There is a thread about DS's work on sports betting. Most is relative drivel, while some is fundamentally flawed. He has no concept of an overround.

Oh, agreed 100%. Trust me, as a poker player, I know all about the loopholes. However, one area in which I've never tried to find a loophole is with online poker- every cent I withdraw either hits my bank account or is withdrawn through an ATM(firepay credit card for example used to let you take money out from an ATM). All of this leaves a clear paper trail.

So it would seem to me that with sports betting, I can use those same loopholes with Nevada casino sports betting(as long as my wagers aren't so big that the casino takes down my info) and with illegal books. However with online sportsbetting, it would seem to me that I'd have to pay full taxes(obviously I could just not pay, but I'm not willing to take the risk of not paying fully on traceable income).

Again I don't expect anyone to come here and state that they don't pay taxes, but maybe someone could PM me some info because I'm just not seeing how to get away with not paying full taxes on all online sports betting winnings unless you want to take a big risk.

You're really putting the cart before the horse.

Another thing I've wondered for a long while...

Why would anyone make a future wager when they know that their bankroll would force them to take a -EV hedge if their future wager looked promising but has not yet been completed? Moreover, do you factor that into your EV of the initial future wager?

I'll probably stay away from futures simply due to not wanting to have money tied up for so long, but this is an interesting question for me nevertheless.

As I said, I will no longer be responding to any of those types of posts.

Fair point, but then again if the answer to the question is "no you cannot beat online sports betting while paying taxes and no there are no ways to not pay" then it would be best to know that before wasting my time, no?

But since you all do beat it, I'm sure there is a way around it....so yea I'll just come back to this later, hopefully after I'm a winning bettor.

You do understand you pay taxes on winnings?

Like if I win $5 and lose $4. I pay taxes on $1.

Here's two:

1. If you can get the -EV hedge as a "cash in your pocket" wager, you are essentially getting more $ to make other +EV wagers, thus allowing your bankroll to grow more quickly.

2. -EV hedges that return when you lose the primary bet can increase your net expected return by reducing your naked exposure (and thus variance) to the original bet. It is similar to diversifying a portfolio. Even though some investments may actually have -EV, the fact that they provide a positive return when you are losing big in something else actually increases your overall expected growth of your portfolio.

I believe you are only "reported" for gambling winnings when the odds of your win equal to or exceed 299 to 1. This will only occur for longshot future bets and big parlays. For straight bets, unless you get reported for large cash transactions, this should not be a concern.

SPFH Chapter 2: Money Management

"The professional level bettor that has chosen
sports betting as a full-time job will want to use a money management plan that
reduces, as much as possible, the chance of wiping out his bankroll due to natural
variance.
A part-time bettor that has other sources of income will want a money management
plan that reduces the chance of wiping out his bankroll due to natural variance, but
that also allows for him to maximize his profits with the idea that, if necessary, the
bettor has the ability to infuse more money into his bankroll in the future.
The part-time bettor that has other sources of income that bets for entertainment
will want a money management plan that simply allows him to bet for the entire
season without any real notion of winning money over the long haul."


I feel as if I'm clearly in the middle group(or at least I'm striving to be).




"Although not likely, even when using a conservative
wager size you will still run the chance of losing 50% of your bankroll due to natural
variance. You will, however, still have 50% of your bankroll left providing you with
the opportunity to continue betting to create a more likely outcome: making a
profit."

Relating this to the current debate in this thread, I think it'd be fair to say:

When starting out, its most important to verify that you have the ability to make longterm +EV wagers and EG is not nearly as important.

Once that is confirmed, maximizing EG is the key and EV is not nearly as important.




I found the chart on pg.47 interesting. Basically after 500 wagers I most likely should be able to tell if I'm +EV or not. After 2000 99% of winners will be winning. I think its fair then to use 2000 as a sample size and say that if I happen to be in that 1% that runs badly then oh well.

Still that seems a bit daunting- to make 2000 wagers only on the HOPE that I'm a winner but not knowing for sure.

However that is assuming 55% win rate at -110. I'm at -105 now, and I can use +EV promos and such to make it even easier.



Ah good...the author goes on to say pretty much what I said above about 2000 wagers being a sufficient sample size.




So basically what I'm taking from this is that I should set aside a bankroll for sports betting and bet 1-2% of it on each bet, although I could take a risk and bet a big more if I valued the action over the minimized risk.

I have been betting $500-$1000 per game, which would necessitate a $100,000 sports betting bankroll. I think I'm probably betting too much then, as I'm not willing to risk $100K before I know that I'm a winner for sure.




"When
wagering 1% of your bankroll on each wager, waiting to recalculate until you’ve obtained a 25% increase in bankroll should be sufficient. When wagering 2% of your
bankroll on each wager, waiting to recalculate until you’ve obtained a 55% increase
in bankroll should be sufficient. If you wager 4% or more of your bankroll on each
wager you should strongly consider not recalculating your wager size at all as you
are already betting at a fairly high risk."


good info imo



"This trap advises you rate each wager on a scale from 1 to 5 based on the
expectation of winning the wager, and these ratings dictate the bankroll percentage
to bet on each wager. There are two problems with this trap. First, wagers with a
rating of 5 have the highest influence on determining if you win or lose money. As
such, you might as well not even bother betting wagers with a rating of 4 or less.
Second, referring back to Section 2.3.1, betting 5% of your bankroll on a wager is
too risky for bettors looking to win over the long haul.
A star rating system is only suitable if you have no aspirations of winning money
over the long haul."

I'm a bit confused here. I realize that nobody here uses "star rating systems", but in my admitedly very limited understanding of Kelly, isn't it advising to do something very similar? Isn't it advising you to evaluate your edge and bet more when your edge is higher?

It sounds to me as if the above quote is advocating sticking with your 1-2%(if thats what you've decided) no matter how big you percieve your edge to be. Am I just misunderstanding??


End of Chapter 2.

Your EG calcs are also wrong, a bit surprised thremp didn't catch that (selective editing, I guess).

Yea, I understand. Maybe I'm just going overboard with the whole tax thing. It just seems to me like we're pushing such small edges as is and to pay full taxes when we hit on those small edges is going to make our profit margin microscopic. I'm probably wrong though, so I'll just drop this point.

I think I understand what you're saying. But let me ask: Does this affect your decision to make the initial wager?

For example, lets say that you think you have a 10% edge on a future wager, so you tie up a larger portion of your bankroll than you normally would because a 10% edge is huge. Should the prudent bettor realize ahead of time "Yes its a 10% edge, but I'm going to have to hedge with a -EV wager which would bring my total edge down to 5%, and 5% is nothing to write home about. In fact 5% might not even be worth tying my money up all season, so maybe I should just lay off."???

At poker I always cash out $3000 or less to avoid having to give them my player's card and have my name taken down(the Bellagio has even asked for my SS# in the past). I have no clue what it means when they take your name down, but I've always figured that its better to not have my info taken down and a record made that I cashed out a large amount of money.

Can anyone tell me what exactly happens when they take your info down? Am I just being overly paranoid here?

Going to the gym now. May play poker the rest of the day, not sure yet. If not, I'll probably get to chapter 3 later on.

Certainly. This is how (american) options are priced, you always have the opportunity to sell back the option at a higher price. European options do not have this sell component, and thus have less value. So the opportunity to "hedge out" actually adds value to the future wager.

How much money you want to invest in a futures bet is involved. Some posters here (e.g. thremp) will avoid future bets like the plague, while I confirmed mathematically that futures bets can be a bonanza if you get favorable odds (i.e. high EV). You will need to search that thread for a thorough examination of the subject.

You confirmed nothing. You used outlandish examples. Ridiculously outlandish.

There is a simple formula (kelly) that will tell you exactly how much you should bet given your probability of winning, and the payoff for winning. You should be able to, at some point in your sports betting learning curve, identify what your approximate chances are of winning a bet, otherwise you should not make that bet at all. With this in mind, you can always apply the formula and determine exactly how much you should bet. It really is pretty simple if you can fairly approximate your winning chances.

Unfortunately (for your argument's sake) the examples were real. Nice try.

No that is the whole point, maximizing EV means betting your whole roll on any bet that has a positive expected value.

Maximizing EV is NOT the whole point. The point is +EV is a prerequisite to expected growth. (and thus more important)

Bookmakers are (usually) smart and attempt to maximize their EV and EG. Usually they don't seek to completely balance action at any cost since over the long run it'll balance out. However, in some cases, they do compensate when a vast amount of action comes on one side. This is the basis for the BSP bets. Also, there's a section in SSB entitled "the myth of balanced action" or something like that. I'm at my day job and I don't have it in front of me.

Edit: I guess I didn't fully explain that when they take unbalanced action, they are taking additional risk that there'll be a large influx of action on one side.

Come on. You don't believe this, do you?

If you disagree with Ganchrow, you are almost certainly wrong. It's not us.

Getting double payouts on low odds futures is prety much a straw man- sure, any random book can hang any random stupid line (I've bashed a -150 prop from +150 all the way to -120 in 10c increments, wheee), but even a +5000 future paying out +15000 (triple expected payout) just isn't exciting. It's the EG equivalent of hitting a prop 30c off or making a few bets with free .5s, and that's not taking the time into consideration. I'd bet it if it were brought to my attention, but it's pretty much a complete waste of time for me to go looking for market-valued edges in futures instead of in straight bets, unless I'm making a quick pass to use up some freeplay.

When posters write "EG is more important than EV", then I guess I'm right, am I not?

Again, expected growth is a result of bankroll management, which can only show a profit presuming you have +EV wagers. This is why +EV is more important. Very simple.