The Computer Group - How the computer group made millions betting on sports

How the Computer Group Made Millions in the Early 80’s on College Football, And Why That’ll Never Happen Again

Almost anyone who knows about the history of online sports betting knows about the Computer Group, perhaps the most successful computerized sports betting (see video) group in history, whose success led to the arrests of the entire group, including famed sports bettor Billy Walters, after investigations that the group was involved in an illegal bookmaking operation in 1985.

After the indictments of the members, the Computer Group split, and the level of success they reached was never to be repeated. But why? It’s a useful lesson to learn from their own history.

How the “Computer Group” Started: Michael Kent and Dr. Ivan Midlin

In 1972, mathematician Michael Kent began to look into determining win/loss probabilities with a rented computer. It took a few years, as he continued to add more data to the computer’s algorithms, and by 1977, he decided to try making bets with it. Yet Kent was bothered with the difficulty of dealing with others in transacting the business of betting, which he found bothersome.

In 1980, a stressed Kent met with Dr. Ivan Midlin, an orthopedic surgeon with connections and the ability to move money. A partnership was formed, which began the story of the Computer Group. Kent deferred his trust to Midlin, who was able to grow the group into a network. Shortly a front business was established, with Billy Walters, already a wildly successful– and heavily mistrusted– gambler, who worked for the Group on a percentage basis, giving them even more clout.

How the Group Rose to Infamy in the 1980’s, and Subsequent Downfall

Between 1983-1985, the Group had amassed record profits, at its height profiting a half a million dollars a week from sports betting. Kent focused solely on the technical side, often unaware of what was happening on the business side handled by Midlin. Kent gave over the information to Midlin, who spread the bets.

However, after the FBI arrested the members of the Group (assuming, mistakenly, that they were an illegal bookmaking operation), information revealed by the investigation caused each of the Computer Group’s members to turn on each other. In the end, the FBI never did get its illegal bookmaking operation, but they had effectively destroyed the Computer Group. While most of the Group’s members still work in professional sports betting, they officially wouldn’t work together again.

How the Computer Group made millions

The Computer Groups sports betting system, primarily applied to college football and NFL betting, was based on using statistics based sports betting to predict the outcome of college football. The group reportedly made millions each season.

Statistics based sports betting is based on 3 fundamental models. Regression analysis, Statistical analysis and probabilistic analysis.

Statistical analysis is based on deep data analysis on deviations from the common rule and to give you a competitive advantage. For example, using new tools only available to the public today thank to the power of the web, allows sports bettors to query and calculate multiple data points across timelines and scenarios. For example, a sports bettor can now create a unique betting system using statistical NFL data over the last few seasons to determine profit performance of the New England Patriots against the spread on away games versus team A, team B and team C, and when the point spread is +7. Simple analysis of this can now be performed using free sports betting tools as custom betting systems that allow members to quickly and easily simulate betting scenarios, and get alerted when these scenarios arise for future games.

This point statistical distribution factor opens up the possibility of statistical anomalies that a sports investor can take advantage and profit.

To find anomalies you need to cautiously review team statistics, performance and players. You should also know significant factors such as: injuries, does the team tend to win more in indoor or outdoor sports stadiums, weather (for outdoor games), what atmospheric conditions is the team used to playing in, etc.. You can also look for anomalies based on team psyche and public opinion, which is a very popular sports betting strategy Sharps use, commonly known as a contrarian betting strategy.

Factors that are used into determining betting systems are a mix of psychological, motivational, biological, situational factors that, based on past performances, support one team over another. It is generally believed that more than one factor pointing towards a team is needed to have a successful betting system

According to figures compiled at the time by Michael Kent, the Computer Group in 1983-84 earned almost $5 million from wagers on college and, occasionally, NFL games. Yet Michael Kent suspects that his records are incomplete.

Kent invented the statistical models. He was 34 when he had created the first successful program for handicapping basketball and football games: together with his brother, Michael collected statistical data about every team to put all that info to his computer and update the program

Can There Ever Be Another “Computer Group” Again?

Often there are stories that a group has matched– or will match– the initial success of the Computer Group. The biggest problem with this argument is ignorance of calculation in sports betting at the time, as well as the Computer Group’s sheer size in terms of operation then. Before the work of the Computer Group, there was a lot of human error involved in bookmaking, and that human error allowed the Computer Group to exploit that lack of accuracy.

After the very public arrests of the members of the Computer Group, when it was now obvious that the use of computers could give more accurate predictions, casinos and bookmakers upgraded.

While programming errors still account for huge fundamental errors later (such as in the case of Bob Voulgaris, who discovered a hole in basketball prediction he could exploit), with bookmakers still driven by how much the public bets, the days of large-scale exploitation of huge errors in the books were over. Before the Computer Group, the bookmakers were just using books. With the technological explosion since, a return to those days in largely unforeseeable.

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