Last year I wrote about PicksPal, a fantasy sports betting site where well over 100,000 members bet their friends and coworkers on the outcome of sporting events (and they just launched a nifty March Madness site as well). No money changes hands, but top users can win various prizes.
It’s all for fun, but the company started selling the top picks of its best users in October. For $10, you can get the collective picks of the top 30 users on five games. The idea was that people could use these for-fun picks to win bets in Vegas. The question was, would PicksPal be able to consistently beat Vegas odds, and the spread, with these picks.
So far, yes. By a lot. PicksPal’s overall record, against the spread, has been 562-338, or a 63% win rate. In college basketball, the win rate is 66%. In pro football, 62%. They are even getting a 52% win rate in pro hockey, their worst sport. Some of the recent results can be viewed here.
PicksPal is a fascinating human experiment in predictive markets. The people making the picks (the elite users) don’t know they are doing it – they are simply making bets with their friends for bragging rights. If they did know that their picks were being used as part of an average to give advice to actual Vegas betters, they may choose games differently. Perhaps they would be more conservative, for example. If PicksPal’s win rate over the long run remains over 50% against the spread, they will begin to disrupt the betting markets.
Pickspal also expanded into pop culture “betting” earlier this year, with PicksPop.
Gotta love anyone who gives better odds than a bookie! 63% average win rate is pretty damned impressive!
Wow thats a crazy percentage
I wonder if Marketocracy is as successful (I don’t know enough about mutual funds to judge that).
This is a light, non-monetised version of Betfair (www.betfair.com), the British betting exchange, where users are setting the odds and betting against each other. Betfair take a commission on your winnings.
You’d have to say this will be a better reflection of the market knowledge, after all the real brains will be doing it for money at Betfair if they can, than for free at Pickspal.
Neat site tho
Who knows if it’s sustainable but that’s a nice streak. Love the idea of Wisdom of the Crowds.
Sweet NCAA bracket…love the “invite a friend and win their prize too” concept
That is a great record selecting that many games. The free daily email has a nice detailed writeup in there too.
Not bad for free.
How do they afford prizes with no advertisers on the site?
Speaking of March Madness and pop culture, Fafarazzi is having a hilarious Celebrity March Madness bracket contest going on.
Great Idea, monetizing the groups wisdom. Hopefully they give a split to the top users they use to – sell.
-RB
Re: Post #3
“You’d have to say this will be a better reflection of the market knowledge, after all the real brains will be doing it for money at Betfair if they can, than for free at Pickspal.”
That’s exactly why market knowledge is BETTER than ‘real brains’. Real brains have all been trained and work within the same market area so they don’t have the breadth it takes in order to predict as accurately as the diversified market place. This has been proven over and over again… breadth of the supplied knowledge base will out perform the ‘expert’ knowledge base is most circumstances.
Para-phrased from Surowiecki, ‘The Wisdom of Crowds’.
Pickpal is setting the pace for similar predictive sites for stocks and investments. Reuters, for instance, is betting on a myspace inspired stock picking site. They’ll be lucky though to make it look and function like Pickpal. There’s cracking Vegas, and then there’s everything else.
anywhere we can keep track of how well they are doing? it’s kind of suspicious though, isn’t it? why would they open up this service to EVERYONE if they are doing so well? why don’t their employees opt to keep this service internal, and milk the money themselves?
hmmm….
For those who are interested, a similar attempt is being made in economics for forecasting the economy (GDP, inflation, etc…):
http://www.financialnext.com
I am excited to see if the pickspal success continues!
Internet is a good medium to start global business, if you master the art you are millionaire in months. A sound cash generating business model is needed, Pickspal seems to have got theirs right.
http://www.tekn...ld.blogspot.com
For another take at a wisdom of crowds model check out FanIQ.com.
FanIQ has collected over 6,000,000 predictions to date and they also aggregate data from “experts” at ESPN, Sports Illustrated, etc…
All of this information is presented for free in an automated Prediction Ticker that presents Vegas, Fan Consensus and Expert Consensus side by side.
http://www.FanIQ.com
You can’t beat the bookie, because you are not actually betting against the bookie, whose goal is to have an equal amount of money wagered on both teams in a contest. If too many people start to use these picks, resulting in an unbalanced amount of money bet on one team, the bookies will simply change the point spread to encourage betting on the other team.
FanIQ is a sports site I like. They feature a pretty entertaining blog about current hot button issues in sports will a lot of member commentary. They features polls not just to predict games but other opinion based stuff (such as does Barry Bonds deserve to be in the Hall of Fame) that leads to a discussion.
Sites like Stockpickr and PicksPal share (or sell) recommendations from “experts,” that is, people who have had a lot of recent success picking winners in sports, the stock market, and such. Here’s the thing: If you ask 1,000 people to predict NFL outcomes for six months, normal curve theory guarantees that this is what will happen: 10 people will get every game right; 10 will get every game wrong; and 980 will be somewhere in between. The 10 who get every game right will be viewed as geniuses, and folks will pay mightily for further predictions. Folks will be sorely disappointed.
If you have 1,000 people picking stocks for 30 years, the normal curve guarantees the following: 10 people will achieve 30% annualized returns, 10 will have -30% returns, and 980 will be somewhere in between. We’ve seen some of the winners: Warren Buffet, George Soros, Peter Lynch. Recently we’ve seen a prominent loser: Brian Hunter, of the now-defunct Amaranth Advisors, lost $4 billion in two weeks (that’s “billion” with a “b”). He’s thinking about starting his own hedge fund.
If you have 10,000 men playing professional baseball over the course of 100 years, the normal curve guarantees that there will be a few who will bat .400 over a season (Ted Williams), a few who are stuck under .200 (Bill Bergen), with the rest somewhere in between. [As an aside, the normal curve for batting averages has narrowed over the years as players have improved at every position. Thus a four standard deviation performance 70 years ago would equate to a five standard deviation performance today. The upshot? It’s quite unlikely that we’ll see a .400 season in this century.]
In conclusion, please DO NOT send money to people with a successful two-month (or four-month, or six-month) string of predictions. One in 1,000 of them will continue that streak for a few years; 999 of them will not.
[from my blog at twilightsong.com]
Agree with swf – I don’t believe in it either, and am curious to see whether their business model really works. Michael wrote before about gottabet.com, which has a much better proposal in my opinion. They let you create your own bets on virtually anything you can thing of and share it with your friends. Can be for money… if you’re not from the US at least – we are stuck playing for what they call peanuts.
Did a quick search for March Madness and this is what came up: a guy betting he could win another guy’s Facebool pool – smart way of monetizing if he would have done it for money.
http://www.gott...vent/detail/968
Agree with swf and Jeffrey.
I also think the idea of predictive markets for the stock market is quite dumb – the stock market itself is a predictive market. It’s easy for a lot of amateurs to forget that the stock market is manipulated on a daily basis and there are people who have information that is not publicly known, so the basis on which the average person makes their stock picking decisions may seem rational but isn’t going to make money because you’re playing checkers against people who are playing chess.
Wisdom of the crowds?
I think this is another great example of just that. It’s funny that these top users don’t even realize what great data they are pumping out.
- Josh
Where’s your head at? – http://www.StateOfBrain.com
The numbers are too good to be real. Make every “genius” pick every NFL game for one year and you will find out how usefull the “wisdom of the crowd” is for sports betting.
Just checking a few games I also notices that their spread data seemed to be dated on a couple of games, if they don’t update their data as the event nears, their results are useless.
I guess I should preface this by saying that I’m a professional sports handicapper and I have most of the top bettors and syndicates on my cellphone speed dial.
The only thing that has impressed me about PicksPal is their ability to scam so much venture capital, and their ability to get press. Their predictive ability doesn’t impress me in the least.
Sports bettors for years have tried to “follow the smart money” with varying degrees of success. Of course that necessitates to knowing who the “smart money” is, but I can definitely tell you that they’re not making random picks for “bragging rights” on a website like this. This sort of service would be more valuable for getting an idea about who the general public–which we refer to as “squares” in the biz–is backing. Over the longterm going against the general public is a good idea.
The notion that this will “disrupt betting markets” is laughable. Its not even on the radar screen of 99% of the bookmaking industry in Nevada or offshore, or the players and handicappers who move any significant amount of money. The minority who is aware of it, quite frankly, could care less about the opinion of PicksPal’s “geniuses”.
I agree with the post that suggests to not send money to “geniuses” who can hit even a high percentage for a single year. I’ve been doing this fulltime for most of my adult life and work 14 hours a day to keep myself and my clients in the black. Every year someone claims to be a genius because they hit 60%+ but the trick is to do it over the long haul.
Granted, these sites offer a unique experience, what ever happened to good interface design?
=P
Yeah I’m a little skeptical as well. It seems that if the top pickers were consistently good then they would be making money on their own….or the owners of this company would parlay their data into some serious betting. Why not use 50% of all company earnings to place bets according to the data provided by their users? Now if they became instant billionaires then I might believe them.
Shredder
http://www.monomachines.com
I’m not surprised by this. It shows that if you get enough people to follow something for a period of time and combine all that knowledge together then maybe, just maybe, you can beat the odds.
In this year’s NCAA tournament (where almost any team can win), it may be that PicksPal’s “Wisdom of the Masses” approach will provide the best direction. A 66% “win rate” is pretty strong. I may have to not bet with my loyalty and go with the numbers (Duke grad – I know, despised like the Yankees, but that’s only because of consistent excellence).
Nice post Jim. I agree that it’s naive to think that this is in any way, shape or form close to disrupting the betting markets.
Another thing that’s worth noting here is that no money is changing hands. There is a psychological effect when you’re just predicting a result and have no risk. Therefore people using a service like PicksPal (who might not even be real bettors anyway) are probably more likely to make predictions that are different than the picks they’d make if they were putting money on the line. Many of PicksPal’s users have probably never placed a real bet in the first place.
Agreed. Thanks for keeping us in the loop on this service. Well… I gotta go make a couple calls
“pickspal-noreply@ pickspal.com PicksPal Invitation”
They should change the above to reflect which one of your friends sent this to you in the subject line. I almost thought it was spam because the person that sent me the invitation didn’t have their email/user id in it.
I will have to disagree with some points here.
It’s somewhat of a fallacy that Vegas always tries to balance the wagers 50/50. They have the best information in the business and will shade their wager balance to reflect a house advantage based on their information compiled over years of doing sports business.
In effect…sometimes they are making a wager to maximize their overall profits. Why wouldn’t they if they know for a fact what the true odds are based on a large statistical sample?
“IF” the information from pickspal is true in regard to their record…it certainly will influence the wagering markets if they continue to post records above 55% ATS. Once the herd effect kicks in…viral marketing works fast.
Just look at the Dr. Bob story this past year. He was moving Pinnacle lines like crazy on Thursday when his picks came out. It doesn’t take much money in today’s connected world to move the lines. The books are now ultra-sensitive to the herds.
MJ
http://www.blackboxwagers.com
What happens if the system can’t compute because the dynamic nature of the world give it something it
doesn’t have a variable for?http://www.allconverter.net
I think the emergence of market or trade betting sites like betfair.com into the mainstream will make this type of fantasy betting activity less relevant. It’s far more interesting to see what happens when people put their hard-earned money on the line than simply looking at a set of “pride” picks. If we can just get the UIGEA repealed people won’t have to resort to pretend sport betting.
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williamgeorge
Euro 2008 football betting odds and bonus offer. Euro 2008 football game.
What company is the largest sports betting company in Vegas?
I’m wonder if they have those good results in 2008 and 2009. Any percentage greater than 53% is a good invest and does make profit in long term. Too bad that they provide only US sports for making picks.