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Retired MLB pitcher Michael Schwimer is using analytics to upend sports betting
17th September, 12:34Retired MLB pitcher Michael Schwimer has put together a team of data analysts and machine learning experts to take on the corrupt tout industry (sellers of sports betting picks).
Driving the news: Schwimer's company, Jambos Picks, has raised $23 million and recently launched its paid subscription service that will provide customers with pick recommendations.
Schwimer is so confident in his team's ability to predict outcomes that Jambos Picks is offering bettors their money back if their picks don't win."The discounts vary depending on how long you subscribe, but the full 17-week plan, which costs $3,000, carries a $10,000 refund if the picks don't make money overall," per Bloomberg.
The backdrop: This isn't Schwimer's first foray into the world of analytics.
He's also the founder of Big League Advance, which is essentially a venture capital firm that uses predictive modeling to invest in minor leaguers (BLA offers players lump-sum payments in exchange for a share of their future MLB salary.)
The big picture: I asked Schwimer how the idea for Jambos Picks came about, and the story he told me illustrates the sports world's evolving relationship with analytics.
From teams and athletes to sports books and bettors, everyone is collecting and analyzing more data than ever before -- and attempting to predict outcomes using that information has never been more en vogue.
"We put together this great group of statisticians from all these different sports -- directors of analytics from NBA teams, machine-learning experts -- and we initially thought we were going to bring our predictive models to sports teams.
"We thought we could go to the Knicks and say, 'Hey, you're playing the Rockets and you have a 30% chance to win this game, but if you use these lineups and do these things defensively, now you're at a 41% chance.
"When all the teams told us to 'prove it,' that's when we looked at the sports betting space and realized it was the perfect place to do that. Because it's a scorecard. So Jambos Picks is really about proving that our model works.
"[Assuming this works], team ownership is a likely next step for us. In fact, in the next few months, we're hoping to close in on an ownership stake in a European soccer team where we'd use the same models to predict outcomes and build a team around that."
The bottom line: If you can best predict the outcome of a game, you, by definition, know more about what it takes to win that game than anybody else.
Whether you're placing a bet or building a roster, that information is incredibly valuable -- and it's only going to increase in value as sports betting comes out of the shadows and analytics departments continue to expand.
Go deeper: The NFL's slow embrace of sports betting