A St. Olaf student’s successful career in sports betting.
When you imagine sports betting, it might be easy to picture bookies and attendees throwing money around at a horse race, a frenetic financial chaos similar to stock exchanges and pre-computerized securities trading. But like in a stock exchange, this chaos has vanished in favor of the digital world. The rise of sports betting with its path towards legalization in many states has also triggered a rise in the use of algorithms to predict which teams and players to bet on.
Largely, the process of creating algorithms to determine the success of individual players or teams is enabled by a recent change in sports as a whole, where teams and stakeholders have started using data and statistical modeling to not only decide what players to play when, but how the game is played. This revolution was brought to the forefront by the bestselling book “Moneyball,” which inspired the movie of the same name.
One St. Olaf student is using this statistical approach to sports to improve his own game, and also to make money in sports betting. Let’s call him Jay, as he must remain anonymous to maintain NCAA eligibility. Jay bets using a website called DraftKings, a site featuring a wide range of sports betting avenues, but bets almost exclusively on football. In order to maximize his chances of winning, he bets using a system where a lobby of individuals will each set forth a lineup, and based on how successful the players in the lineup are, they earn points. The half of the lobby with an above-average number of points get 180% of their bet back, and the other half lose it all.
This method is ripe for success, as you only have to beat the average competitor, not the Vegas odds. And so, to ensure that he wins a significant majority of the time, Jay uses algorithms to decide which players to pick for his lineup. The results speak for themselves. Every season Jay takes $25, with the hopes to multiply it as much as possible. Last year, he turned his $25 into $1000. This year, Jay is on track to replicate his staggering 3,900% return on investment, a return on investment even the biggest and most successful sports brokers would envy.
The secret to his success is the effort he puts into his algorithms. These algorithms are intensely complex mathematical functions that use over a dozen individual player metrics to spit out which players are likely to score him the most points on DraftKings. These metrics can be as simple as average yards per game to as complex as to which team is projected to be playing from behind, causing a higher likelihood of late game passes. Of course, creating the algorithm is just one part of the process. Jay spends about 24 hours a week collecting and inputting the data needed to fill in his massive excel spreadsheet that houses the algorithms.
In interviewing Jay, I realized there was something deeper than just his intellect and an ability to make money on sports betting. There was a wholehearted love for sports and a love for numbers at play. With the amount of effort he was putting in and the comparatively low amount of money he was betting, I asked him why he did it. He was certainly making below minimum wage, after all. I asked if it was to fulfill a career ambition.
“I would do it for free, just because I really love it,” Jay said. “If this was a lucrative, stable job, I would definitely consider it. It is a very good combination of things I love.”