Exploiting sports-betting market using machine learning

Ondřej Hubáček, Gustav Šourek and Filip Železný

International Journal of Forecasting, 2019, vol. 35, issue 2, 783-796

Abstract: We introduce a forecasting system designed to profit from sports-betting market using machine learning. We contribute three main novel ingredients. First, previous attempts to learn models for match-outcome prediction maximized the model’s predictive accuracy as the single criterion. Unlike these approaches, we also reduce the model’s correlation with the bookmaker’s predictions available through the published odds. We show that such an optimized model allows for better profit generation, and the approach is thus a way to ‘exploit’ the bookmaker. The second novelty is in the application of convolutional neural networks for match outcome prediction. The convolution layer enables to leverage a vast number of player-related statistics on its input. Thirdly, we adopt elements of the modern portfolio theory to design a strategy for bet distribution according to the odds and model predictions, trading off profit expectation and variance optimally. These three ingredients combine towards a betting method yielding positive cumulative profits in experiments with NBA data from seasons 2007–2014 systematically, as opposed to alternative methods tested.

Keywords: Decision making; Evaluating forecasts; Neural networks; Sports forecasting; Probability forecasting (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S016920701930007X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intfor:v:35:y:2019:i:2:p:783-796

DOI: 10.1016/j.ijforecast.2019.01.001

Access Statistics for this article

International Journal of Forecasting is currently edited by R. J. Hyndman

More articles in International Journal of Forecasting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().