SBC News The lost art of odds compilation: Over-reliance on Asian Handicap lines

The lost art of odds compilation: Over-reliance on Asian Handicap lines

supersoccer-JeevanJeyaratnamPricing feeds have become de rigueur in an industry beset by increasing costs, but are they the best way forward for established sportsbooks desperate to retain market share? In a two part article, Jeevan Jeyaratnam of Super Soccer GPS takes a look at how the market has developed.

In recent years the growth of online wagering and the, ever-extending, choice of whom to bet with has led to a “more is better” attitude. Firms will gauge the quality of their offering by the number of derivative markets available; this has become champion over accuracy.

In truth, the oft-seen ‘+120’ markets could well be condensed to ‘+20’. The majority of markets won’t garner any money but image is the key and the ‘more is best’ approach seems to be the trend.

There’s no harm in bookmakers providing a plethora of extraneous markets – they are all derived, via algorithm from the same basic attributes; in the case of football this is match supremacy and goal expectancy. They appear to be ideal website fillers – provided the key ingredients, the prices, are correct.

However one trend sees the ebbing away of independent compilation. The robots have indeed taken over the industry with “tracking” or “scraping” markets the norm, particularly in the nascent stages of market formation. This cheaper, perhaps lazier, approach to bookmaking ends up causing problems for punters and bookmakers alike.

Before we focus on the current norms it is important to frame the evolution of the all-important football betting product. Gambling on football has changed irrevocably in the last 15 years, with betting exchanges opening options up to anyone with an internet connection. The ability to act like a personal stockbroker has flipped the dynamics of punting and laying.

Much has been written about the influence of exchanges but this in itself isn’t the key driver behind the changes in football betting. By far the biggest influence has been the huge rise in Asian Handicap (AHC) betting.

Though not really seen on our shores until the year 2000, the advent of Asian handicapping dates back to the 1980s. Asian punters didn’t know what to make of 1X2 odds. There was confusion about what to do regarding a draw, so they used a handicapping system called ‘Hang Cheng’. This system ‘removed’ the draws and thus helped entice aggressive Asian bettors and big staking syndicates into the European football market.

From a bookmaking point of view, traditional three-way handicaps are generally a positive thing, providing a far better chance of ‘making a book’ than traditional 1X2 markets, which can be severely skewed. Negatively, the Asian system offers only two possible selections (with a possible push for a draw) and they come with low margins, which means higher volumes of trades are needed to make them profitable. You’ll never see a pre-game TV advert offering a ‘boosted’ price about a quarter-ball Asian handicap.

inifootballSuch is the popularity of the Hang Cheng, or Asian Handicap, system that all bookmaking firms will now revert to the derived 1X2 price when the AHC are posted. The exchange market inevitably falls in line too and so we end up with a standard industry price, with very little variance. It’s almost as if we have a horseracing SP but for football.

AHC are high volume products and so the professional syndicates can trade thousands of pounds in these markets, and this liquidity is the reason these markets are so valued. Their strength is unmatched and as such they are portrayed as the closest reflection to the true price.

This is all well and good, but fixed odds firms have realised that they don’t need to pay expensive compilers, they will all just revert to the AHC line in the end. Some firms won’t provide prices until the Asian line goes up, others will use 3rd party providers to post early shows.

It is here at this point in the market creation where, in my opinion, the industry is letting itself down and opening the lid to a large can of worms. The standard of compilation can be very poor, with no appreciation of the popularly traded teams in the AHC.

These embryonic markets are the weakest part of a fixed odds firm’s repertoire. The reason these markets are frail is because they aren’t researched properly at source. Employing numerous compilers and assigning them different leagues is deemed an inefficient use of funds. It is far easier to reduce the liabilities down and wait for the AHC market, so why offer them in the first place?

The really sharp players have learned they won’t get any action with these ‘show’ prices and so after having account after account closed they will bet solely with exchanges or via proxies into the AHC market, often with non-UK licensed firms. The lack of taxation income has been a hot topic recently, ending with the point of consumption tax law made legal in late 2014.

Forcing sharp UK players into foreign markets negates the impact of laws like this and although a perfect solution is unlikely, I feel the fixed odds industry could do more to accommodate the sharper players and keep the revenue inside the UK. I understand the theories behind closing accounts; the case is strong from a business point of view. However there shouldn’t be a firm in operation that wouldn’t take sizable bets at the ‘right’ price. The issue for some firms at present is that they don’t know the right price without the aid of an AHC.

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