Game-show contestant James Holzhauer developed a strategy to quickly maximize the amount of money he won, says OPIM professor David Bergman.
An aggressive strategy, mathematical finesse, a sharp mind, and a willingness to take risks were some of the factors that spurred ‘Jeopardy!’ game-show contestant James Holzhauer to win 32 consecutive games and rake in more than $2.4 million, according to UConn business professor David Bergman.
While some may think it was brainpower and good luck that favored Holzhauer, Bergman says the ‘Jeopardy!’ champ used analytics and strategy to dramatically increase his chance of success.
We need to have more people who can think outside the box. Analytics provides a way to see things beyond conventional thinking. — David Bergman
“As a professor of operations and information management and an analytics expert, I think it is always interesting when people can find new ways to challenge conventional thinking,” he says. “We need to have more people who can think outside the box. Analytics provides a way to see things beyond conventional thinking, creating a new opportunity and a fresh look at traditional strategies.’’
Bergman, who drew media interest for a paper he wrote about how to increase the odds of winning a football pool, has a new paper pending on fantasy sports betting. Sports betting is an industry that is rapidly exploding due to a Supreme Court ruling lifting restrictions on gambling on sports. And, not coincidentally, Holzhauer – the ‘Jeopardy!’ champ – is a professional sports gambler.
Champ Wasn’t Afraid to Take Risks
Unlike other ‘Jeopardy!’ contestants, who worked their way up from the easiest to the most challenging and financially rewarding questions, Holzhauer developed a strategy to quickly maximize the amount of money he won, Bergman says.
He found his success in the higher-value questions, which are harder, but it allowed him to keep control of the board and increased his chances of claiming the Daily Double.
“I’m guessing that if he was confident in a category, he probably hit the buzzer before finalizing the answer in his mind,” Bergman says.
He notes that Holzhauer wasn’t reluctant to risk large sums in an effort to win the game.
“I think his willingness to go ‘all in’ was interesting. He wasn’t scared to gamble $40,000 on one bet, which led to profit maximizing. I think most new players are more timid,” said Bergman, noting that Holzhauer’s educational credentials include a bachelor’s degree in mathematics from the University of Illinois at Urbana-Champaign, a background that likely influenced his decisions.
Holzhauer, who had taken a year off from work to prepare for the game show, had accrued more money than his competitors and was in an advantageous position when he hit a Daily Double. He bet aggressively, and it paid off because he answered 72 of the 76 Daily Doubles he played. Bergman says his technique was far more aggressive than that of Ken Jennings, the previous ‘Jeopardy!’ champion.
The fourth-highest American game-show winner of all time, Holzhauer’s winning streak on ‘Jeopardy!’ extended from April to June 2019 and allowed him to set multiple single-game records for winnings accrued. His winning record intrigued viewers, with one episode drawing more than 14 million people.
Sports Betting Now a $400 Billion Industry
One thing is clear: whether on betting the odds in a game show or in professional sports, there is money to be made, Bergman says.
Last year, the U.S. Supreme Court struck down a 1992 federal law that effectively banned commercial sports betting in most states, thereby allowing the legalization of an estimated $150 billion professional and amateur sports betting industry. Since that ruling, the industry has grown to $400 billion.
“People, like James, are taking advantage of it and placing bets at will,” Bergman says. “Even TV broadcasters are trying to get a piece of the pie. Today you can watch a game on TV and put in a bet before, or even during, the game.”
He says the daily fantasy world is a great business opportunity for betters and platforms, which take 10 percent of the wagers. “Betters with good analytical models can take advantage of this explosion in gaming,” Bergman notes. “A few years ago, I would have been surprised to think of sports and casinos as partners. Today it is having a tremendous impact on the business world.”
Will ‘Jeopardy!’ Ever Be the Same?
But for those seeking armchair entertainment, it is likely that the next big ‘Jeopardy!’ winner will need a new or more refined strategy.
“James destroyed a lot of records, and perhaps changed the game moving forward,’’ Bergman says. “I think it’s possible that in a Tournament of Champions, the people playing against him will need an adversarial strategy. Obviously they will have to take more risks and ‘beat him at his own game’.”