RBOA: Risk Balanced Odds Arbitrage \ stacker news ~Stacker

A few weeks ago, some of us here in what has become Stacker Sports Territory started using freebitcoin for placing micro bets on NFL games. It took me a little while to fully understand the betting system used on the site, but once I did, I realized it's possible to get better-than-fair odds on the site.

Pooled Betting with an Early Wager Bonus I know the promise of better-than-fair odds sounds like a scam, so I'll explain their model and why it works. In contrast to most sportsbooks, freebitcoin is not setting odds for events. Rather, they collect bets on all possible outcomes of an event into a pool that will be divided amongst those who bet on the right outcome. It's from that pool that the site takes its payment.

If the site takes a payment, that must mean the expected payouts are worse than fair, right? Well, on average, yes they are worse than fair. However, the site offers a bonus for those who place bets early. They use a mechanism like that because otherwise there would be no incentive to place early bets and they need early bets to make the pool more attractive to potential betters. I haven't worked out the precise cutoff, but bets placed within a few hours of an event being posted have a sufficiently high bonus to generate a positive expected return on bets placed.

Risk Balanced Odds Arbitrage So, how do you take advantage of this better-than-fair feature? If you just bet on the outcome you expect, that might be what everyone else does too and there ends up being no upside to the bet. Many times, I've seen the current expected "odds" (payout ratio) swing wildly, such that I wished I had placed a bet on a different outcome than I did.

This is where we can appeal to outside information. The major sports books have done the work to set as accurate of odds as possible with the information available. By translating those odds into a percentage likelihood of each outcome, it's possible to bet in such a way that if the freebitcoin odds end up resembling the sports books, then every outcome will yield a net positive return. Specifically, you divvy up your bet in proportion to the odds of each outcome.

Thus far, the RBOA method has yielded a positive return in each of the past two NFL weeks and for about 20 soccer matches. Going forward, I'll make a post with RBOA suggestions whenever new events go up on the site.

462 sats \ 3 replies \ @grayruby 8 Dec 2023

The jury is still out on the long term viability of this strategy v.s say another time tested strategy, dumb ass guessing, which I have been testing for years, but it definitely has a professional sounding name.

100 sats \ 2 replies \ @Undisciplined OP 8 Dec 2023

Different approaches may have different results for different people. My dumbass guessing had me down about 8k pretty quickly vs RBOA having me up 2k. At the very least, it would take a long time to lose 8k using RBOA.

462 sats \ 1 reply \ @grayruby 8 Dec 2023

Last week helped renew my faith in dumb ass guessing. I am only down about 1500 overall now. Although I am invoking a portion of RBOA by conducting my dumb ass guesses early to exploit the odds arb. DAGOA

100 sats \ 0 replies \ @Undisciplined OP 8 Dec 2023

Early betting is definitely the key point.

I like the hedging part, because of how many times I missed out on big odds swings or ended up holding a bet with almost no potential return. This way, I always have an outcome to really root for, instead of regretting the pick I made.

31 sats \ 2 replies \ @riberet19 16 May

After reading it, a question came to mind: is arbitration not punishable in Freebitcoin? I say this because in most traditional betting houses I think they can ban you due to arbitration.

10 sats \ 1 reply \ @Undisciplined OP 16 May

To my knowledge, they have no issue with this. The reason why they wouldn't have a problem with it is because it doesn't undermine their profit mechanism.

They take their cut out of the pool first and then pay out the winners, so however we structure our bets is of no consequence to the site owners.

By contrast, traditional betting houses give betters fixed odds that are less than fair. That means they make money in the long run, but can lose on any particular bet. Since they can lose money, they don't allow certain systematic betting behavior that opens them up to losses.

21 sats \ 0 replies \ @riberet19 16 May

It makes sense, thanks for explaining to me, I suppose you have already verified this very well.