Secrets of Pinnacle’s success with Paris Smith

Originally posted on by Becky Liggero:

I’ve always regarded Pinnacle one of the online gambling industry’s strongest operators backed by one of the industry’s most respected leaders.  Put aside the fact Pinnacle’s CEO is a rare female in a C-level position within iGaming, Paris Smith has been successfully leading her organization for over a decade and has rightfully earned the respect of internal and external iGaming professionals alike.

Pinnacle has maintained its position as a powerhouse in online sports betting since its inception in 1998 and is now recognized as the leader in eSports offerings, an area of sports betting Pinnacle has built up since 2010.

Running such a finely oiled machine is quite an accomplishment for Smith and learning what goes on behind the scenes at Pinnacle was the purpose of this interview.  Paris Smith and I have plans to meet in person shortly, so stay tuned for an on-camera follow up conversion coming soon.

Paris Smith PinnacleBecky Liggero (BL): Thank you for taking the time out of your busy schedule to talk with me today, Paris.  We all recognize Pinnacle as an industry leader in sports betting, how have you managed to maintain one of the best offerings on the market for so many years?

Paris Smith (PS) Unsurprisingly Pinnacle’s success and popularity is closely linked to the market leading odds we offer on multiple sports day in, day out. Our low margin model, high limits and the fact that we welcome winners (rather than exclude them) also differentiate us from any other operator in the market.

BL: Your model is certainly one of a kind. Can you provide us with a quick update on Pinnacle’s eSports offering? How are the numbers progressing in terms of growth and in comparison to other sports offerings at Pinnacle?

PS – eSports betting has gone from strength to strength for us. We recently passed the 5 million bet mark and if we keep on this trajectory we should pass 10 million sometime in January of next year. This is an incredible accomplishment for Pinnacle and the eSports trading team as we started from scratch just 7 years ago in 2010. Back then there was no eSports betting market – and now it’s our 6th biggest market by bet count – beating sports as established as hockey.

BL: Impressive accomplishment, Paris- congrats.  How will Pinnacle continue to grow their eSports offering in 2017 and beyond?

PS – We’re in the middle of a total overhaul of our eSports Hub and are investing in the marketing team as well as marketing spend. Whilst we’re keen to defend our #1 positioning in eSports betting we’re unlikely to invest huge amounts into team sponsorships and events like our competitors. Our intention is to be a legitimate supporter and partner in educating players on how to bet strategically and responsibly. That said, we’ve got a few tricks up our sleeve for the new Hub launch and I’m very excited to see the potential fully achieved.

BL: Interesting that you’re not going to go the sponsorship route as your competitors are doing, can you provide specific examples of how you plan to maintain your position as industry leader in eSports?

Secrets to Pinnacle's Success with Paris SmithPS – As I said, we want to remain embedded in the DNA of eSports at a grass roots level. Being authentic, supporting fans and partnering with eSports media and affiliates are our keystone.  We’ll look for tactical opportunities and markets in which to push one off campaigns if the fit is right and the ROI adds up.

BL: Got it, thank you.  Switching gears here a bit, Pinnacle led the race to the border with Poland. What are your thoughts on such protectionist EU countries and their newly imposed regulations?

PS – I can’t comment on decisions made by jurisdictions or regulatory bodies. We’ll continue to follow the letter of the law in any market we operate in.  Sometimes that means we need to withdraw from markets where Pinnacle is hugely popular, as was the recent case with Poland. It’s a shame, but that’s the nature of the evolving regulatory environment we exist in.

BL: Agreed, it is a shame, especially for the consumers.  So there’s a bit of internal drama in Antigua with regards to gaming regulations and we understand Pinnacle doesn’t plan on renewing the license for your Antigua-licensed subsidiary.  What would it take for you to consider returning?

PS – Once again, it’s not my place to comment on jurisdictional regulations. What I can say, is that we’ll continue to explore license opportunities and prepare applications if a license helps meet Pinnacle’s business objectives in the long term.

BL: Understood.  Before closing out, I would just like to say what a pleasure its been talking with a professional who has been at the helm of Pinnacle for over a decade and is clearly a big part of the company’s success. What’s your number one secret as one of the industry’s most respected leaders?  

PS – I’d have to say hiring the best talent and nurturing it. You’ve got to encourage your team to thrive and grow professionally. I’ve said it before and I’ll say it again; I’m lucky to work with an incredibly strong, intelligent and motivated team of people across all our different offices worldwide. They’re the beating heart of what makes Pinnacle tick and I value their contribution and input every day.

BL: I love it, Paris.  I’ve heard you speak of Pinnacle’s outstanding talent on panels at various events in the past, clearly you’re very proud of your team.  Thank you so much for joining me today and I look forward to a face-to-face chat the next time we’re in the same city.

Poisson Distribution and Football Betting

Poisson Distribution, coupled with historical data, provides a simple and reliable method for calculating the most likely score in a football match which can be applied to betting (a.k.a Poisson Betting). This simple walk-through shows how to calculate the necessary Attack/Defence Strength measures along with a handy shortcut to generate the Poisson Distribution values. In no time you will be predicting football scores using the Poisson Distribution.

Poisson Distribution is a mathematical concept for translating mean averages into a probability for variable outcomes across a distribution. For example, if we know Manchester City average 1.7 goals per game, so by putting the Poisson Distribution formula tells us that this average equates to Manchester City scoring 0 goals 18.3% of the time, 1 goal 31% of the time, 2 goals 26.4% of the time and 3 goals 15% of the time.

Poisson Distribution – Calculating score-line probabilities

Before we can use Poisson to calculate the most likely score-line of a match, we need to calculate the average number of goals each team is likely to score in that match. This can be calculated by determining the “Attack Strength” and “Defence Strength” for each team and comparing them.

Once you know how to calculate result probabilities, you can compare your results to a bookmaker’s odds and potentially find value.
Selecting a representative data range is vital when calculating Attack Strength and Defence Strength – too long and the data will not be relevant for the team’s current strength, while too short may allow outliers to skew the data. The 38 games played by each team in the 2015/16 EPL season will provide a sufficient sample size to apply the Poisson Distribution for this particular football betting.

How to calculate Attack Strength of football teams?

The first step in calculating Attack Strength based upon last season’s results is to determine the average number of goals scored per team, per home game, and per away game.

Calculate this by taking the total number of goals scored last season and dividing it by the number of games played:

Season total goals scored at home / number of games (in season)
Season total goals scored away / number of games (in season)
In 2015/16 English Premier League season, there were 567/380 at home and 459/380 away, equalling an average of 1.492 goals per game at home and 1.207 away.

Average number of goals scored at home: 1.492
Average number of goals scored away: 1.207
The ratio of a team’s average and the league average is what constitutes “Attack Strength”.

How to calculate Defence Strength of football teams?

We’ll also need the average number of goals an average team concedes. This is simply the inverse of the above numbers (as the number of goals a home team scores will equal the same number that an away team concedes):

Average number of goals conceded at home: 1.207
Average number of goals conceded away from home: 1.492
The ratio of a team’s average and the league average is what constitutes “Defence Strength”.

We can now use the numbers above to calculate the Attack Strength and Defence Strength of both Tottenham Hotspur and Everton (as of 1st March 2017).

Predicting Tottenham Hotspur’s goals
Calculate Tottenham’s Attack Strength:

Step – 1: Take the number of goals scored at home last season by the home team (Tottenham: 35) and divide by the number of home games (35/19): 1.842.
Step – 2: Divide this value by the season’s average home goals scored per game (1.842/1.492) to get an “Attack Strength” of 1.235.

(35/19) / (567/380) = 1.235

Calculate Everton’s Defence Strength:

Step – 1: Take the number of goals conceded away from home last season by the away team (Everton: 25) and divide by the number of away games (25/19): 1.315.
Step – 2: Divide this by the season’s average goals conceded by an away team per game (1.315/1.492) to get a “Defence Strength” of 0.881.

(25/19) / (567/380) = 0.881

We can now use the following formula to calculate the likely number of goals Tottenham might score (this is done by multiplying Tottenham’s Attack Strength by Everton’s Defence Strength and the average number of home goals in the Premier League):

1.235 x 0.881 x 1.492 = 1.623

Predicting Everton’s goals

To calculate the number of goals Everton might score, simply use the above formulas but replace the average number of home goals with the average number of away goals.

Everton’s Attack Strength:

(24/19) / (459/380) = 1.046

Tottenham’s Defence Strength:

(15/19) / (459/380) = 0.653

In the same way we predicted the number of goals Tottenham will score, we can calculate the likely number of goals Everton might score (done by multiplying Everton’s Attack Strength by Tottenham’s Defence Strength and the average number of away goals in the Premier League):

1.046 x 0.653 x 1.207 = 0.824

Poisson Distribution – Predicting multiple outcomes

Of course, no game ends 1.623 vs. 0.824 – this is simply the average. Poisson Distribution, a formula created by French mathematician Simeon Denis Poisson, allows us to use these figures to distribute 100% of probability across a range of goal outcomes for each side.

Poisson Distribution formula:
P(x; μ) = (e-μ) (μx) / x!
However, we can use online tools such as a Poisson Distribution Calculator to do most of the equation for us.

All we need to do is enter the different event occurrences – in our case goals outcomes from 0-5 – and the expected occurrences which are the likelihood of each team scoring – in our example Tottenham at 1.623 is their average rate of success, and Everton 0.824; the calculator will output the probability of the score for the given outcome.

Poisson Distribution for Tottenham vs. Everton

Goals 0 1 2 3 4 5
Tottenham 19.73% 32.02% 25.99% 14.06% 5.07% 1.85%
Everton 43.86% 36.14% 14.89% 4.09% 0.84% 0.14%

This example shows that there is a 19.73% chance that Tottenham will fail to score, but a 32.02% chance they will score a single goal and a 25.99% chance they’ll score two. Everton, on the other hand, is at 43.86% not to score, 36.14% to score one and 14.89% to score two. Hoping for a side to score five? The probability is 1.85% for Tottenham or 0.14% for Everton – or 2% for either team to score 5.

As both scores are independent (mathematically-speaking), you can see that the expected score is 1–0 – pairing the most probable outcomes for each team. If you multiply those two probabilities together, you’ll get the probability of the 1-0 outcome – (0.3202*0.4386) =0.1404 or 14.04%.

Now you know how to calculate score-line probabilities using Poisson Distribution for football betting, you can compare your measures to a bookmaker’s odds and see if there are discrepancies to take advantage of, especially if you factor in your own assessment of relevant situational factors such as weather, injury or HFA.

Converting estimated chance into betting odds

The above example showed us that a 1-1 draw has an 11.53% chance (0.3202*0.3614) of occurring when the Poisson Distribution formula is applied. But what if you wanted to know the predicted odds on the “draw”, rather than on individual draw outcomes? You’d need to calculate the probability for all of the different draw scorelines – 0-0, 1-1, 2-2, 3-3, 4-4, 5-5 etc.

Once you calculate the chances of each outcome, you convert them into odds and compare them to a bookmaker’s odds in order to find potential value bets.
To do this, simply calculate the probability of all possible draw combinations and add them together. This will give you the chance of a draw occurring, regardless of the score.

Of course, there are actually an infinite number of draw possibilities (both sides could score 10 goals each, for example) but the chances of a draw above 5-5 are so small that it’s safe to disregard them for this model.

Using the Tottenham vs. Everton example, combining all of the draws gives a probability of 0.2472 or 24.72% – this would give true odds of 4.05 (1/0.2472).

The limits of Poisson Distribution

Poisson Distribution is a simple predictive model that doesn’t allow for numerous factors. Situational factors – such as club circumstances, game status etc. – and subjective evaluation of the change of each team during the transfer window are completely ignored.

In this case, the above Poisson formula calculation fails to quantify any effect Everton’s new manager (Ronald Koeman) might have had on the team. It also fails to take Tottenham’s potential fatigue into consideration now that they are playing close to a Europa League fixture.

Correlations are also ignored; such as the widely recognised pitch effect that shows certain matches have a tendency to be either high or low scoring.

These are particularly important areas in lower league games, which can give bettors an edge against bookmakers. It is harder to gain an edge in major leagues such as the Premier League given the expertise and resources that modern bookmakers have at their disposal.

Last, but not least, these odds do not factor in the margin a bookmaker charges which are hugely important to the whole process of finding value.

Want to apply the Poisson Distribution to football betting?

Get the best Premier League odds and highest limits at Pinnacle.

This article was first published in Pinnacle’s Betting Resources titled: Poisson Distribution: Predict the score in soccer betting