Forecasting sports tournaments by ratings of (prob)abilities: A comparison for the EURO 2008

Different methods for assessing the abilities of participants in a sports tournament, and their corresponding winning probabilities for the tournament, are embedded in a common framework and their predictive performances compared. First, ratings of abilities (such as the Elo rating) are complemented with a simulation approach which yields winning probabilities for the full tournament. Second, tournament winning probabilities are extracted from bookmakers’ odds using a consensus model, and the underlying abilities of the competitors are then derived by an “inverse” application of the tournament simulation. Both techniques are employed for forecasting the results of the European football championship 2008 (UEFA EURO 2008), for which the consensus model based on bookmakers’ odds outperforms methods based on both the Elo rating and the FIFA/Coca Cola World rating. Moreover, the bookmaker consensus model correctly predicts that the final will be played by the teams from Germany and Spain (with a probability of about 20.5%), while showing that both finalists profit from being drawn in groups with relatively weak competitors.