New academic paper dives into science of sports betting
Peer-reviewed study from CCNY professor shines spotlight on optimal decision-making
A new peer-reviewed study from a City College of New York professor is attempting to shed light on the science of sports betting.
The academic paper, entitled ‘A statistical theory of optimal decision-making in sports betting,’ is authored by Jacek Dmochowski, associate professor in the Grove School of Engineering, and strives to illustrate the limitations of intuition in betting.
“The central finding of the work is that the objective in sports betting is to estimate the median outcome. Importantly, this is not the same as the average outcome,” said Dmochowski, referring to the difference between median (the middle value in an ordered set of values) and mean (the average value of a set of values).
Dmochowski then uses the most recent SuperBowl match up as a hypothetical example to show how bettors can mistakenly apply the mean as a guiding principle for their wagers, when they should in fact be leveraging the median.
“Assume that Kansas City has played Philadelphia three times previously,” Dmochowski said. “Kansas City has won each of those games by margins of three, seven, and 35 points. They are playing again, and the point spread has been posted as Kansas City -10. This means that Kansas City is favored to win the game by 10 points according to the sportsbooks.”
While a bettor’s intuition may point to a wager on Kansas City -10 – the Chiefs had won all three previous games by an average of 15 points, after all – Dmochowski argues the optimal bet is in fact Philadelphia +10 when factoring in the median score differential among the three games.
Dmochowski’s primary conclusion is that in the absence of building a model – a skill foreign to most recreational bettors who lack engineering or statistical backgrounds – bettors should nonetheless strive to employ a more data-driven approach to wagering.
In practice, that can take the form of simply comparing multiple sportsbooks in search of the best price for a bet, also known as line shopping.
“Understand that the sportsbooks are incredibly skilled at setting the odds,” Dmochowski said. “At the same time, they only need to make a small error to allow a profitable bet. So, the goal is to seek out those opportunities.”
Dmochowski’s full paper can be found in PLOS One, an open-access mega journal published by the Public Library of Science.