Happy cup day everybody. Hope you have a cracker.
I was just taking a look at one of the betting sites. I won’t name names. I was thinking of having a little flutter.
I know betting is a bit of a waste of money. The odds are stacked against you, especially on something like the Melbourne Cup.
But that’s ok. I’m not doing it for financial gain.
I’m doing it because if I don’t do it, it’s just a bunch of horses running around a paddock.
Betting puts something on the line. You become invested in the outcome. Suddenly its no longer a bunch of horses out for a strut. Suddenly it means something.
And that makes it exciting.
So I’m paying for the privilege of getting excited. I’m paying for the buzz. It’s worth the small amount of money I put on it.
I mean, it’s not like there’d be a horse racing industry without gambling, right?
And I guess that’s the nature of gambling. Like all things that give you a ‘buzz’ it can be addictive. Hugely addictive.
Stay off the sports betting sites kiddies.
Anyway, as a mature adult who can take responsibility for his choices, I was on a sports betting site, looking at the Melbourne Cup options.
And there’s a tab that says “Special Markets”.
That piqued my interest, so I clicked through, and there’s 13 other betting markets going.
The quinella’s a standard, but since when did we bet on the colour of the jockey’s cap, or the sex of the winning horse?
What’s going on here?
Well, it’s tempting to say that this is the free market at work. People want to gamble on these things, so the bookies are making a price.
There might be an element of truth to that, but I think the full picture is a bit more sinister.
Because remember book-makers don’t really care about individuals. Rather, they’re working with their entire betting market.
And what they want to do is encourage that market, as a whole, into the most profitable bets.
Bets are profitable (for the bookmakers) when punters are grossly underestimating the odds.
For a simple win/loss result (Hawks vs Carlton) the punter is on fairly solid ground. They’re going to have a fairly good idea whether the odds on offer are fair.
It’s hard for the bookmaker to get a large margin on the event.
So there seem to be two strategies emerging for leading the punters astray.
The first is to offer bets that are complex and difficult to calculate. That why you see a lot of coupling bets. You see it a lot in soccer. E.g Messi to score the first goal, and Barcelona to win 3-1.
That seems very reasonable, but it’s actually a low probability outcome.
They also encourage you to misestimate the likelihoods, by working your emotional brain.
The first is by playing off familiarity.
If we think an outcome is ‘representative’, then we tend to give it higher probability that it actually has. Take the Messi goal and 3-1 bet. It sounds representative. If that result came up, no one would really be surprised. But, from a bookies perspective it’s actually a long shot.
Or take a coin toss for example. We think that a H-T-H-H-T (in that order), is much more likely than a H-H-H-H-H outcome, because it feels more familiar. It’s more like what we’d expect.
However, both sequences have exactly the same probability.
The other way they mess with representativeness, is by playing off emotional connections to events. So Messi, 3-1 will have a lot of appeal to Barcelona fans. They’ll have played that scenario out in their heads.
They like it. It feels right. They’re familiar with it because they’ve watched it play out in their heads. All that means they’ll do a crap job of estimating how likely it is.
Which is sweet music to the bookmakers.
So all these fancy bets we’re seeing. All the in-play betting. This is not about giving you more options and serving your betting needs.
This is just digital era attack on a fool and his money.
Oh, but listen to me. Don’t let me be wet blanket. Enjoy the race folks. C’arn Jameka!
Who you backing? Why?