SIMON NOTT: When Algorithms Go Rogue

Amidst all the bookmaker fall-out of the Frankie four-timer at Ascot, what people didn’t expect was the decision by some firms to refuse some multiples on his mounts on Friday and Saturday.

Those included giants Bet365 and SkyBet which raised eyebrows even more. After all it was 23 years ago when Frankie last clobbered the on-course layers with his ‘Magnificent Seven’. If an army of punters had been backing his mounts blindly in multiples on a regular basis ever since – all losses must surely have been got back many times over?

Not taking bets on Frankie multiples on Friday was surely the biggest case of shutting the stable door after the horse has bolted ever in the history of the turf? Common sense would dictate that a minibus was sent around to pick up all Frankie punters to take them to the nearest betting shop to ensure they can all get on if they don’t bet on-line, not bluff them?

Worst of all, take away the eternal ‘one big win’ dream of the average recreational punter and they’d all desert the horses to bet on the football instead. Blimey, the game really is gone if the biggest bookies in the land are running scared of taking archetypal mug bets.

Well, that’s what a lot of people thought, me included. Then I got wind of what may really have prompted the ban on multiples.

Cash-Out

At this point in the blog we have to assume that everyone is aware of ‘Cash Out’, it’s where people that do a multiple can take the money and run after a couple of their selections oblige rather than let it ride for that life-changing win they always dreamed of.

Usually it’s set a figure very much in favour of the bookmaker, naturally. All that business is set by algorithms which make the offers to the punters based on their models with no human input which is excellent news when you have 10’s of thousands of customers.
That is, unless there’s a flaw in the system hitherto undetected.

I must point out that what I’m about to write is based on information received and assumptions based on it, not fact, but here goes.

Everything is ticking away nicely at Bookie HQ, it’s Royal Ascot and business has been brisk. The first race is won by 5/1 A’ali with Frankie Dettori up. It’s good news, the 13/8 jolly is beaten, happy days. That’s followed up with 13/2 shot Sangarius which beat the well-backed 7/2 favourite Fox Chairman.

Hang on a minute, that’s two for Dettori, but hey this is Royal Ascot no need to worry. That is until Star Catcher winning at 4/1 makes it three, that treble has added up to a nice few quid and there are still three to go. The traders decide it’s time to trim the prices of Frankie’s last three, even though almost everyone would be on BOG. Stradivarius makes it four, bugger, time to slash not trim, some more.

Deep in the computer systems the ‘Cash Out’ algorithm robots get to work, but in doing so they are taking into account the artificially reduced prices of the two yet to run. Punters start getting cash-out offers that they can’t refuse. The bet I have been told about, a £2.50 each-way accumulator at morning prices BOG, was offered and bagged an eye-watering cash-out of £37,000. His SP cop for that bet would be worth about £1200.

That’s just one bet, imagine the scenes in trading rooms when the out of control technology started firing out similar big money offers at punters who were rolling up. Pandemonium, possibly no way to stop it, panic stations already in gear with the potential roll-up on a five-timer an on-going situation too. It’s like a gambling Sci-Fi nightmare the robots are out of control.

Some on the trading floor must have been on the verge of a meltdown. I can’t imagine the scenes when Ian Bartlett screamed that Frankie was two lengths clear on Turgenev before the Gambling Gods intervened allowing 28/1 Biometric to collar him.

But it wasn’t over.

I can only guess how many punters placed bets and cashed out to inflated big money on wagers that were ultimately losers. If a human dealt with cash-out I reckon most £2.50 each-way accumulator punters would have happily snapped up the offer of a grand with the two hardest races to follow, call me cynical.

On Friday the £2.50 each-way punters that copped, punters that are never going to lose that back to the bookie in their lifetime of betting, must have been mad keen to go in again. The trouble was, those algorithms had to be re-written, I’m guessing that sort of thing takes time. The guess is that time wasn’t on the side of the layers. In the unlikely but eminently possible scenario of history repeating itself, well it didn’t bear thinking about. While the boffins got to work rejigging the robots the only way to eliminate the risk was to refuse the bets in the first place. So that’s what they did.

Is that how it was? It’s a guess.

Just imagine though had Frankie won on Turgenev, it doesn’t bear thinking about, all depending on what side of the cash-out you are on of course. It’s all guess-work.

Simon Nott


skintmobSimon Nott is author of:
Skint Mob! Tales from the Betting Ring

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