Are Tipsters Value for Money?
Posted 5th September 2013
In June I reviewed the performance of 42 tipping service records which Sports-Tipsters had analaysed over the preceding year. An obvious question to ask next is whether they are actually offering any value for money. Usually the more we pay for a product the better we can expect that product to be. Thus for an advisory service, the more it charges, the better its tips should be. Sadly, it appears this is not the case.
On a case by case basis answering the question of whether a tipster is offering value for money should be fairly straightforward: if we're not making a reasonable net profit after taking into account the subscription fees then we should probably be considering another service. With data for nearly 250 services from ther period 2001 to 2012, however, my book "The Truth About Sports Tipsters" attempted to examine more critically whether paid tips in general performed better than free ones, and whether paying more for them guaranteed a bigger profit over turnover. For some services it should be recognised that there was no monthly fee, for example for pay per tip or pay per profit services. For these, a figure had to be estimated based on the actual record of tips. Furthermore, no account was taken of any profit guarantee offers where a following month's subscription might be discounted or waived altogether after a month of losses. Despite these shortcomings, this exercise nevertheless does provide a useful generalisation.
The first table below compares the performance as measured by yield for different monthly subscription price brackets selected to ensure a fairly even spread of service numbers. It should be recognised that the quoted betting yields are based on gross profits and do not taken into account the cost of the subscription fees themselves.
|Monthly subscription fee||Number of records||Betting Yield|
|£50 < fee ≤ £100||49||1.73%|
|£25 < fee ≤ £50||79||2.23%|
|£0 < fee ≤ £25||48||-0.45%|
On the basis of these figures, there appears to be no evidence that paying more for your advice ensures you receive more profitable tips. Granted, the cheapest services actually lost money but so, too, did the most expensive ones overall. The best performance came from the largest category of advisory service charging more modest fees. One can speculate on why this is so. A more cynical conclusion might be that the higher the charge, the greater the likelihood that factors other than an ability to beat the bookmaker are motivating the tipster. It should be stressed, however, that the differences between these categories are not statistically significant. The next table provides a straight comparison of the average monthly subscription costs of profitable versus non-profitable advisory services.
|Profitable||Number of records||Average subscription fee|
It was actually the case that the profitable services from this large sample, on average, cost less than the unprofitable ones, although again the difference between the two was not statistically significant (p=0.25 from a two-tailed t-test). Finally, the third table compares the average price against the quality of service performance as measured by statistical significance (p-value) of the profitability for the 116 records (included in the analysis) that managed to make some money. [Remember that only p-values of less than 0.01 (1%) can strictly be considered to be evidence of a skilled tipster as I have defined it; see the discussion on luck versus skill for more details].
|Statistical significance||Number of records||Percentage of total|
|p-value ≤ 0.01||10||£66.02|
|0.01 < p-value ≤ 0.05||19||£38.86|
|0.05 < p value ≤ 0.10||22||£40.80|
|0.10 < p-value ≤ 0.25||29||£41.25|
|0.25 < p-value ≤ 0.50||36||£56.91|
Those services which had demonstrated statistically significant records at the 1% level, on average, did cost a little more. However, with such a small sample size, this difference would not appear to be meaningful. Indeed, testing statistically there is no significant difference in subscription fee between any of the performance categories.
Unquestionably, this analysis should dispel the belief that better tips cost more. The twaddle that some tipsters put out to make a case for their excessive charges should finally and forcibly be consigned to the refuse tip where it belongs. The idea that an advisory service can charge high rollers more simply because they are high rollers is complete bunkum. Granted, a tipster could argue that so long as you stake large enough, even a tiny positive yield will deliver a net profit after paying a large subscripton fee. This, however, completely misses the point. Smaller yields, unless sustained over many thousands of bets at shortish prices (download my significance calculator worksheet to test this), represent little more than chance. We are not purchasing lottery tickets here, or playing roulette. On the contrary, we want to know that the betting advice we are buying is of proven quality and significance, capable of delivering profits not through chance but via the tipster's aptitude and skill. Additionally, why can't the high roller simply buy cheaper advice somewhere else? Why should he pay more simply because he stakes more? Of course an advisory service can choose to charge what it likes. Hopefully this analysis will persuade readers, and particularly high rollers, that such flawed economic principles, and the unwarranted and gratuitous advisory service pricing that accompanies them, should not be encouraged. Tips are only worth something if they show evidence of sustained long term skill. Unprofitable tips or lucky tips over the short term are worth nothing.