When Saudi Arabia beat Argentina in a recent World Cup match, it sent shock waves across the sporting world. A $1,000 live bet on Saudi Arabia to win when they were trailing Argentina 1-0 during the match paid out a whopping $21,000. This was a truly stunning turn of events that nobody could have predicted. Or could they?
Eugene Plotkin, the CEO of TechWallet and a quantitative guru who spent years as an investment banker, is intimately familiar with sports and understands the sports betting market. Can sports upsets be predicted?
“Sports betting is like any other financial market,” Plotkin explains. “There are buyers and sellers. For example, in the Saudi Arabia and Argentina match, those betting on Argentina were buying an Argentina win. And those betting on Saudi Arabia were in essence selling an Argentina win. In the middle are the bookmakers, who act as the brokers in this market and who take a cut of both buy and sell orders as a fee for their services.”
Eugene Plotkin: Applying Technical and Quantitative Techniques
According to Plotkin, the technical and quantitative techniques used in the stock market can be applied to the sports betting market. He notes that while the terms may differ in the stock and the sports markets, many core concepts are remarkably similar.
“One thing that many people like about the sports betting market is that the outcome is quick and definitive,” Plotkin says. “In the stock market, it can take many years for a company to live up to its potential and for its stock price to reflect that reality. However, in the sports betting market, the outcome is known as soon as a match or a tournament is over. It only takes days or, at most, weeks, and the outcome is certain. The bet either wins or loses.”
According to recent surveys, 1 out of 5 American adults has wagered on sports within the past year and more than half of those place sports bets on a regular basis. All sportsbooks across the United States generated more than $4 billion in revenue on nearly $60 billion in bets placed in 2021.
“I know many sports fans and the question of how to pick upsets invariably comes up,” Plotkin says. “Now, I want to be clear. I’m not encouraging anyone to gamble. Not at all. If someone does decide to place a bet on a sports match, they should make sure that losing the entire amount will not have any meaningful impact on their life. With that said, market analysis and historical statistics do present a certain perspective on situations when upsets may be more likely.”
Look for Underdogs
Plotkin explains that an upset is any sporting result in which an underdog beats a favored side. In other words, any match or game in which the higher ranked team or player loses to a lower ranked team or player, particularly when the difference in ranking is significant.
“The first technique for identifying potential upsets is to look for underdogs with a home field advantage,” Plotkin says. “In the Saudi Arabia versus Argentina game at the World Cup, the Saudi team had a home field advantage because they were playing in Qatar, a country that is right next to Saudi Arabia. Meanwhile, Argentina had to travel halfway around the world. In addition to the Saudi team being more rested and more familiar with the climate and the territory, they also had strong fan support. And fans make a significant difference, not only in a team’s energy level, but also in the way that referees are subconsciously affected by the crowd.”
According to statistics, home field advantage plays a significant role across many sports. In the NFL and the NHL, for example, the home team wins nearly 60% of the time.
“The second technique for identifying potential upsets is to look at injuries,” Plotkin says. “Although Lionel Messi was on the pitch, Argentina was missing some of its other top players and playmakers due to injuries. This included Paulo Dybala, Nico Gonzalez and Giovani Lo Celso. Without key stars and starters, even the best team is more likely to have a poor performance.”
Plotkin compares injuries to the loss of key executives at public companies. He notes that major changes in management can have profound consequences on company results and, by extension, the company’s stock price over time.
Eugene Plotkin: ‘Nothing to Lose and Everything to Gain’
“The third technique for identifying potential upsets is to consider the relative importance of a given match for each side,” Plotkin says. “If one side has far more pressure to get a victory than the other, this will make a difference. Given that Argentina was guaranteed two more matches regardless of the outcome and given that they were heavily favored, the Argentinian players likely did not feel a lot of pressure coming into the match. They likely came in expecting to ease into the World Cup. On the other side, the Saudi team came in knowing that every team in their group was ranked higher and so every match would count. They came in with nothing to lose and everything to gain, ready to fight with everything that they had.”
After Saudi Arabia defeated Argentina, the Saudi sports minister Prince Abdulaziz bin Turki Al-Faisal said: “It’s been an unbelievable result. The team played really well, they prepared for three years for this day, the coach did an amazing job.”
“Like the saying goes, on any given Sunday, any team can beat any other team,” Plotkin says. “The history of sports is rife with upsets. However, it is important to remember that upsets are the exception rather than the rule. While the techniques I have discussed can help predict potential upsets, most of the time the favored team will still win. So, I would advise anyone from thinking that they can consistently pick upsets. This is incredibly difficult, and I don’t personally know anyone who can predict upsets with a material level of consistency.”
Plotkin notes that his favorite aspect of sports isn’t wagering, but rather the pure joy of supporting a favorite team and watching them triumph. While sports betting provides a quick payoff, it can also provide an equally quick loss. “Sports betting does not offer the security of investing in a stock or bond, which provides something of lasting financial value,” Plotkin concludes.