won, re-investing the total winnings on a multibet the following weekend, continuing on with bigger stakes each week until reaching a decent collect before banking the entire winnings.  This is our ‘All-up strategy’.

This all sounds good in theory however the odds against winning stacks up quite high when you re-invest week after week. We found that we could only get to one or sometimes two weekends of winnings in a row until missing a single leg in a multi and losing the lot.  For some reason that year the third week was the all-up killer.  In this case, I bet 50 bucks the first week and won $161, bet $50 the second week for a collect of $230, but then decided to stake the total winnings so far plus $34 of my $50 for that week for an even $425 on the third week multi, which ended up saluting for my largest collect for the Champ Bros synd in the 10 years we’ve been keeping records.

So, in summary, starting with a $50 multibet, and wagering $134 in total, I managed to successfully pick three winning multibets (a total of 14 legs) over three weekends in a row, to collect just over $1100. I found the spreadsheet from 2009 with the bets from the streak, and the results were as follows;

Week 1;

12/06/2009        16:08     FIXED ODDS        Multibet 4 legs @Combined Price: $3.22=Combined Return:$161.00        Sports Multi                3.22        $50.00   $161.00

Week 2;

19/06/2009         14:38     FIXED ODDS        Multibet 5 legs @Combined Price: $4.60=Combined Return:$230.00        Sports Multi                4.6          $50.00   $230.00

Week 3;

26/06/2009         15:53     FIXED ODDS        Multibet 5 legs @Combined Price: $2.61=Combined Return:$1109.25      Sports Multi                2.61        $425.00       $1,109.25

Looking back, it seems crazy to wager such a large amount of money on a 5-leg sports multi, when these days I can’t even land a 3-leg short priced set of sure winners. I also found the screen shot of the sports I was betting on. AFL and tennis! Both sports vulnerable to upsets. The odds for each leg in the final multi were 1.22, 1.11, 1.25, 1.25 and 1.25 generating a 2.61 combined odds.

Knowing what I know now about short price favs losing quite regularly, I probably wouldn’t have gone for a 5 leg multi and been more conservative, but at the time it obviously looked like a good bet and it came home and thus gave me my first “white whale”, a rare large collect on sports betting. I will continue to chase the dream that it IS possible to land big wins, and this result is what still gives me hope.

I decided to bank the lot after the final win instead of continuing the strategy and good thing I did as well, as the results in the following weekend were back to normal; UPSETS GALORE!

If I’d been aggressive and bet the total winnings each time, plus my $50, i could have won $2663.77, but a win is a win and money in the bank beats hind sight every day of the week.

Kenny

The NRL did the business again this week, with a Quick Multi on my mobile via Sportsbet getting up.  There were 3 legs and I liked that Melbourne Storm and the Bulldogs were two of the choices, so I broke from the plan (again) and decided to gamble.  It wasn’t my usual week to bet, but Kenny is in KL.  It paid the healthy odds of 3.91-1, and provided another win for the Champ Bros Synd.

The Quick Multi on the Sportsbet app basically gives you favourites in your preferred sport.  For example, AFL Round 20 favs are Hawthorn/ Richmond/ Geelong/ Carlton/ Sydney/ Gold Coast/ Essendon/ North Melbourne/ Fremantle.

The odds available for picking all 9 is 7.3-1, which as you know if you have read my previous entries, is much much lower than the 512 possible outcomes there are with 9 head to head games.  Of these games, the closest match odds wise is North Melbourne at 1.80 and Adelaide at 2.0.  I would also be wary that the Bulldogs are a big chance against the Blues on their recent form, Port could upset the Cats, Collingwood would back themselves to beat the Swans and West Coast will try and take advantage of a club in turmoil v Essendon, as the Pies did in Rd 19.  So as I see it, there are 5 matches which are no given in this 9-leg Quick Multi.

Of course if all the favs get up, you get a return of 7.3-1, but the reality of this type of bet is that you are being paid WAY below the odds of actually winning the bet.  To be blunt, it is a SUCKER BET.  How many semi-drunk punters on a Friday night after work actually load up on this bet is hard to know; only Sportsbet would know the numbers, and I’m sure they rub their hands together every time money is laid on their table for an AFL Pick 9.

At the odds of 7.3-1 presented this week, you would have to pick 9 winners (in a round) 4 times in a season to make a profit (or 6 winners at good odds during the bye weeks mid-season). Anyone in an AFL tipping comp will tell you that this is not easy to do.

There are also options for the Saturday Rd 20 Favs (5 legs paying 3.28) or Sun Round 20 Favs (3 legs paying 2.47), but both of these have upset potential. UPSETS HAPPEN!

So regardless of all the dangers of the Quick Multi, the NRL Round 21 Sunday/Monday Favs Pick 3 was a winner (Melbourne Storm /Gold Coast Titans /Canterbury Bulldogs), and I was lucky enough to be on it.  And I always think myself lucky when I get a return on a multi as Kenny will attest in 2013; they are not easy to win.

What could be simpler than picking 2 or 3 short priced head-head favs and bundling them in a multi?  Easy money my friend, and that is why all the sports bet companies are going broke.

The weekend’s return was 3.91 x $50 = $195.50, making the running tally of the past 4 multi bets $442.64, a profit of $242.64.  This has been achieved by successfully backing 10 head to head winners now since the 5th July.

If I was a very lucky man and had picked 10 flips of the coin correctly, being paid 2-1 for each correct call, my initial $50 would now be worth $51200 ($50 x 1024).  Getting into some serious territory now, and in fact, if you could pick 15 coin tosses in a row, your $50 would be worth $1638400.

If I had of been using the All-up Theory:

Start with $50

1st win = $70.76 (50 x 1.4152)

2nd win = $131.04 (70.76 x 1.85196)

3rd win = $219.57 (131.04 x 1.6756)

4th win = $858.52 (219.57 x 3.91)

So I would have only bet $50 (instead of $200) for a return of $858.52, a profit of $808.52.

Bottom line, another bet and another win for the Synd.  It may not pay off the mortgage yet, but a weekly sports bet win of at least 40% is the current goal, and the goal has been achieved once more.

Beaner