At Paddy Power--Ireland's largest bookmaker--teams of quants and risk analysts set the odds on 12,000 to 15,000 events a week--everything from horse races and other sporting events to speculation on the name of Beyoncé's unborn child. Within these events, there are 60,000-70,000 individual bets, or "markets," to be made. And every market needs a set of odds--some kind of calculation of the probability that a specific outcome might occur, based on available data. But how does a bookmaker know what data is good and what data is bad? How can it build safeguards into predictive systems so it doesn't get burned?
Seismologists and geologists would love to know which volcano is going to erupt next. Now, so do bookies, odds-fixers and those with a taste for games of chance. Paddy Power, Ireland's largest bookmaker, is taking bets on which volcano around the world will next blow its top to the tune of a VEI-3 eruption. Following the recent eruption of Philippine's Mount Mayon, apparently Paddy Power was flooded with requests by -- and we're quoting here -- "punters around the globe" who wished to wager on nature's next super-destructive geo-seismic event. Apologies up front to Japan; it seems the odds are stacked against you.