Risk of ruin calculations

[pythonic]

Yeah, thats my thought .. but how do u quantify it.

If he lays them to lose $50k, I couldnt really argue .. thou, its prob on the high side.

I imagine $20k, would be right .. like 10x,less what hes doing.

20k exposure looks ok according to Kelly. That is, IF you assume that his counterpart has no edge against the BF starting price and IF you also assume that his counterpart is playing completely fair. Two big IFs! And that also assumes that he scales down if he has a loosing streak.
Anything more than 50k is way too risky.

[Euler]

Thx, but I have v basic excel skills, and just copying the link, gives this error.

This should work

=ROUND(LN(555)/-LN(1-0.5),0)

[Kafkaesque]

How come a 'world class' poker player has to ask about risk management? That should be his bread and butter unless his two wins were fortunate.

The two aren't mutually exclusive. I know a few very high level poker players falling into two categories.
1) Those with an intuitive understanding of RoR without quantifying it.
2) Those without an understanding and going bust every few years, only to build a bankroll again and again.

I completely agree that risk management is essential to maximise the results of the work and net worth, but not using it - whether at all or not ideally - doesn't as such have anything to do with being world class.

So, I have a friend, who is a world class poker player.

Hes just won 2 x $100k events, so his bank is now .. lets say $500k.

He has formed an aquaintance with a betting syndicate, who are placing large multi type bets, at Bet365 prices, on quality leagues, every day.

The syndicate want massive bets, and hes taken to laying them $200k liability, for a 7-9 fold multi.

soccer multi.jpg

The edge on the acca, is small .. maybe 3-4%.

How likely is he to go bust ?

Thx

I would like to be able to show him some maths to work out what his liability should be .. but, yeah, can see it seems wrong.

My initial take is that you're going about it the wrong way around. If he's taken that sort of liability without much thought, he'll go bust through this scheme or poker soon enough no matter what, and will have to build again. It wouldn't matter what you calcs show to him imho, because you're just showing him what he already deep down knows is the case, without listening to it.

If you want to help, the way to do so is if you can get him to consider, how much it means to him to have a bank of 500k right now. How important is that bank (or the income it degenerates) to his current lifestyle? How important is it to him, on a non-monetary level, to be able to play poker at the $-entry levels, he's able to right now? Does he have funds set aside to live without poker income if he has to build again? Does he have enough of a reputation and contacts in the community to get a good staking deal to help that process?

Once he's looked at those things - hopefully honestly - he can try to quantify how much risk, he's willing to take on board, ie. risk of going (bankroll) broke in the next 3, 6, 12, 24 months. At that point he should really be able to find and do the calcs himself with RoR and Kelly without having you ask on a forum, if he's world class at anything

[ShaunWhite]

Fair point Kafka, I accept it.

And very wise words about this being more than a question of mathematics. Bottom line should always be 'sht happens, so how will you feel when it does'

Mega, the other thing that springs to mind is who's placing the bets and why they want him to lay them. If they're shrewd and successful perhaps nobody else will touch them, or are they mugs and your friend has got lucky.

"Successful syndicate cosies up to a young guy who's just won 6 figures" does sound like a recipe for disaster.

[megarain]

Many thx for the very thoughtful replies.

There are definately more levels to this .. and I may just have to see him in person, to get to the bottom of it.

Unfortunately, he doesn't live round the corner.

Hes not a degenerate. He has had more accounts closed than u would think possible - targeting his sports betting expertise - which makes
the whole thing, even more puzzling.

On another channel, I was referred to this link, for calculating kelly for independent simultaneous events. I need to get my head
around the right numbers to put in the boxes.

https://www.sportsbookreview.com/picks/ ... alculator/

[pythonic]

If I understand you right, then it is an accumulator, so you just have to multiply the implied probabilities of the individual events to get the implied p. for the acca. He is laying this, so his implied p. is 1 - p and you can use the normal Kelly formula.
Get him to read about bankroll management, if he is a professional poker player then he should be able to understand it.
His sports betting experience is probably in arbing, where bankroll management is not that important. But this is straight betting where losing streaks are bound to happen. And if you keep betting 50% of your bankroll on individual bets then you will wipe out your bankroll eventually. Maybe he feels unsinkable at the moment because he has won half a million in two high stake poker turnaments, but if his bankroll is wiped out in this gamble then he will be sad.

[Derek27]

It's quite hard for me to understand, but I used to have a housemate who was hopeless at maths, needed me to work out the bills between three people, yet he was one of the whiz-kids that wrote quality arcade games for home computers in the 1980s!

[megarain]

Update:

IMHO, he is getting fucked over.

He is led to believe its a money-laundering operation .. they pay in cash, but want cheques for winnings .. but, thats just a front so they can get on.

The guy is an idiot .. hes laying his life on the line, for games which only sometimes trade 2k on Betfair.

It wont end well.

Here is tonites marked card :

soccer day 2.jpg

[pythonic]

Oh dear...

He is led to believe its a money-laundering operation ..

If that doesn't raise a red flag than what else will...

The guy is an idiot .. hes laying his life on the line, for games which only sometimes trade 2k on Betfair.

It wont end well.

Here is tonites marked card :

soccer day 2.jpg

Wow, insane.

[Derek27]

So, I have a friend, who is a world class poker player.

Hes just won 2 x $100k events, so his bank is now .. lets say $500k.

They're not Venezuelan dollars are they?

You wouldn't think somebody with $200K would need to get into money laundering unless that's how he obtained the money in the first place, and his only means of income.

[northbound]

He is led to believe its a money-laundering operation ..

I wouldn’t get involved with money launderers but, as a thinking excersise, this would probably be the way to go:

- Add a 15% premium to the accas, for example if B365 odds are 20.00, offer them 17.00. Even better, talk them into betting singles, so you can hedge on Betfair

- Get a device where you can scan each banknote they give you, to prevent accepting fakes

- With a bank of 500k, don’t risk more than 50k on a single acca.

- When it’s time to pay a winning acca, convert money into bitcoin and pay them that way.

[megarain]

Thx for replies.

Gamblers generally distrust everyone .. I know my basic default is that everyone is trying to get +EV on me, and its my job to deny it,
unless proved otherwise.

Its easy to get paranoid, but, much like card-counters, at some point the money has to get out there - and if the deck is v positive they are counting.

In this case, if the bets generally beat SP, its not business u want - especially in the size etc.

Last night, there was a 8-10% ROR for the guy .. he survived, and won 30k, but had lost 40k, the night before.

He was involved in a high stakes poker tourny during all this, which extends into the weekend. No doubt he will sleep late (as these things go on till 1am etc), but will try talk some sense into him later.

He has all the slips for the last 45 days .. he can send them to me, and I could check all the prices taken, to SP, if I can find a site etc which records it.

That will be definitive proof.

[LeTiss]

This all sounds very murky. I'd be running to the hills to escape these people

[megarain]

Todays entertainment.

Doesnt look so bad, its just about the volume.

soccer 6 oct.jpg