The Monte Carlo method is the calculation of the probabilities of outcomes based on the simulation of random processes, taking into account many factors that affect the final outcome of a sports event. The method came to betting from the casino industry.
Monte Carlo method: history of origin
The effective mathematical model is named after the Monte Carlo area for a reason. The fact is that not so long ago, in 2013, a unique case was recorded in one of the casinos in this region: twenty-six times in a row a black cell played on the roulette wheel. Obviously, many players crashed that evening, especially those who were trying to catch up with the appearance of the red cell.
However, if you look more closely, you can understand that there is not too much sense in such dogons. The roulette ball is absolutely indifferent to how many times one or another cell color has appeared on the table before. Each new throw-in of the ball is evaluated with the same probability of 50 to 50, and the probability of the red sector does not increase even after one hundred hits in a row in the black cell.
How to apply the method in sports betting?
The Monte Carlo method has found its application in betting as well. The simplest way to use it in sports betting is to simulate the results of matches based on the history of your bets, or by using a specific strategy that you follow when analyzing a sporting event. Let’s analyze the Monte Carlo method using a specific example, for example, a forecast for the winner of the Champions League. Suppose we are going to test the method against determining the winner of the Champions League.
The clear favorite to win the Champions League is Manchester City. The bookmaker estimates the likelihood of his victory at a relatively modest odds of 3.7, followed by Bayern Munich at 3.9, then Paris Saint-Germain with an odds of 5.4, and completing the top four teams in Barcelona. The probability of her victory is estimated by a solid eight. Let us remember these numbers, we will still need them.
Just as shown in the picture, the bookmaker identified the four main favorites of the Champions League. Our task: to carry out our own calculations, according to which, perhaps, the main favorite will not be Manchester City, but, for example, Barcelona. Calculations will be made according to the Monte Carlo method.
Simulation using the Monte Carlo method
First, you need to identify the key factors influencing the results of the Champions League matches:
- valid command form
- injuries, disqualifications
- tournament problems in parallel home championships
- state of affairs within the team
- previous winners of this tournament
Now we turn to the analysis using the Monte Carlo method, relying on the above factors. We will analyze four teams, each of which will be assigned from one to four points. For example, we learned that Barcelona has no problems with injured and disqualified players, so we give Barça four points. PSG has some small losses – we give three points. If we talk about Manchester City and Bayern, they have more losses in their roster than their rivals, so City gets two points, according to our analysis, and the Munich club one.
The situation is as follows:
- Barcelona – 4 points
- PSG – 3 points
- Manchester City – 2 points
- Bavaria – 1 point
Next, we carry out a similar analysis for all the remaining factors, which we cited just above. Of course, this analysis should be combined with maximum immersion in the process, as well as with a player’s good knowledge of the affairs of all teams. What did we get in the end? With the help of our calculations using the Monte Carlo method, it turned out that Barcelona has the greatest chances of winning the Champions League, whose probability of winning is estimated by the bookmakers with a solid odds of 8.0. Next comes Bayern Munich, then Manchester City, and Paris Saint-Germain closes the list.
The bet on Barcelona’s victory in the Champions League in this case will be more justified from the point of view of the Monte Carlo method and will have more value than the rest of the elections. Playing such bets over a long distance, you will have a stable plus in relations with bookmakers. The accuracy of the final result is determined by the number of factors influencing the final result of an event. For example, in our case, the experience and merit in the Champions League of the coaches leading the Champions League favorites could be added to the factors.
Risks of the Monte Carlo Method
Risks in sports betting are present everywhere, so it is not surprising that in our case, not everything is so cloudless and simple. Let’s analyze the main types of risks of the Monte Carlo method:
- Incorrectly selected factors. If among the factors you have displayed are only insignificant ones, and several main ones are corny overlooked, then the accuracy of the calculations is unlikely to be correct.
- The information content of the player. To be lazy in this case is definitely not worth it. If you are going to apply the Monte Carlo method based on your superficial knowledge of lineups, injuries, coaches, teams’ form, their performance history in a particular tournament, then the risk of not hitting the target increases significantly. Get up-to-date sources of information on commands and then carry out calculations using the Monte Carlo method.
However, even with these risks, the Monte Carlo method remains an effective way to analyze sports events, in which the player has a better chance than the bookmaker to determine the winner of a particular game or tournament.