The Elo rating system is a method for calculating the relative skill levels of opponents in competitor-versus-competitor games.
It is named after its creator Arpad Elo, a Hungarian born American physics professor.
The Elo system was originally invented as an improved chess rating system, but is also used as a rating system for multiplayer competitions such as Association Football, American Football, Basketball and Major League Baseball.
The difference in the ratings between two opponents serves as a predictor of the outcome of a match. Two teams with equal ratings who play against each other are expected to score an equal number of wins. A team whose rating is 100 points greater than their opponent’s is expected to win 64%; if the difference is 200 points, then the expected win rate for the stronger team is 76%.
A team’s Elo rating is represented by a number which increases or decreases depending on the outcome of games between rated opponents. After every game, the winning team takes points from the losing one. The difference between the ratings of the winner and loser determines the total number of points gained or lost after a match.
In a series of games between a high-rated team and a low-rated team, the high-rated team is expected to gain more wins. If the high-rated team wins, then only a few rating points will be taken from the low-rated team. However, if the lower rated team score an upset win, more rating points will be transferred.
The lower rated team will also gain a few points from the higher rated team in the event of a draw.
This means that this rating system is self-correcting. A team whose rating is too low should, in the long run, do better than the rating system predicts, and thus gain rating points until the rating reflects their true playing strength.