FIELD OF THE INVENTION

The present invention is directed towards a betting system and methods of operating a betting system. In particular, the present invention describes an apparatus able to administer a live-event, non-fixed odds betting system where the house takes an active role in placing bets in addition to the usual roles of posting current odds, collecting bets, and distributing payoffs to winners. Additionally, the present invention describes a method for collecting data from multiple sources, automating the procedure of calculating odds for betting lines based on the data, placing bets on behalf of the house, and streaming the betting odds and data to the players, that is more accurate than pari-mutuel systems and less risky to the house than fixed odds systems.

BACKGROUND OF THE INVENTION

Most sports betting systems use fixed odds betting where the house (i.e., the organization operating the betting system) posts the payoff odds on the available choices, and winning players that place a bet while the line is open are guaranteed a payoff based on the posted odds when they placed the bet. Fixed odds betting is very common today with football, baseball, basketball, hockey, soccer, golf, tennis, and most other popular sport events. However, a few sports, like horse racing, dog racing, and jai alia, typically use pari-mutuel betting systems. In a pari-mutuel betting system, the odds paid on a winning bet depends on the sizes of the betting pools on each choice when the betting line closes, and may be different from the posted odds at the time the player placed the bet. There are also sports betting systems modeled on financial markets (e.g., prediction markets) where one “share” of a betting choice is worth a fixed amount if that choice wins, and zero if it loses. The profit on a winning share depends on the price paid by the player, which varies in time due to changing supply and demand.

As used herein, the “ultimate payoff odds” on a bet is the ratio of the amount a winning player wins (in profit) to the amount of the bet. So, for example, if a player bet $10 and received $100 back after winning the bet, then the ultimate payoff odds on that bet was 9:1 ($90 profit versus the initial bet of $10). If the probability that a given choice will be the winning choice is 1/(m+1), and if the house pays m:1 on that choice, then the house has no edge on the bet, i.e. the expected profit/loss for the player is zero.

Players obviously want to know how much profit they stand to make on a bet before they make the bet. The “posted payoff odds” on the betting choices at time t are typically the only current information provided by the house. In an honest sports betting system, the posted payoff odds at each time t are good-faith estimates of the ultimate payoff odds. In fixed odds betting, the posted odds on the choices at the time of a bet are exactly the ultimate payoff odds if that choice wins. This is also generally true in prediction market sports betting (even though it is usually not described this way). The posted payoff odds on a choice can be calculated from the asking price: it is the reciprocal of the asking price of a $1 share, minus 1. In any case, the player knows at the time of the bet exactly how much profit will be earned if the bet wins.

Pari-mutuel betting is different from fixed odds betting. In fixed odds betting, the ultimate payoff odds are the posted odds at the time of the bet. In pari-mutuel betting, the ultimate payoff odds is the ratio of the total money bet on all the choices to the total money bet on the winning choice while the line was open. At time t (before the line closes) the posted odds on choice j is the ratio of the total money bet on all the choices up to time t to the total money bet on j up to time t, minus 1. In general, the posted odds will vary in time, so the posted odds on a choice at the time of a bet may not be the same as the ultimate payoff odds on that choice if it wins. Pari-mutual betting systems, and other non-fixed odds systems can therefore be problematic in that players may prefer betting systems where the posted payoff odds at the time of their bet, and ultimate payoff odds if they win, are guaranteed to be the same. Several pari-mutual betting systems have attempted to address this issue by providing multiple independent pari-mutual betting lines for the same betting event (see for example, U.S. Pat. Nos. 7,454,380 and 7,740,539).

The present invention is similar to pari-mutuel betting in that the ultimate payoff odds may not be the exactly the same as the posted odds at the time of a bet. However, the present invention is different from pari-mutuel betting in significant ways. In the present invention, the posted odds at the time of a bet and the ultimate payoff odds are computed differently and are much closer to each other than for pari-mutuel; and crucially, in the present invention the house can adjust and control the posted and ultimate payoff odds during the betting event by making its own bets. In the present invention, house bets and posted odds are fully automated and controlled by an intelligent subsystem with fast access to historical sports data.

SUMMARY OF THE INVENTION

Within the categories of fixed odds, pari-mutuel, and prediction market sports betting, there are a number of variations and enhancements in the prior art. However, the present invention provides a sports betting system and method with a new way to provide real-time payoff odds and calculate ultimate payoff odds, wherein the house places bets in order to adjust and control the posted and ultimate payoff odds. The streaming real-time payoff odds and all house bets are fully automatic, as the present invention is controlled by an intelligent subsystem with fast access to various data inputs, such as historical sports data.

The posted odds are streamed in real time to the players. The current posted odds are calculated by the system based on the most recent set of house bets and the player bets that occurred after the house bets. The house bets, in turn, are controlled by an intelligent subsystem with fast access to data inputs, such as historical sports data. The betting system of the present invention therefore does not utilize or provide a fixed odds system, pari-mutuel system, prediction market system, nor any variant of those systems disclosed in the prior art.

In an embodiment, the present invention provides a betting system, preferably for in-progress sporting events, that is able to collect data from various inputs, selectively manipulate the data to generate improved estimates of the ultimate payoff odds in a non-fixed betting odds betting system, and provide the estimates to a plurality of end computer processors or electronic devices on a network. In an embodiment of the present invention, the betting system allows a plurality of players to place bets where the house places bets along with players. The system comprises an artificial intelligent subsystem (an “AI”) designed to estimate real-time probabilities of outcomes associated with live events, and a host computer able to accept bets from players, place bets on behalf of the house based on the AI estimates, maintain a detailed electronic record on all betting activity (including house betting activity), estimate and stream up-to-date payoff odds based on the electronic record, and distribute payoffs on wining bets when the betting events terminate. In an embodiment, the AI unit works by searching for similar situations in an electronic historical database related to the live event, and then estimating the probability each choice will win by the fraction of times it won in the historical database. Other embodiments may use more sophisticated estimation techniques. The purpose of the house bets is to continuously and strategically adjust the real-time posted payoff odds to be in line with the AI estimates, and/or to create additional revenue for the house, as the house is entitled to profits from its winning bets in the present invention. Players can communicate with the host computer and place bets through physical devices, such as mobile electronic devices, personal computers, or stationary kiosks.

Betting occurs before and/or during a betting event such as an entire sporting event (like a football game), or parts of sporting events like a single drive in a football game, an inning in a baseball game, a set in a tennis match, or a round in a knockout tournament like March Madness or the Stanley Cup playoffs. Betting events can also be based on non-sporting events like award shows, reality shows, and elections. During the live events, one or more betting lines are provided for each betting event, where there is a set of betting choices (i.e., possible outcomes of the betting event) that players can bet on while the betting lines are open. The betting choices are preferably mutually exclusive, i.e., no more than one of them will be the winning choice. While the betting lines are open, players can bet whenever they want and as much as they want, subject to house rules. In an embodiment, there may be intervals of time during the betting event when betting is paused; for example during the actual plays in a football game, or during points in a tennis match. All payoffs are made after the betting event terminates.

In an embodiment, the present invention provides a betting system between a host computer and a plurality of remote electronic devices, wherein the betting system is operating during a live event. The method comprises the steps of:

a) generating a betting event associated with said live event on the host computer, wherein the betting event is based on actions occurring during said live event, and electronically transmitting data relating to said live event and betting event from the host computer to the plurality of electronic devices;

b) opening one or more betting lines on the host computer for said betting event before the start or during the betting event, but before a termination event occurs with regard to the betting event, each betting line comprising two or more mutually exclusive betting choices from a finite set of possible outcomes associated with the selected betting event;

c) electronically transmitting betting line data from the host computer to the plurality of electronic devices, wherein each of the plurality of electronic devices is able to select a desired betting choice for each of the one or more betting lines while the betting line is open;

d) the host computer electronically receiving selected betting choice data from the plurality of electronic devices;

e) at one or more time periods, placing a house bet on one or more betting choices of a selected betting line, wherein each house bet is in an amount that is able to be the same or different from one another, and wherein the amount of each house bet and the time of each house bets for the selected betting line are placed by the host computer and are determined by a first predetermined algorithms based on data from an artificial intelligence (AI) feed,

wherein, while the one or more betting lines remain open, the host computer continuously estimates ultimate payoff odds for the betting choices as determined by a second predetermined algorithm based, and electronically transmits said payoff odds to the plurality of electronic devices; and

f) automatically monitoring the betting event until a termination event occurs with regard to the betting event, determining a winning choice on each betting line after the termination event, and terminating the betting lines on the host computer upon occurrence of the termination events.

At certain times during the betting event the house will make bets. The precise betting times and betting amounts for the house are determined by the AI. The AI streams data to the host (also referred to herein as the AI feed), which includes estimates of the current probabilities that each of the betting choices on a betting line will prevail. Said estimates are based on historical sports data, and other relevant information. The precise timing and amounts of the house bets are determined by the host computer from the AI feed. In addition, the host computer maintains an electronic record (such as a spreadsheet) that lists the details of every bet made up to the present by players and the house, computes the real-time odds for the choices on the betting line from the electronic record, and streams them to the players mobile devices and/or fixed kiosks or other displays.

House bets are made at times {t0, t1, . . . , tn}, where t0is around the time the betting event starts, tnis around the time the betting event terminates, and the other times are at irregular intervals. In the present invention, the number of times the house will bet during the betting event, n, and the precise times of those bets, {t0, t1, . . . , tn}, are not known ahead of time. They are determined in real time by the host computer from the continuous stream of information in the AI feed. House bets are preferably in exact proportion to the estimated probabilities of the outcomes, because this can be shown mathematically to minimize the risk to the house. House bets have the same status and effects on payoff outcomes as bets placed by the players.

Preferably, the house bets are simultaneously placed on each of the betting choices of a selected betting line, and the house bet amount for each choice is proportional to a current estimated probability (from the AI feed) of that choice becoming the winning choice. Preferably, the house bets are placed at times {t0, t1, . . . , tn} which are determined in real time from the AI feed by continuously observing changes in the estimated probabilities that the choices will win. When the probabilities change by more than a threshold amount since the last time the house made bets, the house bets again. (Since there are always k>1 choices in the choice set, the choice probabilities are a vector (p1, . . . , pk). The house therefore needs a way to measure changes in probability vectors in the present invention. In one embodiment, the distance between probability vectors is the square root of the sum of the individual squared differences (i.e., Euclidian distance.) This procedure continues until the betting event terminates, so the number of house bets and the amounts of those bets cannot be known ahead of time. With regard to the estimated posted odds, the posted odds on a choice j at a time t is preferably calculated from all bets placed from the previous house betting time tiup to time t; and the ultimate payoff on a winning bet placed at time t depends on all bets placed between times tiand t1+1.

In an embodiment, the host computer creates and maintains a detailed electronic record, such as a spreadsheet, of the time and amount every bet made by the players and the house during the betting event (also referred to herein as the BetLog). The house uses the data in the BetLog to post payoff odds based on the most up to date information, and also to determine the payoffs on winning bets when the betting event terminates. The posted payoff odds are good faith estimates of the eventual payoff odds, but are not guaranteed to be exact. The posted payoff odds in the present invention are significantly more accurate than the posted odds in a pari-mutuel system because of the way the odds are calculated in the present invention.

In an embodiment, the present invention provides a method of providing a betting system between a plurality of players, wherein the betting system is based on a live event. The method comprises the steps of: a) selecting a betting event associated with said live event, wherein the betting event is based on actions occurring during said live event; b) opening one or more betting lines for said selected betting event before the start or during the betting event, but before a termination event occurs with regard to the betting event, each betting line comprising two or more mutually exclusive betting choices from a finite set of possible outcomes associated with the selected betting event; c) allowing the players an amount of time to selectively place bets on the betting lines while the betting lines are open, transferring bet amounts corresponding to bets placed by the players from player bank accounts to betting pools corresponding to the selected betting choices, and recording data associated with said bets in a BetLog, wherein the data associated with a bet is comprised of a time of the bet, the betting line and choice, the bet amount, and the bettor's identification; d) at one or more time periods, placing a house bet on one or more betting choices of a selected betting line, wherein each house bet is in an amount that is able to be the same or different from one another, and wherein the amount of each house bet and the times of the house bets for the selected betting line are determined by a first predetermined algorithm based on the data from an artificial intelligence (AI) feed, wherein the amounts of the house bets are transferred from a house bank account to the betting pools corresponding to the selected betting choices, and wherein the data associated with the house bets are recorded in the BetLog, wherein data associated with each house bet is comprised of the time of the bet, the betting line and choice, and the house identification; e) during the time when players are allowed to bet on the betting lines, continuously estimating ultimate payoff odds for the choices as determined by a second predetermined algorithm based on data in the BetLog, and continuously communicating said payoff odds to the players; f) monitoring the betting event until a termination event occurs with regard to the betting event, determining a winning choice on each betting line after the termination event, and terminating the betting lines upon occurrence of the termination events; and g) upon termination of the betting event, paying winning players of the one or more betting lines amounts determined by a third predetermined algorithm, based on data in the BetLog, and transferring said winning players' winnings from the betting pools into bank accounts of the winning players, and wherein winning house bets are also transferred from the betting pools into the house bank account.

Optionally, the betting event is a live sporting event including, but not limited to, a half-inning in a baseball game (where the betting choices are 0 runs, 1 run, 2 runs, >2 runs), an at-bat in a baseball game (where the betting choices are Home Run, Single, BB, K, Fly Out, Ground Out, Other), a set of downs in a football game (where the betting choices are Touchdown, Field Goal, Punt, Turnover, and New First Down), a drive in a football game (where the betting choices are Touchdown, Field Goal, Punt, and Turnover), a k-game football parlay (where the betting choices are the 2kpossible winning and losing combinations) or a set in a tennis match (where the betting choices are the possible scores, like 6-3). In every case the betting choices are preferably mutually exclusive so that exactly one choice wins every time.

In an embodiment, the invention provides a system for providing a betting game between a plurality of players, where the betting game is based on actions occurring during a live event, and where said system is under the control of a host computer. The system includes a host processor programmed for analyzing and processing input data from players and from an AI feed, and outputting data and information to players relevant to the betting game. The host processor is programmed to:

i) provide one or more selectable betting events to the players while the live event is in progress, wherein each betting event is based on actions occurring during said live event;

ii) open one or more betting lines for each selected betting event before the start or after the start of the live event but before a termination event occurs with regard to the betting event, each betting line comprising two or more mutually exclusive betting choices corresponding to a finite set of possible outcomes of the selected betting event;

iii) allow the players an amount of time before or during the betting event to selectively bet on the betting lines;

iv) at one or more time periods, place a house bet on one or more betting choices of a selected betting line, wherein each house bet is in an amount that is able to be the same or different from one another, and wherein the amount of each house bet and the time period to make the house bets for the selected betting line are determined based on a first predetermined algorithm;

v) during the time when players are allowed to bet on the betting lines, calculate estimated payoff odds based on placed bet data and the second predetermined algorithm and post said estimated payoff odds to the players;

vi) closing the one or more betting lines after an interval of time such that no further bets may be placed on the betting lines, wherein player bets and house bets are combined to form a total bet amount for each betting line;

vii) monitor the live event until a termination event occurs with regard to the betting event;

viii) terminate the betting event upon occurrence of the termination event; and

ix) upon termination of the betting event, pay winners of the one or more betting lines according to the total bet amount for each betting line and a third predetermined algorithm, wherein winning house bets are paid to a house account.

In a further embodiment, the system further comprises a plurality of player processors interactively connected to the host processor, where each player processor is able to send and receive data to the host processor. Optionally, a display and interface device operatively associated with each player processor is part of the system, where the display and interface device is able to display data received from the host computer, and is able to send betting instructions entered by the player to the host computer through the player processor. Preferably, an administrative processor is interactively connected to the host processor, where the administrative processor is able to send commands to the host processor. An administrative display and interface device is operatively associated with the administrative processor, where the administrative display and interface device is able to display data received from the host processor, and is able to send commands entered by the administrator to the host processor. The commands entered by the administrator control when the host processor opens and closes the betting line, and when the host processor terminates the betting line.

