Sports Betting Guide
How much luck is in your betting?
How much does luck affect your betting? Do you think your last wins were luck or skill? We would like to share some knowledge to help you tell these things apart.
Betting on sports can also be described as the type of relationship between bookmakers & punters. Their communication is usually based around the odds, where bookies offer them & bettors try to find a value depending on their accuracy. The ultimate way to describe how does it work is a good ol’ coin toss. Why the coin toss, would you ask? Simply because the result of any possible outcomes (head or tail) have the exact same probability - 50%. Converting everything into betting terminology, we would get the odds of 2.00 (1/1) or evens for the coin to land on either side. Unfortunately, this is not exactly how bookmaking works. As you might already know, betting operators are profit-oriented organizations, and their goal is to ensure that every single bet they take guarantees them profit in the long run.
Having said that, the odds for the above example wouldn’t be a bit shorter than 2.00 (1/1). This all happens due to the betting margin online bookmakers impose on their betting markets. In other words, the margin is a sort of fee bookmakers take for accepting bets. Luckily, margins vary from the bookmaker to the bookmaker, as well as from one market to another. Thus, having accounts at multiple online bookmakers will help you find the book with the lowest betting margin!
If you are looking for value, then betting margin should be one of the first things you need to check about the market you are looking to bet on. Professional & experienced punters never bet with operators that impose a high margin because, by default, you are putting yourself at a disadvantage. The higher the margin, the less work bookies have to do to keep their prices shorter than the true value.
What are the chances of a profitable run?
Since we already know a bit about margin & value, let’s talk about how likely are you to make a profit after a series of bets? Coming back to the coin toss, the example where we already know the true probability & real value, let’s find out how likely the run of bets is to make a profit or not? Assuming the set of 10 throws, we can get any combination of outcomes from 10 losses to 10 wins. Since the coin toss has a 50% true probability, it is more likely the outcome of ten consecutive throws will look more like an even split of wins & losses. Now, let us add the bookmaker to the mix & now we have a margin in place. Assuming the book offers the odds of around 1.87 (13/15), which means the margin is about 7%, the most likely to happen outcome of ten throws (5 wins. 5 losses) will produce a return of just 9.35 betting units. A betting unit is a unified way of describing the size of the stake. This helps define a proper stake size for each specific budget & approach. Once again, using the above scenario while betting 1 unit per toss will produce a 9.35 return. In other words, this is a 0.65 unit loss from ten staked units.
Since we already mentioned margin & their role in betting, let’s take a bit more detailed look at it. While not very many punters know about them, these little things are crucial when it comes to your yield, especially in the long run. Let’s get back to the coin toss and the last scenario we used. In that scenario, we assumed the bookmaker with a margin of 7%, which in reality is quite a lot. What about a 2.5% margin? Unfortunately, even a more generous margin & the odds of 1.95 (18/19) would produce a 0.25 unit loss from 5 wins. In both cases, we need 6 or more wins in order to make a profit from tossing the coin 10 times. Hopefully, this simple example showed you how important it is to calculate the margin.
Difference between luck & skill
This will be rather a pro tip from us rather than some sort of explanation. We suggest keeping a record of your personal estimations compared to the bookmaker’s odds. In reality, the reason for that is that you won’t have only 50/50 true value events and only 1 unit stakes. You will have a whole lot of different odds & stakes all mixed, which is an easy way to get lost and then biased down the way.
Simply create a spreadsheet with your estimations of the true probability of your bets being successful alongside the implied probability (derived from the bookmaker odds). Developing such a habit will help you build a decent database & analyze your betting activity to be able to tell where it was just luck & where it was pure skill...