Calculated Bets: Computers, Gambling, and Mathematical Modeling to Win

Steven Skiena of Stony Brook University has a lifelong passion for the sport of Jai Alai, a ball game from the Basque region of Spain. Akin to squash, the game is played with baskets attached to the hand rather than with racquets held by the hand. The book details Steven's building of a model for the game of Jai Alai with which he used for betting. The book explains the rules of Jai Alai and how betting is incorporated into the game. It is important to understand how betting and a sport's rules are related, which can reveal quirks that can be utilised for arbitrage.

In the following chapters Steven builds a Monte Carlo simulation of Jai Alai so that he can test his theories about the likelihood of any one particular player in a matchup winning the event. With 8 players vying to be the best there is an advantage in being one of the first two paired players to play. Steven's simulation proves this hypothesis. Using available player ratings Steven builds a model for each player and for the payoffs for various kinds of Pari-Mutuel bets. He then goes on to build an automated betting system, which was rather sophisticated for its time. Finally, Steven discusses how to approach other sports and gambling games using his methodology.

All-in-all this book is a fascinating read. Some find it hard going but I can appreciate all the hard work that Steven has put into mastering modelling a sport and betting on it. If you want to know what it takes to model a sport and build a bot to place bets then you need this book at hand. You won't learn how to program specifically for your requirements and this book was written before Betfair took off. However, you will learn what it takes to dedicate yourself to a related task.

Amazon - Calculated Bets: Computers, Gambling, and Mathematical Modeling to Win


  1. Hi James, how are you?

    I just finished the book, and I'd like to thank you for taking the trouble to review this kind of books.

    I found it very useful and motivating. At one point Steven recommended reading "The Visual Display of Quantitative Information". I wonder if you've read it and what do you think about it. I guess it's an important part of the quantitative analysis, but I'm not aware of the magnitude.


    1. Hola Diego. Estoy muy bien. Y tu?

      The book you refer to is Tufte's 'The Visual Display of Quantitative Information'. I haven't read it but I assume it is a work on standard visualisation techniques.

      To you and me that is charting data on something like Excel or other such software, which will be more than adequate.

      The first thing I do after grabbing data is to put it into a spreadsheet and look at timeseries charts to see if there is anything obvious. I can then carry out further analysis.

      I think the book would be over-kill for our kind of needs.

      Useful books that cover visualisation for sports betting would be books on technical analysis in commodities, forex and futures contracts.

  2. Estoy muy bien tambiƩn, gracias!

    Thanks for the advice! I wanted to know your opinion because is kind of hard for me at Argentina to get related material, even though Financial books are much easier to get. I'm dipping my toe a little bit with technical analysis and I think that I'm going to start with Murphy's book, from what I've read is easy to read and to understand, and then maybe I'll try to get Edwards and Magee one.

    Regarding Betting book, I think your list of reviews is great start point, although I have to order it to UK, and it will take a month at least. Happily many of them are available in Kindle Edition, but unfortunately those who seem to be the most important ("Efficiency Of Racetrack Betting Markets", "The Compleat Horseplayer" and "Information Efficiency in Financial and Betting Markets") for what I notice on your review, are not.

    I would like to ask you, if is not inappropriate, about some recommendations that you made regarding ratings methods. Seems to me that's fundamental information, and you reviewed it because maybe many of your readers are fundamental traders, so they could find it usefull, but becomes useless for technical traders. I'm asking this because that means that I could dispense with very books of the list, and would be quite relieving.

    Have a nice weekend!

    1. Yes, I sometimes write about fundamentals for my readers. I don't use them myself but it might be useful for others.

      Although there are some that use fundamentals and technicals. I have read quite a few books relating to fundamentals just to make sure my knowledge is complete.

      If you are ordering books though Amazon UK then I hope you do so through the links on my blog. There is no additional cost for you. I just get a little to enthuse me to write some more.