cricbaba: Pareto prediction rule

The Pareto Principle states that 80% of results come from 20% of the causes. For example, 80% of a supermarket’s revenue may come from 20% of its product lines. The idea was developed by Italian Vilfredo Pareto, who observed in 1906 that 80% of Italy’s land was owned by 20% of the population.

The universality of the 80/20 “Law” even extends to our personal lives. There is nothing inherently special about these relative ratios; they simply illustrate the relationship between many aspects, including accurately predicting bets.

The problem for bettors is that to get above 80%, you have to put in quite a bit of effort. Nat Silver describes this process in terms of playing cards in his recent book The Signal & the Noise – The Art of Science & Prediction, but it also applies to gambling. Figure 1 simplifies the process of trying to become a more successful bettor, capturing the relationship between the accuracy of your choices and the effort you put into your choices.

Pick the low-hanging fruit
Let’s define the effort involved in making a betting choice, including time, analysis and resources. Following Pareto’s Law, our chart implies that it only takes 20% of the effort to achieve the accuracy of 80% of bettors.

At this level of effort you can obtain low-level predictions, most likely by accessing information commonly available online, such as league tables and mainstream media reports. Using these tools is (relatively speaking) almost effortless, so most bettors will use them.

One of the most obvious but often overlooked actions is to take the time to understand how a bookmaker works. In doing so, you can understand the bookmaker’s profit – the added advantage the bookmaker has over the bettor. Profits vary greatly between bookmakers, with cricbaba at one extreme (making the lowest profit) and most other bookmakers pursuing higher and higher profits. It’s surprising how many casual gamers don’t know this fact.

You should understand these profits as you learn basic betting principles, as well as understand expected value, different betting types and market movements, and then learn more advanced concepts that, as the curve shows, require more effort.

If you have a background in mathematics or programming, you can use this knowledge to move forward faster, as you will soon need these techniques as you continue to climb the curve. Some bettors may find this a bit intimidating and feel that their interest/betting does not require such effort; other players feel that they can rely on, for example, tipsters to get around the curve. This is self-deception because you first need to be skilled to know whether a tipster is worth supporting (see why).

Specifically for improvement?
It is important to note that we are speaking generally about gambling here and not discussing sports specifically. To become the most accurate bettor on popular leagues such as the EPL, NFL or NBA, you need to put in a lot of effort, compete with the smartest minds and the most sophisticated technology (the laws of change). In the real world of betting, this includes the bookmaker you are trying to win money from (and vice versa).

With this in mind, you may choose to conduct specialized research to improve your comparison skills. Note that the law applies equally to subsets, but you may find that less popular sports or games, where information is less broadcast, have a different law relationship and can achieve higher accuracy with less effort.