- In January we released a report uncovering the state of the tipping service industry.
- As we expected, many of these Australian “tipping services” aren’t legitimate whatsoever.
- We found common traits that can be spotted when identifying these dodgy tipping services.
- This aims to be an expansion and explanation of the research we uncovered in January.
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Recap of the Research
800k Aussies follow at least one of 100 “tipping services”
20% of these tipping services claim to be “Australia’s best”
Only 10% provide a track record of their peformance
35% are affilates, which means they get paid when punters they refer lose
60% of affiliates don’t disclose that they are affiliates
500K Australian tipping service members are getting fleeced
Summary of the core issues
The shocking truth is that too many tipping services in Australia have a conflict of interest that is plain wrong. Affiliate tipsters are financially incentivized to refer losing punters. It should go without being said that as a tipster you should be incentivized to send winning tips.
The next fact we uncovered is that the large majority of Australian tipping services do not provide any track record of their performance. For us, no track record = no proof of edge. Every tipping service should provide an easy way for members or website visitors to see their results. If you want to see what that should look like click here for our full results since inception.
Another key indication of a dodgy tipping service is a service that closes down and rebrands. It’s a complete rort. Once they have their members money and eventually send out pointless losing bets they close up shop, open under a new name and start the process all over again like a thief in disguise.
Finally, the assumption of claiming to provide a “top price”. In regards to performance this is a very misleading statement. Most bettors are unable to place a bet with a top price, it will usually only be the first 3 or 4 of 500 members. Thus, using this claim as a selling point makes no sense.
Two key questions to ask any tipping service…
1. “Do you have a proven historical track record?”
2. “Do you have affiliate relationships with any bookies?
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Not just the racing industry
Principles in the betting world are applicable to the investment world and so the traps can be very similar as well.
Here are a few to look out for:
- FX trading tipsters: propose to have edge though many have the same level of shameful conflict of interests as dodgy tipping services.
- Crypto tipsters: Question of legitimate edge and conflict of interest as well due to plus tail risk that many members miss.
- General investments tipsters: Question of legitimate edge and sample size.
We knew there are many bad eggs in the basket, though to put it into numbers through this research those who are looking for a legitimate tipping service can now be aware and identify those companies to avoid.
You should always be asking yourself:
Is the edge genuine? Does the service provide results so that you can see a large enough sample size that suggest the service has a statistical significant edge, or is it due to luck?
Is there a conflict of interest here which may result in their advice not being in my best interest. Remember: shockingly 35% are affiliates with other bookmakers.
Is there a significant tail risk that I am missing here?