The Pyckio Blog

You can already submit your e-Sports picks at Pyckio

January 23 2015, 14:45 · by Daniel Mateos · 1 Comment

e-sports

Today we have introduced the e-Sports (electronic sports) as a new competition where you can submit your picks. The e-sports are organized video game competitions among professional players. They are gaining importance in the last years. In 2014 ESPN broadcasted the most important DOTA 2 final, The International 4, that was watched by 20 million people. If you know this world you can already start tipping in Pyckio to the following games: League of Legends, Dota 2, Startcraft2 and Counter-Strike: Global Offensive. You can prove yourself and submit your picks without risking a penny. And if you are reallygood at tipping  you can even become a professional e-sports tipster. Good luck!!

The Bookmaker’s profit margin or “overround”

January 21 2015, 13:13 · by Daniel Mateos · 2 Comments

BOOKIES OVERROUND

In Anglosaxon terminology the “over round” refers to the profit margin that the bookmaker applies when making a market for their betting customers. The overround is the sum of the inverse of the odds:

Overround = (1/Odds1 + 1/Odds +…+ 1/Oddsn)

Let’s look at an example. Let’s imagine a Real Madrid v Barcelona fixture in which the bookmaker prices up the game with the following “a priori” probabilities: Read Madrid: 45%, Draw: 25%, Barcelona: 30%. In the absence of profit margins, these probabilities converted to odds would be (1/probability): Real Madrid: 2.22, Draw: 4.0, Barcelona: 3.33. To make money the bookmaker needs to offer lower prices than these, for example: Real Madrid: 2.10, Draw: 3.70, Barcelona: 3.20. The new probability associated with each price is now: 47.6% for Real Madrid, 27.0% for the draw and 31.3% for the Barcelona victory. The overround is calculated by adding these probabilities, which in this case sums to 1.059 or +105.9%.

overround

The bookmaker’s overround will always be greater than 100%. The higher it is, the higher the bookmaker’s profit margin and the more difficult it is for the punter to make money. The overround the bookmaker applies depends on various factors:

1. The Sport. The degree of competition is very influential. Football is the most competitive sport there is, so bookmakers have to offer good odds in order to attract bettors, leading to a reduction in their profit margins. On the other hand, sports in which less information is freely available or where the result depends on only one or two players (possibility of match-fixing) introduces more uncertainty and therefore leads to less generous odds being offered.

2. The number of possible outcomes. The higher the number of possible outcomes, the greater the uncertainty, so the house protects itself by offering lower prices. When this occurs, the risk to the house normally increases the higher the odds are. In addition, a greater number of outcomes also makes it harder for the bookie to balance their books. For example betting on horse racing or on the winner of a golf tournament the overround will generally be larger than that of a football match with just 3 outcomes.

3. The bookmaker’s strategy. Just like in any other industry, every bookmaker has its own strategy. Some will decide to put all their efforts into marketing and offer very poor odds, while others will prefer to offer a better service with more competitive odds.

Below is a table produced by Joseph Buchdahl (member of Pyckio) in his book “How to find a black cat in a coal cellar, the truth about sports tipsters”, in which the average overrounds from a range of English bookmakers are presented. We can see a big difference, both by sport as well as by bookmaker. Football (in the Premier League 1X2 market) is the sport in which profit margins are the smallest. Next follow NBA and tennis. For less popular leagues, the figure will be larger. If we move to the correct score football market or market for golf tournament winner, we will find huge overrounds. Conclusion: don’t bet on markets with very high overrounds like correct score because in the long-term the probability you have of winning will approach zero.

overrounds bookies

Another way of expressing the overround, which some odds comparison sites show, is the Payout Ratio. Payout Ratio = 1/Overround. In our example the payout ratio is 1/1.059 = 94.4%, also expressed as a profit margin of 5.6% for the house. The payout ratio represents the percentage of capital that the bettor is likely to receive back from the bookmakers, assuming the bookmaker’s book is totally balanced.

As a final piece of advice we recommend that you don’t bet with bookmakers that have very high overrounds. You might be capable of estimating the probabilities better than the market (even if subconsciously), but it is difficult to defeat high profit margins in the long term.To be able to defeat the overround the best thing to do is have accounts with a wide range of betting houses. For example, if you are going to bet 1X2 on a football game and you have the option of placing the bet with 5 different bookmakers, by choosing the house with the best odds for the Home win, or Draw or Away win, you are “manufacturing” a smaller overround than you would if you only bet with one bookmaker.

Daniel Mateos
Co-founder/CEO at Pyckio

We raffle 100,000€ among all the RT&Follow if we win this multiple bet

January 19 2015, 10:28 · by Daniel Mateos · No Comments

Tennis multiple

Hi!! We’ve bet on 25 favorites in the 2nd day of the Australian Open Tennis. We can win 100,000€!! that would be raffled among among all those with a Twitter account who RT our last tweet in our timeline and follows our Twitter account.

It’s very difficult. But… if it happens? You can win 100,000€ (- taxes). Are you gonna miss it only because you didn’t follow us and make a RT? ;-)

RULES

- All users whose Twitter accounts RT the above tweet, until Tuesday, January 20 2015, at 01:00 h. (CET) will participate

- If we win the multiple bet the prize to be raffled among the winners will be net of ALL applicable taxes.

- Only >18 year old participants can take part and only one participation per user. A notary would manage the distribution of the prize process

- If for whatever reason Sportium doesn’t give us the prize we won’t be able to distribute it among those who have complied with our requirements

- The participation in the distribution of this potential prize implies acceptance of these rules

More betting resources for this match

January 09 2015, 12:50 · by Daniel Mateos · 1 Comment

moreinfo

We’ve just introduced a new module in the timeline of every game, called “More betting resources for this match”. Here you are an example. Our objective is to provide you with the best information so that you can submit your picks at Pyckio.com and/or place your real money bets in your bookmaker. You will be able to find links to other sites with relevant statistics for the game, previews, analyses…We make the work for you; you don’t have to worry about looking for information in other websites. We are placing at your disposal links -specially selected by us -in the timeline of every match. In this way it will be very easy for you to read relevant information that will help you with your picks. In only one page you’ll be able to access several betting resources. This module will be available for the top Football leagues as well as the NBA, NFL and MMA at the moment.

Up to now the websites we have selected are SoccerstatsWhoscoredGoalEPLindexESPN and NBA.. If you have a website that offers valuable information to bettors and you want us to offer your links to our users in this new module contact us and we’ll study it.

To sum up, we keep on improving our platform and extending the information we offer to our users to make Pyckio the best sports betting marketplace in the world. We are really grateful for the welcome the Pyckio project is having up to now.

Rating and type of tipster by Sport

December 29 2014, 22:18 · by Daniel Mateos · No Comments

amigomarcos3

From now on, in your “miniprofile” (image above) and also in the timelines where you post picks and/or comments, you will be able to see your statistics and the type of user you are in the sport where you have the highest Rating. We want to reinforce the idea that each type of user (Trainee, Rookie, Promise, Coach, Master and PRO) and Rating will always be associated with one specific sport. There are great tipsters in one sport who have ruined their global figures submitting picks in sport they don’t excel at. You can prove yourself in several sports and not be afraid of ruining your global Rating and statitics because they become much less important.It’s the individual sports Ratings and type of users the ones that gain importance.

The change is only for the “miniprofile” and the timelines, when a tipster post a pick. Your personal Tipter page doesn’t change. You will keep on seeing there your General Rating and Satistics.

In our new Global Ranking, that we’ll introduce shortly, the best tipsters by sport will compete. That is, if a user has a global Rating of 0.25 but his Tennis Rating is 4.20, it is this 4.20 Rating on Tennis the one that will compete with other specific ratings by sport in this new Global Ranking. The difference is that we won’t take the whole tipster statistics, as we do now.

If you have any doubt, please ask here.

The “Value” in Sports Betting

December 26 2014, 18:34 · by Daniel Mateos · 6 Comments

Value

The concept of “value” is widely used by punters and tipsters when explaining or justifying their selections. I myself have used the term on multiple occasions, but I can´t help noticing that I have been trying to avoid it as much as possible lately, and even when I do use the term I feel a kind of embarrassment in doing so.

When someone says that they see value in a bet, what they actually mean is that the probability attached to a determined outcome is greater than the probability implied by the odds. If someone sees value in a Valencia victory over Real Madrid at odds of 6,20, they are confirming implicitly that, for them, the probability of Valencia defeating Madrid is greater than  (1/6.20) = 16.13%. Let´s imagine that Valencia win the game. Does this mean that those who claimed the value was at Valencia were right in their argument? Not necessarily. Making this forecast does not necessarily mean there “was value”. It could have been coincidence or luck. Real Madrid could have had 20 shots at goal and not have scored while Valencia could have had just one shot or scored after gaining an unfair penalty. If we play roulette, roll dice etc. we know the exact probability of a determined outcome. But in sport it is impossible to know the probability of various outcomes beforehand. For this reason the concept of “value” isn´t meaningful in the short-term. Let´s take another example. Imagine a tipster who forecasts and then argues why he believes there is value at 1.45 in a Robredo victory over Almagro. Almagro then goes on to win 6-1, 6-0. We cannot claim the forecast was very bad and that there clearly was no value in that bet either. It is possible that over 100 matches Robredo might have won 90 of them, with this one being one of the ten that he would lose. Those who place bets are trying to evaluate, beforehand, how the outcome of a sports game could turn out, but they are not fortune tellers. They don´t have a crystal ball that will tell them if a player might get injured, if they might have a bad day, etc. The outcome and evolution of games of sport are determined by external factors that are impossible to identify beforehand. In summary, it does not make sense to state, as I have pointed out, whether a bet had value if it won or that there was no value in the event that the bet lost.  

The concept of value makes sense in the long run. If over a large number of bets a tipster or punter has been capable of generating very strong results, we can implicitly say that their forecasts have added value and that they have been capable of estimating probabilities better than the bookies or the market. While keeping in mind that a yield of 10% is an incredibly good long-term record for any tipster, we can state that this knowledge or skill will only generate a very small impact for an individual, single bet. Let´s imagine, in the Valencia v Real Madrid example, that a punter with a long-term yield of 10% forecasted that Valencia would win at odds of 6.20. This Valencia bet has an implied return of 520% in the event it wins. Well, we can say that on average, if the long-term yield of the tipster is 10%, of this 520% returned only 10% will be due to skill and the rest due to luck (510%). This assertion is tough on the tipster, but correct…

In summary, winning at betting involves estimating, even if subconsciously, the probabilities of sports events outcomes more accurately than the bookmakers in the long-term. It is true that winning in betting is equivalent to being capable of identifying value when analysing sporting events. But value is a concept that only applies to the long-run. In the short-term, luck and uncertainty has a lot more influence than our skill or experience.

Daniel Mateos
Co-founder/CEO at Pyckio

The Psychology of the Tipster

December 15 2014, 20:17 · by Daniel Mateos · 2 Comments

psicologia tipster

I have published my Tennis and Football tips on Sportyy.com for several years, first completely free of charge and then on a subscription basis. Although what I have written in this article is mainly an “autobiography”, I don’t think I would be too far wide of the mark if I said that many other tipsters or forecasters will have felt exactly the same emotions as those I write about here, whether such tipsters are giving their tips away for free or charging for them. A tipster has to carry a significant burden of responsibility when charging a subscription fee for his selections, but when you have many followers betting on your recommendations, even if you don’t charge for them, you cannot help but feel (a significant) pressure that can affect the quality of your selections.

I have summarised 7 states of mind that tipsters will experience, which will be a function of their sequence of results:

tipsters confidence
In principle, if we are talking about the central categories on the above scale, (to generalise) it is normally a good option to follow tipsters with confidence and not to follow those who are lacking it. But as we approach the extreme levels of the scale, things change.

Let’s put ourselves in the shoes of a tipster who is watching his profit curve (P&L graph) soar while he is on a winning streak. Confidence makes you see things with greater clarity, boosts your ego and inspires you go against the general direction of the crowd, daring to take bets that you would not make with less confidence. It is good to follow confident tipsters. However, beware when the tipster develops an “I am God” attitude from continued top form. All tipsters have found themselves in this state of mind at some time or another after all has been going well. Here is the danger. You feel invincible and you think everything is going to carry on like that forever. Even though it may be a subconscious reaction, you effectively consider yourself akin to a fortune teller capable of predicting the future. Although you say to yourself “I am going to calm down and not bet any more than normal” it is difficult to do so. Without meaning to, you issue tips that you wouldn’t normally make if you were not in this state of “levitation”. This overbetting makes your selections worse and can decimate your bankroll very rapidly. My recommendation is therefore to temporarily stop following tipsters who are “on fire”. There are obviously exceptions, but I believe that on average it is unprofitable to bet on tipsters who are showing signs of excessive confidence.

On the other hand, things change. I don’t believe it is good to follow unconfident or extremely unconfident tipsters either. When you don’t bet much, your self confidence evaporates, you don’t see things as well, you don’t analyse the games correctly… In summary, you are likely to continue losing. However, if the losing streak continues and the tipster keeps sinking, he will reach a state of depression in which things can start to change. The tipster will not get as much sleep and will sleep badly, will enter a quasi-depressed way of thinking and will not want to make another bet in his life. But he knows that he has a duty to his followers or subscribers and doesn’t have any option but to continue. Many tipsters temporarily stop issuing tips for a while in order to recover mentally (which is a wise choice) and/or they start to think not twice, but instead 20 times, before issuing each pick. They also issue far few bets than normal. As a punter, I think this is a great moment to follow or at least to start closely monitoring such tipsters. We are of course talking about tipsters that have previously demonstrated a great track record over a large number of selections – not just anybody who is starting out afresh. Generally speaking, the more experienced a tipster is, the better their ability to control their behavioral impulses (and emotions).

In summary, my recommendation is to follow tipsters who are confident but to stop following them if they enter “on fire” mode and to consider following good tipsters that have entered a state of depression. How is it possible to detect when a tipster is “on fire”? If the tipster is on an incredible winning streak, he may increase the number of picks that he issues, he may start betting on other markets that he never normally touches, and he may become a bit more “lively” than normal… Be careful, he is “on fire”. In contrast, if a tipster can’t stop losing, if you judge his state of mind to be very weak and then he goes on to announce that he is going to stop betting for a while or think carefully about the methodology behind his picks and issue far fewer tips than normal, he is in depressed mode… Now is the time to start following him.

It is important to highlight that luck plays a very big role in the short-term when betting. That is, random luck will affect all the things discussed above. A tipster’s Profit and Loss account doesn’t just depend on the tipster but also on luck. A tipster’s true worth is demonstrated over the longer term. The comments I have made here are based on my personal experience from almost 4 years of issuing tips. Every person has a different mentality and each tipster is different. In the medium and long-term, if you are a punter that follows other tipsters I think it is a good idea to keep these guidelines in mind.

Finally, I would like to point out that what I have written is only applicable to tipsters who publish tips for their followers. When a punter bets on his own account without passing his tips to others, the pressure is not comparable. When other people follow you, things change. Many of those reading will know from their own experience that the majority of tipsters suffer most from knowing money is being lost by others than from losing their own money.

If you are a tipster but you still don’t know our platform Pyckio.com, we invite you to prove it. You can submit your picks and have a personal Tipster page with all your charts and statistics for free. You can be followed by many users and you can even become a PRO Tipster in the sport you excel at. If you are a punter you are also welcome. You can follow the best tipsters (Free or PRO) and also trying yourself. You can submit your own picks without risking a penny.

Daniel Mateos
Co-founder/CEO at Pyckio

Verified by Pyckio

December 04 2014, 14:19 · by Daniel Mateos · No Comments

Verified by Pyckio

From today, if you have a blog/website and you submit your picks at Pyckio.com, we offer you the ability to show a Pyckio badge in your site that confirms your betting statistics are verified by us.  Within the badge it can be read “Visit my Tipster page in Pyckio.com”. You can link it to the url of your Pyckio tipster account. In this way, the users who visit your site can trust that your statistics are real and verified by Pyckio (at Pinnacle Sports odds). Moreover, they will be able to access your Pyckio tipster page in only one click.

You can find here more info and the different sizes we have made.

Is it worth paying for the betting tips of a Tipster?

December 02 2014, 16:19 · by Daniel Mateos · 2 Comments

pay for tipsters

Although it’s not the general rule, there are some very good tipsters out there that can help you make money on a constant basis, with the logical ups and downs. However, before selecting one or more, we should first answer these questions:

1. Do I have enough time to investigate about one or more sports and bet on my own? And if I have it, has my bankroll grown with certain consistency? I’m sure there are exceptions but, in general, if you don’t have several hours a day to make your research, it is very difficult to cross beyond the “recreational bettor” line. The best tipsters spend many hours in front of their computers analysing all the available information, looking at odds, etc.

2. Is my bankroll high enough so that I can afford paying a fee for the tips of a tipster? The answer is not so obvious. Let’s see it with an example:

Let’s assume our initial bankroll is 1,000 eur and we are thinking about paying for a tipster who has a record of 1,200 picks (average of 50/month), a yield of 8.0% and an average stake of 2% of bankroll. Every tipster has his own money management strategy. Anyway, I don’t suggest betting in average much more than 2% of your bankroll. Only if average odds are low you can do it. If we assume the tipster will keep on providing a 8% yield in the long run, our potencial monthly earnings will be:

Potential earnings =

Initial Bankroll x avg. Stake x number of bets x Yield

for our bettor: 1,000 € x 0.02 x 50 x 0.08 = 80 eur

If we take out the 50 eur subscription fee, the profit drops to 30 eur. Therefore we are giving away 62.5% (50/80) of the potential profits. It’s clear that the bankroll of this bettor is too low to pay for a tipster. We obviously don’t know which will be the future yield, but a punter must make these calculations. He must make an estimation of the yield he might achieve in the long run with that tipster and then decide if it’s worth paying for him or not.

In the following table you can see what percentage of the potential profits are eaten by the tipster subscription fee, subject to 2 variables: the bettor initial bankroll and the potential yield. We have assumed a 2% average stake and 50 bets/month in a fixed bankroll strategy; that is, we don’t update our bankroll after every bet. If the punter decides to take more risk and bet on average a higher stake, his potential profit is higher . However, the bankruptcy risk it’s higher too and a bad run can put him out of the business. We have made this study for 2 different monthly subscription fees, 50 € and 100 €.

bankroll-yield

Deciding what maximum stake of our potential earnings is going to be aimed at paying for the monthly fee is a very personal decision. There isn’t an only answer. I would suggest not to devote more than 1/3. The reason is that any downward deviation in the yield means that our profits, if any, evaporate. Moreover, we should take into account that nearly always the published yield figure is higher than the bettor’s real one because the latter has generally access to lower odds.

To sum up, your bankroll must be high enough so that it can withstand the tipster fees. If it’s too low the tipster will have to provide you with very high yields so that the sums add up, what it might be very difficult to maintain in the long run.

Daniel Mateos
Co-founder/CEO of Pyckio

The Luck factor in Sports Betting

November 21 2014, 12:11 · by Daniel Mateos · 6 Comments

The Luck factor in Sports Betting

Luck plays a very important role in the outcome of our betting activity, much more than many think. It’s true that in the long term the influence of luck tends to zero and the more bets we make the less it will affect our results. But in the short terms  luck can have an amazing influence, for better or worse.

Most of tipsters and regular bettors know what I am talking about. Anyone who bets regulary has experienced sharp trends in his profit curve, although we use to blame “luck” only when things are moving in the wrong direction and not when we are on fire.

In order to see, from a mathematical perspective, how luck can influence our results, we have made a Monte Carlo simulation. Let’s consider a hypothetical good bettor that would have achieved a 10% yield in a very high number of bets and we can consider this 10% yield  his long term “edge” over the market. He makes 400 more bets. These are the parameters:

- Number of bets in 1 year: 400

- Odds: 2.20 (we assume all bets are made at these odds)

- Strike rate: 50%

- Fixed stake: 2 units/bet

- ROI or yield: 10% = (0.50 x (-2) + 0.50 x 2 x 1.20) / 2

- Initial bankroll: 100 units

For ease of calculations, we have used a Fixed Bankroll bankroll management; that is, a 2 units fixed stake is always used. This is how the Monte Carlo simulation works:  Excel gives us 400 random numbers between 0 and 1. As the strike rate is 50%, if the number is lower than 0.50 we consider it a lost bet and if the number is higher than 0.50 it’s a won bet. In the first case we lose 2 units and in the second one we win 2.40 (2 x 1.20).  This is how the bettor achieves that 10% long term yield. With 400 random numbers we can generate a profit line like the ones we can see below:

luck or skill

This is a sample of 12 results, achieved during a year. We can see that in several of them the magnitude of the bad runs is really sharp, even though in all cases the 10% yield bettor gets to finish the year in profit. Now we carry out this simulation not 12 but 1,000 times. With such a high number of samples we can already obtain very rigurous figures from a statistical point of view. The “maximum drawdown” (maximum peak to trough decline in the period) is 82 units (82% of the initial bankroll) and the average of all drawdowns is 30.9 units. That is, the bankroll of a very good bettor like this one suffers maximum drawdowns of 30.9% on average in a year, using a 2% stake. If we raise it to 3%, the average max. drawdown would be 46.5% and if we get crazy and make 5% our fixed stake the average drawdown would be 77.5%!! Moreover, as we raise the stakes, the number of simulations where we lose all our bankroll and we go bankruptc obviously grows.

The conclusion is that even for a bettor who is able to generate significant profits in the long term, luck plays a key role in the short term evolution of his bankroll. A bad run will come sooner or later and we should use a sound money management strategy so that the bankruptcy risk won’t be high. Apart from the value we perceive in each of our bets, the staking strategy should obviously be very connected with the odds size. Taking low odds we can risk higher stakes and viceversa. 

Daniel Mateos
Co-founder/CEO of Pyckio

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