For a sports betting industry observer, a conversation with Rufus Peabody will always be fascinating. The Yale-educated professional bettor is a market maker – when he places a wager, the bookmaker moves the line. A chance to pick his brain, at least to the extent he’ll let you, is an enlightening exercise.
That’s particularly true during this pandemic. Rufus offers a data scientist’s perspective on what we’re seeing in the news every day. Unfortunately, he also became the sports betting community’s Patient Zero – he contracted the Coronavirus and believes he passed it on to others at the MIT Sloan Sports Analytics Conference in early March.
Also, Rufus’ favorite sport to bet – golf – is one of the first to come back, and much of his work over the past several months has been focused on sharpening his model to maximize that opportunity.
From his home in Boston, Rufus spoke with me for the latest installment of our quarantine Q&A series.
BetIndiana News: What are you working on?
Rufus: I’m working on a few various projects – something related to golf, as well as just our general R&D stuff, some various business things I have going on.
BetIndiana News: Have you bet on anything during quarantine that you normally would not have bet on?
Rufus: I think the only thing I bet on was one Outlaw Tour event. I scraped a bunch of Mini Tour data before I realized that it’s probably not worth my time. I could be doing things that yield more down the line. So I’ve been trying to focus on things that stand to benefit me more long term.
BetIndiana News: I recall seeing some Venmo transactions regarding poker?
Rufus: Oh, I just play like $10 games with some of the friends that I’m in a fantasy football league with, but I’m literally playing for like $5 or $10 (laughs). That’s more of a social thing.
BetIndiana News: What about the exhibition golf events like this past Sunday with Rory and DJ and Fowler and Wolff? Did you bet that?
Rufus: I didn’t. I would have if I had gotten in earlier at the bigger prices that were out there to begin. But obviously it gets hard to handicap something like that, just given the layoffs and all that. There’s a lot of unknowns, which is why I would have liked the big prices on Rickie and Matt Wolff earlier. But at the time I didn’t really even look into seeing what places would take (limits that would make it worth it). I tend not to focus too much on the one-off things like that.
BetIndiana News: I guess the same answer holds for (this coming) Sunday with Tiger and Phil and Peyton Manning and Brady?
Rufus: I might have a little something on it just to make it a little more fun to watch if I think that there’s value, but I’m not putting a lot of work into it now.
BetIndiana News: Can you even attempt to model quarterbacks playing golf?
Rufus: (Laughs) If I had some information on how they’ve played in the past then I could. I guess you can make an educated guess looking at their swings too, and their handicaps – that’s probably what you would want to know.
BetIndiana News: I heard on one of your podcasts that you planned on taking the year off from baseball. How come?
Rufus: (Jokes) Because I knew this was going to happen, obviously. So I was like, ‘why do I want to put all this time into a season that’s ever going to happen?’
No, in all seriousness, I just kind of wanted a break from it. Baseball is a grind, and I had a bunch of other projects that I’m more interested in. I thought that not doing baseball would free myself up because baseball just ends up being a lot of work, and I would have needed to put in a lot of work this off season to get my model to where I wanted it to be. And I just decided that wasn’t really worth my time.
BetIndiana News: You bet on golf, baseball and football. How did you land on those three sports? Are those the sports that you were the biggest fan of or are those a sports that you found beatable or had softer markets – probably not softer markets with football – or that you’re most able to model? How did you land on those three?
Rufus: Honestly, a lot it’s happenstance. I did my senior thesis on inefficiencies in the baseball betting market and built a baseball model first. Then I started betting NFL props and derivatives, and then realized I should try to build something for NFL, which ended up turning into the Massey Peabody stuff. And then a business partner of mine had been doing something with golf, and he showed me the data, and I was like, ‘wow’ and it just sort of went from that.
BetIndiana News: Are there other sports you’re looking at or considering?
Rufus: Yes, definitely. There’s always stuff I’m sort of exploring. I know I only have so much bandwidth myself to handle projects solo, so in other sports I’m looking to be more in a managerial capacity and find somebody that I can work with, where they can do most of the coding and I can be giving my input on the bigger picture and how I would approach things.
BetIndiana News: Can you talk about what sports you’re sort of eyeing?
Rufus: I’d rather not.
BetIndiana News: (Laughs) Okay, understood. … If you could only bet on one sport what would that be?
BetIndiana News: How come?
Rufus: That’s where I make the most money.
BetIndiana News: Do you think the market over the next five years evolves to a place where that answer might change?
Rufus: That’s a good question. I think the market is going to change a lot, and I think it’s gonna potentially be favorable for golf. It’s a sport that lends itself to betting, and I think legalization will help golf betting relatively more than other sports. But yeah, it could change. It totally could change.
BetIndiana News: That’s an interesting answer. In terms of legalization’s impact on golf, is that just because there are so many betting opportunities during a golf match?
Rufus: Yeah, I think there are. You have these discrete events in terms of shots. I think you’re going to see a lot of growth in live markets, live props stuff, like ‘will a player birdie this hole,’ things like that. But that will be more geared towards recreational bettor with lower limits. That’s not something I’m bullish on for my own gain, I guess.
But in general, people who play golf are pretty wealthy, have a lot of disposable income, and these people like to gamble. So I see there being more options. I see it as market that has room to grow.
BetIndiana News: I have to ask you about home-field advantage in football if games are played with no fans. Without giving away your secret sauce, how you go about modeling something that we’ve never seen before.
Rufus: That’s a good question. With a good deal of humility. Different people are gonna have different thoughts about this, and there’s been lots of literature about home-field advantage over the last 20, 30 years, and still there isn’t really a consensus on where it comes from exactly. There’s familiarity, there’s referee bias, there’s travel distance and all that stuff.
I think we’ll see less referee bias if there’s no fans in the stands, so in that way I think there’ll be less (of an advantage), but you still have travel, you still have things like that. Personally, I don’t think it’s going to make as much of a difference as a lot of people think. Even bad teams have home field advantage – or maybe I should say road-field disadvantage – it kind of cuts both ways, right? It’s going to be interesting to see, and it’ll give us a chance to look at what are those factors that are driving home-field advantage, because we don’t have a lot of samples of games with no fans.
BetIndiana News: What’s the worst beat of your gambling career?
Rufus: The one that sticks out in my head is Kyle Stanley blowing the Farmers Insurance Open back in 2012, when he had a three-shot lead going into the final hole, and the other guy (Brandt Snedeker) was in the clubhouse. He just needed a double bogey or better on the easiest hole on the course and was sitting in the fairway a hundred yards out on a par five after two shots. He could have used his putter and made a double bogey from that point. But he triple bogeyed it, and we lost on that. We had him 150/1 to win that. And he came back the next week (at the Waste Management Phoenix Open) and won somehow, and the guy that we bet on the following week, Spencer Levin, had a six-stroke lead going into the final round and blew it to Kyle Stanley. There’s been a lot over the course of the years, obviously, but that kind of sticks out in my head.
BetIndiana News: I almost didn’t ask you that question because I thought for sure you were going to say the DraftKings contest (in the 2019 sports betting national championship, Rufus was among the contestants whose bets weren’t graded on time in order to roll over their winnings to the final game of the contest, the NFC Championship Game between the Saints and Eagles, costing him the $1 million prize for first place).
Rufus: Yeah, financially, that probably is, I hadn’t thought of that.
BetIndiana News: Not a traditional bad beat.
Rufus: But overall, I feel like the bad beats from earlier in my career on actual events, on actual sports bets sort of stick out more. I think part of the reason for that is my bets are relatively smaller now. They’re not smaller in absolute size – they’re bigger now in absolute size, but relatively smaller results compared to my net worth. They’re not as consequential to me.
BetIndiana News: What podcasts do you listen to, sports betting or otherwise?
Rufus: I try not to listen to sports betting podcasts. I listen to The Ringer NFL show during the football season with Kevin Clark and Robert Mays on Monday morning – love that podcast. I listen to NPR’s Planet Money. I listen to The Daily for news. Recently I’ve listened to Invest Like the Best. My podcast time is spent away from sports betting and away from sports in general.
BetIndiana News: I love the theme song to your and Jeff Ma’s podcast (Bet The Process). Whoever wrote that seems to have a pretty good deal of knowledge about what you guys are trying to accomplish. Who wrote that, who performs it? Did you guys have a hand in writing those lyrics?
Rufus: If you go back to the beginning of the podcast, almost two and a half, three years ago, we had that same music without any lyrics on it. But somebody approached us and was like, ‘Hey, I wrote this rap that goes over it.’ Just a random Twitter person, and we love it, we think it’s great.
BetIndiana News: Yeah, he nails it. … What are you watching on TV these days? Anything you might recommend?
Rufus: My fiancé and I are watching ‘The Wire’. I had seen the first few seasons, but it was a long, long time ago, and she’s never watched it, so we’re working our way through ‘The Wire’, watching maybe an episode a day. And just like everybody else, I watched ‘The Last Dance’.
BetIndiana News: Thoughts on that?
Rufus: I thought it was fascinating, it was really interesting. Back in 1998, I was 12 years old when Jordan won that last championship. I still remember, I had a Michael Jordan 45 jersey when he came back of retirement from baseball. So it’s takes me back to a time in my life when I was more of a basketball fan, to be honest.
BetIndiana News: I talked to Captain Jack for (the first) of these Q&As, and I asked him what was the best habit he picked up during quarantine. He mentioned he was practicing some advice that he learned from you, and that was when you’re working, be working, when you’re not working, don’t be working. I’m wondering if you’re practicing what you preach.
Rufus: (Laughs). Not as much as I would like. My problem is that with a lot of my work, I’ll write some code and then I’ll go do something else and then you end up sort of losing focus, and then I come back and I’m like, ‘well, where was I?’ But I’m doing better with it. It’s something that I do think makes you a lot more efficient if you don’t have that time where you’re watching TV and trying to work at the same time.
BetIndiana News: You are the sports betting community’s Patient Zero. What was the worst part of having Coronavirus for you?
Rufus: The worst part for me is just the knowledge that I infected other people. Honestly, that was about it. My symptoms were super mild. I wasn’t in bed, I didn’t have a fever. I just had a little bit of a headache and lost my sense of taste, and that was basically about it.
BetIndiana News: I’ve been listening to a lot of your podcasts, and what I have enjoyed maybe the most is your discussions about COVID. I appreciate the scientific perspective you bring, how the data is insufficient and unreliable and therefore the models are pretty bad. From your perspective, is that improving – is the data improving, are the models improving?
Rufus: We have more data now, so that helps. The question I’ve asked is, ‘what are we actually trying to model?’ And if we’re trying to model, ‘This is how many deaths we’re going to have’, policies and things like that are endogenous to that. There are so many things that could happen that could change a prediction, so are these predictions supposed to be if governments continue doing things the way they are, if we reopen the economy, if we don’t reopen the economy? That’s a big issue I have.
But I think you’ve seen a lot of bad statistics out there. The White House model, the infamous cubic model, was pretty bad. I saw two different tweets that were absolutely hilarious, show(ing) why the cubic model was bad – one that predicted the Bills based on cubic model, using how many wins they had the previous few seasons, would win 17 games (this season); and it had some other team winning negative 0.3 (games).
There’s a lot of bad stats out there. There still are issues, needing to contextualize data and honestly in a way that we really can’t necessarily. I mean, how do we know the data that China or Russia is reporting is accurate? And different states have different policies regarding testing, so it’s not like we’re randomly testing the population. I haven’t actually taken an extended look myself, but I do think it’s extremely important to contextualize the data, and it’s very hard to do that with this.
BetIndiana News: I hope I can articulate this next question somewhat intelligently, but there seems to be another fundamental difference – and maybe you just touched on this – between modeling sports and modeling a pandemic. With sports you have thousands of samples to go off, to model off and to back test. With this (pandemic), the scientists are kind of doing it on the fly and there’s no real previous examples.
Rufus: You don’t have a track record of predicting and sort of learning what works and what doesn’t. With something like this, the less data that you have, the more logic needs to play a role in building a model.
In sports, though, you deal with things where you might not have a lot of data all the time, you have to make educated guesses on certain things. Specifically, if you’re modeling prop betting. A number one wide receiver gets injured. Does the number two wide receiver benefit more, do they throw it to the tight end more? There’s all sorts of things like that where you don’t really have a model that you’re back testing, you’re just trying to make some assumptions and logically thinking through it.
Obviously, it’s not an apple-to-apples comparison, but you’re right, it is a very different task than modeling sports.
BetIndiana News: How do you think the sports betting industry will change as a result of this?
Rufus: I think in the United States we’ll see states pushing harder for mobile betting. The reason for that is pretty self-explanatory. Globally, I think there’ll probably be some books that don’t make it through this. A book is like any other company. The books aren’t making money right now, so a lot of it is what the balance sheets look like at these different books and things like that, how much cash they have in the coffers.
BetIndiana News: I know this is pretty much on pause for the time being, but is there anything you want to say about the American Bettors Coalition (a customer advocacy non-profit led by Rufus, Captain Jack Andrews and Alfonso Straffon), an update you want to give?
Rufus: We unfortunately have had to put it on pause because launching now would be kind of a death sentence. Right now, operators are just trying to survive. All these companies are trying to survive, and they don’t have the money to help fund an organization like ours. We still believe just as strongly, if not more strongly, in our mission, and as you see more states legalize and as you see more mobile betting in these states, bettors having a forum, bettors having a voice in the process is going to be just as important.
BetIndiana News: The final question I’ve been asking everybody (in this series) is what’s one positive thing that comes out of this. From a personal perspective or an industry perspective, or perhaps something as a nation or as humans, what’s one good thing or one lesson that we can all take from this?
Rufus: For me, it’s to be more grateful for what we have. It’s reminded me how important friends and having social interactions are. You don’t know what you got until it’s gone, right? When things get back to normal, and I hope they will, just appreciating how nice it is to be able to go out with your friends and be outside on a nice day. When you’re stuck in an apartment, it’s like you’re in a little prison.