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Zooming in on Sports Betting Algorithms Software

22 November 2023 | Articles

Author: MOHIO Team

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Zooming in on Sports Betting Algorithms Software

Zooming in on Sports Betting Algorithms Software

Thanks to harnessing sports betting algorithms software, bettors can minimize the likelihood of losing, and gambling operators maximize their ROI.

Sports Betting Algorithms Software: A High Tech Tool for Getting Rich

In the early third millennium, the gambling industry market is on a robust rise and is expected to display a spectacular CAGR of 11.7% within the next seven years. Sports betting is one of the locomotives in the field, manifesting a $20+ billion increase within just one year (2021), which turns the domain into a mouth-watering business niche. 

Although having quite a checkered reputation in society and a polar legal status in different jurisdictions, this kind of entertainment is probably as old as sports are. People have always wanted to combine their delight in watching competitions with an opportunity to monetize their passion. Wagering at sports events gives them a valid chance to do that. 

Yet, like it is the case with any kind of gambling, here you also face the likelihood of losing the money you bet. Avid punters are wracking their brains about the ways of minimizing such an adverse outcome and correspondingly increasing their prospects of winning. This is where sports betting algorithms come in handy.

Betting Algorithms Made Plain

In mathematics, an algorithm is defined as a sequence of clear-cut instructions applied for performing calculations or solving certain problems. One of the possible use cases for algorithms is their predictive application, which is widely practiced in the world of finance. 

Recently, these mechanisms have started to penetrate other spheres, including the realm of sports betting. Here, special algorithms are employed to figure out the chances for a sports team or an individual player to win or lose in the oncoming match with the purpose of helping gamblers and operators in the niche. Utilizing them, punters can place a profitable bet, whereas gambling operators will tap beneficial business opportunities and maximize their ROI. How come sports betting algorithms have such value?

How Do Sports Betting Algorithms Work?

Unlike what happens in RNG games, sports results aren't random. They can be predicted more or less accurately after analyzing historical data on the performance of a certain athlete or team. In fact, this is the key recipe for the efficiency of forecasting models founded on betting algorithms in sports. In the age of across-the-board digitalization, these models have become the underlying principles of sports algorithm software utilized by forward-thinking gambling operators. What is the formula for building such models?

First of all, you should determine the sport (for instance, tennis or biathlon) or league (NBA, NHL, FIFA, NFL, etc.) in which your tool will specialize.

Then, you should comb out all available resources and collect as much relevant data about the teams or players and their previous results as possible. Such records should include multiple items, such as the athletes’ form, injuries, and individual stats (points/yards per game, rebounds, turnovers, etc.), team stats (like the percentage of killing or capitalizing on the power play), the event’s venue, weather conditions, time remaining before the kickoff, etc. The greater the dataset and the more diverse the information it contains, the more accurate the prediction will be.

The third step is to understand what the model is going to predict, that is, what bets it will be designed to support. Here, you have two options to choose between that condition the type of algorithm it will rely on.

  • Value betting algorithms. In sports, this is the most widespread type by far. They use statistical data to establish the odds of a team or a player winning the game, calculate the expected bet value (hence the name), and suggest the most advantageous bet size. Being aware of such figures, operators can determine the interest rate on this or that bet, and bettors can search for operators with the best offers.
  • Arbitrage betting algorithms. These are more common in the financial sector, where actors can make a profit by exploiting price differentials in various assets (stocks, currencies, etc.). When utilized in sports, arbitrage algorithms take into account sports event odds changes. Typically, punters place a bet at favorable odds and then make a second bet against their initial one. In this way, the bettor is sure to get a profit, no matter what the game's outcome will be. Here, the betting algorithm won't go for any predictions of sports results but will search for suitable patterns in the odds related to a certain event. 

Once you know what algorithms you need for your software, you can select the tech stack, recruit a team of vetted professionals, build the solution, and test it to gauge the accuracy of the model it is hinged on. 

Sounds perfect, doesn't it? Well, almost. 

Limitations of Sports Betting Algorithms

When using betting algorithms, you should bear in mind their shortcomings. Here are the most critical of them.

Dependence on the quality of data

However skillful the chef may be, the way the dish will taste is greatly conditioned by the ingredients it is made of. The same truth applies to betting algorithms. As computer specialists put it, GIGO (Garbage In, Garbage Out). If you feed in tons of useless and irrelevant facts or the input data lacks consistency, accuracy, completeness, clarity, and integrity, don’t expect much of the predictions made by your algorithms.

Thus, the rule "the more, the better" doesn't work here. Never be tempted by the sheer amount of such garbage data. Try to utilize a handful of solid, straightforward, and relevant items rather than overwhelm the software with heaps of confusing and/or insignificant facts that will only distort the final outcome. 

Dependence on the historical data only

All the results betting algorithms yield consider only the facts people enter into them. And that means the data related to the past. Whatever happens right before the sports event or during it remains outside their reach. Changes in the starting lineups due to various reasons, unexpected injuries, suddenly worsening weather conditions or other unpredictable turns of events will surely have an impact on the result. However, since they weren't accounted for before, the algorithms didn't have access to this novel information, so the accuracy of their predictions will suffer.

Inability to create a comprehensive picture

No matter how many relevant figures you will feed into the algorithm, some non-measurable factors may influence the result of a sports event. You can know everything about an athlete's physical state or the points they scored in the current season, but you can hardly fathom their psychology and emotions. The assessment becomes even more doubtful when it comes to team spirit and collective sentiment, which can fluctuate during the game. Also, the personality and competence of the coach can become a game changer, capable of reversing the momentum of the events on the pitch. Algorithms can't include these unpredictable and indeed incalculable things in their analysis; thus, the accuracy of forecasted odds is deficient. 

Finally, you must remember that even flawless algorithms just give predictions, after all. There is always a possibility that, in real life, they will fail against all odds, leaving you in the red. To turn such likelihood into a fat chance, it is vital to harness cutting-edge technologies in developing sports betting algorithms software.

Disruptive Know-How to Use in Sports Betting Algorithms Solutions

The efficiency of betting algorithm solutions can be dramatically enhanced via the employment of innovative technologies.

  • Big Data. Data analysis is the bedrock of betting algorithms. In the modern world, the amount of data to be entered into the predictive software is so huge that old-school approaches and methods won’t cope with this ocean of facts and numbers. Big Data tools will empower betting algorithms with complex and highly productive mechanisms for data analysis to expose patterns and trends bettors and operators look for.

  • Machine Learning and neural networks. ML, as an AI-fueled technology, employs statistical techniques to create computer programs that can learn from data they obtain and come up with predictions based on recorded performance. The power of Machine Learning mechanisms can be increased manifold when combined with neural networks. They excel in searching for repeatable game patterns and transform them into data sets fit to be analyzed by ML tools. Thus, by replicating the structure of the human brain, neural networks can process information very swiftly, handle vast amounts of variables, and solve complicated problems related to prediction.

  • Natural Language Processing. To help betting algorithms with calculating odds, NLP is utilized to sift through players’ and coaches’ press conferences and interviews, scrutinize news reports and social media posts about teams, and process any other text-based data (either spoken or written) bearing on the subject. Such analysis makes betting algorithms’ output more accurate since it allows them to take stock of athlete’s motivations, attitudes, and emotional health that influence their performance significantly. Also, NLP tools examine experts’ opinions concerning a player or a team to obtain a balanced 360-degree view of them and thus contribute to prediction quality.

Key Takeaways

Sports betting is one of the popular pastimes of our time, having a long history behind it. The secret of its popularity is in its mission to blend the thrill of watching sports events with money-making opportunities. 

To increase winning chances and minimize the possibility of losing, modern gamblers have stopped acting on a hunch and increasingly rely on mathematically proven methods of determining the team or athlete that has the highest likelihood to succeed. These methods are the cornerstones of betting algorithms implemented in the specialized software that streamlines the process of calculating winning odds and selecting the most profitable bet size. 

Despite having some limitations (like dependence on past data of high quality and inability to present a 360-degree picture of the analyzed object), sports betting algorithms are widely applied by both bettors and gambling operators. Their efficiency can be drastically augmented by harnessing cutting-edge IT innovations (Big Data, ML, NLP, neural networks, etc.).

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