Like a lot of traders, I like sport, betting and I feel I have a good understand of the underlying markets. So when an opportunity swings by to combine all of these and to potentially earn a passive income, I’m all ears.
Pouncebet is a new-ish service which uses a ‘smart’ algorithm which monitors in-play football and tennis matches to identify opportunities when the odds become out of line. This would be fine in itself, but with odds changing rapidly, these alerts would be useless unless you could actually be on hand to place the bets yourself at the time. The main selling point of Pouncebet, in my view, is the ability for the app to sync with your Betfair account and place bets automatically for you. Therefore, you don’t need to do anything at all, apart from watch the money roll in – hopefully.
All this doesn’t come for free though – you have to pay a monthly cost which ranges from £7.99 to £14.99 for this service. So is it any good? I’ve been a user of the service since the middle of January and I have to say I’m not in profit – in fact, I’m showing a small loss. However, March and April have been rather poor months for the service, and prior to a couple of weeks ago, the results were good. Poor runs are to be expected, so for the sake of things I will start documenting results here along with a review of the service.
Is the model credible?
This is a fundamental question, as in order to produce profits, the system needs to have an edge over the Betfair odds. I’m a believer that the odds on the exchange are much more efficient than places such as the stock market – after all, the sphere of information that affects these events is much, much less. Therefore the probability of the displayed odds reflecting reality is much greater.
That isn’t to say it’s impossible not to find an edge. But it is much harder. Having an algorithm on it’s own is not a guaranteed factor for success, but rather what goes into that algorithm. Tony Bloom’s Star Lizard organisation runs around similar lines, researching as much as they can to find odds that are out of line. But that clearly is an expensive operation to run – they employ lots of people to find the data and process it. For a system that charges as little as £7.99 a month, one must presume that the algorithm isn’t going to be as sophisticated and contain much less data. But for now, we’ll give it the benefit of the doubt. There have been plenty of one-man bands in the past who have demonstrated some type of edge over the markets.
Bets and Edges; Expected Value
The back-end is very simple. There are just two sports featured: football and tennis, and just one bet type: a back bet of a favourite team when they get into an adverse position. ‘Pounces’ are flashed to your phone app, but this is only for your information as by that time your synced Betfair account will have already placed the bet for you. There is only a limited selection of bet types you can do. Increasing the level of account subscription allows you to change the level at which you cash out to a percentage level, but there is no real flexibility in what you stake: it’s either default, double or half. This becomes relevant as the recommendations you get come in various strengths which is quantified by a score out of 100 (known as the PBI). The higher the PBI, the greater certainty there is of the bet landing.
So what is the expected value of the whole system? On one hand, I certainly believe in the premise of the system. Sometimes prices move too far out as traders seek to ‘be with the leader’. In the seconds after an event, the odds are momentarily not liquid and can be pushed one way or the other as people and systems look to either take new positions or lock in profit.
On the flip-side, I don’t believe the edge is that large. As I said before, I believe the betting markets are mostly efficient. A 10% edge seems unrealistic to me – that’s betting at 2.20 when the odds are only 2 – and this would be quickly cleaned out by others as well. So the ramifications are pretty simple, unless you get lucky returns will not exceed this.
This isn’t necessarily a bad thing at all: a return of even 5%, tax-free is not to be sniffed at in this environment. The type of bets placed by this system (the vast majority at odds-on) should lead to low volatility as most of them will be winners. But at the same time, no system is immune from a bad streak of luck.
Having received some more data, it appears that the gross edge is something in the region of 6%. Their results quote without Betfair commission which is unavoidable for any punter, so allowing for this, the net edge is somewhere between 3-4%.
Staking Value and Commission
Let’s be honest here, if you are betting small, then it is not worth getting involved here at all. The reasons for this are simple: you have to pay commission on winning bets, and you have to pay commission to Pouncebet. There are also a limited number of opportunities to bet – on average about 30 per month, or 360 per year.
Like I said before, I believe an edge of 10% is unrealistic. My top estimate might only amount to around 7% and in reality this could be less.
If your average stake is £10, your profit on 360 bets would be £252, minus Betfair commission of £12.60 (assuming 5%) and minus £179.88 for an Expert subscription. That leaves a profit of £59.52. If my assumed edge is even less, then you are in trouble. At a 5% edge, you will be in loss because of the subscription costs.
So in reality, you need to be staking up as the subscription costs does not care what you are staking. This increases your risk, but also gives you a greater cushion in the event your assumption on the house edge is wrong. For instance, using the 5% example, if your average bet was £100 instead of £10, your profit for the year would be £1,530.12. In fact, the algorithmic edge could go down to as low as 1% and there still would be profits, albeit quite small.
To Lay or not to Lay?
Pouncebet offers the ability to lock in profits by using the lay market at a percentage of your choosing. This has the obvious benefit of reducing volatility. But essentially this reduces your expected value further, as you will be paying the Betfair commission more often. Furthermore when considering the lay market this will often be at very low odds – for instance 1.1 to back, 1.11 to lay. The spread between these odds – essentially buy and sell is massive, and in the long run laying will see your profits diminish by the exchange commissions paid.
Other factors to consider
Past performance is no guarantee of success. Because of the average odds given, you will need a good success rate to show profit – ideally over half, and also a tolerance for losing runs. It also may be questionable what happens if the service gets too popular. If the algorithm has even a five-figure sum to fill on the exchange, there is no guarantee that this might move the odds down a tick – and when we are playing with a slim edge, a tick is really important.
Is very simple. £100 default, no laying, no betting under PBI 60 (this rule was amended until results improve), start bank of £1000. You can see the results below. If you’d like to find out more, Pouncebet currently have a 14-day free trial, which you can access here.
|18/4/18||Roda v PSV||60||1.82||£100||LOST||-£100.00||£0||-£100.00||£900.00
|18/4/18||Napoli v Udinese||78||1.40||£100||WON||£40.00||£1.84||£38.16||£938.16|
|18/4/18||Real Madrid v A Bilbao||68||1.56||£100||LOST||-£100.00||£0||-£100.00||£838.16|
|22/4/18||Arsenal v West Ham||68||1.96||£100||WON||£96.00||£1.92||£94.08||£932.24|
|24/4/18||Goffin v Granollers||68||1.61||£100||WON||£60.89||£2.80||£58.09||£990.33|
|25/4/18||Klizan v Djokovic||67||1.43||£100||LOST||-£100.00||£0||-£100.00||£890.33|
|25/4/18||Gasquet v Sonego||79||1.64||£100||LOST||-£100.00||£0||-£100.00||£790.33|
|25/4/18||Halep v Rybarikova||70||1.2||£100||WON||£20.00||£0.92||£19.08||£799.41|
|26/4/18||Thiem v Kovalik||67||1.25||£100||WON||£25.00||£1.15||£23.85||£823.26|
|26/4/18||Dimitrov v Jaziri||88||1.42||£100||WON||£42.00||£1.93||£40.07||£863.33|
|26/4/18||Wozniaki v Errani||67||1.54||£100||WON||£54.00||£2.48||£51.52||£914.85|
|26/4/18||Kerber v Kontaveit||64||1.56||£100||LOST||-£100.00||£0||£-100.00||£814.85|
|27/4/18||Thiem v Tsisipas||60||2.52||£100||LOST||-£100.00||£0||-£100.00||£714.85|
|27/4/18||Halep v Vandeweghe||50||2.68||£50||LOST||-£50.00||£0||-£50.00||£664.85|
|27/4/18||Wozniacki v Parmentier||79||1.24||£100||LOST||-£100.00||£0||-£100.00||£564.85|
|28/4/18||Liverpool v Stoke||54||1.56||£50||LOST||-£50.00||£0||-£50.00||£514.85|
|28/4/18||Nadal v Goffin||75||1.21||£100||WON||£21.00||£0.95||£20.05||£534.90|
|28/4/18||Benfica v Toledea||85||1.83||£100||LOST||-£100.00||£0||-£100.00||£434.90|
|28/4/18||Monaco v Amiens||80||1.57||£100||LOST||-£100.00||£0||-£100.00||£334.90|
|29/4/18||Feyenoord v Sparta||66||2.39||£100||WON||£139.40||£6.27||£133.13||£468.03|
|1/5/18||Kasatkina v Paolini||58||1.28||£50||LOST||-£50.00||£0||-£50.00||£418.03|
|2/5/18||Zverev v Hanfmann||76||1.62||£100||WON||£62.00||£2.79||£59.21||£477.24|
|3/5/18||Schwartzmann v Materer||54||2.42||£50||LOST||£50.00||£0||-£50.00||£427.24|
|3/5/18||Cilic v Jaziri||61||1.71||£100||LOST||£100.00||£0||-£100.00||£327.24|
|4/5/18||Buzarnescu v Kvitova||62||2.16||£100||WON||£116.00||£5.22||£100.78||£428.02|
|4/5/18||Juventus v Bologna||82||1.7||£100||WON||£70.00||£3.15||£66.85||£494.87|
|6/5/18||Kvitova v Tsuerenko||64||1.57||£100||WON||£57.00||£2.57||£54.43||£549.30|
|8/5/18||Verdasco v Lorenzi||65||1.34||£100||WON||£34.00||£1.53||£32.47||£581.77
|8/5/18||Muguruza v Vekic||61||1.71||£100||WON||£71.00||£3.20||£67.80||£649.57|
|11/5/18||Nadal v Thiem||61||1.61||£100||LOST||-£100||£0||-£100.00||£549.57|
|12/5/18||Bayern v Stuttgart||70||1.41||£100||LOST||-£100||£0||-£100.00||£449.57|
|17/5/18||Fognini v Gojowczyk||74||1.55||£100||WON||£55.00||£2.31||£52.69||£502.26|
|23/5/18||Fognini v Rubin||64||1.56||£100||WON||£56.00||£2.52||£53.48||£555.74|
|24/5/18||Bertens v Barthel||74||1.56||£100||WON||£56.00||£2.52||£53.48||£609.22|
|27/5/18||Svitolina v Tomljanovic||79||1.25||£100||WON||£25.00||£1.13||£23.87||£633.09|
|27/5/18||Monfils v Benchretit||64||1.33||£100||WON||£33.00||£1.49||£31.51||£664.60|
|27/5/18||Ostapenko v Kozlova||68||1.3||£100||LOST||-£100||£0||-£100.00||£564.60|
|27/5/18||Goffin v Haase||68||1.48||£100||WON||£48.00||£2.16||£45.84||£610.44|
|28/5/18||Kvitova v Cepede||77||1.80||£100||WON||£80.00||£3.60||£76.40||£686.84|
|30/5/18||Zverev v Lajovic||72||1.44||£100||WON||£44.00||£1.98||£42.02||£728.86|
|30/5/18||Goffin v Moutet||87||1.29||£100||WON||£29.00||£1.31||£27.69||£756.55|
|1/6/18||Zverev v Dzhumur||60||1.78||£100||WON||£78.00||£3.51||£74.49||£831.04|
|1/6/18||Svitolina v Buzarnescu||63||1.35||£100||LOST||-£100||£0||-£100.00||£731.04|
|1/6/18||Thiem v Berrettini||91||1.16||£100||WON||£16.00||£0.72||£15.28||£746.32|
|3/6/18||Zverev v Khachanov||60||1.78||£100||WON||£78.00||£3.51||£74.49||£820.81|
|3/6/18||Goffin v Cecchinato||71||1.68||£100||LOST||-£100||£0||-£100.00||£720.81|
|5/6/18||Djokovic v Cecchinato||81||1.3||£100||LOST||-£100||£0||-£00||£620.81|
|13/6/18||Federer v Zverev||61||1.58||£100||WON||£58.00||£2.67||£55.33||£678.34|
|16/6/18||France v Australia||61||1.54||£100||WON||£54.00||£1.00||£53.00||£731.34|
|19/6/18||Belgium v Panama||78||1.38||£100||WON||£38.00||£0.76||£37.24||£768.58|
|20/6/18||Spain v Iran||73||1.48||£100||WON||£48.00||£1.80||£46.20||£814.78|
|21/6/18||Muguruza v Strycova||68||1.70||£100||LOST||-£100||£0||£-100.00||£714.78|
|22/6/18||Brazil v Costa Rica||61||1.51||£100||WON||£51.00||£1.02||£49.98||£764.76|
|24/6/18||Federer v Coric||66||1.64||£100||LOST||-£100||£0||-£100.00||£664.76|
|28/6/18||Pliskova v Sabalenka||69||1.54||£100||LOST||-£100||£0||-£100.00||£564.76|
|3/7/18||Kvitova v Sasnovich||70||1.58||£100||LOST||-£100||£0||-£100.00||£464.76|
|3/7/18||Thiem v Baghdatis||70||1.52||£100||LOST||-£100||£0||-£100.00||£364.76|
Pure Passive Investor. Always looking for ways to make money (but not myself) work harder.