Even if it wasn’t a stupid accident, still Joe Peta could have a big success in baseball betting model and be a winning gambler. According to his memoirs, on January 2, 2011, Joe was crossing a street near his New York, Manhattan apartment and he didn’t see the approaching ambulance, nor did the ambulance’s driver. Then the accident happened and the former Wall Street trader was in the agony immediately. A month later after the accident, Joe returned Nomura Securities in a wheelchair and was fired after a week. Then he rediscovers the love of his life, the baseball game. Inspired by his father, and the statistics baseball Prospectus 2011, he began writing “Trading Bases” which details baseball numbers and turn them into a business plan. Years later, in the spring of 2019 he gave an interview podcast to Pinnacle sportsbook which we’ll display it here:
“BC: – Hello and welcome to the Pinnacle podcast brought to you by Pinnacle.com, the online bookmaker that offers you the best odds, the highest limits, and unique winners welcome policy. I’m your host Ben Cronin and I know we’ve kept you waiting a while but we’re now back with an extra special episode. Joining me today is a man whose work to move street, he’s built a successful baseball betting model and written a book about it and now he’s gone and done the same with golf, Joe Peta.
JP: – Good morning Ben. It’s a pleasure to be here. Thank you for having me on.
BC: – Yes. Thank you for joining us. Really looking forward to this one. Just to kind of get us going. I know you’ve kind of written a book which will we’ll probably talk about in a little bit more detail later on and you’ve actually written some stuff for Pinnacle as well, and for anyone that’s listening to, that hasn’t heard of you, can you just give us an intro into your background?
JP: – Absolutely right. I was a full-time financial professional on Wall Street here in America and I had worked here for about 15 years, and I had a very quantitative background. I was an accountant before I came to Wall Street, I was a practicing CPA doing tax work, I wanted to be involved in trading stocks and got myself up to Wall Street. And that was where I saw, you know I didn’t see any deviation from that. But I had an accident in New York City in 2011 that laid me up. I was actually in a wheelchair for a while and unable to get on a plane and reunite with my family. And while I was laid up I had an idea to write a book and the book was trading bases, and it really examined. The purpose of the book was really to examine the critical reasoning overlap between my profession of asset management, the money-ball-ization that had taken over baseball and sports betting. And those were three topics that you know if you knew me at that point in my life you knew that that book was a write what you know situation because those were really the three passions in my life. You know, from being a little kid it was baseball, and then you know as I became a professional it was being in the financial industry and if you’ve spent any time on trading desks from the financial industry you know that sports betting is a big deal. And obviously, that’s true even you know made even more true in the financial district in London. So those I tried to put all three of those together in a book in a very analytical way and sort of show how there was critical reasoning overlap between all three of those endeavors. And that was the book and the book still sells. To this day it’s six or seven years old and that you know that has sort of led to this hobby of still staying involved in media in the sports betting world. And then I followed that up I should say follow that up with a book on golf this last January that really focuses again it’s very data-driven and it focuses specifically on the Masters which is coming up in a couple of weeks.
BC: – I can certainly testify about trading basis, I’ve read it myself. I’ve had a role for you here for Pinnacle a little while ago, and this definitely feels like there’s something in there for everyone whether it’s someone who’s completely new to baseball and betting right through to anyone that kind of does it as a job is certainly an interesting read.
JP: – Thank you.
BC: – And with the banks and other things, with the betting side of things you obviously said there are the toys that with the financial industry and your profession at the time so were you before you really applied your knowledge from finance to betting when you were you betting at all before that?
JP: – Absolutely. And I try to make the distinction in the book, really in both books, between the difference for betting as entertainment, which I have done for decades maybe two decades … right? and really betting with the idea of compounding capital. A really betting as an investment. And that’s what I once I got into baseball betting I tried to put away the entertainment portion of the industry which is fought and I in no way looked down on that side of the business I’ve viewed that disposable income that that people get pleasure from by betting on a sporting event that they’re either watching or they’re emotionally invested in. I’m comparing that to no different thing than spending money at the movies or spending money on video games or it’s a direct competitor now spending money on fantasy sports. So that has always been a part of my life and that drove my fascination with sports betting the model building that came with baseball was a separate endeavor that I was going to let my financial industry my sort of asset management or asset allocation skills was going to drive that endeavor. And it’s the same sort of way I’m approaching that golf two is: hey let’s see if we can build a model and let’s see if there is, you know what, I would say in what I’m always referring to is let’s see if we can get our forecasting error smaller than the markets and then we’ll figure out if we can make money from it. But that’s sort of the two ways I’ve approached it but yes I’ve done it forever and if I hadn’t done it as a hobby I probably never would have picked it up as a model building exercise.
BC: – And it seems that kind of when you when you start getting serious about betting if you like when that first book came about and reflects on your experience obviously the sports baseball was that because the passion was there for the sport in itself or was it because when it comes to building a model perhaps that spool is easier to build a model around.
JP: – Yeah I think the latter there was the most important, the ability to model baseball outcomes is much easier than I think other sports because baseball is a team sport. Well, it’s actually an individual sport masquerading as a team event, because really in baseball what you have is about seventy one-on-one encounters between a picture and a batter. And those can be modeled very well. They’re not as dependent on other factors like football or soccer are or you know your football. In our American football obviously, there’s so much dependence on teammates and schemes and you know coaching strategy baseball it’s really not you know we use the same picture in the same batter. You can model their outcomes no matter where they’re you know what city they’re playing in what stadium they’re playing and who the other people are on the field. So that’s very attractive for model building. And then on top of that, there is more publicly available data on baseball dating back decades than there are for other sports. Other sports took a while to catch up with baseball. So that also made baseball attractive from a model building standpoint.
BC: – I mean is as great as the book is because of the underlining narrative there and the story of kind of what happened to you and how you dealt with it. It’s also appealing because you actually enjoyed some relative success with it with your betting endeavors. So, can you just kind of touch upon, perhaps how you beat the market and what you did to kind of actually turn a profit, while you were betting on baseball?
JP: – Sure. So the book is really a diary of the 2011 baseball season and it did help in my recovery. I had a massive leg injury from being run over by an ambulance on the streets of Manhattan. And so it did provide a therapeutic benefit to sort of getting up every day and sort of I felt like I was back at the trading desk, you know I had models to build and inputs to put it, and so did the 2011 season with really just me, I was betting only my own account. And at the same time, you know, sending emails to my similars (you know my buddies who had similar interests) I did after the book was completed. I handed it into the publisher and they came back to me that next spring and said we love it but we need an epilogue because the book’s not going to come out for another year until 2013. They said if we gave you the marketing budget for the book would you be willing to go to Las Vegas and betting on baseball games. We think that would be a great story for the book and we want it to be legal. So we are, you know, you look even though you’ll relocate to Vegas to do it. And I thought that was a great idea that they didn’t have to ask me twice. And so I was like if I’m going to go there I’d better call my friends and family because I know they’re going to want to invest too. So, in addition to going out there, I did raise about a million dollars for a sports betting fund and went to Las Vegas. And that was the epilogue for the book which was really my high season in 2012. The 2011 was more successful but 2011 was lucky, not in the sense that, you know, I was making up numbers, but lucky from the sense that I didn’t know. I had about a 40 % return on my capital and my ex was nowhere near that big. That wasn’t repeatable. And I knew that the next year it was in the low teens. And that’s what I thought was a realistic fund goal. Now at the same time when I wrote the epilogue, I tried to write it sort of as a business school case study. I certainly pointed out that those returns could not be replicated if you had a fund that was ten times as big because the market simply wasn’t big enough to take that much action. So it sort of examined the idea of running a sports fund. From that perspective as well as a sort of telling my experience of what happened
BC: – And to be honest that they’re above the size the fund could kind of limit the success of your endeavors did you find that the market gradually became more efficient and more adapted to the techniques that you were implementing?
JP: – You know that’s a great question, Ben. People used to say to me all the time “Why would you write this?” and I would tell them: “Because, it just as I pointed out, the market wasn’t big enough to run a fund”. I would never be a big seller. That’s not who I am. Again sort of with the Wall Street background that’s not how we do things here if you feel you are a superior investor you invest on other people’s behalf. You don’t sell your research. And as I pointed out and as we just talked about the market wasn’t big enough to truly like, leave my job to run a fund. So in that sense, I had no qualms about writing the book. I also didn’t think that what I was writing about there was no way I felt that there were going to be bookmakers out there who were like Joe. Joe is using picture are in a different way we better adjust our models that I just never thought that is a possibility, as I said the first book was about the 2011 season, then we are eight years ahead. And I do feel like the market has moved even more quantitative and there’s even less differences between professional models and what somewhat the bookmakers are using. And anybody new any new entrants in the market I can’t now I will say I would like to be able to put a number on that and say that the opening line and the closing line has a forecasting error smaller than it did in 2010 and 2011 and 2012. I don’t know that I only suspected but that would be the true way to measure at night if people in the markets have got more efficient there should be a smaller forecasting error in both the opening and or at least in the closing lines. And I don’t know if that’s true but I suspect it is.
BC: – I guess during this period over the 2011 season, you obviously had ample experience with regards to the financial markets. But would you say you kind of learned a lot of? What it’s like to be a professional bettor or someone that’s really in that growing and trying to make their living from betting on sports?
JP: – Well it is a grind that was a great point. My summer in Vegas in 2012 was a grind. Part of that part of the I won’t say unpleasant because that’s not really the right word but part of the toil of doing, I found a very unfriendly business in Las Vegas. The bricks and mortars of Las Vegas I compared to the financial industry and there were some things I would have liked to have seen change some. I have to a degree but it was in the biggest one was I was forced to carry around cash all summer because you couldn’t open an account like a brokerage account with online now or not online but with Mobile betting which has come to Nevada since 2012 that has you know that would be a lot better. Now you actually can deposit but it is a grind and nobody should think it’s not the one part that I think is stressful for people as well as the idea of betting other people’s money. If you are managing other people’s money that is stress if you know a lot of people don’t mind losing their own money they hate losing other people’s money. Now because I had a ton of experience in the financial industry trading my employer’s capital, trading my capital, trading other people’s capital didn’t bother me as much, but that is probably something else that can change behavior that you don’t expect it for somebody that might be going into it for the first time.
BC: – I guess just another element of added pressure to deal with, isn’t it?
JP: – Oh absolutely. Its financial behavior or behavioral finance as the study is very real and it is much easier to be a paper trader whether you’re trading stocks or EPL futures than it is to when you’re actually doing it. It can change your behavior stress, is a real thing.
BC: – Yeah. I mean one of the things that we kind of focus on at Pinnacle, that perhaps some people don’t pay attention to, is the psychological element of things to be interested to know from you obviously. There was a lot of data crunching and dealing with numbers. We’re also could look into things like behavioral biases that could influence the decision making.
JP: – Yeah, I tried to be very mechanical. You can really sort of taking that question two ways and say when you’re looking at the performance of athletes are things that can change their performance as well. And I think to both those questions whether it’s the better or the performer the answer is yes. I mean like I say stress is a real thing. The problem is measuring it. And the problem is always, you know, building a proper model because it’s easy afterward to say they weren’t motivated to play this game. But unless you have a model where you’ve identified hundreds of other situations where someone wasn’t equally motivated you don’t really have a model you’re still just stuck you’re still just guessing. And it’s sort of the same part of being a managing capital your own capital. There’s almost always some slippage that is attributable to some psychological weakness that most humans are prey to. It’s touting your model after it gets cold after it hits a cold streak it’s putting your fingers on the scale when you just can’t believe this is the output. So those are things that all professional bettors know they have to fight against.
BC: – Yeah, I think that’s a great way to think it is the word there is a kind of awareness, isn’t it? Make sure you have an understanding of these things exist, these things happen. You might be able to measure them but at least kind of accept that and understand that.
JP: – Yeah absolutely. I think that that’s absolutely right. The other part is, I think, what can give you confidence is really understanding your model as well and I think in the case that I am not a coder I can build a macro on excel when I open up the manuals and stuff like that, but sometimes I think that’s helpful because if you really have to dig in to building your model and you can’t just hit buttons and get output you really start to understand the inputs you understand sort of the sensitivity of different factors. And I think it can give you confidence when you do hit a cold streak that you kind of understand why as opposed to if you just have a black box and you’ve created some crazy you know 20 input model that can be at home with all these codependency things that you really don’t know you really don’t understand the soufflé that you’re making. I think that makes you even more susceptible to those psychological errors later on.
BC: – And I mean if we’ve probably got people listening to this that this following bet is that the people that work in to trying and try to make them money from betting on sports. If we’ve got any aspiring GOP is out there, what would be your words for the advice you’ve kind to learn a little the law and so forth?
JP: – That’d be the biggest one is really understanding your model and the inputs and understand it the other part is if you can reverse engineer the bookmaker’s line. If you understand which variables are making your model different from the bookmakers you’ve got an edge within you it’s not necessarily a winning edge but at least you’ve got an edge in terms of understanding your model. And I think that’s a huge element to ultimately building something that’s right. I don’t really like the word eggs but I like things smaller forecasting error. If you can build something that has a smaller forecasting error and understands why again I think that gives you gives you confidence and you can really point to when things are working or not working. A couple of factors that are making yours differ from the markets. And if you know what’s different then you can measure it. That’s the biggest key to building something that is specific to your industry.
BC: – You’re very kind of your own money management stake, your methods bankroll management call it what you want.
JP: – Absolutely and you guys write about that you have so much content on that. That’s important. And and I agree. I even tried contributing or did contribute a piece sort of on the on why I don’t like Kelly. And it’s because of my financial industry background and I tried to sort of take it from a reverse engineer standpoint of if you are managing money and me professionally and in the capital markets you need, you know we sort of having this idea of a riskless return. And a riskless return has a certain you know certain elements in terms of standard deviation and drawdowns etc. And the idea is that if you ever want to earn an excess return there’s going to have to be some dial that is going to beat you know you’re going to have to take more risk right. More risk equals higher return and therefore if you can create something in sports betting that has the same risk profile but a higher return now you know your model actually has an edge. And what I kind of was trying to show through reverse engineering it Kelly doesn’t really get you there. Kelly always results in too much risk, even fractional Kelly. I just didn’t express it really. I had so much trouble expressing that because I think the reason is just sort of the graph of Kelly is not correct whether it’s not linear or it’s too steep and I know I printed that that article and I got some pushback but a couple of years later I have seen somebody use that article and I’m not even sure if he writes for Pinnacle but I know he’s a European based. I think his name is Joseph B. He writes a lot about European football and you know he’s kind of reached the same conclusion in sort of a different way and I would say, yes that is something that aspiring betters should really take a look at their results and go back and say what would have been the proper staking to return say 8% which is what the markets typically return. You know what staking would have returned 8% and how much. And then let’s measure how much risk there was how much drawdown. How what was the standard deviation of returns. And if you find that you know it’s less than you know ultimately what you want to do is get your staking so that the risk is similar to the two financial markets investing with a higher return. And I’ve just found that Kelly doesn’t do that for me. Maybe it does for others but that’s something I would say that all you know better should explore as well. And I wouldn’t just blindly follow Kelly.
BC: – I think Joseph booked I’ll be sent there was a smile across his face because he seems to always get a shout out one way or another on the podcast. He is a Pinnacle contributor, and yes he has done some great stuff, but let’s kind of move on to the next phase of your betting career if you will see you now it seems heavily involved in golf, so that I think the obvious question to start with is why (you) move from baseball to golf?
JP: – Because the frontier is a lot more attractive there from a couple of perspectives one just from ads from an analytical from a discovery perspective just sort of the idea of knowledge for the sake of knowledge. You know baseball at this point we’re left on the edges trying to discover stuff that might be a little bit different. But in golf, it’s such a new frontier. And there are so few people that have written about it that I just feel like it’s a greenfield from both an education standpoint from an analytic discovery standpoint and then also from a betting standpoint. So all three of those I think come together I really think golf betting is the new frontier of growth. I hope it is for bookmakers. I see evidence that it is from a fantasy standpoint. So I hope I’m just sort of on the early waves of riding interest and in golf analytics and golf betting.
BC: – We are talking about using what’s already there. So, see you sign, you alluded to earlier about trading bases is things like using ERA in a different way is that the same you’re taking metrics that would golf where it’s like shorts game tee-to-green or greens in regulation whatever it might be you better taking the metrics that are already there and just utilizing them better than other people in the market.
JP: – Yeah. And you say you’ve got a couple of reasons on why that’s possible. For one thing, the golf metrics are only seven years old. And they’re also there hasn’t been a ton written about them. The golf metrics are really invented by a professor at Columbia University named Mark Brody and he’s a tremendous individual in terms of what he’s come up with, and I’ve gotten to have a number of discussions with him and he truly is about education as well. He wrote most of his writing now has approached strokes game from the concept of making both professional golfers and amateur golfers a better because that’s his passion. Now I tend to take a different angle and that I would rather dig into the data and think about it from a predictive standpoint. And from that lens, there is a lot to be done. I think in the community in the analytics community as far as golf discoveries. And I’d say Ben, my biggest sort of proof of that they think you know the easy evidence to look at that, is how much golf markets move from opening to close. And I’m not talking about futures. To me, the futures still sort of unbeatable from an investment standpoint because there’s just too much spread in them. There’s too much margin for the bookmaker but it’s head to head matchups between golfers that are priced essentially like any you know baseball line or any other major sport. And those markets move so much from you know they can move 40 cents often from opening to close which tells me that the opening lines are softer and that the bookmakers themselves don’t aren’t as firm in their models then and their projections as they are in other sports. So that’s why I definitely see an opportunity as well from a betting standpoint. And yes there are ways to use the data better. It’s from both announcers to other writers to people that play fantasy. I will see them quote numbers and they won’t be wrong. They’re not mistakes but they’re not being used, it may be in the right context, and so I’ve written about some of that. You know some I kind of leave to the reader to sort of doing the work on their own, but there’s definite and I take the most just the biggest is a strength of field adjustments. I think the first way that anybody compares golfers these days is to use the advanced strokes games and just say OK “What golfer has more strokes gained ground over the last three months or six months or nine months?” and again that’s something that people can differ on. But I can tell you if you’re just using that number it’s what it can be wildly misleading based on the strength of fields that each golfer different golfers faced in compiling their numbers because of course, no one plays exactly the same schedule.
BC: – And if we get to, I mean I guess the similarities are across to baseball as well with just the sheer number of variables that have to be considered is that something the weather is kind of the weather or the pin position or something about these things that you see is not an advantage to the better that can be used?
JP: – Yes. I think in the case of those you know when you talk about pin positions say from round to round or whether those would be variables I think that would go in to say some of the prop betting work where you might get it will do know will the winning score be under -6 today or you know will the field be under 71 one or over 70 or something like that, but the nice thing about strokes gained is if you use it correctly and if you adjust your numbers correctly you can make everything context neutral so that someone’s past performance is adjusted for different weather is that the different conditions that the field face etc. So, that’s another example of how there’s work to be done where there’s work that people are doing that just isn’t out there, that I think you can be big factors in your model. The other example, that I’ve really started to try to work on this year, is there are different surfaces in the US between the West Coast and the East Coast in terms of putting surfaces out. In the West, just because of the weather, we don’t freeze and and and unfreeze. The greens here are made of “Poa Annua” which is a bumpier grass and it survives year round and it blooms midday so it causes bumpy greens. As opposed to what now that the tour’s on the East Coast it tends to be “Bermuda grass” which is more like putting on a pool table. I think I’ve started to do now is try to tag all my results or all the golfers result by surfaces that they’re putting on and that’s something that people talk about but I’ve never seen anyone put numbers on it because it’s a lot of work to actually tag all this data. But if you do it, you know you’ve got something that other people built. So I’d say that would be another example of a condition that you can exploit or try to look at differently.
BC: – And then a machine will kind of go all this sample and more in the book, you’ve got Joe Peters tour guide presents the 2019 masters preview, watch him. When was this published?
JP: – That was published right at the beginning of February. It came out eight weeks before Masters week, so it sort of has a two-month shelf life. And the book really serves as one to introduce readers to strokes gained and at the same time one of the things I like doing as a writer is trying to entertain people and to sort of captivate them without them needing to use a calculator or open a spreadsheet to enjoy the book. So it starts out with just some stories that strokes gained reveals and I start obviously with the most popular golfer of the last 30 years, Tiger Woods, and sort of try to tell some stories about Tiger that you know we all knew Tiger was great. But the ad than with the invention of strokes gained has allowed us to tell that story in a different way. And I love doing that that kind of stuff just beyond the gambling and giving you know if I were writing an essay right now on the Masters rather than tell people who I think is going to win I’d rather sort of try to captivate them first by telling them I am going to try to convince you that Jim Furyk has a better master’s career than Nick Faldo. And on the surface that’s insane because Nick Faldo has won the tournament three times. But his achievements … he definitely has more achievement at Augusta than Jim Furyk. But if I look at every hole played every round every year I can stun some people in showing what data reveals and then, of course, you can always take that over to betting you know because my ultimate conclusion would be we may differ on that. But if we could hypothetically pick any round in Jim Furyk career and any round there in Nick Faldo career at the Masters, I’ll take Furyk and I’d know the price will be plus money and I’ll feel like I have the edge could I actually think he’s been better on that course than Nick Faldo has. And so, I hope he kind of surprise people when I do writing like that as well.
BC: – And kind of the intro into betting on particular sports for a lot of people tends to be those the fun of something first. Is this kind of something that someone might be listening to this and they’re like? I’ve never watched golf before. I’ve never really been into it. You’ve piqued my interest in the potential value that might be there in the market. Is it something that they’re going to still want to be entertained by, or is it just going to look for those hardcore numbers and as you said hopefully flick towards the end and you say who’s going to win?
JP: – I can give you two answers to that. One is just from a personal standpoint I was much more into baseball growing up. And in fact by years of playing baseball certainly inhibited me from ever being good at golf because I have a baseball swing and that is not necessarily conducive to hitting a golf ball well. So there was some interest for me in golf, but mostly it was data driven. Now, I have a couple of co-workers who have never played golf and have never bet on golf. And every sport even really aware you could and within the last six months, as I was writing the book, I was starting to give them my picks and and they are now huge golf fans to the point that on Wednesday they’re like I don’t understand why this tournament start Thursday we could start this on Wednesday, and they have comments on guys that are 50 60 deep in the PGA Tour and not just Rory McIlroy and Tiger Woods etc., so they’ve actually become fans of the PGA Tour. It’s true batting, and again I think that’s a great lesson for the professional sports leagues. I guess, I might sort of best made it work cannot wait for golf tournaments to start now, and never watch them six months ago.
BC: – I mean that tends to be kind of to two schools of thought if you like within the betting. Well, some people will say you can’t get emotionally attached to a sport being a fan for, it isn’t good, it just kind of clouds your judgment and things that. Others will then say you can’t be some expert knowledge or the ability to kind of just use initiative and spot things that potentially the numbers don’t. So, where do you kind of sit within that you need to be a fan of a sport to bet on it is an advantage?
JP: – I think you have to have some working knowledge of the sport either through participation or from being a fan for a long time because if you don’t like I said early in the podcast then you don’t understand your model and you’re never going to sort of get comfortable with the idea of is it cold or do I really understand the sport like if I’m betting on cricket I would have no idea whether to trust my model or not or whether I have confidence in it. So I think that helps the emotional attachment part two favorite teams etc., also goes to the behavioral finance weakness that we might all have, and you should try to guard against that. I think it’s somewhere in the middle and I’d say yeah I think it’s somewhere in the middle. You definitely want some knowledge but you want to be able to sever your ties to whatever team you’re emotionally involved with because if you’re really trying again it’s sort of betting as entertainment versus betting as an investment. If you’re really trying to bet as an investment then there has to be times that you are betting against your emotional interest because you both will just be time for your team is overvalued or its opponent is undervalued and that calls for a bet against your emotions and it can be tough.
BC: – So you’ve done baseball, you’ve done golf. Is there any other sport in the locker there that, you know the thing where can I work only with a fund the inefficiencies next?
JP: – I don’t . . . I Nothing comes to mind. I hope golf lasts for a couple of years, I hope. It really is a Greenfield of both writing and betting opportunities. And if it is the best thing will be if it becomes more popular. As if more people turned to it that will bring more capital into the market. And then maybe they get a little deeper. I mean of course though they’ll also get more sophisticated. So it’s a tradeoff as well. But right now, there’s no other. I’d say two years ago before I started in the golf I had this idea that I think there’s something there in golf. There’s nothing else right now that sort of what I see on the horizon.
BC: – Many people come to believe that money shapes markets and that’s why we often see with whether it’s the Super Bowl in the NFL or the World Cup in soccer. It’s a lot more difficult from certainty from a professional betting perspective to kind of find that edge. Would you say that when it comes down to the most is it’s gonna make your task or whoever’s betting on it a bit more difficult because there’s so much recreational money involved?
JP: – I feel no right now. I think it will get more difficult if more people enter the market, and if there’s a lot more money in the market during say the St. Jude Invitational in June then I think there’s some there will be so much more smart money that they’ll have to be an adjustment. I feel though right now I feel like the Masters just creates more opportunities like I don’t feel like the matchup bonds between the golfers are going to be any different than they have been in January through March. I just feel like I might be deeper with bigger limits and so I view that as a positive. It could be wrong, but we’ll see. One thing that has disappointed me, Ben, from all bookmakers perspective, is I understand in a typical tournament they don’t attract a lot of futures money across the board. They’re only getting it on a few golfers and that leaves the bookmaker in a vulnerable position. So I can at least somewhat sympathize with the large margin that exists in the futures market. For the Masters, it more annoys me, because I know they are getting action across two dozen golfers and yet the margin still stays huge and those futures market. So that’s the first step I’d like to see. I would like to see more money creating smaller margins and that way even if the money is smarter. At least it’s pretty, it’s creating a more efficient market. But so that could be something I see hopefully out you know a year or two out there.
BC: – And I know you see keen for people to go out and buy the book. I think you’ve done a great job of giving some insight into what they can expect from reading it, but can we give away one little perhaps jimmied advice or something for the upcoming Master that’s in the book that people should look out for?
JP: – Yeah, I think that there’s something specific to the Masters that I talk about in the book, and this is . . . I think this is new and this will be new to readers or to listeners. In all golf modeling or betting, there are certain inputs and one input, of course, is how well as a golfer play and people have different models in terms of how far they go back. Is it three months that you do is it a year is it 100 rounds etc. Then the other factor is what’s known as the course factor, how has a player played at this tournament the specific tournament over time because there’s this idea of “horses for courses” of course coming from horse racing where some horses run better on dirt and grass and vice versa. What is? I go into in the book and this is something that listener should be aware of. There is no course that the on tour on the PGA tour that has a bigger correlation in predicting past to present than the Masters or the is Augusta National. The course factor your history at Augusta has a bigger influence or is more correlated to what you’re going to do in the coming year than at any other course on tour. So you really want to take a close look at who has played well in the past at the Masters and who has played poorly. And if you have a golfer like Dustin Johnson who is unquestionably one of the greatest golfers in the world one of the most skilled and talented golfers who has never really played well at the Masters, to me you shouldn’t be betting on him too. . . this year . . . he’ll figure it out this year because if you get coarse history really matters that at Augusta. So I would say that’s sort of the one big insight from the book.
BC: – I’m just kind of interesting if he flips the other way you’ve got someone but Jordan Spieth who obviously has a great record at the Masters in any one full and go golf over the last kind of three months a year. I mean he’s really had a bit of a fall from grace. Would you then flip that and say although he’s only had a bit of a shock recently his previous form at the Masters is great, so kind of take that into account?
JP: – Yeah. That absolutely. Jordan Spieth is probably the most interesting or polarizing person golfer that you could choose from a model perspective. Because his course history at Augusta is superior to every other golfer who has ever played the course over at least five years. And I do touch on that in the book and that includes Tiger Woods and Phil Mickelson who have sparkling histories as well. And what we’re really talking about is not just playing well at Augusta because obviously those are all great golfers but raising their game at Augusta above their baseline performance and Jordan Spieth has performed above his baseline. I can say at the Masters more than any other player historically. Now, obviously you alluded to it as well his baseline has never been lower. Entering the event that it is this year, so do I expect him to perform better at the Masters than he has the last six months that he’s displayed the last six months? Yes I do. But he’s starting at such a low point I don’t think that makes him a threat to win. So where do I come out in the book. I actually have him ranked 10th and there is a note on a neutral surface on of course they’ve never played before . . . I think Jordan Spieth is . . . I mean he’s dropping fast to the point that you know we see him as an underdog. The guys that are ranked fiftieth in the world and I would say properly, but at Augusta I will certainly raise my expectations to him above his current level . . . but his current level is so low that I can’t put him into the contenders as really having the ceiling to win.
BC: – I think there’s whether it’s go whether it’s baseball. I think there’s so many lessons that can be learned from reading either of your books and anyone that’s kind of listen to this podcast. I’m sure is eager to hear more from you. I’d love to know a lot of the time and I think we did early. We can’t just say what is it that is should be doing to improve performance. Is there anything that you think is common across the betting audience that they really shouldn’t be doing … as almost has a damaging effect on performance that people might not realize?
JP: – It almost always comes down to bankroll management and I think the sort of the proof of that is I have to sort of say to someone just straight up how were your picks over the last month you know and they’ll say something like . . . wow . . . you know I was 19 winners 22 losers but I’m down 15 units and right there that kind of will tell the story. So I think its biggest thing is improving or really being aware of your bankroll management because I tend to find that most bettors vary their betting based on if they’re hot or cold and that’s not the right time to vary or not. That’s not the right factor to use and whether you should be increasing or decreasing your state size it should be whether you think you have a bigger quote unquote edge per game. So I think that’s sort of the biggest difference is I see people that do get on hot streaks and they don’t have enough capital to show for it at the end because they assumed it was never going to end and they were betting double or triple on the eighth game of history compared to what they did when they started. So I think it’s if you can take a real sober look at your capital management, you can just improve your returns whether it’s lowering your losses or you know increasing your wins just through better capital management.
BC: – Yeah, I guess the hope is that that kind of people take on board these educational messages say they listen to words his voice and to know that the betting audience becomes more sophisticated in terms of the betting industry as a whole, where do you kind to see the future developing what you think it has in store?
JP: – It’s a great question and I spent the last couple years actually trying to enter the industry from the counter side of the business in terms of buying an existing bricks and mortar and getting together investors to buy bricks and mortar licensee in Nevada. And this was prior to the overturning of the Supreme Court thing because I kind of saw that as a massive growth possibility as well. But I do think there are some innovations that the business can take that is going to ultimately increase handle. And one, I think that they need to view themselves a little bit more as being in the entertainment business in the sense of what they’re competing for what marginal dollar they’re competing for, and to that end, they should be thinking of creating or inventing games or new betting methods that will increase interest. So there’s not too much fantasy money that’s siphoned away from this industry. So I think I’d like to see a little more creativity from the industry in terms of new offerings. I don’t think there’s been really any product offering innovations over the last two decades that have matched say some of the innovations of whether it’s an online book or amobile apps I think the user experience can still improve from that standpoint and then ultimately I do think and I think a lot of people feel this way. 10 years down the road there will be at least some sort of peer to peer offerings that are more common in terms of so that the bookmaker is collecting rent much as opposed to sort of being at risk versus the player. And I always compare that to casinos and I always point out to people that the casino does not play poker against poker players. They barely collect rent to facilitate other poker players being face to face at a table. And I do think that ultimately we will see some sort of movement in that direction in the industry as well.
BC: – Well, I guess we’ll just have to wait and see won’t we? I just want to say Joe thanks for coming on, I mean it’s really appreciate it and I’m sure everyone that’s listening in as it’s kind of been writing away scrubbing away some notes for the upcoming Masters but this year inside so it kind of goes far beyond that, so I mean it’s surely been really useful for the business.
JP: – That I love being on with you and Pinnacle. Pinnacle does more to help the industry from both a reputational standpoint and an educational standpoint than anyone else out there. So it’s obvious it’s a pleasure to be on with you.
BC: – Yeah we’re trying our best. And if anyone wants to buy Joe’s book it’s J.P. is two guys present a two thousand nineteen most-est preview and Joe machining it’s Amazon and elsewhere.
JP: – It’s just on Amazon this book because it only had a two-month shelf life. It’s available on Amazon in both digital and paperback format.
BC: – Thanks, Joe. And the Masters is fast approaching. So anyone who’s thinking about betting on the event I suggest you move quickly and snap up Joe’s book. As always there’s more information on all the topics we’ve covered today on Pinnacle’s betting resources and at Pinnacle Sports on Twitter. We’ll be back with another podcast soon. But until then . . . Bye