“The industrial revolution is coming to sports betting”, proclaimed David McDowell, CEO of FSB Technology, in a recent thought-provoking article for iGaming Business. But this month’s Freamunde fiasco suggests that the sports betting ‘revolution’ is no more fool-proof than the old-fashioned method of manual odds-compilation and the progress it brings is not always to the benefit of operators and punters.

Investigations are ongoing, but a summary of the Freamunde fiasco is as follows: 

• SD Ponferradina (Spanish second division) was due to play SC Freamunde (Portuguese second division) in an exhibition match on 4 August 
• But this match did not take place as billed 
• Instead the match took place with players from a different away team (who they were has not been clarified at the time of writing) 
• A scout from a data feed provider was present at the match and recorded the events without realising the players were not as stated/intended 
• Betting operators took the feeds, offered prices, and settled bets on the result 
Betfair posted the following statement in its forum a few days after the ‘match’:
Unfortunately it has come to Betfair’s attention that this event did not occur on Monday 04/08/2014. SD Ponferradina have confirmed they did not play a team in this fixture on Monday and due to this fact Betfair will have to void all markets on this event as per our rules and regulations. We can confirm a match did take part at the correct venue with SC Freamunde involved but …the away team were not SD Ponferradina.. 
The saga highlights a number of issues and weaknesses with way sports betting is moving and its reliance on technology and automation.
The first issue is the race between betting firms to offer the most markets and betting “opportunities”. The quantity of markets and betting “opportunities” has overtaken in importance the quality of markets on offer. The use of technology and derived prices has greatly helped the ability of bookmakers to “price up” more matches and more markets within those matches without the need to increase the number of odds compilers at the same rate.
One weakness in the direction sports betting is taking is the equating of “automation” with “reliability” and “fool-proof”. In his article, McDowell writes:
“Tasks that were done manually are rapidly being automated. Data feeds coming straight from a sporting venue, for example, were difficult to find even five years ago with many of the feeds using data collected on the sly by someone sitting in the stands. Today, sports data feeds are fast, accurate and legitimate and the increase in quality and reliability has given rise to real-time algorithmic odds compilation models being used to perform a job that previously depended upon skilled labour.” 
GBGC WH Betting trading algorithm 
GBGC WH Betting trading algorithm
But the Freamunde match shows that, in many cases, the “real-time algorithmic odds compilation model” still begins with manual data entry by someone sitting in the stands. The real-time algorithm can be as complex as you want, worked on by armies of maths PhDs, but the role of the match scout is still both the most important and potentially weakest point of the entire process – “garbage in, garbage out” as the phrase goes in computer science. The computer simply processes the data it is fed. It does not make a judgement on the quality of the data being used. 
There also seems to be an assumption between “automated” and “no need to check”. The bookmakers take the feed from a supplier but how many traders in the bookmakers were then assigned to actually watch the match (if it was on television) just to keep an eye on the action even though they were not actively trading it?
One of the appeals of data feeds and automated/derived pricing is that it means more can be offered with less need to employ dedicated traders and compilers. This helps cut costs and operators’ profits are under pressure. They are facing increased compliance and regulatory costs, higher betting taxes and more competition. 
So, if the skilled, labour-intensive job of odds compilation can be outsourced to a clever black box, you can’t blame the operators for taking the cheaper option.
It must be questioned whether customers really demand such breadth of markets. Some bookmakers have voided all bets on the match above or paid out winners and refunded losers, so presumably someone did have a bet on the match. But, as a gambler, if you feel the need to wager on a pre-season exhibition match involving semi-professional, lower league, European teams, perhaps you do have a problem with your gambling.
If gamblers really are so desperate for things upon which to bet then surely virtual sports are going to dominate sports books in the future. 
There is a number of benefits: unlimited matches 24 hours a day (the players don’t need to rest), nicely staggered start times to avoid clashes, every player metric and event can be measured to create “form” and performance analysis, a healthy built-in margin (pre-match and in-running) for operators and the betting operator can sponsor everything on screen.
If bettors are willing to place their trust in semi-professional, lower league Portuguese footballers they’ve never heard of, why not virtual footballers they’ve never heard of? 
With a sports betting levy being muted by the Labour party in the UK and arguments raging again with sports bodies over the use of data and media rights, betting on ever more realistic virtual events could be the real revolution in sports betting.