A sports betting service called The Quant Edge is utilizing commodities trading technology to make sports-related predictions. The venture, launched by oil trader Todd Gross and backed by former soccer player Shep Messing, utilizes algorithms employed in machine learning to take pieces of information and find statistical connections among data points.
“The Quant Edge provides you an edge in sports betting and fantasy by bringing the best of mathematics, statistics, and machine learning to help you win,” the company’s site describes. The complex estimation algorithms used by the firm are not unlike those employed by commodities traders to forecast prices, taking an approach similar to that of financial markets.
The firm’s algorithm adds tons of information – from injuries to player matchups and historical performance – to identify and prioritize the most relevant inputs for each game, to then provide recommendations on the optimal strategies to win money.
“We accomplish this with former finance hedge fund managers who have used these techniques for decades, as well as PhDs with quantitative backgrounds who are deep experts on the cutting edge of machine learning,” The Quant Edge explains. The firm explains it constantly “tweaks” its models based on the latest result, in order to preserve the “excellence” of its record.
However, just like in the financial markets, “winning requires diversification,” the company warns. In order to make the most of The Quant Edge, the firm claims it’s important to place multiple bets across multiple sports, and over multiple months. “We win roughly 60% of our bets – which is among the best in the industry – but, of course, we will be wrong approximately 40% of the time,” the service admits. “It’s therefore very important that you allocate your bets across all of our recommended opportunities instead of picking just one or two of them.”
Todd Gross, Founder and CEO of The Quant Edge, is described on the company’s website as having “a vision to help sports enthusiasts make money by making smarter betting and daily fantasy decisions.” He previously ran Global Commodities Options Trading for Morgan Stanley and then founded Hudson Capital Group.
“Gross has brought the expertise in quantitative analysis and machine learning he used in the financial markets to build TQE’s sports betting and fantasy platform,” a bio says. The expert came to sports betting after exploring how to better apply Kalman filtering – an algorithm used in machine learning (ML) – to financial markets, with the opening of the U.S. sports betting market in 2018 making him realize the math could be used to predict performance.
By paying as much as $50 a month for access, The Quant Edge allows bettors to tweak the performance of a select group of players and see how it should affect their bets. According to the firm’s website, the service has up to a 65% success rate.
But the firm itself has seen success as of late as well, bringing on board as investors former soccer goalkeeper Shep Messing and sports marketing expert Rob Striar. A $10 million venture capital round is also set to go toward improving modeling for a number of sports, including soccer, NFL and NBA.