September 18th 2002 - issue 17

I got into the betting market on Big Brother towards the end; I think it was shortly before PJ was evicted. Going back to 11 th July I managed to place two decent bets which got me ahead of the game and gave me some paper profits to play with. Firstly, I had noticed that Kate's odds were tumbling, I backed her £100 at 4.3 on Betfair, and then sure enough half an hour later I was able to lay her off at 3.9, giving me a potential profit of £40. Round about the same time I had offered Alex at 2.2 on Sporting Options, and over the course of a day had £65 accepted at this price, despite the fact that I was able to back him at 2.9 on Betfair. Over the next couple of weeks between Sporting Options and Betfair I managed a few other arbitrages, and was lucky to predict market movements and had got myself into a pretty comfortable position.

Because of the need to get Issue 16 out I wasn't able to give this event as much attention as I would have liked, but I did nip in and out of mainly the two sites mentioned. Betfair was very active, with minimal spreads between backing and laying. Sporting Options was less competitive with greater spreads, however, I did find in times of fast moving markets on Betfair, I was able to snap up some great value at Sporting Options from people who had offered the bets earlier at a time when their odds weren't so generous. In the end I managed an overall profit of £125.

From a betting point of view the event became really interesting in the final week. On the Monday, half hour after the nightly highlights show the Betfair odds on Jade suddenly tumbled. In a market where the typical bet was about £100 a would be backer suddenly appeared wanting to place £4,000 on Jade. As a result of this the price quickly dropped from 16 to 9 in about 10 minutes. I don't know how much he matched of this, but as soon as he withdrew his money the price quickly returned to its previous levels. On the message board that night everyone was congratulating themselves for having taking this lunatics money off him, however the next day the market had settled down at around 8, suggesting that this person, whoever he was, had information that gave him an insight of where the true price should be.

On Wednesday, the following night, a similar thing happened with the odds going down from 8 to 6 and then recovering when the big money was withdrawn from the market. During the day on Thursday, once again the odds tumbled suggesting that this person either had a crystal ball, or he had access to information that the rest of the market was unaware of. During the last two days of the competition Jade's odds went as low as 3.0 making her the second favourite. I imagine that those bullish chatroom boys were starting to sweat by now, but they needn't have worried. In the event Jade came a poor fourth, registering just 1.4m votes compared with 3.1m for the winner, Kate.

She was nowhere near, so what on earth was that all about? Given her lack of votes, Jade can't ever have been remotely in the running, so this does not appear to have been a case of insider trading. So who was this Mr Big? Could he have just been a daft punter with more money than sense, or could there have been something else, even more interesting, going on?

A week later I received my copy of the Insider, the fortnightly publication written by Mr X, an anonymous odds compiler at one of the large bookmakers. The front page headline suggested a solution. "How a fake "inside plot" on TV's Big Brother stung over £10,000 from unwary punters at Betfair.com"

The article explained how a small group of punters manipulated the market on this event to make big profits. Due to the threat of people betting with insider knowledge the bookies restrict the size of bet they will accept on this sort of event. This meant that these punters were able to ring up the bookies asking for big money bets on Jade, in the certain knowledge that a maximum of only £50 would be accepted. With the phones ringing constantly with people wanting to stake large sums the bookies kept reducing their prices until they got down to 9.0 from a high of 26.0. Mr X reckons that they could have achieved this market movement for as little as £1,000. At this point the plotters moved onto Betfair, offering to accept large bets on Jade, which pushed the price down further. The betting public then saw what they thought was a betting coup going on and jumped on the bandwagon, forcing the price down further. With the price as low as 3.0 or 4.0, the plotters were able to lay Jade to recover their stakes from the bets placed at longer odds of up to 26.0 and then move into profit. Mr X calculates that they made just over £10,000. Clever stuff, I just hope you weren't one of their victims!