Wednesday 20 March 2013

Knowledge of football is a myth in sports gambling success

In a new study of football forecasting, the researchers compared the betting results of three groups of participants, including 53 professional sports gamblers, 34 soccer fans who were knowledgeable about the sport but had never gambled, and 78 non-gamblers with no prior knowledge of football at all. All participants placed bets on the final scores of the 16 second-round matches of the Champion's League, organized by the Union of European Football Associations.

No difference was found in the results of the most experienced sports gamblers, the most knowledgeable football fans, and the totally inexperienced. Two of the least knowledgeable actually made the most money betting....!

How does it affect the NAM?
Given that NAMs often have to take a ‘leap in the dark’ when dealing with major customers, like forecasting coupon-redemption rates in uncertain times, the role may sometimes feel like high risk gambling. In other words, it may seem that playing by ear can be just as successful as a deep understanding of the customer when predicting outcomes…, according to the football research above.

What makes the NAM role different?
In practice in the NAM role, we need to distinguish risk-taking and gambling. Risk-takers would not pass a car on a hill or a curve, nor blindly go into a business venture. They assemble the facts and evaluate carefully from every possible perspective the chances of success and the benefits which go with that success.  They understand  there are no guarantees and that the possibility exists that they could lose (Zigler/Sully).  Nonetheless, they recognise that the possible gain is so much greater than the possible loss that they deem it appropriate to take the risk.

Gambling is a far more hazardous undertaking, with the only long term winner being the person accepting the bets.

The only difference in these unprecedented times is that we are operating with deeper downsides, requiring numbers-based latest trade and customer insight in order to assess how much risk we are actually taking.
But nothing replaces the need to then take the risk…. 

NB. For those wanting more insight on how to shorten the odds, it also helps to distinguish Risk Intelligence, a purely intellectual ability, from Risk Appetite, an emotional trait, more to do with how comfortable you are with taking risks. Risk Appetite governs how much risk you want to take, while risk intelligence involves being aware of how much risk you are actually taking… ( More )

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