Hey everybody, and welcome to Life is a Gamble. This is episode number
ten and my guest today is Ed Miller. And Ed Miller was a frequent
guest on Gambling with an Edge, mainly back then writing about poker, but
he has shifted over interrolled and has a new book out called Interception that he
wrote with Matt david Ow, who also was his co author The Logic of
Sports Betting, which sort of a must read by anybody getting involved in sports
betting. So Ed, welcome to thank you, Thank you very much for
having me. Richard Cool. So yeah, I want to talk about the
new book, Interception, But before we get into that, can we talk
about your shift from poker and how that came about? Sure? Yeah,
so, I I mean I was, I was. I started my kind
of gambling journey definitely in poker. I started with the flashing online poker,
Paradise Poker, Come come play, living hold of stuff you know from I
don't know, twenty years ago now over twenty years and yeah, and so
I moved. I ended up moving to Vegas just to play poker for a
living. I did that for a while. I got burnt out on playing
poker all the time, So that's how I got into writing. And then
yeah, and then in like twenty fifteen, so I was basically mostly poker
for my gambling stuff for the first I don't know, ten plus years.
But like right after the UI e GA got passed, which was that federal
law that kind of made the right, there was a specific carve out for
fantasy sports. I don't know if people know the history of this, but
that and almost immediately, I want to say, like within the year,
someone launched something the first daily fantasy site called like Fantasy Sports Live or something,
and I, uh, I took a look at it, and I
was like, this is this is really clever, like especially legally, you
know, but you know, my kind of critique of it was, this
is not a very good gambling game because you know, the skill gap whatever
you want to call it, is too great. Like it's just if you're
smart, they like, the casual player is just gonna get destroyed at This
was my was my take. I was like, I was like, this
is this is that I love this game, but you know, anyone who
doesn't like play games for a living is gonna just get crished. So I
was like, I don't really think this is going anywhere, and then like
half a billion dollars of VC investment later, you know, I mean that
was my take. My take was Fandel and DraftKings for creations of the investment,
you know, vehicle right, Like, I don't ever really, I
don't think my take was wrong. I think my take was right that their
the skill gap is kind of too big for those daily fantasy games, but
it just that effect got overwhelmed by the enormous investment. You know that those
companies. I'm kind of amazed they're still going on. I mean, I
haven't looked at them in a while because we can't get them here in Nevada,
right, So did they lower the rake or something? How the daily
fantasy And I'm not an expert on this, I don't want to, like
if I say something that's slightly wrong, I mean, I I'll hear about
it. Probably whatever you know, maya kulpa in advance. But to my
knowledge, the daily Fantasy parts of those businesses are basically stagnant, and it's
it's essentially, you know, there's not much growth there and they offer it
and you know, people play it, but it's a you know, on
its own it's not much of a business in a sports book. Yeah,
that would that makes sense much in the way that like racetracks just want to
have casinos now the horse racing is dying. But I don't think that was
the original idea. I think the original idea was that the daily Fantasy game
would have legs and growth, you know. And and my take was,
no, this is not a game that's self sustainable for several reasons. But
anyway, I kind of threw in the towel on that take, like I
kind of clung to that take a little too long. Really, I mean
I was I was too stubborn with that take. This is a bad game.
This is gonna you know. Meanwhile, I watched, you know,
all the investment money pour in, and I was like, well, I'm
being dumb here. I should just go win the money. Yeah, I
was like, why am I? Why am I stubbornly clinging to this take
that this is a bad game. Why don't I just win the money?
So, you know, once I had that thought, that's what I did,
basically, So I did. So I ramped up a little. I
basically built a little kind of software suite to today they would call them optimizers.
Right, There are optimizers now that are available on the web, and
I kind of built my own optimizer before the optimizers, the public optimizers were
thing, and you know, created a bunch of daily fantasy lineups every day,
and you know that. So that was my entry to the sports stuff.
Was that with me saying, stop being dumb and just go win the
money? Yeah? So yeah, and that's how I got started. So
so now you came up with this crazy idea to develop in game models and
sell them to the sports books, right right, So that wasn't my So
what happened was Matt, who's my co author and partner in all of this.
So I met Matt originally like twenty years ago playing poker in Vegas,
right, So but then you know, I just would see him around town
here and there. But but I didn't really talk gambling much of him.
And then we both got recruited to consult on a fantasy sports project independently,
and we kind of traded notes a little bit and we realized we were both
had exactly the same idea as far as winning the daily fantasy money, except
I went about it with I built my eyes showed him my optimizer stuff that
I built. And then you know, he was kind of doing things by
hand. He had a different method, but it was our strategy for like,
the game strategy was very similar, right that we'd come to independent and
so yeah, and I think I think he was like, hey, you
know, I liked the software skills that. So yeah, so he was
like, well, why don't we work together? And then that was his
I mean, he his project that he wanted to work on was built the
next generation of in game models, so starting with football. So that was
how we started with that. So he was like, hey, let's build
an in game model for football, And I said, are you sure.
He's like, trust me, and then yeah, so that's how that started.
And yeah, we built it, and it, you know, I
thought was remarkably good. I was very surprised by how well it came out.
And yeah, and then we just kind of started doing that for all
the major American sports, and by twenty eighteen we had more or less a
entire suite of in game models. Yeah, it just seems an enormous undertaking
to try to do them for all the major sports. I mean, football
is the hardest one. Football is very tricky because the scoring is weird and
has to do with the way the drives work and the way all the strategy
changes in reaction to the weird scoring at the ends of games, and you
know, all that stuff like are they going to go for it on fourth
down? Are they going to a field goal? Are they going to go
for two? Or are they going to All that weird stuff that happens makes
football very tricky, and and just the play calling changes, right, the
play calling changes fairly dramatically in the fourth quarters, and you know, just
to try to get all that strategic weirdness kind of correct in a model is
and then and then and then. NFL is different from college, right.
In college they play substantially different in many of those situations. The whole offense
has worked differently in college. I mean, it's it's it's so football is
the hardest, for sure. I mean basketball is is. Our basketball model
is markedly simpler. I was, okay, well, so this really uh
kind of leads us directly into the new book Interception. Uh. I want
to say, for the listeners who haven't read the first book, the Logic
of sports betting really sort of was a basic premmer on how book makers work,
how lines work, the difference a market maker and a retail book.
But the new book is more about I guess I would say more about how
the inner workings work and how to get away with being a professional better sort
of some tips and tricks, and the two things really stuck out to me
about this book. Number one, it just seems like there is a lot
of incompetence in this business, like a lot of crazy things going on in
these multi billion dollar companies. For example, you give an example of how
the people in charge of football. There are a bunch of these guys in
the UK where they don't have college football, so they were just using their
pro football model on college and this kind of thing, right, Okay,
well so all kind of So so the way I would say it is,
I would say the logic of sports betting. It's kind of about how sports
betting markets work. So it's kind of an introduction to this is how the
sports betting market works. And you know, and if you see a you
know, a lines minus you know, nine and a half line, and
you know, you think, like understanding who you're betting against when you're betting
into that line on Sunday morning, you're not just betting. You know,
people had this idea, you're betting against Vinnie with a cigar who's got his
power rings. No, no, no, you're not. You're betting into
a market of that is basically price discovered by some extremely smart people who do
this, you know, full time. So that was kind of the point
of logic of sports betting, was an introduction to that concept and how those
markets work. So this book, yeah, this book is more about how
do the we call the modern sports books in the book, and we don't
kind of name brand names, but you know, you can figure out,
you know, roughly who we're talking about. And uh, they go far,
far beyond the markets. The betting options that have markets associated with them.
You know, it's not just you know, lions minus nine and a
half. It's every single possible point spread from plus seventeen and a half to
minus twenty seven and a half they have you can bet on, right,
and they have a price for each one. And the key idea is that
you know, an in play markets, all the in play stuff and all
the different props and all the different and single game parlays and I mean these
menus and and the way they get those is there's no market behind that.
There isn't you know, a bunch of smart people that are banging those prices
into place. Those prices are created by companies, you know, of which
we founded one that use models to create those pricing. So so when you're
betting into you know, lions minus nine and a half, you know,
on Sunday morning your bet, you're basically saying to all the smartest sports football
betters in the world, I think you're wrong. You know, if you
bet into even an in game market, you're just saying and Miller, I
think you're a clown. And that could entirely you know, and so so
the book kind of starts there and makes that distinction. It says, understand
what goes into the numbers you bet so you use the word in competence.
I would not use the word in competence. I think people are trying hard.
What I would say is I think they're over promising, right, I
think the sports betting industry is over promising the amount of product they can offer.
Right. Product in the vernacular of this industry is just all the different
betting options, right, so every time they want to add a new thing,
you can bet on someone has to make a price on that, right,
there has to you know, and that is with a cigar, and
yeah, it is, it's I mean it's and I don't smoke scars much,
but you know, you were doing in game. But but if you're
betting you know somebody for this many passing yards, you know, that would
be someone else with a ciguard. Yeah that's right, Yeah, yeah,
exactly. Yeah. Well our company has some of those options too, and
we're expanding. Yeah exactly right. You're you're you're betting into somebody's uh what
one company. It's usually one company I would say, maintaining some kind of
model or infrastructure and essentially their opinion is what you're betting into, which is
very different from betting into a market. Is there a way to know which
how many providers are there? Oh? That's the other thing that struck me
was how this is all pieced together with spit and chewing gum, Like you
know, one person, one person you know, doing the the mainlines,
a different company doing the in game, and a different company handling all the
customers. And is there a way to know which books are using which companies?
Is but you got to do research, you got it? You can
ask on Twitter. So there's sort of a small industry niche on Twitter where
you know, the people who know about this stuff sort of lurk and they'll
answer questions and you know, if you want to, and you can research
it. None of it's a secret. It's also generally not advertised, if
that makes sense, right, Like it's you know, so these relationships are
all available if you ask around, you go to conferences, or you go
on Twitter and you kind of ask, hey, who does the golf for
you know, so and so? Right, But you could ask that question
and there's an answer, there's such and such company. And it's funny because
sometimes the answer is, well, such and such company does the you know,
does the the front end, does the you know, Like, there's
a there's a golf InPlay product, for instance, that I really am a
fan of, which is kind of why I'm calling it out, because this
is trying to be positive and say you did a good job. So there's
a golf product and in play product, you know, and there's like a
little picture of the golf course, right, and you can like click on
any golfer and it kind of shows you where on the course they are and
you can bet on them, you know, in play during the tournament.
And I think it's a pretty slick product. But even that, it's like
a collaboration effort between one company that is like in charge of the raw data,
like all the shot data in real time, a different company that's in
charge of the pricing the shot data. Right, this is my understanding of
how this product works. And maybe some of these again, I don't want
to get somebody saying and you're wrong. Well, okay, maybe I'm wrong,
you know. And then maybe I think there might even be a third
company that's in charge of the graphics, the web graphs, right. I
think it might be the data and the web graphics might be the same company,
and then the pricing might be a different firm. Anyway, play is
Yes, all this stuff is just really collaboration between distinct entities, you know.
And then that golf product is offered by a sports book, which is
definitely a distinct entity from the entities that created the product. So yeah,
yep. So the other thing that struck me is like I I know very
little about sports betting. I'm just starting to stick my toes in a little
bit. I'm getting the impression that there are very very few originators, Like
I see a lot of talk by people who are making money with this top
down or scalping or various things that do not require you know, building models.
So is that impression correct that there are very You're definitely correct, Yeah,
there are very few that there are very few people who are actually like
betting into the market stuff like what I was saying, like Saturday morning college
football day, who are placing a ton of bets into that full on betting
market on the point spreads and the totals, and who are doing that for
a profit. There's a very small, very small Yeah. Yeah, well
but that is very encouraging. Then I would think for people can originate and
for sure that's you know, I mean, anyone who who can can engage
with the market at that level is has a tremendously valuable skill. I would
say. Yeah, But like any gambling game, there is finding the edge
and then there is finding a way to actually make money with that edge,
which are two very different skills. So it sounds like a place where good
partnerships can come about. It is, yeah, and and there's there's you
know, I mean, there there are market making sports books that kind of
special I like Circa for example, as an example here in Nevada. I
think they would consider themselves a market making sportsbook where where they they accept all
betters, you know, and they're never gonna according to I mean, I
can't, you know, promise how that another business that's not me is going
to behave in the future. But they're they're kind of value offering is that
that we will we will allow anyone to bet within our structure. You know,
even if you're a known winner to us, even if you've won from
us, You're welcome to bet with us, because why are you welcome?
Because our our view is that we take a sports betting as market making perspective
and and we're going to just try to collect the kind of commission so to
speak, for making a market on this stuff. And uh, you know,
and therefore, if you want, if you have an ability to kind
of beat the market prices, you can bet at Circa or bett at a
few other places and definitely make you know, plenty of money. I would
say, you know, there's there's a there, there is a ton of
upside there. I think there's you know, it's I but that is definitely
the hardest thing to do at all. There's a reason a very small number
of people do this. It's it's very hard to generate. I mean that
you know, they're putting a four percent hold on these markets, right,
so you have to overcome quite I mean that's a quite significant hold. You
basically have to say, I know better than everyone else in the world by
not only by a little bit, but by consistently by four percent basically.
Right. So, right, but if you pick, if you pick a
less mature market, like you know, like golf is in your examples,
but you could bet much less on that also, right, The amount you
could bet on it is is commensurate with the size of the market directly,
So I mean it's almost by definition that is, the definition of the size
of the market is how much money is, how much liquidity there is in
it, and therefore how much you could tell sure, yeah, yeah.
So the other thing that I think people will find valuable in this book is
you have some ideas about how to not get backed off or limited. And
you know, one of the things that you talk about there is the closing
line value. In the fact that you always have closing line value, you're
going to get limited very quickly. But isn't that exactly what these top down
betters do? I mean, how do they know they get limited very quickly?
Okay, so they're just churning account after it. Yeah, that's what
they're doing. They're constantly trying to find people with they have Catholic families with
nine brothers and sis mean, I can't I can't say I know the details,
but I think, yeah, so how do you? Okay, so
let's talk about some of these ways to not get limited. Right. So,
so the basic idea is, you know, so modern sports books again,
I'm drawing a distinction between them and market making one. And it's not
a hard discision. I want to be clear. This is not a black
and white thing, right, you know, this is these are you know,
two kind of ends of a spectrum. But modern sports book is defined
by its interest in offering zillions of betting options. That's how I define it.
You know, that one where they want to offer you as many possible
things to bet on as possible. That's a modern sports well they you know,
as we go through in the book, is impossible for them to price
all that stuff correctly. It's just you know, and that's that's the point
where I said, I don't think it's incompetence, it's just over promising.
They're just they just want to offer more and more and more, and it's
just gets to a point where you can't reasonably price it all well. Right,
so because you can't read them, we price it all well. Then
if if if they allowed winning better is to bet and winning better, it
could just turn ten dollars into millions right through the through the you know,
power of compounding interest basically, right, like exponential curves go up. Right.
So yeah, so so they they they basically can't let you do that.
Like they are aware that they can't price everything correctly. They are also
want to offer all this stuff. They want people to be able. They
want they think it's fun. I think it's fun. I mean I get
it. I get why they want to offer it. So they're like,
well, we can't price it all correctly. We want to offer it,
and therefore the only option is we basically have to figure out who's trying to
beat it and get rid of them. And so that's what they do.
So then the question is, well, how do they try to figure out
who's feeding them? So most people are extremely obvious about it. It's that
and you're probably familiar with this like most people who do. Like if I
walk through a casino in Vegas today, right, there's you know, you'll
see people on the I don't know how much you talk about this on your
show, but like, you know, there's the slots that you can kind
of advantage play, right, and you just once you know what you're looking
for, the people advantage playing the slots are beyond obvious, right, They're
just they don't really try to hide the fact that they're doing it. You
know, they'll vulture the things, they'll sit there in lear or they'll like
or or the like. I just I could tell just by looking for two
seconds there that person is advantage playing that slot us right, Exactly, you
can see them before they even sit down at the table. Exactly. It's
just once you know what, once you're familiar, if you're not familiar with
it, you have no idea what's going on. It's like you know,
and then once you learn a little bit, you're like, oh, I
could see it everywhere, right, And it's exactly the same they get sports
Bank, like the people that are trying to win are so obvious most of
the time that it's just they could get picked off after a few bets,
Like it's just you know, just and we talk about a little bit,
you know, you know, but but like I mean, just some of
the most obvious behaviors, people will bet the home runs after they happen.
I mean, this is again this is from my experience as a you know,
a provider of in play betting. You know, there's the guy that
just sits there at the baseball game and jams in the bet the moment the
ball comes off the bat and then two seconds later we got the information that
there was a home run and he got his bet in well, congratulations,
I think I know what you're doing, you know what I mean, Like
it's it's just beyond obvious, right and I mean right, so and uh
yeah, just a lot of the ways people try to win or just are
just not subtle and and so you know, it's just easy to pick those
people off. So so what we talked about in the book is, well,
how how can you do it in a way that Now CLV, which
is closing line value, is kind of a mathematical tell that you're winning.
So CLV means like if you bet a pregame market. Let's say you bet,
uh, you know, Let's say you bet a football game on Monday,
right, like the beginning of the week, right, and then by
Sunday, by the end of the week. You know, if you made
a good bet, what will happen is the market will move in your favor.
That's almost the definition of you making a good bet on Monday is that
by Sunday the market agrees with your bet and the line has moved, and
the amount of the line move is measurable. It's just math, you can,
you know. So a sportsbook can say, hey, if you made
a bet on Monday, and what was our line on Monday that you bet,
and what was the line on Sunday when the game went off, And
the difference between the two is an estimate of how good your bet was.
Right, All sports books can run script on their customers. They can just
run a script that says, you know, how good are all the bets
they make on Monday? And if they're good, guess what, they don't
let you so, you know. So that's the problem with closing line value.
So how do you avoid closing line Well, there's a lot of bets
you can make on these menues that essentially don't have closing line value. In
play beats, for instance, there's no such thing as closing line value,
right they put the line The lines changes between every play, because the fundamental
problem changes between every play. Every time there's a play, there's new information
and the problem changes, and therefore you can't compare Oh, he got you
know, minus one thirty year and then they got sacked and now went to
play, you know, I mean it's like that's not a thing, right,
Like that's that's you know, So there's no easy way to calculate the
closing line value in the same way say for an InPlay beat, for a
single game parlay, for for a lot of this stuff, anything where there's
not a market really, there's not really eat a concept of closing lineback.
So so yeah, like it, if your idea is I'm gonna win at
a modern sportsbook by you know, betting overnights or betting early and then letting
the market confirm that I made a good bet, well you're being obvious.
So in in blackjack, people often have this idea of going into the casino
and just playing for an hour or two with no edge to just show them
like, look at me, I'm not a card counter. Right, So
does this apply in sports books? Can you go in and you know,
bet a bunch of parlays and bet like a donk? Hopefully you can find
bets that are not too bad in terms of how much money you're giving away.
Will this buy you much time? Or as soon as you start pounding
them, they're going to so so in in my so we talk about this
in the book. You know, in my experience, the most optimal strategy
for the longevity. And this is true even this is true in all sports.
So the problem with sports betting is it's not just the books you're trying
to hide the fact that you're waiting from. It's it's or rather, what
happens is, let's say let's let's rewind back in time, and let's say
it's twenty years ago, right, and you know where where all these modern
sports books didn't really exist, and it was kind of all the betting market,
and the markets were all smaller. Let's say you found an angle,
you found something that was not in the betting No one else in the betting
market had figured out yet this was this wasn't is definitely a thing you can
do. You say, they're not accounting for wind in football. I mean,
that's not a thing. But like, at some point, I'm sure
it was a thing. Some point, nobody it hadn't occurred to anyone that
the wind matters, right, So, so you're the only person in the
world that's figured out that the bad and so and this comes up in one
game in ten, right, nine games out of ten, the wind is
not enough to matter. But one game in ten at match, and so
you want to bet that one game in ten to get your edge. Well,
the problem is, so you bet your one game in ten. Well,
there's another person on this taking your bets. There's literally a human being
on the other side who's seeing your bet come in. And the moment anyone
starts to think you're winning, what they do is they say, how,
what's your angle? Right? And they try to figure it out, many
times selfishly because they want to go bet at themselves. Right. So this
is naturally happens. This happens all throughout the sports betting ecosystem, is that
the people taking the bets try to figure out what the winning betters are doing.
This is constant. We kind of described this in the book, and
so you have to disguise what you're doing from them because the moment they figure
it out, then they're gonna are betting it and they're not going to be
cautious about it, and then it's gonna get every bet everywhere, and then
everyone will figure it out and your edge will be gone. So you have
to So it's kind of if you want longevity, even if you don't get
kicked out, if you just want your angle to persist, you have to
basically bet in a way that nobody can figure out what the heck you're doing.
And yes, what you just said is is I think the strongest way
to do that is to create a lot of betting noise around what you're doing.
If you only bet one game in ten, they can say, well,
what's the common thread. If you bet every game and one intent of
the bets is really good and the other nine is roughly break even, I
mean, it becomes much much harder to figure out what the heck you're doing,
and you're still winning at the same pace if you do that, like
if you now that, but I've said a mouthful, because now you have
to find bets on every game that will break even you in the first book
talked about the idea of a synthetic hold. Yep. And it seems to
me pretty easy to find basically break even bets just by line shopping. I
think it easy to get them. But the book you want it at is
the problem, right, right? But but yeah, for sure, yeah,
and that and that is kind of the method that that that's certainly where
you start, right you start by line shopping trying to find Okay, my
hold is not four percent. Now, my hold's now one and a half
percent. I've gotten it between these two you know, books that will taking
my action. I've got the sin. We call it synthetic holde. And
the logic is I don't love that term, but that's what I went with,
you know. Okay, so now the hold is one and a half
percent, Well, what I have is still too much. If you've bet
a lot of one and a half, you're gonna lose, right, it's
craps is one and a half percent or whatever. Right, you're gonna lose.
You keep betting one and a half percent, so you gotta get it
down further. So you really do have to have an anger. You have
to have some ability to to kind of gain an edge even into the line
shops lines. But that's very doable. I mean it's it is doable.
And if you can consistently do that, to me, that's the most valuable
sports medical because once you can lay the cover like that, once you can
spa and and and and the people in practice that I know who have,
like I a few examples, this is this is a common thread that they
spam better spam bet. Yes, yes, so this is this is this
is definitely like the idea, oh I'm picking and choosing, I'm only betting
one game at ten. This is not how the most successful, most successful
people bet everything, and they and that's hard because you have to put everything
not lose on most right. So yeah, so well that most people are
knits and and do not want to give up anything, and haye, very
right. But in other thing, like in the casino variance, is your
friend, yes, you know, if you if you're willing to take big
swings. They they're not used to advantage players who do that, right,
Yeah, exactly, So, I mean exactly all the same ideas apply here,
all of them. And and your example of the oh I'm going to
go in and play like a loser for an hour and then I'm going to
play like a winner. Well, that doesn't work. I mean I assume
that doesn't work very well usually, and that wouldn't work here either. Like
if you open an account and you play two weeks of you know, parlays,
you know, moneyline parlays on random teams, and then you go bet
your angle for the next six months, I mean, you're not impressing anybody,
Like, yeah, absolutely, it seems like your cover has to be
in the same uh, in the in the same sport and the same kind
of bet that your edge bets are gonna be. Yep, you're hiding the
signal within the noise is what you're doing. Yeah, yeah, and that
but that so that will work. I mean that's extreme. I mean think
about how hard that is to detect. How how is anybody going to figure
out what the heck you're doing? You know, at the end of the
day, you know these companies, I mean, you're familiar with how they
work. The end of the day, I have to have a big red
number next to your name. At some point they're just gonna say, you
know, to help it, Yeah, you know exactly. It's not gonna
happen at any moment. I mean, you catch someone on a bad day
and they could just say I'm done with this guy, and then you're done.
I mean, they can do that, and that's human nature and that's
how but but yeah, like my experience is that. My experience also is
you know a lot of people are curious, Like if they can't figure out
what you're doing, they'll just they want to figure it out too. Like
there's I've definitely heard this from people in the industry of people who I know
have basically used this strategy, like specific people talking about other specific people where
they're like, I know, he I can't figure out how, and so
I just let them keep bet. Like I've literally heard that from people,
you know, and and yeah, so yeah, casinos are less likely to
do that. I think those too, I think I think, yeah,
I think the detriment, you know, I think if they did just take
some time to watch, they would figure some stuff out. Right. Well,
my taking my whole our whole point for kind of why we started the
business was I think that their entire products will improve if they harden the menu,
right, Like, like a lot of these bets are extremely beatable.
It's it's like I was saying, you know, with the with the slots,
I mean, the beatable slots are everywhere now, the people beating them
are everywhere now. I mean, and I'm not saying the beautable thoughts are
bad for the casino because they need you know, obviously they win overall for
the casino. But like, like the beatable bets are everywhere on a sports
book, man, this is not subtle. Like there there's zillions of options
at any given point, a number of them are miss it's you know,
it's and And my point is like instead of like like, the product is
just so much better if you just tighten that up as best as you can,
like especially on the bigger stuff like in play football, I mean,
why aren't you trying to do the absolute very best you can to price your
in play NFL life, Like to me, that's obvious, Like this is
a core offering of the sports book, Like why aren't you heavily investing And
to me, if you heavily invest in you know, the pricing of core
offerings like that, like you can just offer much more. You can offer
larger limits, you can offer no delays, you can offer you know,
you know, I mean you end up like, there's this thing called the
palpable error. Do you know about this? I mentioned it in the book.
I don't know if you're how familiar, ye, but go ahead and
explain it first. So the way that works it so that there's kind of
the sports book industry has this thing where they can they can after a bet
is made and settled, they can say just kidding and then basically undo the
bet or give you revised the odds they offered it. So, so a
concrete example is, let's say you know you bet an in play I saw
somebody on Twitter like three days ago they bet an in play hockey game under
eight and a half minus one thirty or whatever, right, And then after
the game was over and the game went under eight and a half, they
got an email from the sportsbook saying, oops, eight under eight and a
half minus one thirty was a palpable error and the actual odds should have been
minus four twenty five. So we've paid you minus four twenty five. So
instead basically instead of saying, okay, you bet one hundred dollars, we're
gonna pay you you know, eight, eight, you know, eighty whatever,
you know for minus one thirty, We're gonna pay you twenty on your
winning bet, right, like, that's that's what they said, and then
they just do that, they pay you. They say, we're gonna pay
you twenty instead of eighty this bet instead, right that you placed I mean
when you were making the eye I mean right, yeah, So, and
they can essentially do this arbitrarily, right, They essentially can on any bet
you make, they can send you an email saying saying, sorry, just
kidding, the odds were actually this, and pay you. Now. I
understand why they have that practice because again, as somebody who's tried to make
these odds on absolutely everything, yes, you do screw up. Sometimes,
yes, people do take advantage of it. And sometimes the errors are I
mean, you know, I mean Matt can get bad, right, you
know, I mean right, so sometimes the error said. But I think
some of these sports are way over useless. It's a terrible customer experience.
Terrible customer experience, right, just really like Amazon did this. So Amazon
palppable aired me like twice. They basically I bought something on Amazon and then
they send me an email later saying sorry, the price was wrong. It's
actually like I bought something for ninety nine dollars. Right, Let's say I
think this is actually what happened is I tried to buy something for ninety nine
dollars and then like two days later, I get an email from Amazon and
it says, sorry that price was in error. It's actually one hundred and
ninety nine dollars. Like we've signed you up to buy it for one hundred
ninety nine dollars and you can cancel it here something like that, they said
me. And I was like, I was like, well, screw you,
you know. And they did that to me twice, and I was
like, Amazon's going downhill. That was my thought process. And literally in
that moment, I was like, man, if Amazon had an actual,
real competitor, I would be trying them now, Like ye I would.
I would be like, all right, this is obnoxious. I'm gonna go
try Amazon's compete. Well, obviously they don't have a competitor, so I
just kind of sucked it up. But if sportsbooks absolutely have competitors, right,
So yeah, and I think somebody is actually suing mgm over. Yeah,
you know, I mean to me, it's a cause, I mean
I try not to say, right, who's wrong? I as someone who's
tried to make that. I understand why they had the rules. I think
it should be I think there should be kind of more restrictions on how it's
used. I think it should really be used in extremes. You know,
we've we've accidentally had games up on the software that were already over and then
people bet it and it's like, come on, you know that game ended
three hours ago and it's obviously software and it is and I'm sorry it's on
there. We screwed up or someone's some bug in the software put it up.
I mean it happens, right, like, yeah, it definitely happens.
I'm sympathetic to that, like, and people definitely like you know,
obviously, you know, I mean, if you put something like that,
everyone's like to these they like anyway, it's just funny how people behave right.
But like, you know, so I get why the rule exists.
I think it's reasonable to say, Okay, there should be some kind of
but I think it's way overused and it's it's just so such a terrible customer
experience to be sending people emails like that. I mean, it's especially your
stuff, man, fix it. Yeah, well, and especially when if
it happens the in reverse. You're screwed, right if yeah, thing,
you meant to bet fifty dollars and you put in five hundred, Well,
oh yeah you're screwed. Yeah you're done. Yeah exactly, yep, yeah,
no, I agree. I mean it's it's definitely not fair, you
know, as a fairness embedding kind of thing goes. Is it an acceptable
practice given the circumstance, It's sort of, you know, in some cases
maybe, in some cases maybe, but I think it's way overused, and
for sure it's a terrible customers. So I'm like, well, why why
don't they put more effort into trying to minimize absolutely minimize that as much there's
there's I think it's too casual. Like in my experience in the industry,
when you talk to industry people, they're too casual about limiting people and too
casual about papa. They're they're they're too they very much say you know,
I like, this was my face because this was my sales pitch. I
was like, I was like, we try to be as absolutely accurate as
possible. We make our lines, you know, you know, and and
basically the pushback is, well, we just limit anyone who beats this or
you know, well, if we make an error, we just we just
poppable error, you know. Yeah, and and and and I'm like,
you know, and I'm like, don't you see how that's bad for your
business though? That practice? Like don't you want to not do that stuff?
You know? And they don't like they it's just they're they're thinking it's
that they're too ingrained into that's the way it works, that that kind of
I think a lot of people don't don't see pads. How do you see
the future of account limiting? Do you think that'll just continue as is?
Get better, get worse? I mean, I I think everything gets better
over time, right, Like I'm an optimist. I I definitely entered the
business thinking it would I entered the business you know, definitely thinking that that
that people would hear my sales pitch would be like like absolutely, you're right,
and obviously let's you know, make our products. It's it's not quite
happeople. But at the same time, at the same time, I did
you know, I and obviously we have customers, I mean people people.
There are definitely sports books out there that want to offer accurate lines there's definitely
I mean I'm overstating it, but but I think the truth is somewhere in
the middle. I think, you know, over time, yes, like
there there will be a you know, an emphasis on quality. I already
see that with some of the big sports books. They are trying to make
their their lines in pricing better. They like the some of the very biggest
ones. If you read what they say in the investor calls and stuff,
like they say, we're trying to make all our stuff higher quality than everyone
else, like high better, pricing better, fewer errors like they say this
in the call. And these are also the people that are winning. So
and I always put on Twitter, I'm like, the people who are winning
are telling you what they think is important industry like pay attention, and everyone
else is like blah blah. I don't know. So, I mean,
it would be one thing if like the little you know, upstart start up,
you know, guy with more arrogance than you know, whatever, if
he's telling you how to do your business, I mean, I get it,
you ignore him, right, But like, I mean, this is
this is your behemoth competitor who in the investor calls and saying, hey,
we're investing in quality and trying to make quality pricing, and you know,
because we see it as an investment in the future and the growth of the
business, and you know, I do, but I think it's a competitive
advantage for them. So yeah, I think over time, I think we
will move in that direction, but I think the movement will be slow.
I don't. I don't think we're about to seech you know, instinct.
So five years down the road, do you expect things to be better for
the better than they are now or the same? I do? I do
well, certainly in the US, Like and the point we make in the
book is a lot of all this product, as they call it, is
new. I mean it had to be rushed out, really. I mean
that, you know, the Supreme Court said all right, no more man
on sports, and then it was just basically like forty nine, you know,
the Oklahoma the Sooners or whatever running into the state trying to stick out
their claims. Right. I mean that's I mean, that was literally the
kind of analogy, and I mean that that's how stuff came out, Like
where they're like, well, we don't have anything for college football, and
college football starts in three weeks when we do, they said when we got
NFL, just try that, you know, like that's the that's the mindset.
So obviously over time like that, you know, things mature and and
you know, someone actually builds a college football specific model, and you know,
I don't know if that makes it better for the better though, right,
I mean, well it makes it well, there's less low, low
hanging fruit. But these problems are intractable. I mean, it's impossible to
price seventeen thousand different props on every single college football game and do it all
correct. I mean, it's just it's physically impossible. So there's always going
to be a space for someone somebody who's an enormous college football nerd and just
wants to go through the college football menu with a fine tooth comb and find
all the good bets. There's always going to be good bets. It's just
impossible for the sports book to price every I mean, to price all that
stuff correctly. So I think it'll always be good for the better. I
don't necessarily think it's better for it. I mean, if there's if there's
five thousand good bets on a menu or or sixty, I'm not sure that
matters for the better, like you know, sixties enough, yeah kind of
right? Does that make sense in all that you know? And and it's
honestly, it's better for the better if the sports book is a little overconfident,
like if it's harder to beat there, and they know because they know
it's harder to they know how easy it is to beat this stuff, right,
So because they know how easy it is to beat it, they're careful.
They're kicking people off like beating you know. And and and the more
mature it gets, the more confidence they're going to have in the quality of
it, and the more tolerance I think they're going to show for people who
who can beat it intelligently, you know. Just that's to me, that's
also human nature. So that's what that's I get the optimistic view of how
this could evolve, and and I definitely think it could evolve that way.
So I wanted to ask you about and you did an interview with Gina for
Unabated, and in it you said that you didn't believe in back testing your
NFL model, right, and the number of people sort of we're asking like,
say, what, why why do you not want to back to I
guess we're getting a little bit in the weeds. Yeah, I'm happy to
talk about this. This is a big topic. So so so the concept
of back testing is you're saying, Okay, I'm gonna go to model and
then I'm gonna look to see if it would have won in the past.
Right, That's essentially what you're saying. So to me, there's two problems
with this. One is, in order to do this, you to do
this properly, you have to hold back data. You basically have to you
have to take games out of your sample that you used to build your model
and pretend those are games that I mean, your model has to not know
about anything that happened in those games. Really in order to get an actual
test. Well, they just don't play very many games. Like there's just
not much data. The entire problem is there's never enough data. I'm never
like, oh, I've got so much football data, Like they only play
like in college they play twelve games a year and then and then they all
graduate. The plans coming like there's no data, Like there's does you know
you're always you always want more data. I mean, this is the core
problem with modeling these sports. It's like there's never enough data, you know,
And and so the idea of oh yeah, and I'm going to hold
back thirty percent of my data so that I could back test, it's like
no. So so that's my first point about back testing. Like the second
point is the stuff is always changing. Every year is different, the rules
and the sport are different. The market is always changing, you know,
like this, you know, we had a thing in baseball where where you
know, we had a we basically were accounting for something in the totals that
we were sure the market was in the account and then the very next year
exit turns out baseball decided the Major League Baseball started messing with the the actual
baseballs. And this is an going problem if you follow baseball. It's the
league's and they don't tell anybody. And and and I don't want to say
it's a conspiracy because it's not. I don't even think it's there's some you
know, oh they're juicing the balls. I don't know. I don't think
it's that. I think it's just you know, it just happens, right
like that. But the actual manufacturer the ball matters a lot, okay,
And then like a lot, like how tightly the threads are wound inside the
ball matters for many how many home runs they hit by a lot, and
and also the humidifiers like how they store the balls matters a lot, a
lot like That's how they had they addressed the Colorado's Rocky Stadium when they built
it. So they originally built the Rocky Stadium with very uh far out outfield
walls because it's high altitude and they know the ball will carry out, so
they tried to compensate for that by building a large outfield. The balls got
there was enormous amounts of offense, like enormous amounts of offense in Colorado anyway,
even though the home run rate and had to do with the fact that
Colorado's also very dry, and so they remedied the They tried to remedy the
over offensing there by storing the balls in a humidor and that brought the offense
down substantially overnight. Right, So I don't want to get into specifics,
but basically, we had we had we had stuff that would have beaten the
totals going back to Kingdom come and it was immediately no good because they changed
it. They just changed the balls and then it was just it was not
a thing anymore. And so it's like and that happens all the time.
So it's like it's like everything's constantly changing. The market's changing, you know,
and it's just like and you're gonna hold data. I just don't see
the point. Like it's like it's like, you think you have an edge,
you bet it. Look at how your bets are doing. You look
at how the market things, especially if you're betting into a market, you
look at what the market thinks of your bets. You know, you,
I mean you just you just have to figure out on the fly whether you're
betting with an edge or not. In my opinion, yeah, you know,
I don't. I don't think it's useful to look back. So you're
no longer with deck Prism, which is now a huddle. So are you
back to betting sports? Well, I wrote a book. My first project
was to write a book because I just kind of had a stuff I wanted
to say, right, It's just that I don't know, like this book
is is stuff ed wanted to say what this book is more or less?
You know, And then and Matt and my co author Matty, you know,
but but you know that's kind of what the book was. And then
yeah, I don't know. I don't have a I don't have a a
plan now looking at you know, maybe doing some new modeling or looking you
know, kind of kind of doing new stuff along the lines of what I've
been doing here. I don't know. Maybe I'll maybe I'll go teach high
school physics, which is my original plan before I uh decided to become a
gift, but probably not. I'll probably do something. Yeah, it's sort
of TBD. I don't have a hard plan. I would think it'd be
hard to resist just opening those apps and saying, just free money laying around
here, I might as well be you know, maybe I'll do some of
that, although Vegas seems to be one of the worst places to be a
sportsman, right well, yeah, that has to do with the regulatory environment
here. In the regulatory environment is is uh. I would to use the
next term i'd called stringent. You know, it's uh. It makes it
hard to bring new things to the new technology, to this data in particular.
So something I ask all my guests on this show is what is the
biggest gamble in your life? Right? Okay, So I would say I
so I adopted my son from foster care. So I would definitely say that
that kind of getting involved in the foster care system, you know, and
this is kind of with I didn't look at it this way from at the
time. You know, at the time, I was like, I don't
know the I don't know what I was thinking. But in retrospect, you
know, I look back on that and I say, wow, that was
that was a huge kind of personal risk I took to get involved with the
system and to kind of because because once you get involved, it's like it
could go a million different directions and it does not have to go I mean,
we've had my son's great, you know, we we did end up
adopting him. His birth family is great, you know, like you know
his you know, everything's positive, you know, kind of more or less
with the outcome, and we had a I would say I have be ending
very much with my involvement with the system. But you know, it was
definitely a bit hairy at the time as we were actively dealing with the foster
care system, and then I heard so many hearts just horrible, you know,
just all all sorts of things to go wrong, and so you know,
kind of in retrospect, I would say that was that was the biggest
gamble I took in life, was to, Yeah, it was to decide
to become a foster parent and to decide to you know, and some people
who become foster parents, I think they look at it differently than I did.
And maybe in that case it isn't as big a gamble, Like you're
just kind of saying, Wow, my job is to just literally just provide
a home, and and I'm gonna kinda not not invest emotionally in it,
not invest financially in it as much, not like I'm just kinda I'm gonna
kind of go by the letter of Okay, well, the child needs a
home, they can stay in my bedroom. You know, they need to
go to school. I'll take them to school. You know, they need
to the system says they need to go somewhere else, I'll just take them
to the other place they need to go, and you know, and then
I'll get a new kid in the better. And you know, I think
some people interact with foster care and maybe in that case it's a little bit
less of a gamble. But you know, kind of we went into it
and I was just like I'm gonna I'm gonna behave like I'm this child's parent,
and I'm going to advocate, you know, on his behalf as if
you know, I were his biological parent. You know, I'm gonna do,
you know, And and in that way, it's really you're taking on
I think a big risk in doing that, because you know, they just
that that that could go all kinds of different directions. Yeah, my wife
and I got into the foster care system in California where I think it may
be even more Yeah, wouldn't be surprised. Yeah, So yeah, big
risk, and I'm glad that it worked out well. So yeah, so
you know, yeah, so that's so so I think that's that's in retrospect,
it's the biggest risk guy I've taken in life. All Right, Well,
I want to thank you for doing that. This was great and just
for the listeners, you can always reach me at Life is a Gamblepod at
gmail dot com, or I'm on Twitter at RWN twenty one