Regression Analysis in Sports Betting Systems
Sport betting is a form of wagering on the outcomes of traditional probability games such as cards, dice, or roulette as well as on the outcomes of sporting events such as football or baseball. Betting results are resolved at the conclusion of the event and generally requires that neither of the parties involved in the wager has any influence on the event in question. A private citizen wagering on the outcome of a football match between Manchester United and Chelsea would be considered a form of sports betting, while the team owner making that same bet would not be considered a form of sports betting.
Sport betting has been popular for centuries. The earliest forms of contemporary sport betting revolved around cock fights in the late 17th century, while wagering on horse races became highly popular between the 19th to 20th centuries. In 1960, television gave birth to a new era in the history of betting on team-based sports, and the longstanding 10% tax on sports betting was eliminated in 1974, leading to even more popularity. In 1990s, the advent of the Internet facilitated online sports betting, creating an increasing need for sophisticated statistical tracking, like regression analysis, to develop winning strategies for wagering.
Traditional gambling and sports betting: Are they same?
There are several key differences between traditional gambling and sports betting. In traditional gambling, the likelihood of any event can be calculated accurately even though the number of possible results may differ (for example: the odds of picking a specific card out of a standard deck is always one in 52). However, the likely result of a sporting event cannot be calculated with such precision. While the odds of winning in traditional gambling are derived from a known probability, sports betting relies on parsing a large number of variables, usually with more than one potential outcome.
Sports gambling: Profitable or not
In 2011, the gross gaming revenue of the global gambling industry was $368.4 billion, with 8.60% of this total earned from wagers made over the Internet. Online gambling includes all Internet-based portals that provide lotteries, poker, casino games, bingo, and sports betting. Sports betting remains most popular form of online wagering, representing 43% of gambling revenue earned from Internet sources, with a total market of $13.66 billion.
Methods used in sports betting system
Various methods can be used to generate a sports betting system, although most experts agree that the most widely used method is regression analysis. Regression analysis can be used to establish the important factors and variables which will influence the overall outcome of a sporting event. Multivariate linear regression, logistic regression, and multiple regression analysis can all be used to calculate the probability of any outcome, and since determining the outcome of a sporting event requires analyzing a high number of variables, regression analysis provides a suitable framework for defining and assigning a value to these variables. For example: A multivariate linear test on American football games was conducted by NFL. The result showed that the most important variable – the variable with the highest influence over the outcome of the match – was “passing efficiency”. Recent movies and bestseller titles like Moneyball have delved into the world of statistical analysis, driving increased interest in the use of regression analysis for sports betting.
Logistic regression analysis
Logistic regression is a forecasting technique that provides a probability percentage for a given variable. For example, if one wants to calculate the probability of a team winning the 59th game of the season, they would analyze the last 58 games to obtain the team’s point differential or margin of victory (MV or MOV). Margin of victory is a statistical term which indicates difference between the number of points scored by the winning team and the number of points scored by the losing team. A smaller MV represents a close match, and by using statistical software like SPSS, the following equation can provide the percentage chance that the team will win, based on MV scores: