This book is a collection of applications of analytic techniques to a number of popular sports including baseball, basketball, hockey, Jai Alai, NFL football and horseracing. We focus on both the statistics of the sporting events and betting strategies on the events. The subject is fascinating as there are many twists and subtle complicated decisions. Sports analytics applies mathematical and statistical methods to important questions in the structure and performance of sporting activities using the same basic methods and approaches as data analysts in other disciplines. Sports games and events are a fruitful area for study and to evaluate betting strategies as there is extensive data and mean reversion. With prices changing continuously, risk arbitrage bets can be made. Moreover, little errors, like a penalty to a player or an error in a call by a referee, can change the score of a game and corresponding betting prices. The collection and analysis of in-game data can inform players, coaches and staff on effective decision making during sporting events. Novel features of the book include: an analysis of who were the greatest baseball batters; analyses of the players most important to team success (and they are not necessarily the best players) in basketball, NFL football and hockey; a tutorial on risk arbitrage and its applications to NFL football and NBA basketball; a discussion of many ad hoc decision rules by coaches and players and what was really optimal; in the racing section we discuss breeding, the analysis of various bets like the Rainbow and ordinary Pick 6, a discussion and betting on the most important races and a visit to the Breeders' Cup with Ed Thorp to demonstrate the place and show system in action.
Author(s): Leonard C Maclean, William T Ziemba
Series: World Scientific Series in Finance, 18
Publisher: World Scientific Publishing
Year: 2021
Language: English
Pages: 586
City: Singapore
Contents
Preface
1. Utility Theory and Preferences
1.1. Introduction
Appendix: Technical Fundamentals for Utility Theory
2. Fortune’s Formula: How the Pros Wager Using the Kelly Capital Growth Investment Criterion?
2.1. Introduction
2.2. Unpopular Numbers
2.3. Good and Bad Properties of the Kelly Criterion
3. Rating Batters in Baseball
3.1. Introduction: Who is the Best?
3.2. Stochastic Dominance
3.3. Benchmarking
4. The Expected Utility of Performance: Dominant Batting Seasons in Baseball
4.1. Introduction
4.2. Aggregate Performance
4.2.1. Batting Impact
4.2.2. Dominance and Utility
4.2.3. Standardization
4.3. Comparison of Batters
4.4. Conclusion
5. Jai Alai Arbitrate Strategies
1. INTRODUCTION
2. THE PERFECT ARBITRAGE
3. RISK ARBITRAGES
4. FINAL REMARKS
ACKNOWLEDGMENT
REFERENCES
6. The Game Box Score in Basketball: Linking Statistics to Game Outcomes
6.1. Introduction
6.2. Performance Measurement: The Box Score
6.2.1. Event outcomes
6.2.2. Composite measures
6.2.3. Team value
6.2.4. The estimated player contribution
6.3. The 1989–1990 NBA Season
6.3.1. Team value
6.3.2. Player contribution
6.4. Discussion
7. Risk Arbitrage in the 2021 NBA Championship
7.1. What is Risk Arbitrage?
7.2. The NBA Playoffs
7.3. The NBA Finals
7.3.1. Game 1: Milwaukee Bucks vs. the Phoenix Suns in Phoenix
7.3.2. Game 2: Milwaukee Bucks vs. the Phoenix Suns in Phoenix
7.3.3. Game 3: Milwaukee Bucks vs. the Phoenix Suns in Milwaukee
7.3.4. Game 4: Phoenix Suns vs. the Milwaukee Bucks
7.3.5. Game 5: Phoenix Suns vs. Milwaukee Bucks in Phoenix
7.3.6. Game 6: Milwaukee Bucks vs. the Phoenix Suns at Milwaukee
7.4. The Road the Finals
7.4.1. Round 1 East
7.4.2. Round 1 West
7.4.3. Conference Semi-Finals: East
7.4.4. Conference Semi-Finals: West
7.4.5. Conference Finals
Acknowledgements
8. Winning Hockey: Team and Player Impact in the NHL
8.1. Introduction
8.2. Winning Profiles
8.3. Team and Player Value
8.3.1. Event outcomes
8.3.2. Performance measure I: Elo
8.3.3. Performance measure II: The LOGIT
8.3.4. Connecting rating measures
8.3.5. Rating teams and players
8.4. NHL 2021
8.4.1. NHL teams
8.5. NHL North: Teams Values
8.6. NHL North: Player Effects
8.7. Discussion
9. NFL Analytics I
9.1. Expected Value of Field Position in Football
9.2. Combining Odds Ratios
9.3. Game Point Spread: Predicting Success
9.4. Aggregation of Performance Measures
9.5. Performance Measures: QB Rating
10. NFL Analytics II
10.1. Introduction
10.1.1. The jet lag effect
10.1.2. How to calculate the home field advantage
10.1.3. The decision on what to do on fourth down on the one yard line
10.1.4. The two versus one extra point fallacy
11. Stop Shy of the First Down
11.1. The First Down
11.2. The Choice
11.3. The Value of Possession, in Yards
11.4. Third and One
11.5. Second and One
11.6. Implied Value of Possession
11.7. Evidence of Poor Strategy
11.8. Conclusion
12. Efficiency in NFL Betting Markets
12.1. Introduction
12.2. Components of the Betting Decision
12.2.1. Odds and win probabilities in games
12.2.2. Point spread
12.3. Team Strength Ratings: The Elo System
12.4. Efficiency in the 2017 NFL Season
12.4.1. 538 Elo NFL Ratings for 2017
12.4.2. Probabilities and spreads from the Elo
12.5. Conclusion
13. National Football League: 2018–2019 Season
13.1. Introduction
13.1.1. 2018 Regular season: Teams
13.1.2. Players
13.2. Playoffs Teams in 2019
13.3. Wild Card Games
13.4. Division Champions
13.5. Conference Champions
13.6. Superbowl LIII
13.7. Awards
13.8. Conclusion
14. Review of the NFL 2019/20 Season, Playoffs and Superbowl
14.1. Introduction
14.2. NFL Regular Season: The Round Robin
14.3. The 2019–2020 NFL Playoffs
14.3.1. Division round
14.3.2. Conference round
14.4. Super Bowl
14.4.1. Awards
14.5. Conclusion: Looking Ahead
14.5.1. Scrambling
14.5.2. Prospects for 2020–2021
15. The COVID-19 NFL Playoffs and Super Bowl, 2020–2021
15.1. The NFL 2020–2021 Setting
15.2. NFL Super Bowl Betting 2021
15.3. The Evolution of the Betfair Odds Before and During the Playoffs and Super Bowl
15.3.1. Super Wildcard weekend January 9–10, 2021
15.3.2. AFC Games
15.3.3. NFC Games
15.4. Divisional Round, January 16, 17
15.4.1. The Conference Championship Games
15.5. The Super Bowl LV, February 7, 2021
15.5.1. Commentary
15.5.2. Final comments on betting
15.5.3. Epilogue
15.5.4. Appendix: The COVID-19 and injury effects
16. Team Composition: Are the Best Players on the Best Teams?
16.1. Introduction
16.2. Top Ranked Players
16.2.1. Number of top 400 players by team in 2017 by Sports Illustrated
16.2.2. NFL top 100
16.2.3. Comparison of SI and NFL rankings
16.3. Modeling the Dependence of Team Win Percentage on Top Players
16.3.1. Number of top players from Sports Illustrated
16.3.2. Weighting by position
16.3.3. Team performance: Predicted and actual
16.3.4. Model predictions
16.3.5. The Sports Illustrated list: Top 100
16.4. Conclusion
17. Primer on Dosage and the 2012 Triple Crown
17.1. Introduction to Dosage
17.2. The 2012 Triple Crown
18. An Application of Expert Information to Win Betting on the Kentucky Derby, 1981–2005
1. Introduction
2. The Racetrack as a Sequence of Markets
3. The Dosage Index and Performance Measures
4. Data Acquisition
5. Application of Breeding Information and Performance Measures to Refine Estimated Win Probabilities
6. The Betting Model
7. Conclusions
Acknowledgements
Notes
References
Appendix: Data Sources
19. Stochastic Programming and Optimization in Horserace Betting
19.1. Introduction
19.2. The Importance of Getting the Mean Right
19.3. The Favorite-Longshot Bias
19.4. Place and Show Optimization with Transactions Costs
19.5. The Place Pick All
19.6. Some Stochastic Programming Formulations
19.7. The Pick3 and Pick 4: Theory of Pricing the Bets
19.8. The Pick 4
19.9. Example of Pick 4 with embedded Pick3’s and Doubles: Travers Day at Saratoga
19.10. The Pick 6: Theory of Pricing the Bets
19.10.1. 2001 Breeders’ Cup Insurance bets for SCA
19.11. The One That Got Away: The Hitable $2 Million Pick 6 at the 2009 Breeders’ Cup
19.12. Professional Racetrack Betting Syndicates
19.13. Conclusion
20. A Walk into Greatness: June 2017 Visits to Tesio’s Horse Stables and the Sassicaia Winery
20.1. Seven Top Tesio Horses
20.2. The 10 Greatest Racehorses of All Time
Acknowledgment
21. Horse Ownership: The Example of Honor Code
21.1. The Setting
21.1.1. Back to Honor Code: The Met Mile on the Belmont Stakes undercard, June 6, 2015
21.1.2. Honor Code at the Whitney, August 8, 2015
21.1.3. Honor Code at the Kelso Grade II Mile Race, October 3, 2015
21.1.4. The Breeders Cup Classic, October 31, 2015
21.2. After the Classic
22. The Pick 6 and the Rainbow Pick 6
22.1. Theory of Pricing the Bets
22.1.1. 2001 Breeders’ cup insurance bets for SCA
22.1.1.1. Insuring the Pick 6
22.2. The One That Got Away: The Hitable $2 Million Pick 6 at the 2009 Breeders Cup
22.3. A Big P6 Win
22.4. The Rainbow Pick 6 at Gulfstream Park
22.5. The Pick 6 at the Del Mar Futurity
22.6. A Pick 6 at Del Mar
Acknowledgment
23. A Pick 6 Tale
23.1. Background
23.1.1. Example 1: An interesting Pick 6
23.2. Remarks on How to Win at Racing
23.3. Postscript
23.3.1. Comments
23.3.2. Conclusion
Appendix
24. The Triple Crown and Major US Three Year Old Races, 2019
24.1. The 2019 Florida Derby
24.2. The Kentucky Derby
24.3. The Preakness
24.4. The Belmont Stakes
24.5. Haskell Invitational, July 17, 2019
24.6. The Run Happy Travers, August 24, 2019
24.7. The Pennsylvania Derby at PARX racetrack, September 21, 2019
24.8. The Jockey Club Gold Cup at Belmont Racetrack, September 28, 2019
24.9. The Breeders’ Cup, Santa Anita, November 2, 2019
24.10. A Forecast of the Top Horses of 2019 by Gehrke (2020)
Acknowledgments
25. The Pegasus World Cup III: Accelerate vs. City of Light
26. The Big Money Older Horse Races: Pegasus, Saudi Cup and Dubai World Cup in 2020
26.1. The Pegasus
26.2. The Saudi Cup
26.3. The Dubai World Cup
26.3.1. Racing is in trouble
Appendix: Past Performances for the Saudi Cup
Acknowledgment
27. The COVID-19 Triple Crown, 2020
27.1. The Belmont Stakes
27.2. The 146th Kentucky Derby
27.3. Preakness
27.4. Breeders’ Cup
Acknowledgment
28. Dr Z’s Place & Show Racetrack Betting System at the First Breeders’ Cup
28.1. Transactions Costs
28.2. Three to Beat the Breeders’ Cup by Bruce C. Fauman
28.2.1. First Race: The Juvenile, one mile, for two year old colts and geldings, purse $1,00,000
28.2.2. Second Race: The Juvenile Fillies, one mile, for two year old fillies, purse $1,000,000
28.2.3. Third Race: The Sprint, six furlongs, for three year olds and up, purse $1,000,000
28.2.4. Fourth Race: The Mile, one mile on the grass, for three year olds and up, purse $1,000,000
28.2.5. Fifth Race: The Distaff, 1 1/4 miles, for fillies and mares, three year olds and up, purse $1,000,000
28.2.6. Sixth Race: The Turf, 1 1/2 miles on the grass, for three year olds and up, purse 1,000,000
28.2.7. Seventh Race: The Classic, 1 1/4 miles, for three year olds and up, purse $3,000,000
28.2.8. Eighth Race: Fleet Nasrullah Stakes, six furlongs, for two year olds, purse $60,000 added
28.2.9. Ninth Race: Seabiscuit Claiming Stakes, 1 1/2 miles on the grass, for three year olds and up, purse $100,000 added
28.3. Postscript by Ziemba
28.4. Off Track and Other Track Betting
28.4.1. Teletrack in New Haven, Connecticut
Bibliography
Author Index
Subject Index
