Sports betting success through “the wisdom of the crowds”

Artificial intelligence has been disturbing gambling consortiums in Las Vegas, the publication Extreme Tech claims, reporting that Microsoft’s AI engine, Bing Predicts, recently bested the Las Vegas odds in predicting winners for week one of the NFL season.

It wasn’t a flash in the pan, either; the system correctly predicted the outcomes of all 15 games in the 2014 Brazil World Cup knockout round and almost all the results of the 2015 Academy Awards, including the winners of best picture, best director, best actor, and best actress.

Bing Predicts was able to pull off these impressive feats, besting professionals in the business, due in part to a “wisdom of the crowds” approach.

In predicting NFL winners, the system not only takes into account diverse variables such as a team’s previous margins of victory, player statistics, stadium surfaces, weather conditions, but is capable of quantifying aggregate sentiments on the social web.

Extreme Tech reports: “By tapping into social media and digesting the opinions of thousands, if not millions, of Twitter and Facebook users, the AI can pick up intangibles that defy even the most hardcore of human statisticians. For instance, the model might detect a rumor among Twitter users that the Patriots starting quarterback just had a fight with his wife in the wee hours before Sunday’s game and hence is less likely to be at the top of his form.

“While such rumors may prove to be unfounded, they have a core of truth enough of the time that they give the model a statistical advantage. In precise terms, Walter Sun, who heads up the Bing Predicts team, found that analyzing this so-called “wisdom of the crowd” actually increases the accuracy of their predictions by 5 percent.”

Extreme Tech poses the question: can professional sports gambling, and for that matter other industries that involve a form of prediction and betting in the looser sense, survive in a world where a Silicon Valley corporation holds the highest card in the deck?

“Notable among these are the fields of insurance and commodities trading. If Microsoft or another one of the Silicon Valley behemoths that are developing cutting edge AI can leverage their advantage in the prediction business to outgun the industry leaders in some of these fields, they wouldn’t have to wait long to achieve supremacy in the market,” the publication speculates.