In a world where £50m can be staked on a single IPL game, whole armies of professional cricket traders work the betting markets for profit. But who are these people?
Vithushan Ehantharajah20-Sep-2014My fascination with cricket trading came from a chance discovery of a rowdy group of traders on Twitter. You probably know them, too; a boisterous bunch who tweet each other almost exclusively in acronyms and the odd “lay”.It was one person in particular – Charlie – who I would have my first interaction with. It was hardly warm, as he’d strongly objected to a point I’d made in something I’d written, but it eventuated into us exchanging emails and eventually meeting up at Lord’s during Middlesex’s Championship match with Nottinghamshire. By this point, I had noted the “trader” in his bio.We meet in the Compton Stand. He’s with two friends, Sonny and Boh. They launch immediately into betting chat. They ask my opinion on England, KP’s sacking and everything else in between. I go through the usual, before turning the conversation onto them and what they do. I can’t quite get my head around it.Sonny, Charlie and Boh are cricket traders. Much like trading stock and bonds, they work to negotiate a fluctuating market. However, unlike traditional gambling models, they operate on the Betfair exchange, in which punters’ bets are matched against one another, rather than with a traditional bookmaker.As a result, individuals bet on and against (or “lay”) individuals, teams or results. While in a traditional bet, it is the bookmaker that is the “layer”, here another punter takes up that responsibility. For example, if you are putting £5 on a 2/1 bet, they are providing the £10 that you stand to win. If you lose the bet, they take your £5.Despite my intrigue, talking about betting so openly, at Lord’s, a hundred yards away from the ECB offices, fills me with guilt. Ridiculously, I speak quieter, looking over my shoulder intermittently. I don’t know what I’m looking for – an anti-corruption agent? Giles Clarke reading a newspaper with eye-holes cut out? “Cricket” and “betting” in the same discourse elicits feelings of wrongdoing.I have bet on sport before, but with handfuls of loose change, hunches and sporting ignorance. “So and so always scores against us”, “He’s due a big knock” and “That horse has a funny name”, was as analytical as it got.”Oh God, you’re not one of those are you?” sighs Boh. I am. I explain away my method with a ham-fisted monologue about my appreciation of sport.”And how much does that win you?!” Boh laughs. A few moments later, Boh and Charlie tell me success does not need to come at the expense of emotion.I quiz them on their world, as Middlesex march on to a first innings lead. I learn more when my questions stop and take in their general conversation, occasionally probing them for explanations on the “LOB” (last over bonus), GSM (game set and match – often tweeted when a bet is due to come in) and other idioms they throw back and forth.Each man has their own source of income, whether that’s betting on the winner of the match, the highest run scorer, innings totals or even completed matches. With the IPL a week away, thoughts turn to prospective earnings.Boh says he’s staying away from the IPL, though cedes he could get drawn into making some moves (he inevitably does). Charlie is all in, though maligns the move to just one game a day, halving his daily takings and, in essence, doubling the amount of time he has to put in.Sonny tells me about a previous IPL that gleamed £27,000 for a friend of theirs. Actually, luck doesn’t do it justice. But the ambivalence of all three to those five figures really strikes me.”Yeah, of course, it’s a good haul,” says Boh, “but you have those moments. We all have.”
****
On the eve of the Lord’s Test against India, I’m invited out for a few drinks with Sonny, Charlie, Boh and the rest of the traders.It has been almost two years since Sonny moved into cricket trading from his online poker lifestyle. And, seriously, it was a lifestyle; and that’s not just including the lavish bonuses that come with being a betting firm’s big player.Today, with cricket as his biggest love and money earner, he has been up since 4am for day one of the first Test between Sri Lanka and South Africa at Galle, for one purpose: “To hammer the draw.”In Sonny’s two years, he has noticed a quirk whereby an inordinate amount of money is put on the draw during the tea interval. It is a phenomenon he cannot explain, but one he has learned to exploit.Before it kicks in, Sonny backs the draw and then lays it off (betting against his original bet) with smaller chunks of money, once the market has taken it artificially short and provided him with better odds for the second bet. Thereby, he rids himself of any liability, and often ends up at a stage where he stands to win money whether the game ends in a draw or not. He shows me his book for Sri Lanka-South Africa. As it stands, each result nets him £750.After a beer, we move on to Riley’s to meet Boh and another friend, Lysagth, who has been trading since leaving secondary school.At 17, having complained of back pain after playing football, Lysagth was diagnosed with Kyphoscoliosis – an abnormal curvature of the spine, which weakens the spinal muscles and can cause serious heart and lung problems.He received an operation that unfortunately did not go as planned and subsequently required extra treatment. In that time he was stuck at home with little to do and decided to use that time to research and learn about trading. Using forums and then Twitter to liaise with and learn from professional gamblers, he embraced it as his primary source of income.
In T20s, the market fluctuates so much with every six and wicket that the ability to work with figures that update every 0.5 seconds is an important edge
Eventually, we sit down to dinner in the back room of a plush Indian restaurant. Inside the room now are 15 traders with a combined accumulation of millions in the past year.The majority of those present know each other through the Betfair Forum. At its height, it was place for discussion. Posts were informative, responses crass or appreciative – sometimes both – and, much like any internet discourse, had the intellectual musk of drunks round a table. None of that is lost here, in this flesh and blood animation of the piece.Nothing sums up their dynamic better than the thread for the infamous Lou Vincent match, when Sussex played Kent in 2011. In-play, questions were asked and allegations made, through a combination of game awareness and an appreciation of how a market usually reacts to certain passages of play.Eventually, the community migrated from the forum and onto Twitter, as threads became a wasteland for users to scream, “FIX!” and post death threats for players when things didn’t go their way.The conversation flows, and my interruptions to ask mundane questions are greeted with openness and clarifications. Slowly, I’m piecing together their world.
****
Charlie meets me halfway between his flat and Vauxhall station. It’s been almost three months since we first met but now, finally, we have been able to schedule some time for me to shadow him while he trades.His room has a very IKEA-ish student feel. This is where he works, with a three-screen set-up of a plasma TV, his trading laptop and another laptop that has a spreadsheet open.This particular spreadsheet is exclusively for ‘Bookie bet’ – that is, bets offered by the bookies with fixed odds rather than on the exchange. On others, he has his monthly figures from trading, with another sheet showing the composite of both fixed and trading winnings. While the last week has been modest, the month of July has been good to him.The middle screen is where his bets are placed. All in all, he has accounts with nine different companies, enabling him to access the best odds available to him for his respective fixed-odds dealings.Charlie’s story is the one I relate to the most. After dabbling with a bit of betting at school, with pocket money and an account his mother had started up for him in her name, he took it a bit more seriously at university, but not enough to turn a profit.”I’d say I was about five or six hundred down in my three years,” he recalls. But in that time he was a frequenter of the Betfair forum and was slowly starting to learn more about the craft. He would soon fall into it through circumstance.Upon graduating with little idea of a career path, he took up an internship in London that he dropped out of when his mother fell ill. Returning home to look after her, and with pockets of time to himself, he began trading a bit more.”I realised then that I needed to get a bit more of a bankroll,” he says. “I ended up working a few standard telesales jobs in the summer, selling car insurance over the phone, and trading on the games in the evening, as the 40-over and T20 games started later in the day.”Eventually, in October 2010, I quit my last temp job and have been able to bankroll and make money from trading ever since.”Charlie’s stability is evident, from his subdued, calm demeanour, to the reams of notes and extensive bookkeeping. He has a variety of notebooks that hold scribblings of the last few matches at certain grounds, documenting pitch conditions, which way the wind blows (particularly useful for T20s) and other recurring quirks at the venue. Such diligence is a necessity in this profession.
****
Soon, it’s time for the last NatWest T20 Blast quarter-final between Nottinghamshire and Hampshire at Trent Bridge, and Charlie fires up a vital part of any Twenty20 trader’s armoury – an application called ‘Geeks Toy’.The language of lucre
Betting Exchange
A betting exchange, such as Betfair, is an online marketplace for punters to bet against themselves on sporting and cultural events around the world. Customers bet against each other, not against Betfair – there is no bookmaker telling you what odds you have to take. The betting exchange works impartially, holding the money until the event is completed.
Fixed odds
For any betting opportunity, also referred to as a ‘market’, a bookmaker will make a contract with a bettor at a fixed rate of return for a fixed amount risked, which makes it easy to calculate how much will be lost should the bet fail and how much will be won if the wager is successful.
‘Backing’
Betting on a specified event to take place. If you put on £10 on 5.0 odds that Gary Ballance will finish top run-scorer in a series, you stand to win £50 – a profit of £40 as well as receiving your initial stake of £10 back.
‘Laying’
This is the opposite of backing – instead of betting on something happening, you’re betting on it not happening. In every bet, there is a backer and a layer. Traditionally, the layer is the bookmaker in a traditional bet. On the Betfair exchange, it is another punter instead. For example, if you are offered lay odds of 1.38, putting on £38 will get you back £100.
Trade
A trade is simply a way of hedging that bet while the match is happening. This could be to ensure a profit by the end of the match or to limit losses if the trader feels like his bet won’t go his way.
Just like in a stock market trade you are looking to buy high and sell low. Or in betting speak, “back high” and “lay low”.
Imagine we think England are going to cause trouble with the new ball early on in an ODI. In this example we back England at 2.00 – odds of 2.0 equate to ‘evens’ in traditional betting. They take a few wickets and the price is now 1.60. But the change bowlers are about to come on, the new ball is swinging less and we expect things to become easier for the batting team. We therefore want to reduce our stake for England to win.
Let’s say we’d backed the 2.00 for £1,000. Our betting screen would look like this:
England +£1,000
India £1,000
Of course now the odds for England after the early wickets are 1.60. In order to ‘trade out’ we need to first reduce our ‘risk’ on India as currently we are risking £1,000 if they win the match. To do this we need to lay England (bet that England will not win). In order to remove the risk on India we need to lay England for a £1,000 win. Given the odds are 1.60, this will cost us £600.
Our new book will be:
England +£400
India £0
Technically, we have traded out of the market at this point. We have no risk, just a risk free opportunity to make £400 if England were to win.
Green up
Let’s level this up though, or in trader speak, “green up”. By laying England a little more (or essentially backing India) we can ensure equal profit on both outcomes. By laying England at 1.60 for a further £250 we can actually ensure that no matter the result (barring a tie) we make a level profit of £250.
England +£250
India +£250
Commonly, taking a profit is greening up, and taking a loss is redding out.
Betfair traders have the advantage of various software packages that allow them to take a level profit/loss with one simple click rather than working the maths out for themselves. Geeks Toy is the most popular application.
Widely considered the most popular and reliable trading software, Geeks Toy provides a no frills ladder of in-play Betfair Exchange prices in real time and allows the user to place, amend and cancel bets with just a single click. In T20s, the market fluctuates so much with every six and wicket that the ability to work with figures that update every 0.5 seconds is an important edge. After a few seconds the market usually corrects itself, so it is important to take advantage of the dips and spikes that take place after a key event.To the untrained, it is a mass of digits lacking context. However, from changes alone, Charlie is able to tell whether a wicket has fallen or a boundary has scored just by the fluctuations. He can even tell if the ball has gone in the air and been dropped; snipers jumping the gun, causing the market to shift expecting a maximum or a wicket, only to resettle when neither comes to pass.Charlie is very much a T20 specialist and very rarely takes up a position in the first half of a match. His knowledge of players, from the reserves of St Lucia, to the front line of Kolkata is extensive, as is his pragmatism.Even in a fast moving game, as the odds go crazy with every boundary, as Nottinghamshire post 197-2. I decide not to ask too many questions for the first game, sitting back and watching him plump for a Notts win on the basis that Hampshire do not have the firepower and the hosts, with Harry Gurney and Luke Fletcher, possessing the best death bowlers in the country. However, a 93 from James Vince, who is dropped early by Alex Hales, and uncharacteristic waywardness from Gurney hands Hampshire the victory and Charlie a loss.The switchover to the CPL is instantaneous. Jamaica versus Barbados gets underway as Charlie starts talking me through his process.”You always work on the side of the winner, whether that’s betting on them or laying them. That is where the money is traded.” To get things running, he puts £1,800 on Jamaica to win, at odds of 1.58 (thereby earning him a profit of £1,044, along the return of his £1,800 stake).At the innings break, he then lays Barbados at 1.68 with around £2,000, making his liability for the bet £1,360. Added to his original stake, his total liability stands at £3,360, with a Jamaica win earning him a profit of £3,044. Throughout the second innings, as Barbados lose wickets and Jamaica’s odds to win shorten, their lay odds are such that he can put smaller amounts on the lay, which eat away at his deficit on Barbados’ side.By the end of the match, he has completely removed his liability on Barbados, finishing with a profit of around £800 as Jamaica win by 19 runs.Were it not for a cameo of 81 from Shoji Malik, he would have ended up with more, but without wanting to leave anything to chance, he ensured he would still be in small profit if Barbados came through.I’m slightly bemused, but Charlie has guided me through with grace, offering his own opinions on players while ploughing four big ones into the market with just two clicks. He then points towards a small box at the top of his screen, which has totalled the amount of money matched for this one game. The mark is £16,000,000. “In the IPL, that figure can be close to £50m.”
****
One thing that really struck me over the last few months has been the generosity of traders. Those with access to reliable weather satellites are quick to offer updates if it looks like the clouds are rolling in, before those with Duckworth-Lewis calculators do their bit. Naturally, those in the know get their business done before the information is offered out.One person regarded as something of an oracle is Wallace. From the beginning, his name continually cropped up as ‘The Man’ to speak to. My first meeting with him was at the traders’ dinner in London, and on the way to the restaurant, Sonny and Lysagth had been keen for as much face time with him as possible. “I know it’s social, but I’d love to be able to corner him and just pick his brain,” said Sonny, as our cab pulled up. Even Boh, so much his own man, ceded the floor. “In terms of money I put up and win, he’s got me beat.”One story I kept hearing, possibly apocryphal, summed up the level on which Wallace is operating.During the England-Sri Lanka Test at Galle in 2007, he supposedly liaised with a driver he regularly uses when in the area and got him to drive in the direction towards where a pocket of bad weather was supposedly coming from. Once he hit the weather, the driver called back with the extent of it, whether it would head to the ground and how far out he was. This information was then spread among other traders, who took up strong positions on the draw, the odds of which were high, with England following on having been skittled for 81 in their first innings, after Sri Lanka had posted 499 in theirs.It turns out that this was in fact true. However it was not Wallace, but a good friend of his.I get the opportunity to join him for lunch the day before the final Test at the Oval. At the lunch are Charlie, Mort (who I also met at the dinner in London) and Grundy who, like Sonny, has a poker background and also trades on the golf.The stakes Wallace, Mort and Grundy trade are so vast that the premium charge is the least of their worries. “The perception of trading annoys me,” he says. “People who don’t know about it think we’re involved in fixing. If they don’t, they feel that we are contributing to the problem. Anyone who thinks traders benefit from corruption or want a corrupt game has very little idea of what trading actually entails.”Earlier this year, Wallace helped the ECB’s Anti-Corruption Unit collate data and evidence that would go on to be used in their case against Lou Vincent. Working with forensic investigators, he provided them with analysis on the market during the infamous match at Hove, most notably how it did not react and held Kent as favorites, despite Sussex getting their chase off to a quick start (they were 76-0 at the beginning of the eleventh over, chasing 216).”A friend of mine was approached by the ECB first and then I was called in to offer some expertise. I was more than happy to help – I’m a fan first.”
****
At first, I had no intention of trying my hand at this trading lark. For starters, a freelance cricket writer’s pay packet doesn’t lend itself to frivolity. And that was how I saw this all, up until the last month.
“You always work on the side of the winner, whether that’s betting on them or laying them. That is where the money is traded.”
After getting a Betfair account and watching how the odds fluctuate alongside the match pictures, I started to put together some of the various bits of information I had garnered from the professionals. As an ECB accredited journalist, you are only allowed to bet on matches you are not attending. This left me with Tests, the odd NatWest T20 Blast game and the Caribbean Premier League.I work with my relatively modest sums to engineer positions where, regardless of the result, I am due profit. This works easiest in Test matches where, given the length of the game, the odds for all three results – in this case England, India or a draw – fluctuate to such an extent that I am able to put bets on at the right time that more than covers my losses. They call this “greening up”. Given the sums I’m fronting up and the profit I’m happy to take, “micro-trading” is a more apt term.With that tactic, I end up going through a decent streak where any losses were around the £20 mark, and wins were three figures. And then it happened.Sonny had warned me about it, just after he informed me that it is all about “losing small, winning big.””You will get to a stage where you start chasing the big scores. What happens then is that you’ll find yourself holding your position in a market for too long and leave yourself exposed. You’ll be so focused on the big number that you’ll forget the fact that we’re dealing with such an unpredictable game.”Searching for my first four-figure win, I lose £177, £237 and a galling £478 (more than any profit I’ve made). Over the 30 days, I’m up £4,372.84, but those losses are sickening.I only have myself to blame. Greed took over and, with that, a loss of respect that I’m working in a market where I am a mere novice in a sea of predators jumping to match my money and take advantage of my idleness.Therein lies the catch. As in poker, if you want the bigger pots, you’ve got to play the best players. However, unlike poker, the best and biggest players roam free, waiting for your miscalculations and their skilled trading techniques to reap them their five-figure rewards.”When we started, it was all fairly new and if you had a solid cricket grounding and a brain, the money was there to be made,” Mort had said at the lunch. “Now, the market intelligence has risen to recognise the value in every ball, whatever happens. It’s much harder to make money now than it was back then,” he says, looking to Wallace and the others, who nod along in agreement.As ever, they judged their entry point into the market perfectly. Who knows if they will ever come out?