They were sheepishly unsure but hopeful. As fans and data curators, they knew this was a watershed moment, the first time “the brain” made a bold proclamation about one of their Toronto hometown teams. The fan and the entrepreneur in both of them wanted the result to be true.
In 2019, Quarter4 Founders Kelly Brooks and Danijela Covic were pleasantly stunned when their artificial intelligence-powered sports prediction system pegged the longshot Toronto Raptors with a 74% chance to win a first NBA title.
The second time, the fan and the analysts in them were torn. This spring, they were at first skeptical, then a bittersweet concoction of validated and crestfallen when their system became smitten with the Montreal Canadiens, the team with the worst record in the Stanley Cup playoffs.
Montreal kept advancing first by recovering from a 3-1 series deficit to the Maple Leafs in the first round. They dispatched Winnipeg, kept advancing. And early in the Western Conference finals, with Montreal a loser in Game 1, the “the brain” gave it a 93% chance of upending the Vegas Golden Knights and advancing to the Final.
And so the stunning Canadiens did.
“I thought it was a joke. Ninety-three percent,” Covic told PlayUSA. “I mean, look, I’m a Toronto fan. It’s fair enough, because I live here, but that was hard for me.
“But then the Jets, I thought no way, that Montreal had a lucky go. But no. It picked [them] just to kind of go on and then Vegas. It’s just mind-blowing.”
It was their greatest prediction that no one ever saw outside of their offices.
“One of our customers, he’s like, ‘You’re making some really weird calls. Like, I don’t know if we can publish these’,” Brooks recalled. “And we’re like, ‘Do what you want.’ And every time we go back and we’re like, ‘Hey, you like that series? How did that get you? And he was like, ‘Oh my gosh, I wish we had the balls to publish. ‘“
It was another lesson, Covic said, of removing emotion and relying on the algorithm they say improves every day with each piece of information it consumes.
“We have a lot of inherited bias ourselves as humans and sports fans. So I’m kind of in the same boat. I’m kind of like cringing and going, ‘I don’t think so’,” she mused, “But you’ve got to believe it. And then our brain or model teaches me every day, ‘Just believe in me and trust in me.’”
Brooks and Covic intend to keep listening and hope to convince the broader US sports betting industry to also. Recently off a seeding round led by Shore Capital Sports & Entertainment, the 14-person company raised $1.6 million for a planned fall expansion where Brooks said Quarter4 will make upwards of two million “4Casts” daily, double the current output.
As part of the funding campaign, Scott Secord, managing partner at Shore Capital, and Terry McInally, chief compliance officer of Gateway Casinos and Entertainment, joined the Quarter4 board of directors.
How two non-coding Canadians came to build ‘the brain’
Neither Brooks nor Covic arrived at this venture from data science backgrounds, though Brooks took a course in the regimen and worked as a web developer for two years.
“I liked to work with developers and take their brains and transform what they had in here into solutions and lead a team,” said Brooks, the CEO and president. Educated in communications and digital media, Brooks began dabbling with technology entrepreneurship in 2004 before starting her own agency, SpeakFeel, in 2009, focusing on mobile software development. The proto stages of what became Quarter4 was developed there.
“I love being an entrepreneur and just seeing things, how can we solve things with really progressive tech?” she said. “How can we use blockchain? How can we use mobile software? How can we use cloud, how can we use data? And that fast-forwarded to this industry where the betting industry is very behind in a lot of ways. And the opportunities here to progress it, launch pad it, to transform it with progressive technology, there’s a lot of opportunity here that is going to reward a lot of people anywhere from the operators to other technology firms, to the betters, to sports fans.”
Covic’s background is in finance. She worked in the industry for seven years and said “as much as it is endearing, it’s also extremely boring half the time.”
“And I was like, ‘OK, well, let’s set up on the tech journey,’ which is where I met Kelly,” said Quarter4’s current director of sales and CSO. “I spent the next four to five years managing and really understanding the idea of technology, what different platforms leverage.
“And then I realized how much I actually loved this world, because coding and development is all based on numbers. And it’s all based on patterns, which is something where my interest lies.”
Both future partners had a keen interest in sports. And by the time Brooks and Covic were having their first discussion about how they could apply their common interests into something new for themselves, legal sports betting was becoming a legal possibility in the United States with the fall of the Professional and Amateur Sports Protection Act in 2018. Sports betting was adopted in Canada this year, but isn’t yet underway.
The opportunity has presented itself.
“So we thought, ‘Hey, let’s have a look at the numbers. Let’s look at the sports and let’s look, see how we can make a difference leveraging technology and this absolutely antiquated, but exciting market that’s about to hit North America’,” Covic recalled. “And this is where we are today. And this is kind of where Quarter4 is, literally being built as we speak every second of every single day. And our machine is learning as we talk to you right now.”
Quarter4 founders grasp unique intersection, strive to be judged on results
Brooks and Covic understand their uncommonness in the multitude of industries that Quarter4 traverses. SpeakFeel was able to develop Quarter4 with the help of a $100,000 grant from Canada’s Women Entrepreneurship Strategy program, which has helped her and Covic evolve in the minds of new peers from “these great women from Canada … in this space that no one else has women in and they’re tech.”
“But then they get to know us,” she added. “And then it’s almost like that, that dissolves.”
While the pair acknowledges their importance, now it’s about the product, Covic said.
“We’ve always been that it’s always business first,” Covic said. “I’m sure you’ve seen is women founders are in certain industries. And I feel like Kelly and I are driving that where we’re saying, ‘OK, well that doesn’t necessarily have to be the case anymore’. And when we started, we had a lot of issues with that. A lot of women-supported [venture capital] funds or even just anything to kind of help us along the way or guidance was not in the industry that we were going after because it was just something that was so different. So in the end we hope we also inspire. I mean, it really shouldn’t be a gender thing. It should be a competency question every time you’re trying to do something like this.”
How artificial intelligence has impacted sports betting
AI start-ups were mushrooming in the months before the COVID-19 pandemic. Many have subsequently vanished. Rex Mundi, founded by tech entrepreneur Vincent Peters, touted a success rate between 65-to-68% before a planned launch in early 2020 that did materialize except for a few Tweets that would have hurt that touted win percentage.
Among the survivors is Unanimous AI’s Sportspicker AI, which sells game predictions formulated with both swarm and artificial intelligence.
Before spinning off as Sportpicker AI and specializing in business applications, parent company Unanimous AI predicted the correct winner and final score of Super Bowl LI – the one where the Falcons lost a 28-3 third-quarter lead to the Patriots with 34-28. In 2016, founder Louis Rosenberg hit an $11,000 Kentucky Derby superfecta at 540-to-1 odds using the system.
Also in 2019, William Hill launched the STATS VQ platform in conjunction with sports technology firm Stats Perform to “allow sportsbooks to create unique player prop bets using machine learning generated…