The Fall of Intrade and the Business of Betting on Real Life (2014)
buzzfeed.com
buzzfeed.com
The cat's out of the bag and they'll make sure it's never going back in.
Except if that were true, why wasn't there legal nationwide betting available before DraftKings and FanDuel? The NFL only cares about gambling to the extent it can grow interest in the sport, but once it gets too messy they will wipe their hands of the whole situation. The NFL's lobbyist have more important things to work on than dying on the hill of legalized sports betting.
Though, yes, the NFL's lawyer army will have concussion battles to fight for the foreseeable future.
The Nevada Gaming Commission just wants licensing fees. Nevada also knows that if fantasy sports is considered gambling, most other states will disallow it. Which, again, is good for Nevada. This is motivated purely by self-interest.
The biggest issues I've come across are:
1) small sample size, football teams only play 16 games which means you really don't have alot of data to use.
2) counter party risk, lots of fantasy betting sites spring up and then fold, just like bitcoin. Ideally there would be a new form of prediction market that hosts bets but has a reliable third party escrow the funds.
3) Not enough volume, this is getting better but only due to Draft Kings huge advertising push this past year.
4) Lack of apis, most of these sites seem to want to cater to people who make 1 or two bets. Ideally I'd be able to make 1000's of bets each week.
If anyone else out there is working on models for fantasy sports betting please feel free to drop me a line if you'd like to discuss techniques for modelling( I believe the cool kids now call this machine learning).
One thing that juices returns is access. If you know about the new markets opening you run your arbs on them and make good money.
Hours are weird.
Something similar could be said of the people chasing the ball around the field.
The process of arbitrage involves observing a mis-priced asset and then making a profit from that observation. By doing so, you push the asset towards its correct value. This kind of activity maintains the integrity of a market.
2) All down to your country's silly gambling laws, unfortunately. Europe, and the UK in particular, have got the right idea here. It's overwhelmingly the shady offshore bookies that disappear without paying out.
3) Probably the same reason as 2) really... American football doesn't seem to attract significant betting volumes outside the US. American horseracing is more popular, strangely.
4) There's very few companies with APIs here. Basically only the exchange-based bookies offer APIs. All other bookies want nothing to do with sophisticated players, and if your customers are at the level of automating bets, you probably don't want to be the one taking them on :)
(Edit): I forgot about Pinnacle - they are (I think) the only traditional bookie who offers an API. Mind you, they also are happy to take on profitable customers.
Here is where a classically trained statistician can really shine. Classical statistics is really all about extracting insight from data when it is hard to come by...
The average player's career is 3 years, the average coaches tenure is 3 years. Teams implement new offensive and defensive schemes even more frequently than that.
Couple those facts with a short season( 16 games) and injuries limiting most players to less than that and it means you really can't use historical stats with any certainty.
Essentially you start from scratch each season.
I mean there is a reason why the phrase "statistically significant" is often used.
if you can figure out how a "classically" trained statistician can create an acurate model with:
1) almost no data
2) inaccurate data
3) seasons in which the next one often bears no resemblance to the previous one
....then please feel free to contact me!
Not sure if this is meant to be satire / sarcasm?
By "classically" trained statistician, i meant someone who has taken a bunch of grad level courses in statistics (as opposed to CS flavoured ML).
A lot of Fisher's and Gosset's work was done in an era of "small" data.
>>if you can figure out how a "classically" trained statistician can create an acurate model with:
>>1) almost no data
>>2) inaccurate data
>>3) seasons in which the next one often bears no resemblance to the previous one
Stats / ML can't help much with 1) and 2). But wrt 3), dealing with issues of non-stationarity is very much a subject of statistical literature.
You mean like many bitcoin companies right?
I resent the supposition that there is not sophisticated investments being made on horse racing.
There are many professional investors all over the world, making sophisticated investments in horse racing.
One company I'm involved with, essentially a one man band, pays between £10,000 - £15,000 per annum just to access horse racing data, both daily races and historic results. They then use this raw data to produce complex ratings for daily races and to perform historic data analysis. Their toolset is mostly R and Python based.
This is just one small company in the UK. If you looked at other jurisdictions, such as Hong Kong, there are multi-million dollar syndicates crunching numbers to make sophisticated horse racing investments.
“Lots of ordinary financial things are gambling,” says Robin Hanson, an economist at George Mason University. “But they are carved out in the public mind.”
Life is playing. Everything you do is an investment of some type - time, energy, emotion, money. Every decision you make is "betting" of a kind, it just depends how you decide to dress it up.
If I invest emotional energy in a friendship, that's certainly a risk which might not always pay off. But unlike playing horses, no one else has to lose in order for me to win.
The lines can seem fuzzy in practice, but it does make good sense to reserve the term 'investment' for deploying resources, with the hope of gain, in domains where a net-positive-sum outcome for all is possible.
Meanwhile, pure 'gambling' reshuffles value in a net-zero-sum or even net-negative-sum process, and in many cases only persists because some participants ('suckers', 'marks', 'degenerates') have equally-persistent behavioral/decision-making problems.
Another related dimension-of-distinction is whether the randomness is an inherent product of a chaotic/complex/natural process, or synthesized precisely with intent to confuse.
Coming to understand (and either control or hedge) the randomness in nature or in complex hard-to-predict systems can be a very positive-sum process, and even generate spillover benefits for others (positive externalities). But engineering a game with fixed completely-deterministic odds, rigged against most players and (designed-to-be) just beyond the ability of their usual rules-of-thumb to model, is essentially predatory.
People generally shouldn't play such games, or confuse them with the other more-reasoned 'bets' made in other domains. Of course people will sometimes make the 'bad' bets, because they're not always easy to distinguish and everyone has to learn. But the end of that process would ideally be to better discriminate between kinds-of-bets, not to lump them together as 'all just gambling'.
Insurance, I'll grant, is a bet, but it's a bet where you have skin in the game - a bet against yourself, to hedge against loss outside your control. A bet you want to lose.
No, it wasn't, or it failed at that:
1) They changed rules on bets midstream. I lost when they redefined the swine flu count as "the CDC's current total" rather than the original specification "number of cases as estimated by major media sources". (The CDC stopped updating.)
2) The bizarre $1 = 10% chance system. (Bet contracts would be set to have a value of $10 each, so a 100% chance should equate to a ~$10 bid.)
3) The flaky, designed-to-trick-you withdrawl system. When I asked for a check for my balance, there as a $X fee. So I asked for $Y, while leaving $X in the account, and was told I'd get $Y. Then they took $X out of the check, leaving an $X balance.
How idiotic. It sound like a very good idea. Anyone with "insider knowledge" but no participation of a terrorist attack, will be very tempted to place a bet. By checking the bets you can avoid attacks. Create such a market using bitcoins, and you'll get very valuable intel. It's like having ears everywhere.
www.augur.net, fascinating stuff.
The article doesn't quite make the case that that is true.
Crowds predicting an election is no surprise -- crowds determine the outcome. It would be more compelling if the results were accurate a year ahead of time or something.
And for sports betting, the average betting amateur is actually quite well-informed.
I don't think this really applies to science very well. Crowds change opinions all the time, so they can't be right about some unchanging law of nature.
> “We’ve learned from our own experience,” [Intrade founder Ron Bernstein] replied, “that regulatory avoidance isn’t a good business model.”
Once the software is initially developed and released, there's no head to cut off or assets to seize, there's just a million little pseudo-anonymous players scattered all over the world.
I mean, Bittorrent ostensibly had a "central organization" at one point but there's nothing you could do to it that would shut down the protocol.
Anyway, I'm watching its development with interest, but I suspect that it won't become a big success.
But the MVP is pretty simple. Create an event, create a bet, create a leaderboard.