How Do Sports Betting Algorithms Work, Are They Worth Using?

Binary Code Information StreamA few years ago, sports betting algorithms were still considered to be in quite a youthful stage. They were just starting to get recognised by people, and therefore were sort of in the trial stages, so to speak. However, over the proceeding timeframe to today, they have garnered more traction and have changed the way that people go about their betting activity. Algorithms in general have been highly effective when it comes to predicting the outcomes in the world of finance. And it was this success that led to such becoming useful within the sports betting sector as well.

Naturally, if you are someone who has not used these algorithms before, then you may be keen to find out more about them. We are here to provide a little more information on what they are, how they work and what their pros and cons are for sports bettors. It’s time to evaluate your own sports bets and see if utilising an algorithm is the way to go for you.

Let’s be honest, robotics and automation have not really had the best kind of reaction from many people. Warnings about self-driving cards and robots that are taking us all out of necessary jobs have been quite rife in recent years. Of course, this does make it quite easy to get caught up in fearmongering and lack of information. However, for people looking to enhance their chances with sports betting, an algorithm could be just the ticket.

How Does a Sports Betting Algorithm Work?

Tech Working with Humans

An algorithm is essentially a mathematical formula, which will organise and evaluate various pieces of data so as to solve complex problems or provide answers to difficult questions. These formulas can be devised so as to solve the outcomes of sporting events, based on all relevant data provided, such as player statistics and team history etc. Don’t worry, though – you won’t need your GCSE mathematics result to utilise one of them.

Sports betting algorithms tend to deal with data that is quite straightforward overall. If someone was writing an algorithm that focused on predicting a Premier League football game, the algorithm for it may place a prime focus on data about each teams’ winning percentage home and away, how many goals they have recently scored, what history the two teams have of facing off against one another and so on.

A huge amount of sports data is already available to the public. You can find a lot of that at online sportsbooks when you are deciding on the type of wager to place. However, many advanced analytical tools are also equipped with such, meaning that you do not have to go seeking out all of that data yourself. These tools are readily available online and are just a few clicks away. The availability of all the information on the internet regarding sports events is what dramatically increases the range and ability of what algorithms can achieve for you.

When there are more points to analyse, mathematical formulas are much more accurate with their results. The more information an algorithm acquires, the better the results of its sports betting predictions should be. By combining both technology and publicly available information, a successful sports betting algorithm can be birthed.

When you introduce machine learning into the equation, things go a step further. This is basically a study of computer algorithms that improve automatically through experience and by the use of data. Essentially, the machine learns from experience and improves over time. A machine learning algorithm can both access and process the data that is needed to make decisions, predict outcomes and operate successfully without the need of any manual input or adjustments. Technically, this could be considered as artificial intelligence (AI).

The use of algorrthms by both punters and operators is only set to increase in the future, especially with things like quantum computers in the pipe line.

Who Creates Sports Betting Algorithms?

creating an algorithm

Of course, sports betting algorithms cannot just be plucked out of mid-air by a machine in the first instance. There needs to be some sort of creation of these mathematical formulas so that the machines have something to learn from. And with the rise of sports betting algorithms, there has been a lot of crossover with some of the most intelligent minds from the stock market. Basically, sports betting algorithms operate as just another tool that these minds have lifted from the frequently interlinked worlds of sports betting and finance.

Since the dawn of the new millennium, an ever-growing number of successful money managers have taken to using algorithms to be able to process data in quicker timeframes and in a more accurate way. These managers remove human error as well as human bias, such as those that occur in the form of emotional investments with no other basis behind them.

Machine learning algorithms have been hugely successful in the world of finance. And it is from the best and the most successful in the finance world that those same algorithms are being applied to the sports betting scene. Once this took off, the chances of many sports bettors improved significantly.

Bridging the Gap Between Investing and Gambling

trader with graphs overlaid

One company that is using such AI to produce accurate sports betting predictions is Strategem. This brand designs its own sports betting algorithms in order to predict the outcome of European football games. Strategem has the belief that these football games are some of the easiest events in the world to predict the outcome of, stating that they have a short duration, repeatable statistics and fixed rules. Therefore, if 100,000 games are observed, patterns can be drawn from the information.

Strategem has a relatively simple idea behind its operation – figure out the patterns, absorb and learn them and then gain an edge over the numerous online bookmakers. Finding those patterns and bringing them into consideration when placing a sports bet can equate to a ton of money being won from wagering.

Utilising the aforementioned machine learning, Strategem has developed its own proprietary algorithms that can wonderfully process and analyse a large amount of data. Through this, the company’s goal is to create a sports betting algorithm that has the ability to provide real-time insight into the matches taking place live. From that, the company has the hope to apply the algorithm to live betting at a variety of online sportsbooks.

The Strategem brand is still quite far away from creating an algorithm that has the ability to watch live events and provide in-the-moment, cutting-edge insights into them. Yet, machine learning remains as something that is helping the brand gain an edge when it comes to sports bets being placed. The most attractive lines across sportsbooks can, for example, be located by using machine learning.

Knowing such information, it is undeniable that the algorithms used by Strategem (and a multitude of other similar companies) are improving at a rapid rate. And they will only continue to get better as time goes on. More precisions and accuracy can be expected as the years roll by, and the likelihood is that more sports bettors will have a reliance on them.

Associated Algorithm Flaws

analyseEven though these algorithms are hugely intelligent and are also helpful to people, there are certain flaws that can be connected to them as well. For example, they aren’t much help unless they’re also supplemented with human analysis as well.

Even though AI can create maps of sporting events, they do not have the capability of representing what is deemed as the “territory” – or the entirety of the sporting event itself.

Let’s say that a Premier League football game between Arsenal and Manchester United is taking place. In the game, an Arsenal player stays on the pitch, even though he has suffered an injury. For the time being, the AI does not have the ability to process this information or understand it, because the impact is actually quite difficult to quantify. Essentially, a sports betting algorithm does not have the ability to know about a player being in pain or grimacing or hurting or, essentially, playing with some reduced effectiveness.

At the same time, shifts in momentum cannot be understood by an algorithm. It also does not have the ability to realise the effect on players’ emotions that such a shift has, or the psychology of the team overall.

It is each team’s starting line-up that is the most significant predictive factor when it comes to any sporting event. Acquiring that information before it is formally released to the public can actually prove to be immensely profitable where an algorithm is concerned. However, AI and sports betting algorithms do not get this information before bookmakers do. To be able to get those pieces of inside information, sources must be acquired and there needs to be the ability to build mutually beneficial relationships with other people. All of that remains in the world of humans and is not something that sports betting algorithms can get the hang of right now.

To put it quite bluntly, sports betting algorithms need humans and humans need sports betting algorithms. It takes both to operate a successful outcome.

How To Utilise Algorithms For Sports Betting

algorithm conceptEverything mentioned here today – AI, machine learning and algorithms – can provide quite the enticing tools to utilise. Even a small gain in their capabilities can end up providing a hugely profitable result for you as the bettor. It’s true that computers are nowhere near outdoing actual skilled people in the area of sports betting, and potentially they never actually will. However, there is no harm in thinking about using such an option already.

What you need to keep in mind when choosing to make use of a sports betting algorithm and AI is that it is not a one-way street. You cannot simply leave it up to the technology to do all the work for you. Instead, you need to make use of a proper sports betting strategy yourself, to put into action alongside the algorithms. Sharpen your own betting skills and combine that with the positive effects of a computer to heighten your own chances of winning.

It is highly necessary to understand how the odds at a sportsbook work, too. Learn about the amount of the return you will receive for placing a bet on a certain team or player. This is a necessity whether you use an algorithm or not, but there will be people who jump right into using a computer to do their betting without knowing what odds are or how to read them.

You can view plenty of strategies and details online when it comes to using a sports betting algorithm. So, there is a lot of information out there for you to soak up. Towards Data Science has plenty of details surrounding making big bucks with a data-driven sports betting strategy.

One final thing to remember about using sports betting algorithms for your gambling activity is that sportsbooks can be very frugal at times. If they see you winning frequently and/or large sums of money, there is very little that will stop them from restricting your account. This will mean that you can only place bets of minimal amounts or a specific number of wagers per day/week. After all, bookmakers do not want to lose money at the end of the day, meaning that if you are using a piece of technology that heightens the chances of this happening, sportsbooks will see you as their enemy.

Algorithms On Both Sides Of The Equation

markets moving up and down scales balanceIt is important to remember that sportbooks themselves now use algorithms to work out their odds, especially in-play.  These companies have bigger resources than you and many have custom built programs more powerful than the ones you can access.  They also have access to data that you may not or may not be able to afford to get.

The point here is that the algorithm you use will work on similar principles to the ones the bookies use to set the odds in the first place.  Therefore don’t expect an algorithm to generate results that the bookmakers don’t already know about, you are unlikely to be able to use them to beat the odds themselves but you can use them to analyse potential markets for value.

It is therefore important to use algorithms and the results from them as part of a wider strategy that includes your own analysis.