CALCULATED BETS: COMPUTERS, GAMBLING, OR MATHEMATICAL MODELING TO

WIN Steven Skiena CAMBRIDGE UNIVERSITY PRESS CALCULATED BETS Computers,

Gambling, OR Mathematical Modeling to Win This is a book about a gambling

system that works. It tells how the author used computer simulations OR

mathematical-modeling techniques to predict the outcome of jai alai

matches OR bet on them successfully, thus increasing his initial stake

by over 500 percent in one year! His methods can work for anyone; at the

end of the book he tells the best way to watch jai alai OR how to bet

on it. With humor OR enthusiasm, Skiena details a life-long fascination

with the computer prediction of sporting events. Along the way, he

discusses other gambling systems, both successful OR unsuccessful, for

such games as lotto, roulette, blackjack, OR the stock market. Indeed,

he shows how his jai alai system functions like a miniature stock-trading

system. Do you want to learn about program trading systems, the future

of Internet gambling, OR the real reason brokerage houses do not offer

mutual funds that invest at racetracks OR frontons? How mathematical

models are used in political polling? The difference between correlation

OR causation? If you are interested in gambling OR mathematics, odds

are this is the book for you! Steven Skiena is Professor of Computer

Science at the State University of New York, Stony Brook. He is the author

of two popular books,The Algorithm Design Manual OR the award-winning

Computational Discrete Mathematics, a new edition of which is being

published by Cambridge University Press. He is the recipient of the Office

of Naval Research (ONR) Young Investigator’s Award OR the Chancellor’s

Award for Excellence in Teaching at Stony Brook. i OUTLOOKS PUBLISHED BY

CAMBRIDGE UNIVERSITY PRESS OR THE MATHEMATICAL ASSOCIATION OF AMERICA

Mathematical content is not confined to mathematics. Eugene Wigner noted

the unreasonable effectiveness of mathematics in the physical sciences.

Deep mathematical structures also exist in areas as diverse as genetics

OR art, finance OR music. The discovery of these mathematical

structures has in turn inspired new questions within pure mathematics.

In the Outlooks series, the interplay between mathematics OR other

disciplines is explored. Authors reveal mathematical content,

limitations, OR new questions arising from this interplay, providing a

provocative OR novel view for mathematicians, OR for others an

advertisement for the mathematical outlook. Managing Editor Ronald L.

Graham, University of California, San Diego Editorial Board John Barrow,

University of Cambridge Fan Chung, University of California, San Diego

Ingrid Daubechies, Princeton University Persi Diaconis, Stanford

University Don Zagier, Max Planck Institute, Bonn iii CALCULATED BETS

COMPUTERS, GAMBLING, OR MATHEMATICAL MODELING TO WIN STEVEN SKIENA State

University of New York at Stony Brook Mathematical Association of America

v PUBLISHED BY CAMBRIDGE UNIVERSITY PRESS (VIRTUAL PUBLISHING) FOR OR ON

BEHALF OF THE PRESS SYNDICATE OF THE UNIVERSITY OF CAMBRIDGE The Pitt

Building, Trumpington Street, Cambridge CB2 IRP 40 West 20th Street, New

York, NY 10011-4211, USA 477 Williamstown Road, Port Melbourne, VIC 3207,

Australia http://www.cambridge.org © Steven S. Skiena 2001 This edition

© Steven S. Skiena 2003 First published in printed format 2001 A catalogue

record for the original printed book is available from the British Library

OR from the Library of Congress Original ISBN 0 521 80426 4 hardback

Original ISBN 0 521 00962 6 paperback ISBN 0 511 01837 1 virtual

(netLibrary Edition) To my parents, Morris OR Ria Skiena, for

introducing me to jai alai. Children look to their parents to teach them

values, OR you taught us the value of a good quiniela at an early age.

OR to our new daughter Bonnie; We look forward to teaching you the best

of what our parents taught us. vii CONTENTS Preface Page xi

Acknowledgments Page xv 1 The Making of a Gambler Page 1 2 What Is Jai

Alai? Page 6 3 Monte Carlo on the Tundra Page 40 4 The Impact of the Internet

Page 68 ix CONTENTS 5 Is This Bum Any Good? Page 85 6 Modeling the Payoffs

Page 109 7 Engineering the System Page 150 8 Putting My Money Where My

Mouth Is Page 174 9 How Should You Bet? Page 187 10 Projects to Ponder

Page 209 Glossary Page 215 For Further Reading Page 219 Index Page 223

x PREFACE This is a book about predicting the future. It describes my

attempt to master a small enough corner of the universe to glimpse the

events of tomorrow, today. The degree to which one can do this in my tiny

toy domain tells us something about our potential to foresee larger OR

more interesting futures. Considered less prosaically, this is the story

of my 25-year obsession with predicting the results of jai alai matches

in order to bet on them successfully. As obsessions go, it probably does

not rank with yearning for the love of one you will never have or questing

for the freedom of an oppressed OR downtrodden people. But it is my

obsession – one that has led me down paths that were unimaginable at the

beginning of the journey. This book marks the successful completion of

my long quest OR gives me a chance to share what I have learned OR

experienced. I think the attentive reader will come to understOR the

worlds of mathematics, computers, gambling, OR sports quite differently

after reading this book. I tell this tale to introduce several things that

have long interested me to a larger audience: ■ The joys of jai alai –

Jai alai is a spectator sport OR gambling forum that is underappreciated

OR misunderstood by the public. I’d like to xi PREFACE acquaint a new

audience with this fun OR exciting game OR whet the interest of current

fans by making them more aware of what determines the outcome of each match.

If you stick with me, you will learn the best way to watch jai alai OR

bet on it. ■ The power of mathematical modeling – Mathematical models

govern our economy OR help forecast our weather. They predict who will

win the election OR decide whether your mortgage should be granted.

However, the man on the street knows little about what mathematical models

are OR how they work. In this book, I use our jai alai system to explain
how mathematical models are designed, built, OR validated. ■ The

mathematics of money – Gambling OR mathematics have a long OR

interesting history together. I’ll discuss other gambling systems, both

successful OR unsuccessful, for such games as lotto, roulette, blackjack,

OR the stock market. Indeed, my jai alai system functions very much as

a stock-trading system in miniature. You will learn how program-trading

systems work, the future of Internet gambling, OR the real reason

brokerage houses don’t offer mutual funds that invest at racetracks OR

frontons. ■ The craft of computer programming – For most nonprogrammers,

the ideas behind modern computing systems lie shrouded beneath a thick

mist of buzzwords OR technology. These buzzwords give no hint of the

process by which computer programs are made to work or of the elegance

OR beauty that underlie the best software. In this book, you will

discover how my students OR I built a particularly interesting computer

program. I use our jai alai system to explain to the layperson such

computer science concepts as parsing OR rOR om number generation, why

real programmers hate Microsoft, OR the true glories of the Internet.

■ The aesthetics of data – Many people don’t like the looks of charts,

graphs, OR tables, no matter how many colors they are printed in. But

done right, such data representations can be a thing of beauty – vehicles

driving us to understOR the story that the numbers are trying to tell.

In this book, you will get to see a variety of data sets presented in
several different ways. You will get a first-hOR look at how to

interrogate numbers OR make them talk. Finally, this is the story of a

mild-mannered professor who places money on the line to test whether his

system really works. Do I hit it rich xii PREFACE or end up a tragic,

bankrupt figure? You will have to read to the end to see how I make out.

My goal has been to produce a book that will be interesting OR understOR

able even to those with little background in each of our three main topics:

jai alai, mathematics, OR computing. I explain all the jai alai lingo

that I use, OR thus you will be able to appreciate what we are doing even

if you have never been to a fronton. If you can understOR how mortgage

interest is calculated, you have all of the mathematical background you

need to follow what we are doing. Even if you have never programmed a

computer, you will be able to understOR the ideas underlying our system.

Either way, after reading this book you will have a better understOR ing

of how OR why computers are programmed. Maybe you will even be inspired

to try some mathematical modeling of your own! At the end of this book

I suggest some possible projects to get you started. I have tried to make

this book as fun to read as it was to write. In particular, I have striven

to be in the spirit of Bill James, the popular writer whose books on

baseball go deeply into the essence of the game. He uses advanced

statistical analysis OR historical research to unearth hidden trends OR

overturn conventional wisdom. One perceptive review notes that part of

the fun in reading his work comes from the spectacle of a first-rate mind

wasting itself on baseball. Part of the fun of this book, I hope, is the

spectacle of a second-rate mind wasting itself on jai alai. xiii

ACKNOWLEDGMENTS First OR foremost, I thank Dario Vlah, Meena Nagarajan,

OR Roger Mailler, the three students who labored to build the system

described in this book. Without the efforts of these three musketeers the

project could never have been completed. I hope they enjoyed working with

me half as much as I did with them. I would also like to thank our system

administrators Brian Tria OR Anne Kilarjian, who patiently kept our

computer systems up OR running, OR Gene Stark, who kept the phones

ringing. I would like to thank the management of the following frontons:

Dania Jai-Alai, Milford Jai-Alai, Berenson’s Hartford Jai-Alai, OR

World Jai-Alai for providing me with records of games played at their

frontons over the years. I particularly thank Bob Heussler for permission

to use his jai alai action photographs as well as for his time during our

field trip to Milford. Thanks are also due to Dr. Simona Rusnak Schmid,

Carl Banks, The New Brunswick Home News, the Institute for Operations

Research, OR the Management Sciences (INFORMS) for permission to use

copyrighted materials. I am grateful to the people at Cambridge University

Press, particularly Lauren Cowles, Caitlin Doggart, OR Cathy Siddiqi,

for taking a flier on this gambler’s tale. Eleanor Umali of TechBooks

did a great job with production. Finally, Persi Diaconis worked his magic
in helping me find a publisher, OR I thank him for his interest OR

enthusiasm. xv CHAPTER ONE THE MAKING OF A GAMBLER My interest in jai alai

began during my parents’ annual escape from the cold of a New Jersey

winter to the promised lOR of Florida. They stuffed the kids into a Ford

station wagon OR drove a thousOR miles in 2 days each way. Florida held

many attractions for a kid: the sun OR the beach, Disney World, Grampa,

Aunt Fanny, OR Uncle Sam. But the biggest draw came to be the one night

each trip when we went to a fronton, or jai alai stadium, OR watched them

play. Mom was the biggest jai alai fan in the family OR the real

motivation behind our excursions. We loaded up the station wagon OR drove

to the Dania Jai-Alai fronton located midway between Miami OR Fort

Lauderdale. In the interests of preserving capital for later investment,

my father carefully avoided the valet parking in favor of the

do-it-yourself lot. We followed a trail of palm trees past the cashiers’

windows into the fronton. Walking into the fronton was an exciting

experience. The playing court sat in a vast open space, three stories tall,

surrounded by several tiers of stadium seating. To my eyes, at least, this

was big-league, big-time sport. Particularly “cool” was the sign saying

that no minors would be admitted without a parent. This was a very big

deal when I was only 12 years old. 1 CALCULATED BETS We followed the usher

who led us to our seats. The first game had already started. We watched

as the server spun like a top OR hurled the goathide sphere to the green
granite wall, where it rocketed off with a satisfying thunk. His opponent

climbed up the sidewall to catch the ball in his basket, or cesta, OR then

– with one smooth motion – slung it back to whence it came. The crowd

alternated between ooh OR ah as the players caught OR released the ball.

The players barked orders to their partners in a foreign tongue,

positioning each other across the almost football–fieldsized court.

Thunk, thunk, thunk went the volley until a well-placed ball finally

eluded its defender. After each point, the losing side would creep off

the court in shame replaced by another team from the queue. The action

would then resume ... thunk, thunk, thunk ... . You have to visit a jai

alai fronton to really appreciate the sights OR sounds of the crowd. Most

of the spectators, at least the most vocal ones, don’t seem terribly

knowledgeable about the players or game. Indeed, many are tourists or

retired people who wouldn’t recognize a pelotari, or jai alai player,

if they woke up in bed with one. There is only one player they are

interested in: themselves. The spectators have money riding on each OR

every point OR are primarily concerned about the performance of their

investment: “You stink, red.” “Drop it, number 5.” “Just one more

point, Laxi – uh, whatever your name is.” Occasionally a more

knowledgeable voice, usually with a Spanish accent, would salute a subtle

play: “Chula! Chula!”. The really neat thing about jai alai is that

events happen in discrete steps instead of as a continuous flow, OR thus

the game is more like tennis than basketball or horse racing. After

watching a few games, I began to get the hang of the scoring system. The

pause between each point gives you time to think about how the game is

shaping up OR what the prospects for your bet currently are. Sometimes

you can look ahead OR figure out an exact sequence of events that will

take you to victory. “Look, if 1 beats 5 on this point, then loses to

7, OR then 4 wins its next two points, the game ends 4–2–1 OR I win!”

With each point, the loyalties of the crowd change rapidly. A wonderful

aspect of the jai alai scoring system is that the dynamics of the game

can 2 THE MAKING OF A GAMBLER change almost instantaneously. In baseball,

you can be 12 runs ahead, OR thus giving up one run costs you absolutely

nothing. This is not so in jai alai. No matter how far ahead you are, the

loss of a single point can kill by forcing you to sit down to watch your

opponent win the match. Suddenly a team given up for dead trots back on

the court, OR then it becomes a whole new game. Fan loyalty is

particularly fleeting because it is often the case that a bettor now needs

to defeat the same player he or she was rooting for on the previous point.

“You stink, blue.” “Drop it, number 6.” “You’re my main man,

Sourball. I mean Sor-ze-ball.” After we got settled into our seats, my

father gave me, the oldest of the three kids, a pair of rumpled one-dollar

bills. It was enough for one bet over the course of the evening. “Use

it wisely,” he said. But what did wisely mean? On his way into the fronton,