Value betting and the X Factor

Regular readers will know that this series we have written four articles making the case against certain acts winning the show. All were prompted by acts being heavily backed down towards the head of the market, in what we suspected was an over-reaction to one good performace. Two of the three acts we wrote these articles about after week 1 have gone – The Risk and Craig Colton – while the third, Misha B, clings on by her fingertips.

We probably should have quit while we were ahead, instead of being tempted to give the format another outing when the plunge on Little Mix happened after week 4. In the comments to that Little Mix article, bunnyman said: “The difficulty with any gambling related article which starts with ‘why I don’t think x will win’ is it gives no consideration to the price and whether it offers value.” We thought it might be interesting to write a post on why we didn’t frame the argument this way.

There are a couple of reasons. First, we want to make sure Sofabet is as accessible as possible to readers who enjoy dissecting the machinations of the show, but who are not necessarily seasoned punters. Second, we think there are limits to how far the concept of value betting can be applied, especially in X Factor betting.

Before we explain why, let’s quickly outline what “value betting” means for any readers who may be unfamiliar with the term.

Value betting was popularised in a book of the same name by a tipster called Marc Coton, who sprang to fame in horse racing circles as the Racing Post’s first Pricewise columnist in the 1980s. Essentially, the idea is that you shouldn’t get hung up on whether your individual bets win or lose, but instead on whether they represented “value”.

A coin toss is a classic example. Suppose I offer you this bet: Heads, you give me £10; tails, I give you £11. You accept, we toss the coin, and it’s heads. Bad luck – I win and you lose. But you should nonetheless be happier than me with the bet we struck, because it was good value for you and bad value for me.

Why? Because if we’d split the world into 100 parallel universes at the moment we struck that bet, we’d expect to get something like 50 heads and 50 tails. Whatever the result of any individual coin toss, in the long run a punter who keeps backing tails at odds of 11/10 will do better than one who keeps backing heads at 10/11. The true price was evens.

This is a useful way of thinking about many bets. We can, for example, imagine last Saturday’s 1-1 draw between Manchester United and Newcastle United being played in 100 parallel universes and ask: In how many of those universes would Manchester United have won? Things would have played out differently in each, as countless events – Tim Krul’s fingertips reaching a goalbound ball or not, a debateable penalty being given or not – would have propelled the game into different directions.

Let’s say, having watched the match, we conclude that Manchester United would have won in 80 of those parallel universes. They were available at 2/5 before the game, which equates to winning 72 out of 100. In which case, we can conclude that if you backed Manchester United, although your bet lost, it was good value. They should have been 1/4.

Of course, we can’t experimentally verify our postulation of 80 wins out of 100, as we could by tossing a coin 100 times. But the question makes sense, and it’s a useful way for punters to frame their thinking about many events.

Many, but not all. Imagine, for example, that you are having an argument with a friend in a pub about obscure matter of trivia – say, who sang the opening line in Rhythmix’s performance at judges’ houses. You vaguely recollect it being Perrie, your friend is pretty sure it was Leigh-Anne. Your friend suggests you offer him some odds and then you look it up on YouTube to settle the bet.

If we split into 100 parallel universes at this point, then either you would be right in all 100 or your friend would be right in all 100. In this case, there is an underlying reality of which neither of us are aware, and the concept of value betting ceases to be a useful way of thinking. You just have to go with your gut reaction of how confident you are.

Is betting on the X Factor more like a football match or a pub argument? Consider the week 4 singoff between Misha B and Sophie Habibis. As he wrote in the post-mortem post, Daniel backed Sophie to be eliminated to the tune of around £13,000 at odds averaging 1.08, thus making an 8% return – a profit of around £1,000. TomB asked a pertinent question in the comments: “in my view there was a chance (albeit a small one) of Misha being chucked… so I wouldn’t say 1.08 was necessarily ‘free money’ – do you think it was that far off being priced right?”

For it to be “priced right”, in value betting terms, we would have to say that if that singoff happened 100 times then Misha would be saved in 92 of them and Sophie in 8. But that doesn’t make any sense. There is no randomised process analagous to a coin toss or a goalbound deflection that would determine whether the word “Misha” or “Sophie” comes out of the judges’ mouths at the critical moment. Rather, there is an underlying reality of which we are not aware, which dictates that either Misha is going to be saved in all 100 parallel universes or in none of them.

(Actually, that’s not strictly true. On live television there is always the possibility of a screw-up, such as might or might not have happened in the Katie Waissel vs Treyc Cohen singoff in 2010, when Dermot said he ran out of time to come back to Cheryl and allow her to take it to deadlock. Maybe Sophie might have survived in one).

To take a slightly less extreme example, consider last year’s final. Going into it, Matt’s odds were around 4/5, Rebecca 5/2 and One Direction 10/3. That translates into about a 56% chance of Matt winning, a 28% chance for Rebecca and a 23% chance for One Direction. Yet, if you’d had access to the voting statistics up to that point (which, of course, punters didn’t), you would have seen Matt winning every single week apart from the first one, and One Direction never getting anywhere near the top of the leaderboard.

Even then, things could have gone wrong for Matt in the final – he might have fluffed his lines, or Rebecca might have conjured a moment of magic – but if you ran that final 100 times, how many would Matt have won? A lot more than 56, that’s for certain. About 90, maybe? And how many would One Direction have won? Far fewer than 23, no doubt – it would have taken an act of god. Maybe 1, if they were lucky?

And yet, if Matt Cardle had been trading at 1.1 on Betfair and One Direction had been trading at 100, you would have had punters confidently making the case that Matt was terrible value and One Direction were terrific value. It would have looked that way, but it simply wouldn’t have been so. Though there was no way of knowing it, the underlying reality was such that Matt had a great chance and One Direction had almost no chance.

The current betting suggests that if we split now into 100 parallel universes, Little Mix would win in 40, Marcus Collins in 38,  Amelia Lily in 14 and Misha B in 8. When we get the voting figures at the end of the show, we will quite possibly find that one of those acts ought to be at a lot shorter odds right now. Perhaps one of Little Mix or Marcus is way ahead. Perhaps it’s all very tight and producers have something up their sleeves to help Misha, or even Amelia.

Value betting is a extremely tricky concept to apply in such situations. The word “value” becomes instead a kind of shorthand for how confident you are that you’ve correctly guessed what the underlying reality looks like, in relation to the risks and rewards on offer. This is a whole lot more abstract, ephemeral and subjective a calculation than how many times out of 100 a particular eventuality might happen.

So when bunnyman’s comment to our Little Mix article continues: “Do I think Little Mix will win? Maybe, maybe not. Do I think they win at least 1 time in 12 to create value at the current odds? Absolutely”, we just don’t find it useful to think in such terms. Probably the underlying reality at that time (their vote performance up till then, producers’ intentions and so on) was such that they’d either have a much, much better chance than 1 in 12 or a much, much worse chance.

Fortunately, punters always have the option of sitting it out, and it’s one we take most of the time. You may have noticed that while we love theorising, speculating and debating here on Sofabet, it’s relatively rare for us actually to flag up a bet as one we’re having ourselves.

So with Little Mix, for example, we weren’t remotely tempted to back them at 12/1 (oops). But nor were we anywhere near confident enough to lay them at 1/12. Daniel wrote last year about how he woke up in cold sweats having laid Wagner for £28,000 at similar odds in the win market, wondering if he might have completely misread the situation. There aren’t many 1/12 shots where you can be Sophie Habibis confident – and even then, there is always the chance of it going horribly wrong.

How do you conceive of your own punting strategy, in terms of when you decide to get involved or stay on the sidelines? Do let us know in the comments box below.

[UPDATE, 30/11: This article sparked a good deal of confusion in the comments below among seasoned punters who adhere to the “value betting” approach; if you are one of them and your immediate reaction is also to think we have taken leave of our senses, we highly recommend you skip to commenter patrickstar’s very helpful reframing of the above discussion in terms of epistemic versus aleatoric uncertainty, here and here.  We are obliged and edified now to be able to use this new vocabulary.

To sum up: Our intention was not to suggest that “value” becomes an entirely meaningless concept when there is an unknown underlying reality (or an “epistemic uncerainty”), and that punters stop looking for “value”, as several commenters thought we were saying; but rather to observe that while one can be objectively confident of what represents “value” in purely “aleatoric” situations, such as a coin toss, this becomes less and less possible as uncertainty becomes more “epistemic”.

We personally find that it clarifies our own thought processes to conceive of what it means to look for a “value” bet slightly differently when uncertainty moves away from being purely “aleatoric”. If you find this line of thought interesting, you may enjoy reading the debate that ensued in the comments thread below.]

77 comments to Value betting and the X Factor

  • zoomraker

    very interesting article although the one area you don’t cover where orthodox concepts of value may still apply (even in specials markets) is trading.

    In how many of our 100 parallel universes has Little Mix’s price come in. Was backing them in expectation of a price move the week all the signs pointed to a massive pimping and a “stripped back” performance value?

    • Andrew

      That’s a very good point. We did think about doing that (and should have done, obviously). Then again, it can also go wrong – as when LM came right in during the week 5 show when it became clear they were heading for the pimp slot, and drifted out again when they weren’t that good in it. Same happened with Misha B when she got the pimp slot then bullygate.

  • bob

    The whole basis of reality TV not being value-based is totally wrong. Using the Little Mix opening line analogy misses the point. It’s like saying if you and a mate bet on a coin that has already been tossed, taking 11/10 isn’t value. The whole point about value is that when you don’t know the result (which applies to a pre-tossed coin or the opening line of a song)then you can only go on the information that you have.

    • Andrew

      I disagree, Bob – I would say value thinking is useful with a pre-tossed coin because you know the key piece of information that coins, in general, tend to land 50/50.

      • bob

        But the same applies to the opening line. before the coin toss you have a sedt off information and before betting on the opening line you have information. Your point about little mix is that because it has happened, value doesn’t apply, which, in a sense it doesn’t. However, if you don’t know the result, value still applies. For example, if you know that Perrie sang the opening line in rehearsal and that perrie has sung the opening line in 6 out of 7 performances, then betting on her having sdung it at 1/3 looks like great value. If it turns out Cake Mix sang it then so be it – still a value bet.

        • Andrew

          That’s true. That’s a weakness of the opening line analogy, I think. I was trying to find an example of an event that was such a one-off you couldn’t reasonably apply any knowledge of trends to it. What if, say, the pub argument was over the name of one of the original members of The Risk? I didn’t mean to imply that it’s important it happened in the past.

          • bob

            I think I might see what you’re getting at. That some things are too unpredicatble to apply any reasonable logic to, in order to have any chance of accurately guessing the probability? Hmm, but we know that isn’t the case with X Factor.In your Risk example, I’d back Marvin or Jack or Andy at lower odds than I would Clitface or Sarah-Jayne or Horsesmanorses. If you see what I mean?!

          • Andrew

            I’m sure all of those have been in The Risk at some point, haven’t they? 😉

            I do see what you mean. To me it’s more of a question of how objective you can be about value. You can say with complete objectivity that 11/10 on a coin toss is a value bet – but the less able you are to apply knowledge of similar situations, the less objective you can be and the less useful I find value as a way of thinking.

  • Simon "le happy chat"

    I dont think LM will win and I dont think they are value at 11/8 in a field with MARCUS and AMELIA,
    I rule MISHA out- Bullygate and three trips to the bottom 2 have holed the MISHA hull and it is going to sink this weekend.
    I think that while LM are very popular, it is with the kids and not the Mr and Mrs Middle Class who vote on Saturday nights.
    JANET DEVLIN had more “likes” and followers than the other acts put together, fat good it did her in the end which tells you that those who score high on social media do not exchange the currency for votes.
    I’ve a place in the liferaft but I’m going to run with MARCUS until he either wins or is beaten whichever first occurs.
    Having taken him at 14’s, 16’s, 25’s, 10’s etc the tickets were and remain good “value” although not wuite in the same way as described by Andrew
    Will MARCUS win?
    Perhaps, perhaps not.
    I don’t believe LM are good enough to sink him – if AMELIA continues her performances where she left off last week, she just might, but I’m happy at the moment to take that risk

  • Kev

    “we think there are limits to how far the concept of value betting can be applied, especially in X Factor betting”

    Wow

  • bob

    I’m presuming you’re a believer in value Kev? If anyone does want any more info on value betting I wrote a little article here: http://www.freebetsfreetips.com/gambling-info/value-betting

    (Sofabet chaps – presume you’re ok with this)

  • Kev

    Of course, bob. It’s impossible to make a long term profit from betting if you don’t, irrespective of what the market is.

  • prophetofdoom

    I’m absolutely astonished that a so-called betting expert can put forward an argument that value betting does not apply to XFactor. It beggars belief. Words fail me.

  • Andrew

    Kev, prophet, bob – the vehemence of your reaction suggests to me that we might be talking at cross-purposes.

    So I can understand you better: Would you consider, say, 16/1 about One Direction on the morning of last year’s final to have been a value bet or not?

    • Kev

      In hindsight the bet was not value but that is irrelevent.

      Every bet you place has to be value “based on what you know”.

      If value bets aren’t the way to go because you don’t know how the votes are going you may as well only place ante post bets and never elimination bets.

      It isn’t too late to withdraw this article. I’m sorry but it’s pretty embarrassing.

      • Andrew

        Hi Kev, But I think it is relevant, because 11/10 on a losing coin toss is value, even in hindsight. Doesn’t that establish that we’re using the word “value” slightly differently in the two situations?

        My proposition is that when you ask yourself “is this a value bet based on what I know”, it’s also useful to ask “do I know enough to be able to say confidently that this is a value bet”. In the case of a coin toss, yes.

        In the case of One Direction, no – but that’s not to say you shouldn’t have the bet. I would happily have had that bet, and not regretted it in hindsight, because it seemed like value, at the time, based on what I knew.

        All I’m saying is that I wouldn’t have wanted to state with confidence beforehand that it was value, in the same way I would about the coin toss. Is this making any sense?

        • Kev

          That makes more sense. Also from your other replies I now see what you were trying to articulate.

          I’ve gone from thinking that the article is dumb to a bit pointless. Could it have just been one paragraph? “We are all making what we perceive to be value bets. When the results are released on Xtra Factor next Sunday, we will be able to judge for ourselves whether our bets were infact value.”

          Apolgies for my tone last night. Like others I was gobsmacked.

  • bunnyman

    “So with Little Mix, for example, we weren’t remotely tempted to back them at 12/1 (oops). But nor were we anywhere near confident enough to lay them at 1/12.”

    But you would certainly have been confident enough to back them at 100/1 or to lay them at evens, because at those prices you would have recognised value. Am I wrong?

    • Andrew

      You’re right, bunnyman, that I’d have thought those were prices worth taking. But I couldn’t have been objectively confident that these prices were “value”, in the way I could if we were talking about the same prices for, say, Wayne Rooney in a first goalscorer market, or Rory McIlroy in a golf tournament, or Andy Murray in a major.

      • bunnyman

        Because you can’t prove whether your value call is right of wrong doesn’t mean value doesn’t exist, and if you’re going to have a website like this surely its your raison d’etre to help people find it. I love this site, but I have to say that this article and some recent ones have left me gobsmacked.

        • Andrew

          Bunnyman, I’m horrified to realise you think I was arguing value doesn’t exist. I’m arguing only that in some markets it’s much harder to be confident about whether or not you’ve found it.

          • bunnyman

            Yes of course its harder to be certain, but thats why the rewards for those who can spot the value are potentially so high in Specials and why there is a place for an advisory service which can help spot that value, which is what I thought this site was.

            There have been several key moments in this series where the old hands in this game could see that there was clearly value in backing or laying a particular act. Your readers might have expected you to have highlighted this value, but instead you wrote articles effectively steering your readers away from it!

            Anyway, its a learning curve for all of us, I’m sure Sofabet will emerge stronger than ever for the experience. Good luck for the rest of the series.

  • tpfkar

    I’m a novice punter, and probably still making lots of newbie mistakes. It’s why I need all the guidance I can get! If it wasn’t for my 41-1 bet on Rhythmix in the win market, taken on a whim, and an initial bet on Marcus following your tip, for all the time I spend on here I’d only be breaking even or so across the series.

    Take last weekend. I thought that Janet at 3.85-1 to be eliminated was great value not to be – and I still think that. I’d factored in the fact the show wanted rid of her, but given that she’d been safe with some dodgy performaces to date, I was confident she was still doing fine in the votes, and I didn’t think she’d go behind Misha or Amelia.

    Come Saturday night, I watched Mmmbop with horror, and knew the game was up when Toby produced his figures; I managed to cover myself as best I could but still lost most of my winnings on Craig going.

    But was I kicking myself Monday morning? For going in too early, yes. I think impatience is my mistake. Had I held back to Saturday night (particularly with what’s turning out to be a very accurate early-warning system from Twitter) I’m not sure her odds would have been much worse and I could have gone for a far safer bet.

    What was the chance of her screwing it up so badly? Far too small to make the bet reckless – I don’t think she’d have gone had she struggled through ok. So coming back to the article it IS about value when betting early, as you can split it into those 100 universes; I reckon that Janet would have gone in far less than 26 of them. But when you bet on something inside the show’s control, such as the sing-off result, then it’s like the pub argument.

    So I’d say that X-Factor can be split into producer-controlled (sing-offs) and producer influenced (the public vote) and it’s only the second where value really applies.

  • Dan

    This is one bad article out of many good ones. If all your “X will not win the X Factor” articles and your Elimination order article (with the exception of Marcus) were close I suspect you’d say that this website is all about giving advice you should take. As it happens, like everybody else’s predictions at the time – they were way off.

    It would be better having an article saying something like “The Outright market has been a huge, confusing challenge to any gambler this series and we’re as clueless as you.” rather than trying to wriggle and backtrack away from previous articles is a little saddening.

    Don’t get me wrong though, still love the site and read every article. My takings this X Factor series so far are £10 short of £4,000 with a few more bets still to come in. Just my op. though, otherwise keep up the good work.

    • Andrew

      Quite honestly, Dan, this article was simply an attempt to explore what we thought was an interesting philosophical point. I’m sorry if it seems like an attempt to backtrack – I’d like to think we’re never shy about holding our hands up and admitting when we get something wrong.

  • tom21

    Hi Andrew – very interesting article, though disappointing to see the first time you’ve quoted one of my comments it’s been with a view to lampooning my argument! 🙂

    Needless to say, I disagree. I think most punters would say the answer to your question “is betting on the X Factor more like a football match or a pub argument?” is: the football.

    The pub argument is just an argument about what I’d call a ‘known fact’ (a fact someone betting against you could know 100% one way or the other). This reminds me of Victoria Coren’s poker book, in which one of her golden betting rules is never bet on facts (unless of course you know you’re right!), because even if you’re being offered what seem ‘great odds’, the guy taking your bet probably knows the answer and is going to take your money.

    Xfactor is different. Let’s use the Misha/Sophie example just because that was the context of my origial post. My thought process is: Daniel’s bet says “Sophie is going”. The odds say there’s an 8% possibility of him being wrong and Misha going. Is there a greater or smaller chance, based on all the info we have at our disposal (twitter/running order showing producer intentions/judge comments etc etc), of Misha being chucked? If there’s a greater chance, it’s a bad value bet in the long run; if there’s a smaller chance, it’s a good value bet. (My view was that there was a 5-or-so % chance of her being chucked, so there wasn’t much ‘value’ there, but that’s not the point here.)

    You can phrase it differently by saying “at what price would Daniel not have made the bet?”. What if the odds had been 1.05, or 1.03? There has to be a breaking point where Daniel isn’t tempted, becuase he doesn’t think the bet represents good value.

    Unlike the pub ‘known fact’ bet, I’d categorise Xfactor is a bet on a future possibility. However, crucially, the analysis remains the same even if the result was already decided before Daniel made the bet (let’s say because the producers had told all the judges to save Misha, so ‘in reality’ there was zero chance of her going). This is exactly like the pre-tossed coin scenario (or, in the football example, if the game has already been played behind closed doors when you make a bet)- in each case, assuming the result really is secret, this is an ‘unknown fact’, so whether or not you’ve made a good bet depends on value.

    • Andrew

      Hi Tom, I fully agree with you about known facts and future possibilities. Where we depart is that I don’t think the concept of the long run can usefully be applied to the Misha-Sophie singoff, in the way it can be to football matches.

      I think the phrasing “at what price would you not have made the bet” is much more useful in this situation, because it captures the sense of how subjectively confident are you that you’ve got it right. So the thought process is “am I willing to take an 8% risk that I’ve completely misread this situation and they’re about to save Sophie? A 5% risk? A 3% risk?”.

      I think this is very different from asking yourself “is there an 8% chance that Sophie gets saved”. That’s a helpful way of thinking about, say, a third round cup tie between Man Utd and a non-league team, but I don’t find it a helpful way of thinking about a one-off X Factor singoff – as the chance of Sophie getting saved is either 100% or 0%.

      • nugget

        In an Xfactor sing off your are betting on what you think will come out of the 4 judges mouths, in a football came you are betting on what you are betting on what you think Wayne Rooney and co will do with their feet.

        I cannot see how it is any different Andrew?

      • tom21

        Hi Andrew, I understand the theoretical distinction you’re drawing, but my point is that whether you phrase the question my way or your way they both represent a value decision. The way I phrased it, the bet is a value bet if Sophie will be saved less than 8% of the time; the way you phrased it, the bet is a value bet if there’s less than an 8% chance you’re wrong that Sophie is going.

  • Well here is a co-incidence for you. My blog happens to be called “Value Betting”. Incidentally I worked with Marh Coton briefly just before he started the Pricewise column decades ago.

    In modern punting terms a value bet for me is often when a bookmaker is offering IMO a standout price compared to other bookmakers. There are certain bookmakers I respect for certain sports or betting categories. So for example if Ladbrokes were short on a politics bet and a longer, value price, was available elsewhere I could be tempted if I was keen on the outcome. This, of course, is a simplistic example but I’m sure you get the idea. Many of my accounts have been closed or heavily restricted, which is the downside of any success.

    I will let you be the judge as to whether I have advised value bets on this year’s xfactor. I have advised four bets to date as follows:

    3pts win Melanie 14/1 (lost)
    3pts win L Mix top group 3/1 (won)
    1.5pts each way L Mix 14/1 (tba)
    1pt win L Mix 15/2 (tba)

    You can check what I have said on the following link: http://www.mikequigley.blogspot.com/

  • Sorry that last bet was 13/2 not 15/2. apologies.

    • Noisy

      It depends when they were placed really Mike. 14/1 on Melanie may have been a reasonable price at judges houses stage but would be terrible value now! Little Mix 3/1 top group now would be tremendous value though:-)

      • Dates are on the blog. Bets that lose can still have been good value – however a lot of people cannot see this. As you know I have a bet on Amelia @ 679/1. This is good value even though she is unlikely to win. It will still have been good value when she loses. If I laid you 6/4 heads and the coin toss comes up tails, you will have had a value bet even though you lost.

        With the advent of betfair, value bets, it can be argued, are more easily identified. In the Amelia case above my bet is £2 but the bet is worth a lot more than that. I could for example lay £150 @ say 8.0 right now and the bet would be a winner at around 75/1.

        • Noisy

          Hi Mike,
          Totally agree that losing bets can still be good value.
          My Melanie reference that the bet would be poor value now was meant to read that it would be poor value backing her now at 14/1 rather than it was a poor value bet at the time. It was just highlighting the need for dates really.

  • nugget

    OMG…I disagree with this article on so many levels 🙂
    There is always a concept of VALUE in a bet whether that result is pre-determined or yet to be decided, providing neither the backer nor the layer already KNOWS the outcome.

    For example, suppose both you and I come back from the pub and switch on Match of the Day. We have both been together all evening and both know neither of us has seen what the final score was. We are watching say Arsenal vs Man United (which Arsenal have already won 3-0 as the match finished at 4.50pm and we are watching the repeat).

    If you were to offer me 10/1 Man United to win the game then that “would” be a value bet regardless of the result already being predetermined and the bet being a loser.

    They key element is that neither party (backer or layer) already knows the result and are playing on a level playing field.

    Just because a result is effectively already decided does not prevent a value bet existing. This is the case in XF where both backer and layer are betting on thier beleif of what is going to happen and weighing up the chances of them being right.

    Thats my thoughts, if it makes any sense.

  • Andrew, can you help me understand this? When you make this “objective decision” on value in sports betting, isn’t it based on the past performance of a human and your assessment of his chances going forward?

    If the X Factor had run for 100 years and you’d seen a few episodes of the 101st series, just like Rooney might have played 100 matches and be about to play his 101st, would you then be more confident about talking about “value bets” on types of contestants, simply because you have accessed how human beings behave on the show, how human producers make decisions and how humans vote?

    Just as you assess how human Wayne Rooney behaves in a football match, how his manager treats him, how hard he trains and the quality of people around him and then decide what is a “value bet”?

    Take the singoff vote out of it, since that’s the bit that is likely to be pre-determined. The rest is the producers attempting to influence the result.

  • Andrew

    Hi Richard, yes! That’s very much the line of thinking.

    • OK – So basically your main problem is there have only been eight series, so you can’t make a reasonable assessment on what’s likely to happen?

      I would argue there have been circa 80 episodes, and that coupled with Popstars the Rivals, BGT, Pop Idol, US X Factor etc, we’re starting to get to a point where you can spot the odd trend in this genre of television. There are potential outcomes that are more likely (based on your sport analogy) than the odds would suggest. 75-1 for a girl band to win looked, in my view, good value. I’ll never pretend I thought they’d win it, until the start of November, but in my view there was an above 1.33% chance of a girl band winning the show.

      Value.

      The end result is not set in stone and I’ve got a reasonable level of knowledge about past acts, Simon Cowell’s current portfolio (which I must write about soon!), and how ITV1 want to maximise ratings.

      Your point really seems to be more valid during a sing off and towards the end of a series, when the decision is more likely to be pre-determined or more set in stone. I think it’s widely acknowledged this series the producers have been shaped by events and thus so have the markets.

      Please do correct me if I’ve missed something, because it took me a while to get my head around your argument!

  • Noisy

    It sounds to me like its just a confusion over terminology.

    I think Andrew’s saying that you shouldn’t refer to it as value because it’s more of a foregone conclusion and you’re just betting on whether you’ve correctly guessed the outcome or not. So you’re backing your confidence in reading the situation. Whereas value refers more to there being multiple options with different percentage chances of success.

    If a bet’s worth taking due to the long odds (eg Bunnyman’s 100/1 Little Mix example above) I’d refer to that as good value whereas Andrew would agree it’s worth taking but disagree with the terminology of value being used in that instance.

    I think it’s all the same sort of principal, deciding whether a bet’s worth taking at the odds on offer based on your feeling of the chance you’re right or the chance your selection’s got of winning, whatever the terms used. I don’t think he’s suggesting you should ignore the odds on offer when placing bets.

  • fiveleaves

    Reality tv offers the best value bets you’ll find anywhere.

    One of the strangest articles I’ve ever read.

    • nugget

      I agree fiveleaves, maybe I am thick, but I just do not “get” this article.Surely EVERY event has a “true” price and the only way to beat the book in the long run is to ensure you bets are placed at a higher price than this, or layed at a shorter price than this??

      That is the fundamentals which I base both my odds compiling work and my personal punting around.

      • fiveleaves

        Indeed and it’s because so many compilers and punters put so little effort into pricing up these markets, compared to general sports betting or horse racing that the value at times is truly extraordinary.

        The predetermined point only really applies to sing offs, which are undoubtly decided beforehand.

        But to pick up on the coin toss analogy. Even if a coin was weighted to land on heads every time, as long as the person offering the price was unaware of this then taking 11/10 on tails would still be a value bet.

      • Andrew

        Hi Nugget, yes – the point I wanted to make is simply that the “true” price can often be vastly different from the actual prices on offer.

        In last year’s final, for instance, the “true” prices were probably something like 1.1 Matt, 10 Rebecca, 100 1D. But if any odds compiler had gone up with those, he’d have been sacked.

        If you ask me what’s the true price of heads on a coin toss, I’ll say “evens”. If you ask me what’s the true price of Little Mix winning the X Factor, I’ll say “I don’t know. Maybe 100, maybe 1.01. We’ll see.”

        The question then becomes, “am I willing to take a risk that Little Mix’s current odds will prove to be value”, rather than “are Little Mix’s odds value”.

        It’s a subtle distinction, but I find it a helpful one. Clearly, others don’t…

        • nugget

          Yes but Andrew, the “true” price can only be based around the information you have available at the time of the offer, not on information which is not publically available at that moment.

          Hence the “true” prices for the event you quote above were likely to be much closer to being pretty accurate based on past results, polls, you tube/twitter stats, press, VT’s etc.

          You cannot work thinking afterwoods when you see the actual telephone voting figures that the prices you have compiled were wrong, because they were not. The prices you quote are a personal assessment using all the resourses available at the time.

          Fiveleaves is right, the reason great value exists on “specials” markets is often because a pasionate specials market punter is willing and able to spend much more time and effort establishing what the current true prices actually are than a typical hard stretched sports book odds compiler.

          • Andrew

            Hi nugget, I’m aware that this is the way the phrase “true” price is conventionally used – I read Value Betting, all those years ago 🙂

            My point is that there is also a deeper level of “true” price – one which would reflect all (public and non-public) information.

            In some situations, these two senses of the word tally (the coin toss); in others, they don’t (the XF final).

            The question is, do you find it useful for your own clarity of thought processes to distinguish the two senses of the word, the two situations, in your mind? Personally, I do – clearly, others don’t.

  • pata17

    This article is an insult to any gambler’s intelligence.Every bet a successful punter places,should be on the grounds of value
    ie do the odds underestimate a selection winning.All different criteria are used in creating your own tissue price,some factual some subjective.

    • Andrew

      Pata, the fact that you and so many other seasoned pros have reacted with such horror to this article tells me I’ve failed to find the right words to explain myself. I apologise for failing to get that across.

  • patrickstar

    I actually think you are on to an insightful point – you just draw a slightly misleading conclusion that value doesn’t matter or isn’t a useful way of thinking. I think the conclusion you should be drawing is that there are different sorts of uncertainty that you have to deal with, but the concept of value when betting remains as important regardless.

    The distinction here is between aleatoric uncertainty and epistemic uncertainty. Aleatoric uncertainty describes the unknowns which differ in each ‘run’ – e.g. tossing a coin has an equal chance of producing a head or a tail.

    Whereas epistemic uncertainty describes the unknowns which are constant irrespective of the ‘run’ but which we don’t actually know the value of – e.g. does the coin have a bias?

    Using that simple example of a coin toss (and ignoring the possibility of any bias) – if the coin has not been tossed yet the uncertainty is entirely aleatoric, while if it has already been tossed (but is concealed) then the uncertainty is entirely epistemic.

    Having now clarified the vocabulary your point seems to be that the x-factor has a large degree of epistemic uncertainty, relative to say football or golf, which I would agree with. A good example of a completely epistemic betting market is the general election after the polls have closed. The result is set in stone but that doesn’t stop the betting fluctuating wildly as the information is drip fed to the market participants one exit poll or constituency result at a time.

    Bayesian reasoning allows you to assign probability estimates to an event where you know the result has already been determined but don’t know what it is. As more information becomes available you then update your probabilities accordingly – that is what the participants in the general election market are doing. Now of course there is another key factor – they aren’t all as good as each other at correctly interpreting the information – so there will be disagreements and hence an actively trading market where some are getting value and some aren’t. The key thing is that during that period where the result is determined but nobody knows it the calculated probability estimates are every bit as valid to use in value calculations to determine what bets to make as any estimates are in football or golf or tennis markets.

    Where I think your football comparisons further fall down a bit is that while the X Factor is not 100% epistemic (although maybe some weeks it practically is!) more importantly football is by no means 100% aleatoric – it is also in quite large part epistemic.
    As you say, if a football match between two sides of given strengths could be played 100 times with the same starting conditions it would produce some home wins, some away wins and some draws just due to various random effects inherent in the sport – that is the aleatoric part. But there is also the epistemic part – we don’t actually know the exact relative strengths of both sides. The best we can do is estimate these based on observed evidence.
    Just the same as in x factor where we don’t know the voting figures or the minds of the producers – again we can only estimate them based on evidence.

    So I don’t see how you can argue value betting applies to one but not the other – they are not in separate categories – they are just at different points on the same spectrum, and even at the 100% epistemic point on the spectrum (e.g. the general election market) the principles of value still apply.
    To find 100% aleatoric betting you need to head to the casino, and of course you won’t find a single +ve value bet there!

  • Pete D

    I have a very simple view on ‘value bets’.

    A value bet is ‘only’ of any value IF you can actually ‘afford’ to risk losing that money and not miss it, as nothing has a guaranteed certainty return value (otherwise it would be called a ‘Bank’).

    Therefore Daniel’s (frightening to most) bets of £13,000 on a 1/12 (and a sweaty sleepless night of £28,000 on a Wagner bet) are just as much value (or not) to him as Mike Quigley’s £2 on Amelia at 679/1.

    Both party’s primary bets there have roughly the same sort of monetary return (but look at the outlay).

    As Andrew answered to Nugget in the last thread on whether to ‘lock in’ built up profits and bet more on a 12/1 LM elimination (at THIS stage) for its unlikely increased returns (when he already has his bankroll delivering a guaranteed 5/4 average total return NOW over a 1/1 if he bets-loses and they stay).

    “Hi Nugget, personally I would lock in because I’m a loss-averse wuss. If I had Daniel’s balls I’d let it run 😉

    Think of it this way – you’re being offered an annoyingly expensive insurance policy against an unlikely calamity. Is it worth paying to have the peace of mind? There is no shame in buying peace of mind”.
    (end)

    Therefore ‘value is in the eye of the beholder’

  • patrickstar

    Or to put it another way, you describe one way of thinking about value, then go on to explain why this way of thinking about value isn’t necessarily applicable or useful for X Factor betting and then conclude from this that *value itself* isn’t applicable or useful.

    In fact you just need a different way of thinking about value.

  • Dug

    I came across Sofabet last year during series 7 of The X-Factor and I only swung by because I was invested in analysing the show for my own enjoyment. I had never bet on anything before in my life but the discussions here taught me a bit about the market and led me to start putting money down.

    I’ve really enjoyed contributing to the comments section but have always been aware that I’m speaking more about the show itself than its odds and outcomes. However, I have made a profit with every week on which I’ve bet and have involved myself in the win market with Janet (oh well) and Marcus (a small stake at 25/1).

    I think in some ways, being a reality TV observer rather than a professional punter has been of benefit to me. I have never approached an act with long odds as a good value bet (taking value to mean it as the word meant to me and not as the betting term to which I am now thankfully enlightened). I took Marcus at long odds because I had faith in Sofabet’s top 16 prediction, not because I thought he would win in 1 out of 26 times.

    I can see that this article has raised an interesting reaction from commenters but what I am trying to say is that, as someone who is relatively new to the whole idea of betting money on stuff, it makes perfect sense to me. Having no punting history but a decent understanding of media representation and the laws of probability, your article seems completely correct.

    I can see why people have disagreed so vehemently but I think that some of those people have misunderstood and some are actually trying to argue to same point from the opposite direction.

    Probability is a c**t thought, isn’t it? Ridiculously clever people get it wrong sometimes. Misconceptions of chance are what Deal or No Deal is based on. I also can’t help but think of the Monty Hall Problem, even though it’s not directly applicable.

    Any money that I’ve made so far, I’ve made on one of two things:

    1) In the sing-off, it’s generally obvious who will be going and, as you say, that person would go 100 times out of 100. At worst, 99 times out of 100 but even a variation of 1 seems unimaginable when producers have made a decision beforehand.

    2) When I believe, based on whatever information, that an act in the win market has a good chance on winning and that their odds are long enough to warrant the risk. Janet at 6, Marcus at 26, etc. I would have taken Amelia at 680 if I had seen it. Probably just £2 and mainly for fun. But not because I would imagine that she would win one time out of 680 attempts – because there was reason to believe she might re-enter the race and a couple of speculative quid would be worth it. Gutted I missed that now but I wouldn’t even take her at 20/1 now as I don’t think she has any chance of winning. I believe that because I don’t believe it’s part of the narrative laid out.

    Anyway, great article and I will be reading up more on the theory.

    • Dug

      I even think I’ve contradicted myself here and it just proves how hard it is to articulate the whole thing but what I mean is yes, yes, I understand and agree. I think between us we need to come up with a better analogy.

      • Dug

        Having said that, the coin toss is obviously the perfect analogy and there couldn’t really be a better one but we need a better analogy for the whole scenario, not just the odds. Like a Schrodinger’s cat style thing where Melanie McCabe and Lascel Woods are both trapped inside Misha B’s hairpiece trying to get out.

      • Pete D

        Dug. I am absolutely loving what you said there and I am much the same type of watching wary small punter too.

        Agree too that there has to be some added “analogies” to be ‘valued’ on this site (rather than just straight historic stats), as nothing remains the same without becoming too predictable and boring (therefore XF lose ratings and the ‘not daft’ bookies get more wise every series and let you win less).

        This is the year for change and it is proving to be so this week by getting everyone admittedly foxed as to what will happen next. Clever XF eh ?

        eg. before there was any (early days) show measuring stick history, it would be nice to know what the late odds were just before in an assassination ‘sing off’ BEFORE it also now became recently obvious about the red/black hell and damnation stage set and the usual ‘first on-deffo out’ scenario. This week down to 1/12 for JAN to go was it ?

        Hence all the added twists and attention grabbing publicity stunts before the XF shelf life runs out completely.

        I also study and ‘listen’ to what the ‘main man’ Cowell wants and what trophy he ‘hasn’t’ got on his mantelpiece ‘yet’.

        He has been shouting loud enough for long enough now, hence my “All roads lead to Rome” article content last week.

        Even if LM don’t actually win, they have been an exceptional each way/top 3/top band ‘value’ at worst.

        Every year its usually a boy/girl winner when for the last 2 years his real long term earner/popularity biggy has been boy bands who were top 3 and very nearly there.

        COWBELL is a determined bugger and he decided he wanted a girl band to succeed on the back of them (and better) to fill the HUGE ‘Spice Girl’ vacancy (it bombed last year at the first fence because I was on it with a promising possibility and was left gobsmacked). Looking back, they weren’t really young enough, sweet enough, nice and innocent to crack it anyway.

        Smoldering hot sexy orange babes is old hat now and dying (eg. Girls A-who ?).

        BUT one year he ‘knew’ it HAD to work (right time, right place, right chemistry) and HE has the power to manipulate it too as he knows the market).

        This year he got it right and he instructed and prepared for it (plan A, with Tulisa PLUS Jessie J on board to hand pick/design it). Both with expert fingers on the young ‘chart pulse’.

        I know my business. Girls Aloud are about defunct now and The Saturdays are too ‘boyfriend stealing’ Essex Girl to be ‘Spiced’ enough to appeal to the ‘ordinary girl’ masses.

        LITTLE MIX are the ‘perfect mix’ and are now developing a ‘brand’ just as I foresaw.

        When these things are taken into account via the contributions from the likes of myself, who actually ‘know’ the music industry and study it, it should be recognised as a useful addition to the combined ‘Mystic meg’ predictions here. It’s just pure calculated logic, that’s all.

        Instead, I get veiled ‘doubting’ digs even when my ‘astute’ outsider tip is STILL knocking on the winner’s door in the bookies favourite position as head of the top 4 and gathering MORE snow every minute now.

        Meanwhile the ‘LITTLE MIX STEAMROLLER’ chugs on (that’s MY line BTW).

      • Andrew

        Dug, I can’t tell you how pleased I was to read your post this morning – you have restored my faith in my own sanity, which I’d been rather starting to doubt.

        Terminology is definitely the issue here, and there has been a lot of misunderstanding and talking at cross-purposes. I was clearly trying to make the word “value”, which has a very specific and fixed meaning in some circles, do too many things. My fault.

        But, what other word do we use? As you say, and as I’m discovering, it is really hard to articulate these things. Misha’s quantum hairdo is an excellent place to start.

        Anyway: thank you!

  • Boki

    There is a fine line between interesting philosophical point and pointless discussion about terminology (in which lot of comments turned into I’m afraid 🙂 ).

    Anyway, if I have to define it myself I would name 2 types of value: objective and subjective one. Coin toss at 11/10 is obviously objective value because you KNOW the odds are wrong. Everything else is subjective because you GUESS the odds are wrong, different people could see different value on the same event based on same facts they know. The actual method of discovering value is not relevant imo because is highly individual.

  • Malcolm

    I’m new to this too, though debates like this one help me understand more about betting and how to approach the decision making process.

    I learnt on here this week that better odds were available for the same outcome. Instead of betting on Amelia being eliminated I bet on misha being last girl standing. I may turn out to be wrong, but either way I have been taught something valuable for the future. So thanks to whoever it was that made this point on one of the threads here this week.

    It’s easy to assume that most of the contributors on here are very experienced, so reading the comments on here and seeing that some are not is encouraging, we have a lot to learn and threads such as this one are sofabet at its best.

  • pata17

    Andrew

    Great credit to yourself for responding to the various negative comments.Upon reflection,the tone of my comments were too vehement,for which I apologise.
    The concept of “value” is simply probability…does a possible selection have a better or worse chance of success than the odds imply.Betting when the odds are in your favour is the only way you can be profitable long term.
    The probability of judges voting in a certain way,if you are privy to the inner circle of the show,is obviously 100% therefore any odds on offer is value.The reality though for the rest of us,is we have to make an educated guess,based on criteria we think is important ie We have to second guess TPTB intentions.Sophie V Misha on my tissue would have been 14/1 V 1/14 ,so anything over 1.1 (comm taken into consideration) represented value to me.
    I guess the argument is,can there be a value issue when you are asked to guess an action which has been pre-ordained…I believe the answer is yes.

  • Mrs Shrewd

    I’d echo a lot of the comments already made on this article. Just because an event has some information which, in hindsight, would give us a clearer indication of the winner (televote figures), does not mean we can shelf the concept of value when placing an ante-post X factor bet. I think bunnyman’s post makes this point best and in a most simple fashion, where he questions whether you would have laid little mix at evens, or backed them at 100/1.

    I’d be interested to know what Daniel as ‘Mr Sofa Bet’ thought of this article…?

    Also, is anyone else growing tired of Mike Quigley’s aftertiming??

    • Boki

      What I expected from Sofabet is to give me tips where to put my money and have a great profit in return without any sweat. They failed miserably so I have to switch to another blog which is always finding the “value” for me. Oh how I wish I listened to Mike …
      🙂

  • Pete D

    Interesting Yahoo story today about the ‘supposedly’ proposed winners song.

    http://uk.tv.yahoo.com/fan-backlash-over-x-factor-winner%E2%80%99s-single-2011-rumour.html

    Personal opinion is that it totally the wrong choice for ANY of the top 4. Another attention grabbing ‘Red Herring’ leak perhaps ?

  • Curtis

    Intriguing article. I’ve done a lot of betting in my life, but I’ve never actually thought about things this way, I’ve just followed my gut as to whether a price is good or not. As a mathematician, that’s a bit lax really.

    Personally, I don’t think sofabet has done anything wrong this series. Sure, you’ve got some things wrong, but you’ve got a lot right as well. Every bet that I’ve put on as a result of the advice of this website has actually come in. I certainly didn’t lay Little Mix when you posted that article about them, your article didn’t recommend laying Little Mix either. I didn’t be on Janet when you wrote the article saying she could still win, nor did I bet on Craig to be top boy after you wrote an article saying he was the favoured boy.

    I do have a nice bet on Marcus to win which I’ve hedged (and then a bit more, so I make money if he doesn’t win as well). I have correctly bet on the outcome of every sing-off this series, thanks in part to your simple tip that the person who goes first goes (and also you pointing out how glaringly obvious it was the night before that said person was being chucked from the show).

    Coming to this website has definitely made me money and lose none. Even if I had lost money as a result of your tips, you win some you lose some. It’s the very nature of betting. To be honest, I don’t even use this site primarily as a tipping site. I primarily use it as an entertaining read and you’ve delivered on that this series of X Factor as ever. Thank you.

  • bob

    changing the topic slightly…why do they put ther eliminated act first? In past series I THINK they showed the losers “best bits” and maybe it was to edit the sing-off into that sequence. But now? Seems very weird that they make it so transparent with, seemingly, know reason. Anyone got any thoughts?

  • Andrew

    Hi Pata, Kev, bunnyman, Tom,

    Thanks all. Am relieved that this thread has ended up generating more light than heat in the end, which is certainly no thanks to me for writing an initial post that wasn’t clear enough. I can totally see why you all thought I was rejecting the whole idea of value, which would have gobsmacked me too.

    Hope it’s now clear that what I meant to say, and with thanks to patrickstar for clarifying it, is that I think there’s a subtle and interesting (well, to me) difference in the meaning of the word “value” depending on the extent of epistemic versus aleatoric uncertainty (terms which I now intend to work into daily conversation).
    http://en.wikipedia.org/wiki/Uncertainty_quantification

    Thanks too Curtis, Boki, Malcolm, for the kind words.

    Next post is up so we can get back off this esoteric territory and onto more familiar turf. Of course, though, very happy to keep dissecting the “value” discussion below!

  • fiveleaves

    Isn’t it always done in the order that they sung on the saturday?

    If so it’s no real surprise that the one they put on early in order to get rid off, sings 1st on the sunday.

    • Daniel

      This is a good point fiveleaves, so I went back over the records to check. It’s now 20/21 of the most recent sing-offs that have been won by the second to perform. In 7/7 cases this year, each act to sing first and be eliminated had sang earlier on Saturday.

      In the eight cases of the first to sing-off being eliminated in 2010, there was one exception: Paije being eliminated over Cher. Paije had sung sixth the day before, Cher had sung second. This running order may have been part of the plan to engineer Cher into the sing-off and thus allow her to bounce.

      In 2009, the five cases from week 3 onwards of the first to sing-off being eliminated, there was also one exception: Lloyd Daniels sang before Rachel Adedeji on the Saturday of Week 4, yet the order was swapped in the sing-off.

      So overall, in 18/20 cases where the first to sing was eliminated, it was indeed the earlier to sing on the Saturday that was the victim.

      In that one case among the last 21 sing-offs when the second to sing was eliminated, Katie had sung before Treyc the day before, and went on to sing first in the showdown. This is perhaps another indication that saving her was a mistake or last-minute change of heart, though we will never know for sure.

    • Boki

      Hi fiveleaves, that would be the perfect explanation, is it possible nobody realized it?

      Just checked, week 7 of 2010, Cher 2nd, Paije 6th but reversed, Paije 1st in sing-off.
      Again week 4 2009, Rachel vs Lloyd.

      So it’s not always the case but few exceptions only.

  • bob

    In a way that makes it a bit more strange. If the rule is to stick to the singing order from the show, why change it on a couple of occasions when that’s not the act they want rid of?

    • Boki

      Maybe they didn’t expect the bottom 2 outcome in those few cases. Why they change the order and not simply eliminate 2nd one remains the mystery.

  • Chris

    The official reason for Paije singing first in the sing off was Cher was too overcome with nerves and tears and needed more time to pull herself together.

    Make of it what you will.

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