The Perfect Bet
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adult brain, 177–178
aggressive strategy, 156, 176, 184, 192, 193
AK-47 rifle, simplicity of, 83
Albert, James, 106
algorithms
arbitrage, 113
code-breaking, 26
errant, 116–117, 118, 119, 175–176
flash crashes and, 122, 130
good game-playing, 168
high-speed, 217
increasing number of, in betting and finance, 119–120, 132
intelligent, developing, 174, 175
interaction among, 120, 123–124, 130, 134, 217
Midas, in-play betting and, 87, 88, 89
order-routing, 115
poker, 136, 188
press reports and, 122
rationality and, 123–124
simplicity of, 123, 131, 134
sniffing, 115
trading strategies driven by, 131–132
useful, range of scenarios for, 188
Allesina, Stefano, 129
American Checkers Federation, 156
Annual Computer Poker Competition, 185
arbitrage, 110–112, 113, 129–130
Arsenal Football Club, 104
artificial intelligence, 163, 167, 170–171, 171–172, 174, 175, 217
artificial intelligence conference, 185
Associated Press, 120–121, 122
assumptions, ability to make, about opponents, 184, 190–191
asteroids, study of, 9–10
Atass Sports, 77, 96
automated programs. See robots (bots)
backgammon, 172–173
Baldwin, Roger, 36–37, 38
bankroll management, 65–67, 144–145
bankruptcy, 66
bans
on bank transfers, 198
by casinos, 22, 40, 43
by poker websites, 192–193, 195
in sports, 90
baseball, 79–80, 87, 88, 106, 200, 209
basketball, 82, 85–86, 107
Bass, Thomas, 14
Bayern, Shawn, 181
Beane, Billy, 209
Beasley-Murray, Ben, 20
Beat the Dealer (Thorp), 35, 39, 61, 208
beauty contests, Keynes’ interpretation of, 122–123, 124
behavior
accounting for, 208
deeper understanding of, developing, 217
influence of, in poker, 191–192
involved in lying, 190–191
of opponents and the need for predictions, 163
robots copying, 192
social, influence of, 203
tit-for-tat, 161
unanticipated, errant algorithms and, 118
unpredictability of, 3, 133, 134
Benter, Bill, 35, 39, 42, 43, 45–46, 52, 55, 56–57, 67–68, 79, 91, 103, 206, 207, 211, 218
Bertsimas, Dimitris, 214
Betfair, 93–94, 95, 97, 111, 112, 113, 114–115, 116–117
betting exchanges, 93, 94, 95, 97, 99, 110, 111, 112–113, 114–115, 132, 217
betting limits, 22, 140
See also limited-stakes poker
betting syndicates
in horse racing, 35, 52–53, 54, 56, 57–58, 64, 66–69, 103, 206
legalization of, 101
lotteries and, 30, 31–32, 33–34, 202
private, traditional preserve of, 96
in sports, 89, 100, 102, 103, 110
betting window, 112
bias
favorite-long-shot, 45, 46, 57
in models, 211
overlays, 56
physical, 7, 8, 21
psychological, 6, 98
billiards, 19
Billings, Darse, 167
Binion’s Gambling Hall, 139–140
Black, Andrew, 93–94
black market bookmakers, 90–91
blackjack
bankroll management in, 65, 144
card counting in, 35, 38, 41, 71, 152, 180, 202, 207, 208, 211, 213, 214
complexity and, 83–84
computerized prediction in, 42
evolution of methods in, 208
idea for an optimal strategy in, 36–37
loopholes found in, 72, 197
and the Monte Carlo method, 61
online, 71–73
randomness in, 38, 40, 41, 42, 71, 212
university course studying, 213–214
bluffing, 138, 139, 142, 143, 147, 177, 190, 208, 217
body language, 162–163
Bolton, Ruth, 46, 49–52, 54, 55, 68, 69, 211, 216, 218
bonus abuse, 72
bonuses, 71, 72
bookmakers
aims of, 88–89
arbitrage and, 110, 111
betting limits and, 91
black market, 90–91
competition faced by, 93, 94
and information flow, 89, 90
and legalization of gambling, 101
online gambling and, 73
predictions and, 73, 75, 77, 81, 87–88, 89
robots as, 130
and slippage, 114
sports and, 90–92, 93, 95, 101, 110, 111
traditional, 43, 93, 111
Borel, Émile, 40, 41, 62, 63, 148, 156, 211–212
Boston Globe (newspaper), 32
bot hunters, 193
Bowling, Michael, 187
brains
adult, 177–178
artificial, 173–174, 175
child, 172, 178
injured parts of, related to regret, 153
memory and, 180
Bringing Down the House (Mezrich), 214
brute force approach, 33–34, 64, 168, 171
bucketing, 152, 180
Bundesliga, 78
Burch, Neil, 181, 188
butterfly effect, 9, 124
cable, 110, 113
California State Lottery, 141
call centers, 90
Cantey, Wilbert, 37
Cantor Fitzgerald, 87
Cantor Gaming, 87–88, 89
card counting, 35, 38, 41, 71, 152, 180, 202, 207, 208, 211, 213, 214
card shuffling, 40–42, 62, 215
Carnegie Library, 80
Cash WinFall, 29–32
casino industry, 212
casinos
bans by, 22, 40, 43
gaming machines at, rules involving, 177
security at, 2, 20, 21, 22, 40, 73, 197, 213
See also blackjack; poker; roulette
causation and correlation, issue of, 206–207
Centaur, 100
Cepheus poker bot, 188
Chadwick, Henry, 80
Champions League, 93
Chaos (journal), 15
chaos theory, 9, 13, 22, 120, 124, 127, 217
chaotic decision making, 162
Chapin, R. M., 211
Chapman, Randall, 46, 49, 50–52, 54, 55, 68, 69, 211, 216
chat feature, 194
chat rooms, 142, 143
cheating, 35, 182, 183, 194, 197
checkers, 154–156, 157–158, 159–160, 167, 168, 171, 190
“Checkers Is Solved” (Schaeffer et al.), 160
chess, 154, 160, 161, 166, 167, 168, 171, 176, 189, 202
child’s brain, 172, 178
Chinook, 155–156, 157–158, 159–160, 162, 167
choice modeling, 50
Christie, Chris, 100
Chutes and Ladders, 62
Clinton, Hillary, 92
Cloutier, T. J., 140–141, 142
clustered volatility, 162
coalitions, 181–183
code breaking, 26, 62–63, 64, 169–170
coefficient of determination, 54
coin tosses, 4, 5, 58, 65, 66, 199, 210–211
Coles, Stuart, 73–74, 75, 76–78, 82, 86, 97, 107, 218
collusion, 181, 182
competitive relationships, 129, 130–131, 136
competitiveness and memory, 161–162
complexity, 83�
��84, 120, 123, 128, 131, 134, 142, 154, 155, 159, 160, 161, 162, 170, 179–180, 188, 210, 211, 212
Computer Group, 81–82, 96, 97
computer programs, automated. See robots (bots)
computerized prediction
in blackjack, 42
in checkers, 156, 157
in horse racing, 46, 51, 57, 68
and the Monte Carlo method, 61
in roulette, 2, 13, 14, 15–20, 22
in sports, 80–82, 87, 88, 89–90, 97, 105, 217
“Computing Machinery and Intelligence” (Turing), 175
Connect Four, 158–159
control over events, 199
controlled randomness, 25–26, 28
cooperative relationships, 129, 136
copycats, 132
Coram, Marc, 63, 64
correlation and causation, issue of, 206–207
Corsi rating, 85
Cosmopolitan, Las Vegas 87
countermeasures, 21, 86, 195, 214
counting cards. See card counting
Crick, Francis, 23
cricket, 90
curiosity, following, 218
Dahl, Fredrik, 172–173, 175, 176, 177, 182–183, 184, 185
Darwin, Charles, 46
data
access to, 142
availability of, 54, 55, 68, 73, 86, 102, 174, 209
better, sports analysis methods and access to, 207, 217
binary, 116
collecting as much as possible, 4–5, 103
enough, to test strategies, 131
faster transatlantic travel of, 113
juggling, 166
limited, 84
new, testing strategies against, 53, 54
statistics and, importance of, in sports, 79, 80
storage and communication of, 11
data chunks, memory capacity and size of, 179–180
Deceptive Interaction Task, 190–191
decision making, chaotic, 162
decision-making layers, 173–174
Deep Blue chess computer, 166, 167, 171, 176
Deep Thought chess computer, 167
DeepFace Facebook algorithm, 174–175
DeRosa, David, 198–199, 200
Design of Experiments, The (Fisher), 24
deterministic game, 156
Diaconis, Persi, 62–63
DiCristina, Lawrence, 198, 199, 200, 201
Dixon, Mark, 74, 75, 76–78, 82, 97–98, 107, 218
Djokovic, Novak, 110
Dobson, Andrew, 129
Dodds, Peter Sheridan, 203
dogma, avoiding, 218
dovetail shuffle, 41–42, 62
Dow Jones Industrial Average, 96, 121, 122
Drug Enforcement Administration, 214
eBay, 94
Econometrica (journal), 148
economic theory, 153
ecosystems, 125–129, 130–131, 133
Einstein, Albert, 210
endgame database, 159–160
English Draughts Association, 156
English Premier League, 209
Enigma machines, 169–170
Eslami, Ali, 185–186, 187
Ethier, Stewart, 7–8
Eudaemonic Pie, The (Bass), 14, 15
Eudaemonic prediction method, 14, 15–20, 22, 124, 208
Euro 2008 soccer tournament, 76
European Championship (soccer tournament), 111
European currency union, 129
every-day gamblers, 102, 107
exchange rate, 110
exchanges. See betting exchanges; stock exchanges
expected outcomes. See predictions; probability
experience-weighted attraction, 161
exploitation and exploitability, balance between, 184, 188
extreme value theory, 74
eye contact, 191
Facebook, 13, 174
facial recognition ability, 174–175
fantasy sports leagues, 100–101
Farmer, Doyne, 14, 18, 19, 20, 120, 123, 131, 132, 160, 161, 162, 212
favorite-long-shot bias, 45, 46, 57
FBI, 81–82, 214
Fédération International de Football Association (FIFA), 76
Ferguson, Chris, 140–142, 143–145, 148, 151–152, 162–163
Fidens, 100
“15.S50” (MIT course), 214–215
financial crisis (2008), 96
financial markets. See stock/financial markets
financial systems, regulation and, 133
Fisher, Ronald, 23–25, 74, 84
flash crashes, 121, 122, 124, 130
floating, 176
Follek, Robert, 149–150, 151
football, 79, 82, 87, 88, 103, 107, 112, 114, 209
football (soccer). See soccer
Four Horseman’s method, 36–38, 45, 72
Fréchet, Maurice, 148
freeroll tournament, 144
Friedman, Milton, 111
Friedrich, Carl, 80–81
fundamental analysis, 55–56
future payoffs, maximizing, 153
Galileo fund, 100
Galla, Tobias, 160, 161, 162
Galton, Francis, 46–47, 51, 106, 205
Gambling Act, 71, 201
gambling laws, 20–21, 22, 71, 100, 198, 200, 201
gambling traits, traditional, 208
“Game of Poker, The” (Turing), 170
game theory, 137, 141, 148, 149, 151, 154, 155, 156, 160, 162, 163, 169, 178, 180, 181, 183, 208, 217
Gaming Act, 21
Gandy, Robin, 170
Ganzfried, Sam, 184
Garrood, Andrew, 87, 88
Gerrard, Steven, 104
get-so-many-in-a-row-style games, 158–159
See also tic-tac-toe
Ginther, Joan, 28
Gödel, Kurt, 150, 151, 169, 176
golf, 84–85, 107
Gossett, William, 26, 52
Government Code and Cypher School, 169
gravity, 19
Guardian (newspaper), 94, 117
Guinness brewery, 52
hackers, 121
Hand, David, 204
Hanson, Robin, 92
Hard Rock casino, 87
Harvey, James, 28–29, 30, 31–32, 218
Hastie, David, 78, 105, 113
headline wager, 75
“Heads-Up Limit Hold’em Poker Is Solved” (Bowling et al.), 188
heads-up poker, 172, 186, 188, 195
See also Texas hold’em poker
hedge funds, 96, 97, 99–100, 101, 120, 122, 204
hedging bets, 95, 96, 99
Heeb, Randal, 198, 199, 200, 201
Henry, Thierry, 104
Heuer, Andreas, 78
Hibbs, Albert, 3–4, 7, 21
Hibernia Atlantic, 113
Hilbert, David, 150
hockey, 85, 204, 205, 207
Holt, Matthew, 88
Hong Kong Jockey Club, 43, 90
horse racing
bankroll management in, 65–67
betting syndicates and, 35, 52–53, 54, 56, 57–58, 64, 66–69, 103, 206
compared to golf, 84
fading of data availability limitations in, 73
favorite-long-shot bias in, 45, 46, 57
gambling law and, 198
and the Hong Kong tracks, 43–44, 54–55, 66–69, 74, 114
measuring individual performance in, 103
and the Monte Carlo method, 61–62
pari-mutuel system in, 43–45, 66, 114
Pinnacle Sports and, 93
prediction methods in, 46, 49–50, 51–54, 55–58, 64, 68, 69, 74, 206, 207, 216, 218
and quality measurement, 50–51, 74
and regression analysis, 49, 50
robotic betting and, 115–117
university courses studying, 215
“How to Gamble If You Must” (MIT course), 213–214
human insight, importance of, 105
human language, analyzing, 1
66
hybrid bots, 184
hydrogen bomb, 58, 59, 60, 61, 83, 202
IBM, 166–167
iceberg order, 115
ignorance
first degree of, 2
second degree of, 3, 8, 11, 21–22
third degree of, 3, 8, 12, 21
illegal betting/gambling, 42, 81–82, 90–91, 101, 198
Illegal Gambling Business Act, 200
illusion, 218
imitation game, 170–171, 177, 194
incompleteness, 150, 168, 173
incompleteness theorem, 150, 176
inconsistencies, 150
Indian Premier League, 90
infinite monkey theorem, 156–157, 199
information theory, 11
information-processing problem, 168
inheritance, 47–49, 51, 106
in-play analysis, 97–98
Internet, benefits of, 72–73
investing, 96, 97–100, 204
See also hedge funds; stock/financial markets
Irish National Lottery, 33
Jackson, Eric, 167
Jagger, Joseph, 7
Jennings, Ken, 165–166
Jeopardy! (TV game show), 165–166, 167, 171, 190
Johanson, Michael, 177, 183, 188, 189, 192
Johnson, Neil, 124
Journal of Applied Statistics (journal), 74
Julius, George, 44
Kalashnikov, Mikhail, 83
Kaplan, Michael, 172, 177
Kasparov, Garry, 166, 171, 176, 185
Kelly, John, 65
Kelly criterion, 65–67, 144
Kent, Michael, 79, 80–81, 82, 86–87, 102–103, 105, 107, 167
Kentucky Derby, 43
Keynes, John Maynard, 122, 123
King, Brian, 205
Klein, Matthew, 96
Klincewicz, Stefan, 33–34
Knight Capital, 117–118, 119
Laak, Phil, 185–186, 187
Laplace, Pierre Simon, 217
Larsen, Svend Egil, 119
Las Vegas Sports Consultants, 87–88
Latin square, 24
Le Monaco (newspaper), 5, 7
learning ability, 151, 161, 163, 171–172, 173, 174, 176, 177, 187, 188, 190, 217
legalization, 100–102
Leitner, Christoph, 76
Lickel, Charles, 166
lie detection, 190–191
limited-stakes poker, 172, 177, 185, 187, 189
limits, betting, 22, 140
Liverpool soccer club, 104
logistic map, 125–128
Lorenz, Edward, 9, 53, 124
Lorenz cipher, 26
lotteries
betting syndicates and, 30, 31–32, 33–34, 202
consultant for, 141
controlled randomness and, 25–26
loopholes found in, 28, 30, 32, 218
roll downs in, 29–32, 33
rollovers in, 29, 33–34, 204
and roulette, biased view of, 98
scooping up jackpots in, 197
security team, 27
traditional, 28–34
university courses studying, 215
Lovelace, Ada, 175
luck
in checkers, 156, 157
in chess, 168, 176, 202