The Euros are finally happening! As it’s topical, I thought I’d throw together a hotchpotch of musings about accumulator betting and give it a title that’s really hard to say. There’s some well-worn stuff in here, but also some fresher perspectives, so stick with it to minimise your losses this summer.
First though I want to properly thank former colleagues Simon Young and Paul Tate for their efforts in promoting my blog. I realise most of my content isn’t exactly palatable, likable or sharable for folks in the gambling industry, but if you can help spread the word, even privately, it would be much appreciated.
Now to business. Accumulators. These bets are phenomenally popular with punters because they offer big returns for small bets. They are also phenomenally popular with gambling companies because the profit margins are huge.
That’s why so many of the high street bookies have “special offers” to promote these bets. There are insurance (money back) and added value (prize boost) deals, and yet somehow, despite this largesse, there’s still enough profit left over to pay for A-list endorsers like Kris Akabusi.
That’s because when you combine lots of bets, you are paying commission on each leg of the accumulator. The house edge on a typical betting market is about 10%, so in terms of EV the value of your stake looks like this:
- Initial bet £10
- Value after Bet 1: £9
- Value after Bet 2: £8.10
- Value after Bet 3: £7.29
- Value after Bet 6: £5.31
- Value after Bet 10: £3.49
And that is assuming the juice is only 10%. Before the Euros began, I thought I’d check how much profit my preferred betting provider was making on the tournament winner market. My method for this is to work out how much you’d have to spend to guarantee a £100 gross win. That means placing a bet on every possible winner.
It came to £122. Now if you scale that down to a total of £100 in bets, you guarantee yourself a return of about £82. The commission on this huge market therefore, is more like 18%. If all your accumulator bets are giving up a similar advantage, then by Bet 10 your £10 is only worth £3.18.
Not every market is going to be so stingy. It’s much harder to hide poor value when there are fewer outcomes to bet on. So if you want to protect yourself against a greedy book, bet on simple markets with only two or three possible outcomes.
Alternatively, shop around. I tend to be loyal to my current bookie because they’ve never done anything scummy to me (not true of most providers I’ve used), and I don’t mind sub-optimal value in return for being treated well. But if I had more faith in the industry, I’d be using a comparison site to find the best price for my bet. Loyalty can often be a luxury.
When you’re putting together a big multiplier, you should also be aware of diminishing marginal returns. Presumably, if you’re betting competently, you start off with the outcome you feel offers the best value. Honestly, if you don’t know if the bet you’re making offers value (i.e. you have little or no knowledge of the sporting event), you probably shouldn’t be betting in the first place.
From that first bet, it follows that each subsequent one offers slightly less good value. When you’re picking your spuds out of the big spud-box at Tesco, you don’t start with the grubby ones. You pick the best one you can see, then keep picking ones that are nearly as good until you have the amount you want, or there are only minging tatties left.
I very much hope you’re able to apply that potato metaphor back into gambling terms, but if not, here’s a quick summary: The more football bets you add together, the worse your mash is going to taste.
My final issue with accumulators, is the strong impulse to cash out the bet when the first few results go your way. If you’ve read many of my blogs before then hopefully a lightbulb has pinged on and you’ve screamed LOSS AVERSION at your screen. Yes, it’s our old friend, making-a-sub-optimal-decision-to-lock-in-a-profit.
You may not have thought about it, but it probably won’t surprise you to learn the house commission on cashing out a bet is extortionate. I don’t know if the gambling firms truly understand loss aversion (which is hard, because admittedly it’s complicated), but their machine learning algorithms know how to optimise a cash out offer to maximise profit.
The really smart ones are probably tuning their offers individually depending on a customer’s demonstrated tendency to avoid loss. Why offer a fair market £100 if you know your punter will take £60? May as well bank a bit more profit.
There are two ways to swing things back in your favour. The first and best is to not cash out at all. If you have to bet this way, then think about how much you would be happy to win before starting out. Then design a bet that reaches that threshold and no more.
Remember you will be almost as happy to win £1,000 as you would be to win £2,000, but the former is much easier to win. Once you have made this “prize-optimal” bet, just let it ride. That was the amount you decided you wanted, so cashing out before makes no sense.
The second solution is to hedge your bets. You will get a much better deal by making additional wagers that offset your ongoing accumulator. If you need North Macedonia to win on your last bet, then bet on their opponent. This way you can lock in a profit without giving up so much to the house.
Or… just don’t bet on these things. They’re stupid.
In the interests of transparency, it’s only fair I give an update on the Euros Calcutta which I ran on the eve of the tournament. In many ways it went extremely well. It was smoothly executed, and everyone loved taking part. The late decision to sack off Zoom and just do it via WhatsApp was inspired.
But *hangs head in shame*, it was not a triumph for responsible gambling. I had a notional budget of £50 but ended up spending much more. In the end I picked up the WunderBastards (Germany, Austria and Switzerland) for £240. That’s an amount I can afford, that won’t impact on my life, but it is substantially more than I wanted to spend. The same is true for a number of other participants.
I’ve also done a swap of 20% with a player who got a great deal for Spain and Slovakia. A nice little hedge that I hope will see a chunk coming back to me. Oh yes, and I got England in a sports club £10 sweepstake. I am very much invested.