## Comment Re:Look at the numbers first (Score 1) 312 312

Goldman Sachs gave Brazil (the "favorite") only a 13% chance of winning the world cup.

The fact that Brazil was eliminated is not at odds with the reports.

Exactly. The editorial comment has the misconception that this form of betting aims to find the winner.

Instead, they are looking for models which better predict to the "true" likelihood of any team winning. These models output a series of probabilities, and the amount of money you can make depends on the disparity between this distribution and that predicted by the current betting odds. You place a family of bets which target this disparity proportionally, and then after a sufficient number of events you'll make money reliably.

If other people start predicing the odds more accurately, you'll find that the disparity between betting odds and your model will narrow, and there'll be less opportunity for you to make money. There are a lot of people doing this sort of thing professionally, since sports betting is supposedly a less efficient market than share trading.