The world of trading and risk management has come on leaps and bounds in recent years thanks to advances in technology, but how does that shape the sportsbook of 2030?
Fast forward 10 years to 2030 and Dinos Stranomitis, Director and COO at Altenar, thinks that the future for sports betting lies in the development of software that can independently adjust probabilities based on the availability of data.
With current trading and risk management strategies, Stranomitis is of the opinion that pricing is too influenced by fluctuating betting volumes, which does not always equate to correct odds.
“If we look at what’s happening today, there are companies which come up with the pricing for all sports and leagues,” he shared as part of Altenar’s latest video. “Bookmakers take over with small limits in the beginning. But as we get closer to kick-off time, these limits get bigger.
“This is largely due to the betting volumes they see, and not necessarily according to the news they hear. Does this mean that news, or learning of the news, is a product of betting volume?”
Over the next 10 years, Stranomitis expects this to become a thing of the past. The system should, in reality, be reversed so that the money staked is then a product of the news, with the prices already having automatically adjusted to reflect this.
In layman terms, bookmakers will be able to utilise new software which produces probabilities and subsequent pricing without the need for the trader to be frantically inputting data based on team announcements or player information.
Stranomitis continued: “I do believe that in 10 years time, trading and risk management will be significantly different. I think that there will be software where you can input all of the details of every game including information on every participant and their overall ability.
“The software can then generate suggestions for probabilities, which usually produces the pricing. Any news that then comes out on a particular fixture will be taken into consideration by the programme, which will then adjust the probabilities. It is simple as that.”
But before we arrive at this place, there are a few topics that need to be addressed. For example, which leagues will cooperate in providing such detailed statistics?
For Stranomitis, the delivery of official data is crucial. The software provider, he said, must have direct integration with the data source that comes from the ground, enabling traders to manage probabilities without having to watch the game on TV.
However, he acknowledged that there are different levels of leagues, sports and federations in this regard, with some facilitating the supply of official data while a shortfall in infrastructure or equipment may force the unofficial collection of data sources for others.
“Everything will come directly from the data source,” he added. “Even when the game is being played live, the statistics of the event will adjust the pricing even if there is no goal.
“If a game starts with even money on the favourite team for example, its price may not go up but drops slightly instead. This can happen especially if the said team plays particularly well – because it shows that statistics affect pricing if one team performs better than expected.
“A team may have more shots on goal, more attacks – so as a result, we should see the pricing going down. This would be calculated by the software. Pricing would not just be affected by the betting volume overall, but by ‘clever money’ and more accurate data.”
‘Clever money’, according to the Altenar COO, is when a bookmaker has enough data from an individual punter to understand if they have a winning record betting history.
A bet from this kind of punter, he stressed, should be considered as ‘more important and hold more gravity’ for the bookmaker’s pricing than those just having a flutter on their favourite team – a staking pattern described by Stranomitis as ‘funny money’.
“What’s happening today is that prices are mainly affected when bookmakers see changing volumes of bets,” he reiterated. “They follow the money. But in the future, following the money will not be good enough. Bookmakers must follow the clever money. Funny money should never affect a bookmaker’s prices. But clever money should.”
He concluded by suggesting another way that bookmakers can capitalise on technology to increase accuracy of the data – geolocation of both the players and the ball.
“There will be some cases in the Premier League where the ball may have a microchip so data sources will know where the ball is at all times,” said Stranomitis.
“Even players’ shoes could have microchips for a similar reason. By knowing where the player and the ball is at all times, you can adjust your probabilities.
“There are experiments on that which are ongoing. In 10 years time, which is not so far away, I do believe that sports may use methods like this to calculate such probabilities.”