In previous articles, we ve looked at odds and probabilities, then used this to un

derstand the concept of value betting. Whilst discussing value, we touched on cr

eating our own prediction model to allow you to generate your own probabilities
and odds for certain sporting events. This can then be used to compare your odds
with those of the bookmaker to identify value in the market and (touch wood) en
sure sustained profit in the long term. In this article, we go through the steps
required to create our own football (soccer) prediction model using Poisson Dis
tribution, as well as look at some of the limitations of this approach.
So what is Poisson Distribution? If you Google it, you get back a lot of scary d
efinitions that are very difficult to understand, such as Poisson distribution is
the probability of the number of events that occur in a given interval when the
expected number of events is known and the events occur independently of one an
other . What this basically means is that when we know the average number of times
that an event will happen, we can use Poisson to calculate how likely other num
bers deviate from this average.
Luckily though, we don t need to fully understand the concept, the formula or how
to calculate it because Microsoft Excel has a formula which can work out Poisson
automatically. All we really need to know is that it can be used to calculate t
he probability of outcomes for a football match, which in turn can be turned int
o odds which we can use to identify value in the market. This covers a number of
goal based markets such as Match Outcome (12), Correct Score, Over / Under Match
Goals, Both Teams To Score and Asian Handicap. There is plenty of more in depth
reading into Poisson online, but we won t be delving into that level in this arti
cle.
Although it has its limitations and faults, Poisson is a useful starting point t
o understand the fundamentals of creating your own odds. It can work as a standa
lone model which you use to advise your betting, or it can be used to understand
the basics before going on to explore further, more complicated methods. It als
o has applications to other sports, but in this article we will just look at foo
tball.
So how do we actually create a predictive model for football games based on Pois
son distribution?
As a quick summary, what we are going to do is take historical results to calcul
ate the number of goals teams score and concede. These averages are compared to
the league average and used to create values for attacking strength and defensiv
e strength for every team, which are then turned into goal expectation figures.
This metric is put into a Poisson Distribution formula which works out the proba
bility of every result when two teams face each other. We then take these probab
ilities to create our own odds, compare these against the bookies odds, then iden
tify where there is value in the market because the bookies are offering more ge
nerous odds that we d expect. Simple!
The beauty with a method like this is that there are a number of different point
s during the process where you might decide to try a different value as an input
or may want to include something else in the calculation. You may even choose t
o calculate goal expectation in a completely different way, for instance, by usi
ng Elo ratings which ranks all teams against each other
as teams play each other
, their respective rating will increase or decrease based on the outcome of the
result and will be covered in a later article. That is perfectly fine and will h
elp you develop and refine your predictive model during its lifetime.
The below is a slightly modified version to the method I used throughout the 201
3/14 season
after all, I don t want to give all of my secrets away however, it wil
l allow you to create your own predictive model if you follow these steps.

The first step is to decide which league(s) you want to build a predictive model
for. Until you get your model to a stage where you are happy with it, it makes
sense to focus only on one league, preferably one you know well. Once everything
is working as you wish, then the model can be replicated for different leagues.
You will go through a period of testing and improving, so it makes sense to do
this for one league to start with rather than making the exact same changes for
multiple leagues. Trust me, there is nothing worse than taking on too much at th
e start by attempting to predict every football game being played. For this exam
ple, we will use the English Premier League.
Open Microsoft Excel. It will become your best friend! Using a website such as W
hoScored.com, Soccerway.com or Football-Data.co.uk, copy and paste all results f
rom last season into a format that you can manipulate in Excel
for example:1Thes
e results are the base data that help you get to the point where you can create
your own odds. As more games are played, you will add these to this list of resu
lts, but we don t need to think about that just yet. This is one of the first poin
ts where you need to decide how many results you want to use as an input into yo
ur calculation. Some people may use five games, others may use 10, whilst some m
ay use data for the entire season. What you choose is up to you and this may be
something you wish to tinker with as you refine your model. For this example, we
will use all 38 games from the 2013/14 season.
If you re good with Excel, you can use all of these results to calculate the next
step. If you re not good with formulas such as Sum Ifs and Count Ifs, then a short
cut is to create another table based on the final league table. The key things w
e are looking to capture is goals scored and goals conceded by teams in games at
home and on the road. This will then be used to work out the total goals in the
league, average goals in the league, in addition to average goals for and again
st per team.Goals For and Goals Against are simple Sums in Excel, whilst the two
averages are worked out by dividing the total goals by the games played. For in
stance, Arsenal s Average Goals is simply 36 / 19 = 1.89. The below shows two tabl
es one for teams at home and one for teams against
showing all of these calculat
ions.2