World Cup 2014: Free ratings can identify value bets for armchair fan

Elo ratings give Roy Hodgson a better chance than the Betfair market does

In the second instalment of a series which attempts to demonstrate how the armchair fan can profit from this World Cup, Jack Houghton, a self-confessed know-nothing when it comes to the beautiful game, shows how a freely-available rating system can quickly identify odds discrepancies.

In my last World Cup offering I tried to demonstrate that, even using relatively crude and questionable rating systems, like the FIFA/Coca-Cola World Rankings, it was fairly easy to identify discrepancies in the Betfair markets between the odds available for teams playing in Brazil and the actual chance that those teams have of being successful.

In this blog I hope to show that slightly more sophisticated rating systems can identify ever more reliable betting opportunities - even for those punters who might not be professed football experts.

As a chess player, one obvious way of rating the performances of national football teams is to use an Elo rating system. In the absence of an accurate method of assessing the relative strengths of chess players, an American master, Arpad Elo, developed his approach in the early 1960s, and it has subsequently formed the basis of how the vast majority of the world rates chessters.

Football and chess might not seem especially similar: it's certainly difficult, and undesirable, to try and picture my fellow attendees at the local chess club sharing a raucous, towel-flicking, post-match shower together.

But for all that we might struggle with the sociability demanded by other parts of society, the game we play is - mathematically at least - very similar to football: a game can be won, drawn or lost; and any subjective assessment of how good or bad a particular sequence of play might be is irrelevant when compared to the final result.

At their simplest, Elo systems work as follows. Two teams have a number of points (their rating) - say 1,000 - and put a percentage of those points into a "pot" before a match. Whoever wins the match takes the points in the "pot" and adds them back to their rating, with the points split equally between both teams in the event of a draw. In this way, the ratings are constantly adjusted to reflect the form of a particular team.

Given how easy it is to access international football results, it takes only a basic knowledge of a spreadsheet package and a few hours a month to experiment with your own rating systems. However, given that this series of blogs is supposed to be about arming the armchair punter with a statistical armoury with which to arm-wrestle a profit from this World Cup, it makes more sense to let someone else do the work for you.

Since the late 1990s, World Football Elo Ratings have done exactly this, operating a more sophisticated Elo system than that outlined above which includes an adjustment for goal superiority and for the level of competition involved. Some criticisms can be levied against their approach, but, for the time being, it's a brilliant, free resource that can help us immediately identify some price discrepancies in the upcoming World Cup.

For starters, in Group A, Mexico are rated the slightly better side than Croatia, and yet are third-favourites to qualify from the group at 2.588/5. And in Group C, Greece is rated as the second-best team, and yet are outsiders-of-four to qualify at 3.185/40.

But of most interest is that England - traditionally so over-bet in World Cups - is rated as the best team in its group (and indeed the sixth-best in the world as things stand), and yet are third-favourites in the market to qualify at 1.654/6.

One other potentially interesting angle is to look at the average Elo rating by Group. Doing this gives a snapshot view of which groups are relatively stronger and weaker. You can then work out which teams have the most in hand of the others in their group. Topping the world ratings, it is no surprise that Brazil and Spain look set to dominate Groups A and B respectively.

However, perhaps more interesting is that Argentina and Germany have similar advantages over their groups, and then are due to play representatives from Groups E and H in the Round of 16 - statistically the weakest two groups in the competition. In the 2014 Winner market, it is these two teams who look the best value.