Sports Betting
Information |
|
|
|
Client Testimonial |
"It's simply not enough to provide today's sports bettors with statistics and trends. SportsInsights.com realizes this and gives players indispensable sports betting odds & market data where bettors find the reasons behind the line moves...a valuable source of information."
Simon Noble, Manager
Pinnacle Sportsbook |
|
|
|
|
Subscribe to SportsInsights.com RSS
Feed 
SportsInsights.com: Lessons in Sports
Investing
(Part I: The Computer Group)
We’ve all heard about sharps, wise guys, professional gamblers,
syndicates and betting groups. Perhaps the most famous sports betting
group was the “original” Computer Group. Over 20 years ago, the famous –
or should we say “infamous” – Computer Group changed the face of the
sports betting world. Many of the Computer Group’s members made unreal
amounts of money. Several made millions (indeed, at least one eventually
earned a fortune estimated to be in the hundred-million-dollar range!).
In this article, we’ll take a look at the Computer Group’s story and see
what we can learn.
Can sportsbooks be beaten? Yes. Is success more difficult today? Most
definitely yes (tougher lines), although in some ways, no (more Low-Vig or Reduced Juice
Books; more competition amongst books
Shop
for the Best Line). Can SportsInsights.com’s tools be used to achieve success
and track sharps? Happily, yes. First, let’s “go to the videotape” and
see what we can learn from the Computer Group’s story.
The Computer Group: Early History
Twenty years ago, computers and computing power were not as readily
available as they are today. Backtrack even further – into the 1970’s –
and computers were even scarcer. Enter our first character, the
“computer dude /mathematician.”
The year is 1972. Our statman studied stats for his softball team at
work. He wondered, “What made teams better than others?” Later, he saw
more value (dollar signs!) in other areas – and turned his interest to
writing computer programs for college football. What stats were most
important to the outcome? How often did certain factors help to beat the
spread? It always pays to be ahead of your time – but this computer dude
was THE pioneer in studying everything from: number of first downs, home
field advantage, common opponents, etc. Some say that the distance a
visiting team traveled to a game was a factor. Amazing…
Fast-forward to 1979 where, seven years later, our mathematician moved
to Las Vegas. As usual, there were bumps along the way and this was NOT
the “happily ever after” ending that you might expect. Our computer dude
saw that sports investing was hard work – and included everything from
inputting data, to getting bets down at good prices, to suffering the
ups and downs of the business and especially the responsibility of
knowing this was his livelihood. The ups and downs of the business were
particularly difficult for our mathematician.
The Computer Group: Success
In 1980, our statman partnered with a doctor. The moral support of a
partner was key to turning things around – as was sharing some of the
responsibilities. The doctor had not been successful in his own
handicapping – but was toying around with the idea of forecasting
baseball games with a computer. The doctor and computer dude hit it off.
The doctor took over the responsibilities of getting the bets down –
leaving the mathematician to focus on the computer results. The doctor
was a wizard at moving large amounts of money around and getting bets
down.
The mathematician (now, with his brother) was happily updating the
computer and generating good results. In 1980, the computer researcher
and doctor shared about $100,000 in profits. In addition, the doctor was
growing a network of people to help get bets down. The doctor eventually
had a network of an estimated 1,000 people who used the information.
This network included people in almost every state around the country
and was used to get money down fast and to find the best lines.
By 1983, it is said that the Computer Group was earning almost $1
million in a good week of college football. Overall, the Computer Group
is said to have earned almost half a million dollars a week when it hit
its stride. During the 1983-1984 sports year, it is estimated that the
Group earned between $10-$15 million. However, even this could be an
underestimate because so many people had access to the information. Much
more may have been earned “off the books.”
The Computer Group: End Game
In 1987, the Computer Group’s success got to be too big. The federal
government initially investigated the Group because there was a question
that the Group was operating as an illegal sportsbook. However, the feds
soon learned that the Computer Group was “merely” betting on the games –
not operating as a book. However, after the case, the Computer Group was
dead due to the various principals not cooperating with one another. One
example: when the size of the network was revealed (as a result of the
investigation), the statman felt like he never got his fair share.
In the five years from 1980-1985, one ledger showed $14 million earned
on $135 million total money bet – for a ROI of more than 10%. Overall,
it is estimated that the Group achieved a winning percentage of around
60%.
Today, some of the individuals involved with the original Computer Group
continue to achieve success against the spread and are successful sports
“investors.” Indeed, some of these individuals are said to be worth
hundreds of millions of dollars. So, what is the moral of the story?
Some Notes and Points
• Winning at Sports Investing is possible. However, as in other
“businesses” that involve competition, only a small percent are
successful in the long run.
• The Computer Group achieved 60% back when lines were “looser.” This
seems to imply that this is close to an upper limit for a winning
percentage. You might be able to achieve a higher winning percentage –
but you may be leaving some money/units on the table by being too
selective.
• Some believe that “softer lines” aided the Computer Group’s rise in
prominence in 1980. This was the result of the FBI’s arrest of Bob
Martin – who was the “official line” in Las Vegas from 1967 to his
arrest in 1980.
• Today’s lines are “tighter” and are tougher to beat – but this just
means that you might have to “settle” for a slightly lower winning
percentage – or be more selective – to be successful.
• Value is important. The “leader” of the Computer Group used to compare
the actual Vegas lines to the Computer Group’s output. The Group would
then get money down on the games that had “value.”
• How do SportsInsights’ tools come in handy? We often talk about
“Betting Against the Public.” (LINK) This is one way of finding value.
• We also highlight Smart Money
methods as a way of tracking
where sharps might be investing.
• Today, one advantage that we have is that more books are available –
including some “low-vig” books. Some books are “sharper” than others.
Some may need to balance their action a bit. All of this can help to get
a better “price.” (LINK)
In Part II of our series, we’ll take a closer look at some of these
lessons – and how we can use SportsInsights.com’s tools to succeed in
sports investing – and in particular, apply some of these tools to
basketball.
Disclaimer
We do not guarantee that the trends and biases we’ve found will continue
to exist. It is impossible to predict the future. Any serious academic
research in the field of “market efficiencies” recognizes that
inefficiencies may disappear or fade over time. Once inefficiencies are
discovered, it is only a matter of time before the market corrects
itself. We do not guarantee our data is error-free. However, we’ve tried
our best to make sure every score and percentage is correct. Past
performance is not indicative of future performance. The information in
this article is for entertainment and educational purposes only.
|
|