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Hacking March Madness

It's March Madness, college basketball season in America, and for Nicky Gold that means one thing:  time to bet.  The twentysomething player sits down at his shiny wide desk in a sweeping loft, and fires up his PC.  A Red Bull condenses in arm’s reach.   Gold boasts five monitors in his home office, each filled with windows from dozens of sports sites.  Instant messages chime endlessly on his screen.  In another window, a tally of available lines rise and fall.  In this country of bettors, Nicky Gold is among the best.

Gold makes millions betting sports online.  He and a college friend head up a team of a half dozen math-minded friends who quit their day jobs for this.  You name it, they bet it:  NBA, NCAA, NFL, hockey,  golf.  On a given day, they may have up to $1 million in action.   They have a well-engineered system, which, for obvious reasons, they don’t want to reveal.  “If you’re really good, you don’t publish how you do it,” Gold says, with a laugh, which is why he doesn't want to use his real name.  But each person essentially has his own responsibility, from keeping tabs on the changing lines to researching a history of stats on how well teams and players perform against the line.  And though they take their hits, in the long run they win. 

“Why should I get a job on Wall Street?” Gold says, “I make more doing this, and I don’t have to wear a suit.”  While his skills and success are unique, he epitomizes this new manifestation of the American dream, and the generation of secretive young guys who are pursuing it.  They’re college educated math smart sports fans weaned on the Internet and video games.  The best of them have the broker-like gift for analyzing numbers and the dexterity of make flash decisions on the fly.  They're similar to the "quants" -  analysts who rocked Wall Street the last decade, except they're focused on mastering the betting systems online. 

But online gambling is still a murky field.  It's governed by an ancient, some say archaic, law.  In 1961, long before Gold and his crew were born, the United States Congress passed the Federal Interstate Wire Act aimed at illegal bookies who were taking sports bets by phone across state lines.  When the Internet gambling arrived in the late 1990s, the United State Justice Department dusted off the Wire Act and applied it to the wires of the new and burgeoning digital age.  While exceptions are now made for off-track horse betting, the vast majority of bets on the Internet are deemed against the law. Enforcement is often another story, though.

While poker garners most of the hype, sports betting is among the most popular – and profitable – games online.   Though the U.S. regulates other forms of gambling, from the lottery to Vegas and Indian casinos, online play remains a wild west.  As a result, hundreds of operations set up shop  in Costa Rica, making this the largest mission control for this controversial new American pastime. In addition to sharing the U.S. time zone, Costa Rica is in the proximal satellite footprint.  It also boasts a highly-literate workforce, willing to sit at the computers in call centers for a fraction of U.S. minimal wage.

Running the game is both an art and science.  It relies on two essential sources:   Don Best, and the Wiseguys.  Don Best is the name of a computer program, commercially available software that displays the various lines being offered at sites across the Internet. As bets come in, the betting sites adjust the line and the company’s take, called the “juice.”  They do this with the help of the Wiseguys, their term for the professional bettors like Nicky Gold.   If the Wiseguys, who they know from experience by name, come in at a certain line, the odds-makers adjust accordingly. 

In the underworld of online betting, the Wiseguys like Gold are the taste-masters, the people setting the standard that others follow.  Betting sites have terms for their followers; the Beards are the savvy players, who come in after the Wiseguys’ moves, and the Squares are everyone else.  Most bettors are Squares, he says, putting down an average of under $50 a bet.  Ultimately, it’s the Squares, not the geeks, whom the sportsbook operators care about most.  The average guy putting fifty bucks on the Wildcats to win is the lifeblood of this  culture and industry.  And the only way the sites are going to continue to reach him is to overcome the most pressing concerns:  underage gambling, money laundering, and problem gamers.  

DEMO Spring: Keeping Track of Your Gizmos with Bluetooth

At first, I wasn't impressed. Oh, whoopee, this gizmo is going to buzz me when I walk out the door without my keys. Then the folks at Phone Halo happened to mention that if you keep going, it will go on to text you to tell you where you left your keys, post it on your facebook page, and twitter it out to all your friends. Finally, a good use of social media. (Of course, if you left them in a place you shouldn't have been in the first places—maybe not so good.)

DEMO Spring: Add Some Lasers to Your Cash Register

Is this really as cool as it seemed? Or was I just tired of all the online applications I'd been subjected to? Maybe I was easily impressed by something that dealt with nuts and bolts. Real nuts and bolts.

DEMO Spring: VenueGen Launches Virtual Meeting Technology

I don't like web conferences; I never can tell who is talking, I get tired of staring at static Powerpoint slides on the screen, and it's hard to get a word in when I have something to say. So I could be a future user of VenueGen's 3D virtual meeting technology—as long as I don't have so much fun instructing my avatar to make faces that I lose track of the conversation.

DEMO Spring: Quantum Dots About to Move into Camera Sensors

When I scanned through the exhibitor list at Demo Spring in Palm Desert, Calif., InVisage Technologies, a company promising a leap forward in camera sensor technologies with paint-on quantum dot technology, immediately went to the top of my "gotta check this out" list. I was even more intrigued to discover that their Chief Technology Officer, Ted Sargent, had written an article for IEEE Spectrum's February issue explaining the technology. ("Connecting the Quantum Dots.") He hadn't happened to mention that he had a little company about to introduce image sensors into the cell phone market.

DEMO Spring: Neverend Media Says E-books Could be Better

The Alpha-earliest stage-companies at Demo Spring in Palm Desert, Calif., didn't have lot of time to make their case for why the world needs their technology-just 90 seconds. So IEEE Spectrum took a closer look at Neverend Media, whose Neverend electronic books can be constantly updated, annotated, and discussed as they are being read.

DEMO Spring: Flinc Puts a High Tech Twist on Hitchhiking

Flinc is calling their new technology a digital ride sharing system. Come on, call it what it is—high-tech hitchhiking. But besides linking riders and potential drivers who are about to pass nearby and heading for the same destination, Flinc adds a little motivation—it lets drivers sell their services.

DEMO Spring: Companies Launch Social Networks for Doing Good, Tweens

DEMOSpring2010 featured a lot of variations of social networks; in fact, it got so I was relieved when a technology being unveiled didn’t tweet, text, or update its Facebook status. (For one of those, see my videoblog on General Inspection, an automatic parts identification system for hardware stores.)

Two examples—Everloop and KarmaKorn.

Everloop is a social media site for kids who too old for Club Penguin (a website for early elementary schoolers) and are too young for Facebook (thirteen is Facebook Legal). There is an obvious niche here—plenty of tweens, including my 11 year old—are counting the days until they can get their own Facebook pages. Many aren’t waiting—they’re just lying about their ages.

Everloop presents itself as a safe-from-creepers place for tweens to go on the Internet. Unfortunately, Everloop has filled that space with commerce—the kids are given points to buy and sell things, like access to games and video content. And much of what they’re offered to “buy” is intended to be branded—send your friend a Coke, not a generic soda. After watching the Everloop demo, I realized that every niche doesn’t need to be filled. On the plus side, Everloop coined a great description of a demographic--the post-Penguin set.

KarmaKorn has also bought into the points mentality of social network—it calls its points “kernels”, but thinks it can turn a passion for virtual commerce into a force for social good. Folks who sign on with KarmaKorn will start out with some number of kernels in their bank accounts; they can use those kernels to encourage other people to do good things, for themselves or society (take your kids for a walk or give a homeless person a sandwich and I’ll pay 10 kernels), or earn kernels from others. The company plans to keep itself in business by charging large companies who want to position themselves as socially responsible to participate (earn 100 kernels from Weyerhaeuser if you go plant a tree). I don’t totally get the impulse to collect virtual goods on social media, but when I see how many people I know got sucked into Farmville, I have to admit that I know it exists. And if KarmaKorn can get people away from their computers and out helping society, they’re pointing this impulse in the right direction.

Everloop's Demo:

KarmaKorn's Demo:

DEMO Spring: Automatic Emotion Detection Technology Wins Grand Prize

Turns out, that when you’re ticked off, you’re ticked off in any language. This is a good thing for startup company eXaudios Technologies. This Israel-based company has developed software that analyzes volume and intonation changes in a person’s voice and translates that information into statements about the speaker’s feelings and intent. (“You feel disrespect and rejection.” “Patronizing.”) It unveiled this technology in Palm Springs this week at DEMOSpring2010, demonstrating the system live in both English and Hebrew.

EXAudios is planning to sell this technology into call centers, where it can be used to monitor customers and agents, allowing supervisors to step in when a customer’s anger is mounting and, ideally, turn the call around. The technology has other applications—screening for Parkinson’s and other diseases, Homeland Security, but the company thinks it will take off most quickly in the call center world.

This company had all the right stuff—cool technology and an obvious market niche. I can see it having a positive effect on my life—the next time I call Verizon to complain about bizarre charges on my cell phone bill, someone who can actual do something might step into the conversation sooner rather than later.

And I wasn’t the only one who was impressed—eXaudios won the People’s Choice Award—a million dollars worth of advertising on IDG properties.

 

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