Six Nations / Jack Houghton / 03 February 2011 / Leave a comment Bet Now View Market

There are rare occasions when the Betfair market gets it all wrong and England's position as tournament favourites is one of them, predicts Jack Houghton.

At my leaving drinks, a woman from the marketing department asked me what the best thing about working for Betfair was. I should have mustered something flirtatious - "you" - or at least something humane - "the people" - but instead, quite inexplicably, could only manage: "the data".

That short exchange pretty much sums up my life's attempts to woo the opposite sex: desperately unsuccessful. The woman soon found someone else to talk to, and I was left to ponder how honesty was an undervalued trait in the predatory jungle of courting.

At the time, I'd been reading The Wisdom of Crowds by James Surowiecki. The premise of the book is that when it comes to making predictions, provided you get a large and diverse enough group to state their opinion, they will show amazing prescience.

In my last days at Betfair I secreted myself and some data away and set out to discover whether this phenomenon of collective wisdom would be demonstrated in Betfair's betting markets. Limited only by the time I had left and the 65,000-odd rows then available on an Excel spreadsheet, I set to work.

Looking at huge amounts of data, in every sport where the markets were consistently liquid, Betfair proved an amazing long-term predictor of probability. [1.5] shots won 66 per cent of the time. [2.0] shots won 50 per cent of the time. [100.0] shots won one per cent of the time. Whatever the event, given long enough, Betfair's customers would - collectively - get the odds right.

In the days of unemployment that followed, I pondered an obvious question: if the market is so accurate, then what's the point of betting? Surely, in the long-run, you can do no better than break-even?

Not so. Whilst the market is right across thousands of events, it is certainly not right in every single market. The job of the successful punter is to find those individual instances of inaccuracy. And the best place to look? Wherever the collective wisdom is somehow mislead.

Take the price of England winning this year's RBS Six Nations ([2.92]). It's hard to see why Johnson's men are favourites given that, on the face of it at least, their recent record is no better than France ([3.45]) or Ireland ([4.3]) - opponents who both beat England the last time they played.

Proponents of England's chance will point to their win against Australia in November as a sign of great things to come; a dénouement in a narrative that sees the godlike Johnson build a talented team to recapture the glory of old.

This narrative ignores, of course, the lacklustre performances against Samoa and South Africa that followed that win against Australia.

The short price about England can be explained in another way. More England fans punt on Betfair than those of the other five nations. Those England fans are overly influenced by an England-centric broadsheet Rugby media who, year-after-year, deluge their readers with stories of England's latent talent; whilst largely ignoring the often more proven records of France, Ireland and Wales.

This is one of those events where the crowd - their opinion unfairly skewed - constantly gets it wrong. Lay England.