Artificial intelligence is changing the sports betting game
With more and more states legalizing sports betting, artificial intelligence companies are leaping in feet first to make their mark on sports betting – AI style.
What can algorithms bring to the sports gambling front? Plenty, it appears:
Take Monster Roster, the brainchild of Dylan Elder, a 22-year-old math whiz. The artificial intelligence platform claims to “make the right picks in sports betting from the NFL to NBA to the MLB.” Company sources say that the Monster algorithm has the industry’s “highest return on investment” and it’s due to machine learning and artificial intelligence that continuously tracks players in all professional sports throughout their seasons.
Then there’s Israel-based WSC Sports, which uses AI and machine learning to create sports video content in a simplified and automated way that can be used for broadcast highlights and social media distribution — essentially making a machine help identify great moments in sports.
Here’s the kicker. The company’s data and highlights arrive so fast — often between pitches, for example, in a Yankees-Red Sox game — thus “incentivizing” fans to place a bet on the next play. “With AI and machine learning technology, you can better target to drive more engagement, which equals more betting,” the company states in an email to Science 101.
Another AI company immersed in the sports and entertainment world is Unanimous A.I., which made headlines in 2017 by correctly pegging both the correct score of the Super Bowl (with the New England Patriots roaring back from a 28-to-3 deficit to beat the Atlanta Falcons) and the Kentucky Derby winners — all three top finishers — a few months later.
All are capitalizing on the organic symmetry between gambling and high-end numbers-crunching and data analysis.
“By its nature, sports betting generates huge amounts of data,” says Jason Gasparro, a betting industry digital expert and analyst and analyst at Gambling.com. “Artificial intelligence can operate much more efficiently than humans ever can, primarily by using algorithms to predict outcomes of sporting events based on previous results much more efficiently than was previously possible.”
Rise of the robots
Why is artificial intelligence such a good fit for the estimated $104.31 billion (in 2017) global sports gambling market — a figure is expected to crest $155.49 billion by 2024, according to Zion Market Research https://www.globenewswire.com/news-release/2018/12/24/1678117/0/en/Global-Sports-Betting-Market-Will-Reach-USD-155-49-Billion-By-2024-Zion-Market-Research.html?
It’s all in the data, industry insiders say.
“We’re already seeing the impact of AI on sports betting,” says Nick Galov, content strategist at Hostingtribunal.com, a global data analysis firm. “Since AI is based on data, the more input it has, the better chance of predicting the outcome of a game. The reason why AI predictions are sometimes more accurate than humans’ is the fact that AI can process thousands of inputs within seconds without bias.”
Other digital risk-assessment experts agree.
“The beauty of AI is that it is able to compute vast amounts of data in split seconds,” says Ray Walsh, digital privacy expert at ProPrivacy.com. “Where betting is concerned, this can give gamblers a huge advantage because beating the bookmaker’s centers around odds — which at its core is just data analysis and mathematics.”
Nowadays, gamblers can even create bots — or machine learning algorithms — whose job it is to perform statistical data analysis that can help them to make better-informed choices, Walsh adds. “This can allow gamblers to take a massive percentage of luck out of their endeavors,” he says.
Chess-bots an indicator?
Smart sports prognosticators should have seen the AI/sports wagering alliance coming, as there is a precedence.
“The best way to understand where AI is going with regards to sports and fantasy gambling is to look at the history of the champion chess player,” says Dan Pitluk, an amateur sports gambler and Founder of Majors Challenge, a fantasy golf league.
Before computers, these players were virtually unbeatable, Pitluk explains.
“Their brains processed the game like a computer,” he notes. “The more future moves a player could mentally simulate, the better he or she was. When computers caught up with this ability in the 80’s and 90’s these people finally had a worthy opponent.”
Nowadays, machine learning and computer power are so powerful, only the rarest of human competitors have a chance, Pitluk adds. “For example, Google’s AlphaZero program is so advanced, it was “taught” to play chess in only four hours and promptly dominated the best AI chess programs on the planet.”
Adhering to the 54% rule
Another advantage AI brings to the gaming tables is that it doesn’t need to be correct 100% of the time — just most of the time.
“The larger the sample size you have of anything, the deeper an understanding you’ll be able to make of it,” Pitluk explains. “Consequently, at its core, sports wagering is simply an exercise in statistics.”
Pitluk says technology is at a stage in sports where data has been meticulously collected for the better part of 20 years, with present-day games possessing a “mind-boggling amount of data points” that can be used to the advantage of the bettor, the bookmaker, and business alike.
“A realistic sports gambler is only looking for a few percentage points advantage,” he says. “Anything else is wishful thinking. James Holzhauer, the current Jeopardy phenom and professional Las Vegas sports gambler says, “guys who win 54% of the time clean up in this game”.
“That narrow percentage, when leveraged correctly, is all it takes to be successful — sometimes wildly so,” Pitluk says.
AI or not, don’t bet against the house
Gamblers who embrace AI data sets should expect professional gaming outfits, at casinos or online, to do the same.
“Sporting events often produce random results based on fallible human performances, but given a large enough sample of data, compelling patterns emerge,” Pitluk adds. “The wide availability of vast quantities of data, powerful computers and increasingly sophisticated AI algorithms make gaining this advantage an increasing reality.”
“Does this mean beating the house is inevitable? Unfortunately, no,” he says. “Businesses will be able to innovate quicker than consumers and their use of AI combined with a keen understanding of human behavior will likely keep them one step ahead of the average gambler.”
Pitluk sees the artificial intelligence factor as a race “between oddsmaker and bettor” and the oddsmaker will likely ultimately win.
“Assume each side has access to the same compute power, data sets and AI sophistication,” he says. “The oddsmaker has an advantage because they have the luxury of time and volume. An individual bettor makes a single bet and hopes for the best. The oddsmaker takes hundreds or thousands of bets up until game time.”
“If each side were to calculate the game outcome roughly the same, the house can reasonably expect an equal amount of wagering on both competitors.”
How can the average bettor take advantage of AI? It’s counter-intuitive but simple — don’t be a sports fan, Pitluk says.
“Drop your emotions at the door,” he advises. “Act like a champion chess player and understand that no bet is ever a “lock.”
“Trust the data and statistics, but realize winning 55% of the time might be a job well done, so spread your action across as many games that your wallet and attention span can tolerate.”
The Future is Now
AI and algorithms are already having an impact on setting odds.
At Gambling.com, Gasparro says the firm is using algorithms across its business to help better its relationship with customers, as well as setting odds on games.
“However, sports betting is a very human activity so I think there will need to be people helping to shape and manage the odds,” he says. “AI and algorithms still aren’t very good when a bit of chaos is input or when outliers are thrown into the mix.”
Others agree, noting that with such an emotional-based vibe surrounding it, gambling will always embrace the human element.
“I don’t think that AI can completely substitute the role of people,” Galov says. “What machines aren’t able to predict are specific factors – like environmental conditions affecting the athlete’s performance, physical and
mental state of sports’ teams, emotional importance of certain games, and many more.”
“In the future, I see a much greater role of AI in terms of precise mathematical predictions, but I don’t see it completely overtaking the sports betting and gambling industry.”