If you love your sport, the chances are that you also enjoy the odd wager here and there; this adds a little excitement to games you may not otherwise hugely care about.

Interestingly, the chances are also that you’ve generally lost money in this endeavor over the years, despite having the odd big win here and there. This is the pattern most sports fans see across different sports over the history of their gambling activity over a number of years. The bookies aren’t in business to give away free cash and their careful mark-up of the odds is generally designed to put you in a slightly disadvantageous position, statistically speaking, before the game or race etc., gets underway.

Now, the chances also are that when you have a wager here and there – you do so based on your gut feel for a game, or possibly as a way of enhancing the enjoyment should your chosen team win. But there are people out there who take very little or no interest in sports whatsoever – but do take a keen interest in how effective their gambling systems are at generating a profit. In other words, their ‘utility’ or enjoyment comes from the development of their systems, seeing them work well in practice and, of course, the favorable results on the bottom line.

Moneyball

We’ll call these people the ‘Moneyballers’ – in honour of the book and subsequent movie of the same name. The main premise of Moneyball was that the statisticians’ purely mathematical approach worked better than that of the collective wisdom of baseball professionals such as managers, coaches, players, scouts, and anyone else involved directly in the game making what are essentially qualitative – rather than quantitative – judgments (even if stats are involved to some extent in more qualitatively based judgment calls).

The book and film tell the story of the Oakland A’s‘ purely statistical approach to the business of signing players. The As’ statistical analysis was able to demonstrate that previous player stats such as slugging percentages and on-base percentages were superior indicators of likely future success than coaches’ and other advisors’ more qualitatively based judgment calls. Meanwhile, other stats such as runs batted in, stolen bases, and simple batting averages were, according to the As, outdated.

The Oakland As also realised that the qualities they were looking for in players based purely on the stats they wanted to look at meant those players were generally cheaper than the market was rating them. In other words, the As would be able to build a baseball team that would be able to compete at the highest possible level in Major League Baseball (MLB) against other teams who had spent a whole lot more money.

And as anyone who has seen the movie starring Brad Pitt as Billy Beane, the general manager of the Oakland As, Jonah Hill as Peter Brand, the assistant general manager and the late Philip Seymour Hoffman as manager Art Howe will tell you – it worked…and how!

In fact, the Oakland As’ 2002 season was one of the most remarkable in Major League Baseball history. The As finished top of the American League West, with an enviable record of 103-59. And this was all down to the statistician’s cold, hard numbers only based approach.

The league win is now probably the most famous in the history of MLB. The previous year saw three important players leave the As and general manager Billy Beane replaced them with relatively unknown players. The As would go on to win 20 games in a row which in turn prompted Michael Lewis to pen his 2003 book “Moneyball – The Art of Winning an Unfair Game” followed by the movie.

The rest, as they say, is history – but what’s all this got to do with gambling?

Well staying with baseball for the moment, it’s perfectly possible to build systems to generate data to inform your gambling in a whole battery of statistics and in different areas of the game. With the world’s biggest gambling exchange Betfair, for example, gambling on baseball can be done on pure stats. In fact, Betfair even sells software and apps to help punters build their own databases affording different weightings to different criteria to better inform gamblers’ baseball wagers. That’s because Betfair isn’t a bookmaker but a straightforward exchange of buyers and sellers coming together to create a market. The greater that market volume, the greater the dollar margin for Betfair which takes a five per cent commission on the successful wager only. In other words – the greater the gambling volume, the bigger the profit; Betfair doesn’t care who actually wins or loses anything – unlike a conventional bookmaker who may have to take a big hit now and again at a sport, particularly when a favorite of some kind is victorious.

There are other exchanges, of course, and it isn’t always necessary to wager with an exchange to be able to get the best odds – but it is usually the case. Quite what systems you develop and in what areas of the game is up to you; there are countless opportunities to go at and the system is only as good as the data you input and the weightings of importance you give to different aspects; welcome to the money-ball world of stats! The best way is to try out different software and develop your own niche based on experience and previous data to see if you can beat the market. You should be able to do this in demo mode based on previous results and on current / future events etc., to rigorously test your own system before investing any real cash.

Instinct

But if all this (quite understandably …) rips all the fun out of baseball or any other sport for that matter, then it all comes down to your own qualitative judgement calls. We’ll call this the “instinctive” approach.

There are certainly times when one’s instinct can prove superior to any statistical system; whether it can do so over a long enough time, though, is quite another matter.

Sometimes, you just get a strong feeling that some kind of upset is on the cards. This is notably true of simpler bets with simpler outcomes. Let’s say, for example, that you think the afore-mentioned Oakland As are going to get a lot closer to winning the World Series than the market does. So you back them at 20-1. Then the As out-perform expectations and look like they’re in with a better chance and the odds are now 10-1. With an exchange, it’s then possible to lay back your bet either locking in a profit from your previous judgement, or laying back half to enjoy a free bet on the As whatever the outcome.

In a two-horse race of any kind, the same can be true. Let’s say you just had a strong feeling that the Seattle Seahawks were going to get the better of the Denver Broncos in the Super Bowl back in February in New Jersey. Of course, as we now know, the Seahawks really smashed it – and the Broncos were pre-match favorites. In this case, if you followed your instinct and kept the wager simple with a small designated percentage of your overall pot of, let’s say, around five per cent, then any bet at better than even money would have been worth taking. With an exchange, you’d have to take account of the five per cent commission, but you’d most certainly have got better odds in this particular example.

But there are also times when your instinct is off-kilter. So make sure you stick to your own system, particularly in terms of the size of the wager as a percentage of your overall pot.

Better still, if you can do it, why not run two mini funds – one based on what you think and the other based on what the stats tell you to do in any given sport – and see if your instinct can beat your own moneyball system? It’s all good fun and you can do this without laying down a penny of real cash.