Contact Brian Boyd for more info.

http://twitter.com/livemocks

http://www.facebook.com/pages/Live-Mocks/282396780436

Best wishes to them.

New England Patriots’ quarterback Tom Brady suffered a season-ending injury during yesterday’s game with the Kansas City Chiefs. After he left the game and before the extent of the injury was known, the TradeSport’s contract on whether the Pats would win the Super Bowl fell about 5 points (from 21 to 16). Then at about 6:30pm ET Yahoo Sports posted a story that he was done for the year and the price collapsed. It has now stabilized at about 8, so the injury experiment suggests that a healthy Brady was worth about 13 points in this market.[*] I hope his agent is paying attention.

[*] Possibly understates Brady’s value since there were already concerns about his health prior to the injury.

link: Tradesports NE Pats market

A fantasy sport (also known as rotisserie, roto, or fairy-tale sport; or owner simulation) is a game where fantasy owners build a team that competes against other fantasy owners based on the statistics generated by individual players or teams of a professional sport. Probably the most common variant converts statistical performance into points that are compiled and totaled according to a roster selected by a manager that makes up a fantasy team. These point systems are typically simple enough to be manually calculated by a “league commissioner.” More complex variants use computer modeling of actual games based on statistical input generated by professional sports. In fantasy sports there is the ability to trade, cut, and sign players, like a real sports owner.

It’s estimated by the Fantasy Sports Trade Association that 19.4 million people age 12 and above in the U.S. and Canada play fantasy sports and 34.5 million people have ever played fantasy sports. A 2006 study showed 22 percent of U.S. adult males 18 to 49 years old, with Internet access, play fantasy sports. Fantasy Sports is estimated to have a $3-$4 Billion annual economic impact across the sports industry. Fantasy sports is also popular throughout the world with leagues for soccer (known as football outside of the United States), cricket and other non-U.S. based sports. [...]

Despite the economic instability, fantasy sports started to become a mainstream hobby. In 2002, the NFL found that average male surveyed, for example, spent 6.6 hours a week watching the NFL on TV; fantasy players surveyed said they watched 8.4 hours of NFL per week. “This is the first time we’ve been able to demonstrate specifically that fantasy play drives TV viewing,” said Chris Russo, the NFL’s senior vice president. The NFL began running promotional television ads for fantasy football featuring current players for the first time. Previously fantasy sports had largely been seen in a negative light by the major sports leagues.

Fantasy sports continued to grow with a 2003 FSTA survey showing 15 million people playing fantasy football and spending about $150 a year on average, making it a $1.5 billion industry. [...]

Unlawful Internet Gambling Enforcement Act of 2006

The Unlawful Internet Gambling Enforcement Act of 2006, which was an amendment to the larger and unrelated Safe Port Act, included “carve out” language that clarified the legality of fantasy sports. It was signed into law on October 13, 2006 by President George W. Bush. The Unlawful Internet Gambling Enforcement Act makes transactions from banks or similar institutions to online gambling sites illegal, with the notable exceptions of fantasy sports, online lotteries and horse/harness racing.

The bill specifically exempts fantasy sports games, educational games, or any online contest that “has an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events, including any non-participant’s individual performances in such sporting events…” [...]

Criticism

Some sports writers criticize fantasy sports, especially those involving team sports, of focusing too much on statistics. A player on a real team might be a team player and help his/her team win championships, but in fantasy sports that team play may not matter as much as having good individual statistics.

There was a bill presented before Congress in 1999 that would have prevented public fantasy sports businesses, the contention being that fantasy sports is in fact a form of sports gambling. That bill failed, and eventually a ‘carve-out’ was created for the fantasy sports business. In 2006, the United States congress passed the “Security Port Act”, which prohibits credit card transactions and other electronic transfers to online gambling operators; the bill includes an exemption for fantasy sports.

Players who enjoy competing in fantasy sports leagues often do very well with sports related prediction games by using their team statistical knowledge to predict the outcome of a sporting event. [...]

Developing… (as would say our Deep Throats).

[...] I take the position (PDF) that, while point shaving in amateur sports may be somewhat more common than previously believed, the suspicious statistical trend that he identifies (heavy favorites win yet fail to cover the spread more often than expected) is unlikely to arise primarily from widespread corruption.

I base my opinion on the observation that the same statistical pattern also appears in NBA and NFL game outcomes, yet athletes in major professional leagues are unlikely to engage in point shaving. [...]

Does anybody know whether Justin Wolfers has responded to this argument? If yes, then please, give me the link in the comment below. Thanks.

Goff writes:

A couple of observations come to mind. First, the NFL future is an uncertain place regardless of whose predictions one wants to use. Second, few, if any, economists would be surprised by the outcome. In the end, the writer picks are just one guy’s view. The Vegas line represents an initial estimate by a stat-based person or group that then gets adjusted up or down by the opinions of hundreds or thousands of bettors.

Goff notes that the experts and the crowd in Vegas made many of the same mistakes: “Nobody had the Saints doing anything close to what they did. The Redskins tended to be overvalued, and so on.”

Featured In Super Crunchers:

Predict Your Child’s Due Date (Ayres)

Predict the Value of Bordeaux (Ayres)

Predict Justice Kennedy’s Vote (Ayres)

Personal/Family:

Predict How Long You’ll Live (Northwest Mutual)

Predict Your Child’s Due Date (Ayres)

Predict Your Child’s Adult Height (University of Saskatchewan)

Consumer Applications:

Predict Future Airline Fares (FareCast)

Predicts the Market Value of Your Home (Zillow)

Predict the Value of Bordeaux (Ayres)

Fun/Sports:

Predict Your Next Move in Rock-Paper-Scissors (Chappie)

Predict (on play-by-play basis) probability that MLB team will win a game in progress (Fangraphs)

Predict MLB Playoff Probabilities (Baseball Prospectus)

Predict NFL game (NFL Picker)

Predict Tennis Winner (Swineburne Sports)

Predict Justice Kennedy’s Vote (Ayres)

Media:

Predicts the Success of a Book Title (Lulu Titlescorer)

Predict Demographics of Who Will Use a Webpage (Microsoft adCenter)

Health:

Predict Your Liklihood of Illness or Disability (Northwest Mutual)

Predict Cancer Mortality and the Effect of Treatment (Sloan-Kettering)

Predict Risk of Cancer, Diabetes, Heart Disease, Osteoperosis and Stroke (Siteman)

Predict Heart Disease Risk (Eur. Soc. of Cardiology)

Predict Liver Disease Survivability (Mayo Clinic)

Money/Business:

Predict Your Lifetime Income (Northwest Mutual)

Predict How Much You’ll Have to Retire (Nationwide)

Predict Risk of Business Bankruptcy (cellspark.com)

Predict Risk of Business Bankruptcy (creditguru.com)

Tom and Mark are the betting analysts in the security department at the British Horseracing Authority, and the breadth and power of the information at their disposal is remarkable. The sport in general now accepts that Betfair works closely with the regulators to fight corruption. It is still startling, though, to see it at first hand. To the analysts, individual accounts are numbers, not names, and the identities of those behind them remain Betfair’s business unless the investigators have cause for concern. Every bet placed on Betfair is logged on the system within seconds, while at any one time, around 100 “flagged” accounts will be receiving particular attention. Bets are recorded, patterns noted and, where necessary, local stewards informed of suspicious betting patterns. On the other side of the desk, another member of the department is compiling information received from the betting analysts and elsewhere, which may eventually become evidence for a BHA disciplinary panel. [...]

“When we first signed the memorandum of understanding with Betfair [which allowed the department access to the exchange's betting information] we were sending ‘red alerts’ to local stewards all the time,” he says, “which meant that we had deep concerns about the betting patterns on a particular horse. Now, I can hardly remember the last time we sent out a red alert. [...]

Great.

There aren’t any “memorandum of understanding” between TradeSports-InTrade and the US sporting bodies.

Previous: BetFair has an anti-fraud team whereas InTrade-TradeSports has none.

—

UPDATE: Chris Hibbert comments on the lack of cooperation between TradeSports and the sports bodies (which is a fact)…

Don’t the US Sporting Bodies consider betting (other than regulated domestic bodies) to be illegal? Why would TradeSports approach them? Why would it read any missives they sent? And vice versa, why would the domestic bodies contact or welcome contact from TS?

If TS offered to provide info on suspicious activities, the American authorities would ask for a list of all Americans in their DB, and then go after anyone they received details on. This isn’t useful to TS. British authorities, OTOH, make a distinction between good customers and bad customers, and believe there are many more of the former than the latter.

UPDATE: Mike Giberson makes a counter-point…

Chris Hibbert makes a good point, but given that NFL security reportedly maintains contacts with illegal gambling operations to help the NFL detect possible corruption, presumably the NFL and other U.S. sports leagues could work out some arrangement with legal companies operating outside the United States, such as TradeSports, that wouldn’t require the companies to help the U.S. enforce its local laws.

• The Late Season Bias: Explaining the NFL’s Home Underdog Effect (PDF file) and;
• The Home Team Weather Advantage and Biases in the NFL Betting Market (PDF file).

Although the latter was published first, I began writing it after the former was accepted for publication (unfortunately long backlog at the publisher). Each paper deals mainly with home underdogs, as I make the point that at least part of the underdog bias is a function of whether the underdog plays at home or on the road. That is, bets on home underdogs win at a rate greater than do bets on underdogs. The main idea, which is nicely summarized on this post published on the “Odd Numbers” blog, is that the home underdog bias in football occurs almost exclusively in the final two months of the NFL season. While this may or may not be the case in other sports, the timing of the bias potentially reveals something about the behavior of bettors and/or bookmakers.

In the first paper, I dedicate the majority of the analysis to show that removing late-season games makes the home underdog bias disappear, and briefly offer that bettors may fail to take into account the impact that winter weather conditions have on game outcomes. In the second paper, I gather weather data that enables me to contrast the temperature to which players are acclimatized and those which occur on gameday. It turns out that cold-weather acclimatization is an important determinant of game outcome, which is not surprising. What is surprising is that cold-weather acclimatization is also an important determinant of bet outcome.

The important question that remains unanswered is ‘why?’ Is it simply that weather is not part of the equation for gamblers? Probably not. Is there a relationship between this finding and that in Levitt (2004 – PDF file), who shows that bookmakers may exploit bettor biases? Do bookmakers take a naked position on the acclimatized team just as they do on heavy underdogs?

Incidentally, this weather bias is not limited to sides bets. In ‘Weather Biases in the NFL Totals Market (forthcoming),’ I show that a simple and profitable strategy can be implemented to take advantage of the relatively slow speed with which totals lines move in response to changing weather conditions. Temperature, rain, humidity and, even more so, wind, all affect the total number of points scored. These determinants are known with certainty only immediately prior to kickoff, yet gamblers place totals bets in the days prior to each event. What is the point of placing a totals bet before this information is known? Unless you know what no one else does, your risk (but not payoff) is greater.

Obviously, gambling is entertainment, and to some the risk must be a significant part of the reward.

Rick Borghesi