James Krause: Pay Me Money So I Can Show You How to Lose Money
The betting results when an active UFC Coach bets on UFC Fights
Over the past few weeks you’ve likely heard about former fighter and current UFC coach James Krause's gambling problem. To summarize, an active UFC coach of a UFC champion, directly against a public notice from the UFC on October 17th, ran both a gambling discord and podcast about betting on MMA fights including those with fighters he coaches. Krause is currently under investigation for leaking one of his fighter’s injuries prior to the largest pre-fight line movement in UFC history, his podcast, YouTube, twitter, and gambling discord have been taken down, his coaching license in Nevada has been suspended, and all fighters using him as their coach have been suspended from the UFC. But there is a question that I noticed nobody has asked during this debacle:
Did his betting discord actually make anybody who isn’t Krause money?
No, it didn’t.
Results:
A few months ago I began an experiment where I would directly follow all of the money line and prop UFC bets of James Krause from his paid discord and for comparison another random betting discord as well as myself over a 3 month period. Here are the results in $’s:
Krause Discords betting Results in $
Summary:
1 betting unit was $5
Krause took 99 bets to lose $12
The random free discord took 104 bets to lose $25
I took 27 bets to lose $3
Below is a breakdown of Wins versus loses:
Krause went nearly equal in terms of wins/losses, the free discord was more of a “go big or go home,” and I won nearly triple my losses but to no avail. So how did I lose money while winning more than I lost?
The Odds:
As a brief interlude let me explain how MMA odds work in case you aren’t a degenerate gambler. All betting odds are expressed as a negative or positive number indicating if a fighter is more likely to win (the favorite - a negative #) or less likely to win (the underdog - a positive #). The numbers indicate the return on your bet. If you bet $10 on a +200 underdog and win, you profit $20 (you also get the original $10 back, or $30 total). If you bet $10 on a +300 you win $30 ($40 total). If you bet $10 on a -200 favorite and win, you get $5 profit or $15 total. If you bet on a -300 and win you get $3.33 or $13.3 total. For both underdogs and favorites a higher number is always better odds.
Betting on a fighter to beat another is called a money line Bet. Betting on specific results e.g. Fighter A to Win by Second Round KO or The Fight Goes to Decision are called prop bets. If you make more than one bet at the same time, such as Fight 1 will have fighter A winning by KO in the second round and fight 2 will go to decision, that's a parlay bet. If either of those two things don't happen the entire parlay is lost, but if both do you receive a payout larger than the sum of both bets if they were made independently.
I think one of the more fun ways to show a gambler's appetite for risk is to sum all of the odds for all of their picks. If a gambler picks safer favorites they have a more negative sum while a gambler who picks riskier underdogs has a higher sum.
Here is that sum for Krause, the other discord, and myself:
By summing the odds for each bet placed we can see that I was picking mostly favorites, Krause was rather in the middle, and the Free Discord was picking obscene underdogs.
Of course this stat can be skewed by the total number of picks so we have to divide the sum of odds by the total bets to get an average odds per bet:
This is where we see that I was picking heavy favorites, Krause was picking so close to neutral to even that his average odds are something you can't even bet (odds don't go below 100 on either side) and the free discord really was picking 5-1 underdogs. While you may think it’s dumb to just pick wild underdogs I commend that at least they were losing money in a fun way (I made $36 on Irene Aldana upkick liver kick KO’ing Macy Chiasson which was awesome).
But there's something fishy about the odds. See Krause lists the odds of his picks on his discord and I started to notice that his odds weren’t matching the odds I was getting when I went to go bet. It turns out that for the same picks made at almost the same time (Krause’s picks for a Saturday event usually came out Friday afternoon/evening) the average odds I was receiving using a normal online platform was 40% worse than the odds he listed.
If Krause got -110 odds, I got -127. That is a $0.61 difference per bet at the $5 level. It may not seem like much but that's a $60 dollar difference over the 3 month period of this test. If Krause really got those odds then he could have been making money while the rest of us plebs were losing money.
Real Loses:
Speaking of losing money, note that the other discord I found is free and Me making my own picks is also free. As Mr. Krause's picks cost $50 per month the updated graph below shows the actual profit of following of each the three gamblers:
The $50 a month fee is an absolute money sink. Even if we could get Krause's fantastic odds we still would have lost more than $100 over these 3 months. Not to mention that if myself or the free discord got Krause’s odds then both of us would be positive without having to pay $150 to get there.
“But wait!” thinks a James Krause white knight, “Even if any other strategy would be better, that still means if I got Krause's odds and just bet a lot of money then it would be profitable! My $150 is totally worth it!” He says, resuming his AGDQ stream.
I’m strawmanning here but the truth is it's a valid point. If you think about it, if I can just find odds like Krause’s then all I have to do is bet $17 per-unit bets (Krause’s listed odds made $45 on $5 bets. To cover $150 we’d need to more than triple our betting unit) and I will start to make money. It's not that it's a scam, it's just that I’m using the wrong betting site!
So I went to bestfightodds.com and looked at the best archived odds for all of the picks he made between Draft Kinds, BetMGM, Caesars, Betrivers, FanDuel, PointsBet, Unibet, Bet365 and Betway. I then compared the best odds-per-bet across all sites to the odds-per-bet Krause and I were getting. To be clear the higher the number the better the odds:
Oh wow look at that. Somehow James Krause’s odds are better than the best odds for every pick across all of those sites. Wow, that’s crazy.
As Krause's odds are impossible to get that means you lose money following his picks before even factoring in his $50 monthly cost and lose multiple times that when you do.
But maybe this was a fluke? Maybe I picked a bad 3 months? To check I went through the historical data for the first 20 weeks of his discord that he posted and analyzed the data.
Historical Data:
I went through the 20 weeks prior to the beginning of my tests. I would have compared my results to his posted results but the discord was taken down before I could screenshot them.
The records begin in week 4. Weeks 1-3 were never shown but apparently he made 33 betting units of profit. This is the largest gain he ever made but for some reason he never recorded his picks. Weird huh? As there is no record at all of how I have not included it because how could I.
Historical Profit Based on Bet Type and Fighting Organization in Betting Units (not $’s):
Summary:
In total Krause lost 5.26 units over those 20 weeks. Assuming $5 bets that's more than $25 of losses.
Krause has always been bad at Money Line or Prop bets. He was only making money on Parlays and it wasn’t enough to cover the losses in the other two categories.
Don't forget that these are the results he posted using his fake odds. The real results that any of us would have gotten would’ve been substantially worse.
But Waits!:
If you remember I was only making picks on the UFC and I wasn’t doing parlay bets. Any avid Krausor (Krausee? Krausist?) would note that A) The other fight orgs make money while the UFC loses money and B) Parlays are where he makes money and not money line or prop bets. So why do I only bet on the UFC and not parlays? It would be reasonable to complain that I’ve set up my test to make him fail. Thankfully he needs no help to do so. Here are my responses:
Firstly, I chose a simple answer to only bet on the UFC. As the only other betting discord that actually just listed picks each week only makes UFC bets, I only watch the UFC, and Krause almost entirely makes UFC picks (which makes sense as he is a former UFC fighter, current (former) UFC analyst and UFC coach), I chose to only test for UFC picks. I also couldn't figure out how I’m supposed to match his random and occasional picks in other orgs. Can I make my own random picks from random orgs? Do I have to or can I choose not to?
Second, relating to not making parlay bets I wanted a consistent comparison. The other site didn’t make parlay bets and I didn’t feel a strong desire to either. Krause’s rate of parlays has been decreasing week after week and is often single digits if not 0. Instead of dealing with the similar questions of: can I make my own random parlays? Do I have to or can I choose to? I chose to set a clear and easy to follow rule of no parlay bets.
Third, his parlay profits have been flat for 13 weeks . So even if it's his best category he rarely makes picks, the other discord didn’t, I didn't want to, and Krause’s parlay picks haven't made a profit for months.
In short nothing he does works. None of his picks in any category make money over time. So why does Krause keep making these picks? Why keep betting if the bets don't even make money?
Because he doesn't need to bet to make money. He makes money off of you.
The Money:
James Krause made an absolute killing selling his losing picks. I’ve seen numbers between 50-116 people active in his discord at a time. Just like for twitch streamer or youtubers the number of people live at a time will never be the full scope of users because not everybody is can be on at the same time. It would be fair to assume there are 150-200 paid users of his site. For my calculations I will only use a number I have seen with my own eyes, which is 116.
At the steep price of $50 per month for 116 users that's a monthly profit of $5,800. I have also confirmed that he has one member in his “the 1%er” which is a subgroup of his discord (which is also called “the %1”) that gets special insider picks. Membership to that group costs $2,000 a month.
In total, James Krause was making nearly $8,000 a month selling losing MMA betting picks.
Bankroll:
I’ve already shown above that even without the monthly fee Krause’s picks lose money but there is something else that needs to be brought into the conversation which is the bankroll required to participate.
Most weeks James was making between 10-15 picks. Let's say you want to put down $5 per pick as I did for my experiment, that means you will need between $50-$75 to be able to even participate ($5 *10).
This does not mean your bankroll is just $75 to cover the maximum needed because what happens when you lose money? You need to be able to cover losses while still being able to bet next week or else you just lose money without the chance to make it back. The worst run he had on records was a -32 unit run in a 2 week period. That means during that time to just keep playing you would have lost $160 ($5 *-32) and would need another $75 (That you need each week) to keep playing next week. That means you need $250 available to be sure you can keep betting after suffering the worst loss so far.
Don't forget that this discord costs $50 per month. That would mean that you would have to make 10 units of profit a month to break even at a $5 bet. Pretending that Krause can even make money that would be an outrageous amount of money to be making. It's so comically beyond reason to say that you can multiply your money ten-fold a month I’m just going to move on.
If you instead assumed a much more reasonable amount of profit, such as doubling your money each month (1 unit of profit a month) ((this isn’t reasonable tbc)), you need to be making not $5 but $50 bets. This means you need to be adding a 0 to everything. That big $160 loss? Now it's $1,600. You don't need to keep $75 on hand each week, you need $750. You don’t need $250 available to afford to keep gambling, you need $2,500.
This is real money. 56% of Americans can't cover a $1,000 emergency expense.
Don’t forget that we assumed 100% return on your betting unit each month. If we assumed something that is almost close to reason, such as 10% of your betting unit as profit a month (this is still beyond any kind of reasonable profit) that would mean you need to be making $500 bets and would need $25,000 to keep gambling just to break even.
This information about breakeven, how much bankroll you need, or any information on responsible betting is entirely missing from the discord. Of course it's not James' responsibility to tell his users this information. He’ll argue he doesn't have to. It's just, you know, the right thing to do.
But of course he never does that because the entire purpose of the discord, now and forever, was to extend the scam as long as possible to swindle thousands of dollars from unsuspecting users.
Excuses:
While Krause and his partner in crime Shay “I’m too ugly to have a profile pic on twitter” Handicappin (@shayhandicappin) are the main villains the absolute drivel that his community spouts gives them a share of culpability too.
Every time the picks were wrong people would start to detract or make noise in the discord. There are a few different excuses that we made by both James Krause and his community that are so stupid I can’t believe I have to write this down and explain it to people, but here you go:
It’s a marathon, not a sprint. This was a personal favorite of Krause. He wanted to lean into the idea that gambling is an investment and that you need to weather the storm to see profits later on. Like all good lies a bit of truth exists here. For real investments (stocks, bonds, not crypto) there exists an underlying value to the commodity. An actual company has a long term plan to sell a product or service that over time will generate net profits that you will either share in or receive back as investment on their debt. At least crypto has a real value as a way to pay for illegal goods digitally.
Even today, though the stock market is in a terrible place you should still put money into your 401K. You should still buy VOO or SPY. The stock market doesn't always go up but it eventually does. Betting on somebody's ability to gamble (or betting at all) isn't an investment. There are no goods being sold, there's no positive cash flow, it's just a person trying to play an openly rigged game. There is no reason to expect he can make money over time, except, of course, if he is making picks based on insider information not available to the odds makers or other bettors.
“You aren’t paying for the picks you’re paying for the community”. As I’ve said Krause entirely advertises this as a discord about following his picks. Yes there is discussion but nobody is really here for the community. Even if you are that’s kind of sad because the “like-minded people” mentioned above are just gambling addicts desperately following their con-man leader who don’t want to hear people tell them that what they’re doing is harmful and stupid. There are better discussion boards that you don’t have to pay for basically anywhere else. This is a discord clearly about his picks and those picks lose money. It’s not a country club its a scam.
“You shouldn’t just follow his picks.” This one is truly absolutely redacted. The main argument being made is that you shouldn’t make all the picks Krause makes and instead look at his picks and then decide which picks you like of them. This is unfathomably stupid.
This is a paid MMA betting discord. It is in fact one of the few ones that there are. I didn't even want to be in the competition. I just couldn’t even find a third MMA betting discord where it was based around one person posting picks. This site, his podcast, and perhaps Platoic Theory of Form that is James Krause himself are entirely dedicated to MMA betting. If you pay for the discord you are paying for his betting picks.
Saying that you should pick and choose which picks to use is like hiring a lawyer to write a contract and then picking and choosing which parts you want to keep. It's like going to a doctor and picking and choosing which prescriptions they write you to actually take. It's like hiring an architect and deciding which supporting pillars you really need. If you hire an expert in a field you are hiring them for their information. They are telling you what to do. You paid them in the first place because you don't know what to do. The idea that you don't know what to do, pay somebody to tell you, and then pick and choose what advice to listen to entirely defeats the purpose of hiring them in the first place.
Summary:
The last point I want to make to the James Krause dick riders out there who are still defending him is perhaps the most obvious: why do this? Why make a paid discord to sell your picks? Yes there is some clout and he can get more podcast listeners and bring some promotion to his gym but pretending he can multiply his money just by making bets why make them public? Why risk having exactly what happened to him happen? It brought unwanted attention to the point where commissions are investigating him. His discord, podcast, and twitter have been deleted. Him and all of the fighters he coaches are banned from the UFC because obviously having an active coach betting is a ridiculous breach of ethics.
If James Krause really was making money off of his discord picks he wouldn't need to be selling them. That’s because he never was making money off of the picks, he was just scamming his community out of tens of thousands of dollars.
While I'm glad that he’s been deplatformed, people still lost hundreds if not thousands of dollars from his scam. This should be viewed as a cautionary tale for the next time somebody tries to abuse their position within the MMA community to run a grift like this.
Other things about Krause that make him seem terrible and/or stupid that I couldn’t naturally fit above:
While I have no proof that Krause leaked the Minner situation to his discord there are two points to be noted. A) what about that guy who pays $2K a month? Seems like the kind of insider information he’s paying for and B) He’s posted about backstage fighter injuries before:
Another off topic example of the scammy vibe of the place is that either Krause is paying for cringe LinkedIn style ads or his community is actually made up of these hustler’s university graduates. Awful look either way:
Krause bet on Mike “The Truth” Jackson twice.
Krause won his bet on O’Malley beating Petr by decision at +500 odds and still lost $10 total that week.
His discord never kept a running tally of total profits. Because that would make the scam a little too obvious.
Most importantly of all, gambling is an addiction. Please note that nobody in these 3 month tests made money consistently over time. Gambling not a way to routinely make money or to escape your present situation. Individuals can call 1-800-327-5050 or visit https://gamblinghelplinema.org to speak with a trained Specialist to receive support. Specialists are available 24/7. Services are available in multiple languages and are free and confidential.