Obviously, there are inherent risks in this optimal Poisson model. Take Matchweek 24, where we were struck with a net loss of $14 dollars. Both Merson and the Poisson-process model (and me !!!) was very confident in Liverpool, Man City, Man United, and Chelsea earning 3 points against Leicester, Newcastle, Burnley, Bournemouth respectively, proposing a total bet of $19. Result: Liverpool and Man United failed to grab all 3 points while Chelsea and Man City was defeated. All in the same weekend !!!
Before you clone my Github repo and raise capital for your sports hedge fund, I should make it clear that there are no guarantees. You need a large starting capital (I simulate with $1000 but every week I have only $33 to bet), a lot of patience and a cool head.
If anything, this article is a toy example of what you could potentially do. But the bookmakers have made it extremely difficult for anyone to gain sustainable profits. If the bookie thinks the probability of a win is 1/6, then he will guarantee that his expected intake minus payout is positive by setting the odds to be less than 5, maybe something like 4.6. If there are still a lot of people placing a bet at 4.6 odds, then the bookie surely realizes that the probability of a win must be higher than his own estimation and will adjust the odds to say 4. Chances are that by the time the code infers the most optimal odds, it has been changed.
Furthermore, if you do start to make a regular profit, bookmakers can simply thank you for your business, pay out your winnings and cancel your account. This is what has happened to a research group from the University of Tokyo .
A few months after we began to place bets with actual money bookmakers started to severely limit our accounts. We had some of our bets limited in the stake amount we could lay and bookmakers sometimes required “manual inspection” of our wagers before accepting them