It still has to do with sports betting. So let's see. So this is the website. If you're interested you can download a free 10-day copy. If you send me an email I'll send you an authorization key to use. You can use it for 10 days anyway.
It's snoopdata.com of the software. I'm going to talk about how about another little-- we have a few minutes. I'm going to talk a few minutes about an actual case that I got involved in as an expert. So I'm going to talk a little about internet gambling. And I'm going to answer your question in a minute. Internet gambling is about a $12 billion industry. Actually, that's more like a $20 billion industry now. Illegal in the US except for horse racing. So I'm not just talking about sports betting. Internet gambling is illegal in this country, technically, except for horse racing. Now, what does that mean? So I mean I'm sure a lot of you have seen websites like PartyPoker where you can play poker online https://casinoslots-sa.co.za/online-blackjack. If you play on PartyPoker in the State of Washington, you are guilty of a felony right now. You're not going to get arrested, but there's a new law in the State of Washington that makes internet poker playing a felony. So it's a very weird situation. Now, notice I say except for horse racing. So that's interesting. And in fact, there's a law that's sort of moving its way through Congress right now, in which the people supporting the bill and making these impassioned speeches on the floor of Congress about how internet gambling is destroying our moral culture, and ruining the lives of compulsive gamblers, and it has to be outlawed, except horse racing. Horse racing, of course, betting on horses is legal in California and various states. So they sort of have a lot of lobbying pressure. So horse racing for some reason is above the fray here and isn't immoral. You can bet on horse racing on the internet and it's perfectly OK. So right now, except for horse racing, there are over 2,000 internet casinos, and they're all offshore, except for the horse racing websites. There are about 23 million internet gamblers in 2005, eight million from the US. In April of 2005 the World Trade Organization ruled that the US is violating certain rules because they don't treat foreign and domestic internet gambling businesses equally in the sense that everything's illegal except horse racing. So far nothing has happened. However, recently, the Federal government has arrested and thrown in jail two people who are CEOs of internet gambling websites offshore. One guy from England who is the CEO of the company that-- a well-established website completely legal in England. And in fact, it is traded on-- it's a publicly traded company on the London Stock Exchange. He was going to Jamaica and he had a stopover in Dallas, and the Feds busted him in Dallas and threw him in jail where he still sits a couple months later. It's not quite clear-- he's charged with violating the US wire laws. But still, no one's gone after individual bettors at this point. So there are some articles that talk about these things. So here's an article from the Louisville, Kentucky Courier Journal, which talks about how horse racing is good.
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So it's not like the roulette environment. We get these new situations. Like this year, the Raiders have a new coach, a new offensive coordinator-- offensive is a good word for him-- and they have a new quarterback.
So it's like-- AUDIENCE: [INAUDIBLE]. DR. MICHAEL ORKIN: So what people who bet on sports do is they get these patterns, they get these things like Baltimore Ravens are 17 and 3, let's bet on this week. And then they look at other things that might be more connected with the real world, namely-- and they do actually what a statistician would do. They would say OK, I have this weird situation now. What's a plausible explanation? And if there's no plausible explanation, a smart person would say this is just random nonsense. AUDIENCE: So why not weight things differently. So the further they are [INAUDIBLE]? DR. MICHAEL ORKIN: People have used other techniques. What people tend to do, use software like this or is to restrict the year range. I mean I know some people who say if you go back more than two years you're an idiot, because everything that's relevant has happened within the last two years. That's almost like mark-off change or something. But then I know this guy who's a sports bettor who says you have to go back at least 15 years, because only then will you get enough data to establish a pattern. And that there are certain underlying physical characteristics and dynamics of football that you can uncover by looking at lots of years. So it's a mixed opinion on that. Yeah. AUDIENCE: [INAUDIBLE PHRASE] what position you play. At least some combinations of scores might be because of the way that the [INAUDIBLE PHRASE]. DR. MICHAEL ORKIN: That's actually an important issue for a couple of scores things. Like a point spread, like 17% of games land on a three-point difference. So if you're a bookmaker and you change the point spread from 3 to 3.5, you're doing a huge thing. Whereas if you change the point spread from 1 to 1.5, that doesn't mean very much. So in order to move the point spread off of 3, then there has to be a huge imbalance in the betting. So there are certain score differences, like 7 is the other number. But 3 is the big number. And then, in fact, you could even buy a half a point at some casinos. So instead of getting 10:11 odds, you'll get-- or 11:10, however you want to say it, you'll get 6:5 odds, which is worse, and they'll move the point spread a half a point just for your bet. So yes, the attention is mainly from the book makers who are much more hesitant to move off of a popular actual difference in score, a frequent one like 3, and then also bettors. For instance, if the point spread's 3.5, then a lot of the so-called wise guys who are the professional gamblers will take the underdog, because they know that a lot of games will end on 3, so they'll take the 3.5 points knowing that they'll win a three-point game, a three-point loss. So that brings up another little dynamic of sports betting, and that is there are basically two camps of bettors who the bookmakers call the squares and the wise guys. It sounds kind of funny, and it is. The wise guys are the professional bettors and the squares are like, you go to Las Vegas for the weekend and you bet on the home team. But they actually use that. They will not move the point-- if some wealthy square comes in and makes a huge bet on a team, they're not going to move the point spread in the same manner that they would if a well-known gambler comes in and makes the same bet. So there are some well-known gamblers-- this is a little football betting lore, or sports betting lore-- well-known gamblers who actually hire people to go make bets for them, because they don't want to have an effect on the odds. And the gamblers who go bet on them are called beards who bet that for them. AUDIENCE: It sounds like a whole [INAUDIBLE PHRASE]. DR. MICHAEL ORKIN: So your question I think is do to the wise guys do better than the squares? AUDIENCE: Not only that, but are there people who are so good that they make a lot of money from it, as much as-- DR. MICHAEL ORKIN: Well let's put it this way. There are people who are so good that they make a lot of money from the sports betting industry. Now, I know a couple of these people, and I know that they make a lot of money by selling information. Whether they actually make any money by betting on games is an open question. But they will have tout services, in other words, they'll sell. There's this publication called The GoldSheet that comes out of Los Angeles, which you can buy at any newsstand. It costs I think $7 now or something. It comes out every week. They did it in football and basketball. So the guy who originally found it was an avid sports bettor. He passed away now, but I used to know the guy, and I don't know if he ever made anything actually betting. But he had 35,000 subscribers to this weekly little sheet, plus lots of people who buy off of newsstands. So he made a lot of money in the sports betting industry. So typical gamblers-- but there are some people who seem to make money at it. I don't know how much. Anything else? AUDIENCE: [INAUDIBLE]. DR. MICHAEL ORKIN: Some of them have performed well. I see there are a few. I don't really market it anymore because I'm too busy doing other things, but it's available on our website. There are some people those who-- a group of users who swear that the strategies work, and that they made lots of money. I personally haven't really been doing much betting. I'm more of the developer, not the gambler. AUDIENCE: I was wondering-- I don't know too much about sports betting in the US, but where I'm from, the [INAUDIBLE] have quite reasonably different odds spreads against what they're offering. Is that the case here or would that be something else entirely? DR. MICHAEL ORKIN: Typically in football, it'll stay pretty much the same, because as soon as one changes a little bit, people will go and bet on what they think is the right team and it'll force them to comply. So it's just the betting public is so versatile, especially because of computer technology and stuff like that, they won't let odds be much different from one casino to another. Because you can do things like play hedge, you could hedge if there are different odds. And so you can make bets on each team in different places if you have different points spreads. So hedging is not easy in pro football betting because everything, especially with online gambling, there's so much of it going on that everything is within a half a point usually. So you can say it's the point spread plus or minus half a point just about everywhere by the end of the week. During the week, if an injury occurs or something happens, then, of course, the point spread might move a lot. Any other-- I'm going to go to something else now. So this is just a query output. Then this part here accesses the file that stores good situations. So now the automated part. So I'm going to clear this.
Let's say you want to look at just-- I'm going to restrict the year range-- 2000 to 2006. Let's see if we can find any good strategies for the Niners. So I'm just going to click random search. So it's looking for good strategies for the 49ers, and that search count tells how many queries it's looked at and analyzed. It's only saving the ones with Z-values greater than 2.5, and so far it hasn't found anything. Oops, there it found one. I'll let it run for another couple seconds. Two. So it's found two strategies. Let's just look at the best one. This is a strategy. The 49ers from 2000 to the present, when their opponent's last game was on the road, and the opponent's last game was under-- that means not a lot of points were scored-- then the 49ers on the road are 2 and 13 versus the spread with two ties. That's a Z-value of 2.84. What that suggests is when this situation comes up, you bet against the Niners because they're 2 and 13. Then here's a list of all those 49er games. Then, as I said, you can look at the save situations in there. Another thing you can do with the software is you can get updates from the web. So if you click on that, it'll actually automatically download the scores and point spreads for this week. You can manage the situations-- that means the good strategies you've already found. You can share it with other people, you can import last year's, and so on. You can also print out any of this stuff. So I don't have many saved situations, but if I wanted to look at all the games in September, I can go through each one. I don't think anything's on here, but let's see. I'll just look real quickly. So if you have a lot of-- some people use this software, have thousands of situations. It'll find the ones that apply to a particular game. So anyway, the part about this software that I think is sort of interesting is the random search thing. And that is just an automated query generator. So any questions? Yeah. AUDIENCE: Is it interesting to do things like to know that you got rid of those instead of just randomly generating-- DR. MICHAEL ORKIN: Yeah, so that's an interesting question, and we were messing with that for a while. So a genetic algorithm would be taking a good strategy, looking at parameters of a good strategy, like won or loss. Let's say that that Baltimore strategy they won, when they lost the last week and their opponent was whatever. So you have a bunch of variables in some vector. A genetic algorithm would do something like perturb the different values in the components of the vector and see if you can get something better. So would sort of try to genetically mutate the vector, which defines your strategy, and get a better one out of it. So yeah, we sort of messed around with that. It's not part of the software right now. Yeah. AUDIENCE: Can you potentially use the software to identify features which are aspects of the-- bookmakers themselves are using to come up with the point spread? And more importantly, [INAUDIBLE]? DR. MICHAEL ORKIN: Well actually, that's a good question. the answer is the way the bookmakers come up with the point spread is they look at the amount of money that's being bet on each team. And if it's not equally balanced, they'll make the point spread more favorable for the team that's not being bet on. They're not really looking at much of anything, except the betting money, and that's all automated. Now, they have to start with something. So at the beginning of the week, like right now, in fact on my way in, in the lobby, I stole the sports section of today's Mercury News, and even though football betting is illegal, sitting right here in the lobby is the Mercury News latest line, Pro Football. So I can see that this coming week Philadelphia's a six point favorite over the 49ers. Buffalo is a 5 and a half point favorite over the Jets, and so on. Then they also have the lines for college football. If it's bad to bet on pro football, it's supposed to be a real sin to bet on college football because you're sort of corrupting the integrity of the game. But here it is in the San Jose Mercury News. I don't know. AUDIENCE: That's the Nevada issue. DR. MICHAEL ORKIN: What? AUDIENCE: That's the Nevada issue. DR. MICHAEL ORKIN: That's the Nevada issue, right. This is the online issue. AUDIENCE: So doesn't work if the point changes-- DR. MICHAEL ORKIN: Correct. So that's a good question. So he had asked, so your question was how do the odd makers decide what are the important factors? Well, they start out with something, because here it is Monday and they've already printed a line, which is roughly resembling the various lines in Las Vegas. So there hasn't been that much betting action yet. So they had to start with something. So what they start with is they look at software, and they look at the records of teams, and they have formulas that give, what we called, power ratings, which are just ratings of how good teams are. Then they just sort of sit around and actually just sort of talk about how they think the public is going to bet. Then they'll come out with what's called an opening line, and they'll modify the opening line throughout the week. And it doesn't change by that much, actually. They're pretty good at coming out with the opening line. So the things that they are-- and they know a lot about football, and whatever sport they're handicapping. In fact, the companies in Las Vegas, handicapped sports has experts in each sport who really know a lot about the sport. They also have software. But the software is software that just gives trends and patterns, not exactly data mining software. But they use that too. But they rely heavily on how they think the public is going to bet. So right now the 49ers-- sorry, I didn't answer your question. Right now, if you bet on Philadelphia, you have to give six points since Philadelphia's playing 49ers next week, and they're a six point favorite. So let's say that during the week lots of people bet on Philadelphia until they move the point spread up to seven. When you made your bet it was six, so you get six. That was your question, right? Yeah. So you get the point spread that was available when you made your bet. Yeah. AUDIENCE: [INAUDIBLE]? DR. MICHAEL ORKIN: Well, if you're doing this data mining method or something similar to it, that's correct. AUDIENCE: [INAUDIBLE]. DR. MICHAEL ORKIN: That assumption is only moderately reasonable for a few important reasons. One is that teams change, coaches change, stadiums change. |
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