Question — what is steam-chasing?

Large betting syndicates will make a bet at numerous “outs” (offshore books). There are a couple of services, DonBest.com being the most prominent, that sell real-time information on line movements. When these big bets come down the line moves everywhere, pretty much at once. Then small individual bettors, known as steam-chasers (similar to bottom-feeder I would say) come along after seeing the line moves online and make the same bet, but now at a poorer price. The syndicates win over the long haul so the chasers try to win by following their plays.

However the syndicates have many tricks as do the bookies, such as false moves, “moving on air” and so on. Steam-chasing is generally thought to be a losing proposition though a few years ago that might not have been the case. The complexities of the market have increased and various factors, mainly the false move and the speed at which the market/books move, have made the steam chaser an endangered species. Books will move on air, meaning they move their line even though they didn’t take a bet. They follow the donbest screen and cover their asses when a big line move comes down. This has led to books getting in trouble because they are moving not based on money they take in but based on a market move.

Example of a steam chaser and a false move: there’s a basketball game and team A is favored by 4 over team B. The syndicate calls out to it’s numerous “runners”… “runner” is kind of a misnomer because they no longer do this in Vegas where a guy would have to physically be at the book to place the bet–it’s all done electronically offshore as Vegas as sportsbetting capitol of the world is a thing of the past. Anyway, the syndicate calls and says “get down on team B at +4″. So this lights up the screen over at DonBest.com where all of a sudden Mr. Steam Chaser sees every book in the universe moving to +3.5 or +3. They took heavy action on team B and so they make the price better on team A, now -3 instead of minus 4, because they don’t want one-sided action, in general, unless they themselves want to take up a position on the outcome.

So the steamchaser grabs the best number he can as fast as he can, following the syndicate’s lead. He probably gets +3. But in another example, the so-called “false move”, the Syndicate might come back later and play team A -3, or less as the steam chasers and followers might beat that number down to say -2.5 or -2. Basketball games can move a lot. So the syndicate really wants team A minus the points and by putting out a false order on the other side, they get the line driven to where they want it. Then they come back and put out a much larger buy order on team A. Mr. Steam Chaser doesn’t have any way to know this, although possibly by watching the screen every day for a long time some guys might have a much better feel for what’s real, what’s a syndicate, what’s not, etc. If they figure something out that lets them earn they probably aren’t bragging it up on a public message board, which is where I learned all this stuff

So now the syndicate might hold 500k on team B +4 and 3 million on Team A -2.5. So they are in a good position - if Team A wins by 5 or more they win 2.5 mil, if it wins by 3 or 4 they win 3.5 or 3 mil, and if it doesn’t do any of those they lose 2.5 mil. Assuming they can pick winners at a good rate, and by that I mean maybe 54% against the spread (and the most famous syndicate guy, Billy Walters, is said to have picked lifetime at 57% which is phenomenal against a point spread) then they will make a lot of dough. But the steam chasers keep getting the worst of it, they get a poorer number and get steamrolled on the false moves, etc.

Guys who want to make a living watching the donbest screen all day while sitting in their underwear eating pbj sandwiches, have to scalp and middle, aka arbitrage. They have to find two books with the same game lined in a way that lets them bet both sides and lock in a small win no matter what the outcome of the game. This is done with pointspreads (middling) and moneylines (scalping). The false move example above contained a middle - where the syndicate could win both bets if the game landed on 3, and a “side” where they win one and push the other when the game lands on 4. However, because they didn’t bet equal amounts they are technically only middling for 500k, the other 2.5 million is just a bet. Your small time middler/scalper might get say, 5k on both side of a scalp, say laying even money at one book on team A and taking 5% on team B at another. So he makes $250 for his efforts. The difficulty is finding the bets, finding books to take enough action to make real money, and get paid versus books that go under, scam, etc. It’s a full time job though it can pay handsomely for someone with a big bankroll.

That’s probably more than you wanted to know and not all that I could describe…

Source: email from Earl Baker, 1/25/2006 9:15 AM