Posting a Fixed Odds Bet

The 2018 PGA Tour Championship is being held next week and I’m pretty excited to watch who wins the tournament, but also who wins the FedEx Cup $10 million bonus check! In this post I’ll describe how I created my own odds for this tournament and posted them on CoinRoster just like a bookie.

Since the winner of the Tour Championship is a widely followed bet, its a bit easier for me to determine fair odds. I can use an odds website such as Odds Checker to find out what the odds might be and I can also use my favorite sportsbook and base my own odds on theirs.

After reviewing the odds posted elsewhere, I create a quick spreadsheet to do some math. I make a list of 18 players with their associated decimal odds, and then in another column I convert their decimal odds into percentage odds. Now I can sum the percentage odds to see the total implied odds in percentage terms. It turns out, the 18 players I listed have a combined 94%  implied chance. CoinRoster only allows me to post a maximum of 20 outcomes, so since there are 30 players competing in the tournament, I must also post odds for “Any Other Player” which will payoff if any other player not on my list of players wins the tournament.

To calculate what odds I should apply to the Any Other Player option, I can simply take the difference between 100% and the sum of the percentage odds for all the players I’m posting odds for. This comes out to 6% (100 – 94).  The decimal version of 6% odds is 16.66 (1/0.06). But if I post odds of 16.66 for the Any Other Player option, it will leave no potential profit for me, so I decide to offer odds of 10 for Any Other Player. These odds imply a 10% chance that Any Other Player wins the tournament.

I add Any Other Player at 10 on my spreadsheet of odds. Now I will sum all my odds (all players plus Any Other Player option) to see a total of 104%. This means that with the odds I’m posting, I’m building in a theoretical 4% spread for myself.

Click Here to download the spreadsheet I made displaying my odds calculations

Posting the odds as described above will not guarantee a 4% profit for me though. 4% guaranteed will only happen if the money bet on each outcome I’m listing is made in exact proportion to the odds being offered. For example, to guarantee the 4% implied spread, I would need bettors to place 10% of their money on the 10 to 1 odds, and 5% of their money bet on the 20 to 1 odds. Any other configuration of money bet will result in me taking the risk that the outcome with the most money bet becomes the winning outcome, in which case I will may loose money overall. This is the principal risk to the market maker. So the goal of a good odds maker should be to post odds that get action on both sides (or all sides) of a bet, so the risk is distributed in a way related to the underlying chances, thereby spreading the risk and getting close to the theoretical 4% edge.

Now that I have a list of my odds in excel, I’m now going to post those odds on CoinRoster and decide how much risk I’d like to take.

The first thing I do on CoinRoster is log into my account and click on the Create Contest link from the main menu. This brings me to the create contest page where I first need to choose a contest type. I’m choosing “MISC” as my contest type since this is the free form contest where anything can be posted. I type in the title and description of my bet, and then choose a registration deadline of 7am on the Thursday the tournament begins and a settlement deadline of Monday night following the tournament close. The registration deadline is the time after which no more bets are allowed, and the settlement deadline is the time when this bet will be settled and winning bets will be paid off. I choose Monday night for a settlement deadline in order to compensate for weather delays that would result in a Monday finish.

 

 

After filling out the details of the create contest form, I’m going check the “fixed odds” box and then paste each player name and their associated odds from my spreadsheet into the create contest form. Then I choose the maximum amount I’d like to risk, which is 0.1 bitcoins, and the minimum wager amount which is 1 satoshi. From the “settlement type” option, I’m going to choose crowd settled and I’m going to make this a public contest.

Once I click the Create Contest button, the contest will be created and the amount I’m risking (0.1 bitcoins) will be taken from my account. If it turns out that I don’t get enough action to require my full 0.1 bitcoins, the difference will be returned to me at the settlement deadline, but in the meantime the entire risk is being held by CoinRoster.

 

 

The bet is also not yet live, once I click the create contest button, a message is displayed telling me that the contest needs to be approved by an admin. Once this is done, my contest is live and can be viewed by any user and bets can be placed. Click here to view this contest.

A few things to note about the odds I have posted. At the time of writing, it seems sports books are offering 15 to 1 odds that Tiger Woods will win this tournament. However, I would love to see Tiger win again, so I’m offering 25 to 1 odds on Tiger, better than any other sports book, to encourage users to bet on him. Kind of a little hedge bet for myself. Feel free to take advantage of these great Tiger Odds.

Also, CoinRoster offers free bitcoins to new users, check their homepage before signing up to take advantage of their latest offer. Using their freeplay is a great way to play for free and hopefully win some bitcoins!

Comparing CoinRoster Prices to Market Odds

This post is about trying to beat the odds on CoinRoster daily fantasy golf, a game where the fantasy points are determined based on score to par. The worst score to par becomes zero and each fantasy point is awarded based on the difference from the worst score. For example, if the last placed player has a real world score to par of +4 and the first placed player has a score to par of -10, then the first placed player will have 14 fantasy points. All other players are assigned a relative point value.  Six players are drafted to each roster, so the total score of each roster is the sum of the individual scores of all players on each roster.

My goal is to find some drafting strategies that take advantage of the difference between the price of golfers available to draft on CoinRoster versus the odds of betting on golfers to win the tournament.

The price of each player in the CoinRoster draft is relative to their world golf ranking. But I wondered how to determine whether this is a good price or a bad one? And which factors should I consider while attempting to make this determination?

I have compared the prices of the players available to draft with their odds of winning the tournament. I know from previous research that the odds of each player is related to their expected relative score to par.

I made a list of all players available to draft using excel with their associated price on CoinRoster, then I calculated the percentage chance implied by the prices of each players in the draft by taking their drafting price divided by the sum of all player prices. So if a player costs $3000 to draft and the sum of all players prices is $80,000, then this implies 3.75% ($3,000 / $80,000).

By finding this drafting price ratio, it gives me an “implied” percentage chance of each player having the most fantasy points based on CoinRoster’s drafting price. Then for curiosity’s sake, I converted those implied percentage numbers into decimal odds. The next thing I did was add a column of each player’s odds of winning the tournament and then I converted that into a percentage number also. Now I can compare apples to apples using their percentage chances.

With this information, I can eyeball and compare the odds numbers and the percentage numbers (which are the same value, but just displayed in different formats). I can also rank and sort the data in various ways using excel, so I subtracted the implied market percentage chance from the implied price percentage chance to uncover the difference between the two numbers.

By subtracting the two prices (the percentage chance implied by drafting price with the percentage chance implied in the player’s betting odds) I can notice if the price for a player available to draft is relatively lower on CoinRoster than is implied by their market odds. If the player is cheap and represents good value to draft their price on CoinRoster will be lower than implied by their betting odds. This means the player is cheap to draft, but if a player’s market odds are lower than their relative drafting price on CoinRoster, the player is expensive.

The table below shows the numbers for the BMW Championship. The table is ranked best to worst value.  Dustin Johnson has the best value for this tournament according to this formula. His odds were 9.36 (which implies a more than 10% chance he will win the tournament, and thereby have the best score to par) but his CoinRoster price was relatively cheap (even though he is the second highest priced player). Justin Rose, Rory McIlroy, and Hideki Matsuyama are also some of the most relatively best priced players.

Tiger Woods also has the third highest relative value to draft. This makes sense since Tiger’s world golf ranking (which the CoinRoster drafting price is based on) is relatively low compared to his chances of winning the tournament. So intuitively, this affirms my belief that I’m on the right track.

Some of the most expensive players on CoinRoster are Tyrrell Hatton, Alex Noren, Brian Harman, Kevin Kisner, and Peter Uihlein.

CoinRoster Price Implied % Implied Odds Market Odds Market % Diff % Cost
Dustin Johnson USA $2,839 0.0364 27 9.36 0.1068 -0.0705 $9,410
Justin Rose ENG $2,366 0.0303 33 15.70 0.0637 -0.0334 $8,368
Tiger Woods USA $979 0.0125 80 24.00 0.0417 -0.0291 $8,060
Rory McIlroy NIR $1,854 0.0238 42 19.00 0.0526 -0.0289 $9,769
Hideki Matsuyama JPN $1,372 0.0176 57 22.00 0.0455 -0.0279 $10,915
Bryson DeChambeau USA $1,797 0.0230 43 20.00 0.0500 -0.0270 $10,995
Jordan Spieth USA $2,058 0.0264 38 19.00 0.0526 -0.0263 $10,794
Brooks Koepka USA $2,688 0.0344 29 18.10 0.0552 -0.0208 $9,548
Justin Thomas USA $3,000 0.0384 26 17.60 0.0568 -0.0184 $7,905
Tony Finau USA $1,452 0.0186 54 32.00 0.0313 -0.0126 $5,840
Jason Day AUS $1,596 0.0204 49 32.00 0.0313 -0.0108 $5,068
Adam Scott AUS $812 0.0104 96 48.00 0.0208 -0.0104 $5,377
Patrick Cantlay USA $1,045 0.0134 75 48.00 0.0208 -0.0074 $5,254
Cameron Smith AUS $935 0.0120 83 57.00 0.0175 -0.0056 $5,010
Brandt Snedeker USA $680 0.0087 115 76.00 0.0132 -0.0044 $6,305
Rickie Fowler USA $1,905 0.0244 41 36.00 0.0278 -0.0034 $7,128
Emiliano Grillo ARG $689 0.0088 113 86.00 0.0116 -0.0028 $6,426
C.T. Pan TPE $801 0.0103 97 86.00 0.0116 -0.0014 $6,418
Jon Rahm ESP $2,230 0.0286 35 34.00 0.0294 -0.0008 $6,776
Bubba Watson USA $1,503 0.0193 52 52.00 0.0192 0.0000 $5,441
Phil Mickelson USA $1,203 0.0154 65 67.00 0.0149 0.0005 $5,889
Billy Horschel USA $681 0.0087 115 124.00 0.0081 0.0007 $5,417
Henrik Stenson SWE $1,159 0.0148 67 71.00 0.0141 0.0008 $4,963
Gary Woodland USA $895 0.0115 87 95.00 0.0105 0.0009 $4,210
Tommy Fleetwood ENG $1,951 0.0250 40 42.00 0.0238 0.0012 $3,880
Aaron Wise USA $731 0.0094 107 124.00 0.0081 0.0013 $2,691
Scott Piercy USA $227 0.0029 344 722.00 0.0014 0.0015 $2,810
Chris Kirk USA $406 0.0052 192 276.00 0.0036 0.0016 $3,978
Beau Hossler USA $565 0.0072 138 181.00 0.0055 0.0017 $4,269
Zach Johnson USA $762 0.0098 102 133.00 0.0075 0.0022 $5,207
Louis Oosthuizen RSA $850 0.0109 92 124.00 0.0081 0.0028 $4,835
Marc Leishman AUS $1,395 0.0179 56 67.00 0.0149 0.0029 $4,387
Abraham Ancer MEX $697 0.0089 112 171.00 0.0058 0.0031 $3,448
Webb Simpson USA $1,503 0.0193 52 62.00 0.0161 0.0031 $3,436
Ryan Palmer USA $390 0.0050 200 637.00 0.0016 0.0034 $2,399
J.J. Spaun USA $402 0.0051 194 589.00 0.0017 0.0035 $2,496
Jason Kokrak USA $456 0.0058 171 428.00 0.0023 0.0035 $3,531
Keegan Bradley USA $685 0.0088 114 200.00 0.0050 0.0038 $3,544
Brian Gay USA $466 0.0060 168 532.00 0.0019 0.0041 $4,034
Austin Cook USA $487 0.0062 160 475.00 0.0021 0.0041 $4,078
Paul Casey ENG $1,437 0.0184 54 71.00 0.0141 0.0043 $4,322
Ryan Armour USA $469 0.0060 166 646.00 0.0015 0.0045 $3,725
Rafa Cabrera Bello ESP $1,175 0.0151 66 95.00 0.0105 0.0045 $3,863
Andrew Putnam USA $510 0.0065 153 504.00 0.0020 0.0045 $3,466
Adam Hadwin CAN $731 0.0094 107 209.00 0.0048 0.0046 $3,715
Byeong Hun An KOR $840 0.0108 93 162.00 0.0062 0.0046 $5,258
Charles Howell III USA $607 0.0078 129 323.00 0.0031 0.0047 $4,986
Luke List USA $778 0.0100 100 190.00 0.0053 0.0047 $4,898
Si Woo Kim KOR $759 0.0097 103 209.00 0.0048 0.0049 $4,671
Francesco Molinari ITA $2,274 0.0291 34 42.00 0.0238 0.0053 $4,537
Andrew Landry USA $568 0.0073 137 551.00 0.0018 0.0055 $2,823
Jr. Potter USA $519 0.0066 150 893.00 0.0011 0.0055 $3,463
Brendan Steele USA $551 0.0071 142 675.00 0.0015 0.0056 $3,593
Keith Mitchell USA $625 0.0080 125 428.00 0.0023 0.0057 $3,691
Patton Kizzire USA $560 0.0072 139 808.00 0.0012 0.0059 $4,175
Kyle Stanley USA $1,208 0.0155 65 105.00 0.0095 0.0060 $4,514
Chesson Hadley USA $649 0.0083 120 428.00 0.0023 0.0060 $4,047
Brice Garnett USA $649 0.0083 120 561.00 0.0018 0.0065 $5,113
Ian Poulter ENG $1,109 0.0142 70 133.00 0.0075 0.0067 $5,284
Kevin Na USA $899 0.0115 87 228.00 0.0044 0.0071 $5,017
Chez Reavie USA $741 0.0095 105 475.00 0.0021 0.0074 $5,532
Patrick Reed USA $1,715 0.0220 46 71.00 0.0141 0.0079 $5,928
Pat Perez USA $820 0.0105 95 428.00 0.0023 0.0082 $5,436
Daniel Berger USA $842 0.0108 93 428.00 0.0023 0.0084 $5,661
Xander Schauffele USA $1,414 0.0181 55 114.00 0.0088 0.0093 $6,399
Peter Uihlein USA $1,137 0.0146 69 219.00 0.0046 0.0100 $7,100
Kevin Kisner USA $1,223 0.0157 64 181.00 0.0055 0.0101 $5,963
Brian Harman USA $1,045 0.0134 75 361.00 0.0028 0.0106 $82,801
Alex Noren SWE $1,580 0.0202 49 114.00 0.0088 0.0115 $81,756
Tyrrell Hatton ENG $2,115 0.0271 37 67.00 0.0149 0.0122 $80,176
$78,061 1.0000

Tiger Woods Over?

I’m a Tiger Woods fan.  He was an incredible golfer and took professional golf in a new more athletic direction. But now its clear the style of golf that Tiger plays, might not allow him to continue competing on the PGA Tour into his 40s.  He swings hard and puts a lot of strain on his body.  This intensity will probably prevent him from beating Nicklaus’ major records.

TWC Commentary (Clublink)

I live and grew up in Southern Ontario, and the first stock I ever owned was Clublink back when Bruce Simmons was at the helm. I still play many Clublink courses on a regular basis, but I’m not a Clublink member. Below is an off the cuff analysis of what Clublink is part of today. It’s now under the umbrella of TWC which is listed on the TSX and controlled by Morguard’s Rai Sahi.

TWC is essentially two separate operating businesses: golf course operations and rail/port facilities. Its a strange combination, and I wonder whether this is beneficial to shareholders or whether the main driver is Rai Sahi’s ambition? Either way, Sahi is a successful leader and he’ll likely create value for shareholders regardless (and still make some money for himself, since he owns almost 70% of the equity and votes).

Clublink owns and operates 45 golf clubs in three distinct regions (Ontario, Quebec, and Florida). I was at dinner at National Pines, a Clublink course in Barrie Ontario, and our table was commenting on various Clublink courses. One person at our table actually worked in IT for Clublink and mentioned that National Pines was actually just leased and operated by Clublink, and he confirmed that this was also the case for Bond Head. This was confirmed after I examined the AIF for 2013.

Clublink also formerly had an operating agreement with Delta resorts to operate the hotel properties, but this agreement has been mutually terminated, and Clublink will now operate its resort properties internally.

Clublink shared the distribution of its segmented revenue by type, here are the details:

Annual Dues 39.96%
Corporate Events & Daily Fees 22.46%
Food & Beverage 28.80%
Room & Other Merchandise 8.78%

Also, based on the information disclosed in their AIF, Clublink is achieving an operating margin of about 30% from its golf courses. Labour represents about half of the operating expenses. Long term borrowings represent about 55% of property, plant, and equipment. Would it be possible for Clublink to create a REIT to leaseback the golf properties back to Clublink?

Clublink has some mortgages against its properties ranging in rate from 6.2% to 8.3% and the mortgages are laddered from maturities 3 to 15 years.

Deep into note 13 to the most recent quarterly financial statements, there are details of related party transactions. Strategically, TWC has an open revolving credit agreement open to Morguard Corporation for $30,000,000 at TWC’s borrowing rate plus 10 bps. More importantly, TWC make a similar facility availably to Paros (a holding company owned by Sahi) for $5,000,000 at prime plus 1% and the same terms are provided by Paros to TWC. Sahi is a very strategic operator. There are also officer loans outstanding of about $1.2 million bearing interest at 3% (a pretty favourable rate).

Golf Betting

  • 14 tournaments

  • total win $225

  • standard diviation 23

  • average 24

  • highest win $65 (Masters) – I traded thru the whole tournament on Saturday and Sunday.

My biggest loss was -$77 at the Byron Nelson.  The tournament had a shallow field, which may have contributed to a 100 to 1 long-shot eventually winning. I sold Brenden Todd @ 100 on the Tuesday leading up to play on Thursday. Brenden Todd eventually won the whole tournament. My initial liability was $396.  I reduced this risk by spreading the liability to the field during play on Saturday and Sunday. As the tournament was being played on Saturday and Sunday, I would make markets for the various players with long shot chances at winning.  I would start the market by laying the long-shot, then as time went by, and players dropped out of contention, I would transfer these profits to the leader where my liability stood.