Bettor Betty has a record of 4-6 on her last 10 bet picks.
Who is the better bettor?
If you answered either Bob or Betty, then this article is written specifically for you. If you answered that you can’t tell, you’re a smart cookie. I decided that this blog NEEDED to be written after I witnessed several sports bettors on multiple occasions comparing how good they were based on their ability to pick winners. They were talking about what their records were, and the guy with the better record was convinced that he was the top dog.
The fact that they were even having this discussion and using these criteria let me know right away that neither of them had a clue as to what they were doing. If you’re supremely confused, that’s ok. I’m going to walk you through everything step by step.
The Supreme Importance of Value
Let’s take our initial example a step further to show you exactly what I mean when I say value. Here are the betting records for Bob and Betty only this time we’ve included the odds they bet each game at. They each placed 10 bets all at $100 a piece.
Wait, what?!!! Yup, that is right. Betty is actually the better bettor based on this sample size. I’m saying based on this sample size because you usually need to look at a lot more than 10 bets to get an accurate reading, but for simplicity, we are looking at only 10 bets.
The point comes out the same. Bob picked more winners, but he was picking a bunch of favorites that were supposed to win. When you pick favorites, you get paid less for being correct. Betty, on the other hand, picked a mix of favorites and underdogs. She was looking for value and not just to pick winners.
You see, when you’re making wagers, you should NOT just be looking for the winner. I know I sound like a broken record, but I am trying to beat this into your head. You need to look for value and bet even if you aren’t supposed to win that game.
A Second and More Critical Example of Value
Let’s say that Team A is playing against Team B and Team A is a big underdog. The sportsbook has the odds at the following:
- Team A +500
Now, let’s say that you don’t agree with the sportsbook at all and you actually think that Team A is a lesser underdog and that the odds should be more like Team A +200. What does this mean? This means that you STILL think that Team A is supposed to lose, but you think the sportsbook is going to pay out way too much if they do happen to win.
Most people that are only thinking about picking winners would not bet this game or would be inclined to bet on Team B, who is supposed to win (even by your predictions) A smart sports bettor, though, would still bet on Team A.
Let’s look at why. To make this clearer, let’s convert the odds the sportsbook put out and our odds into probabilities.
- Team A +500 = 5 to 1. This means that for every six times these teams play, Team A should win once.
- Team A +200 = 2 to 1. This means that for every three times these teams play, Team A should win once. This means that for every six times these teams play, you think that Team A should win about two times.
Let’s look at what happens if you are right over the course of 12 games. Yes, I know that you can’t bet on the same game more than once, but the idea is that if you keep making value bets like these, you will eventually realize the gains from the difference in incorrect odds.
Now, what you are seeing in this chart is the results of the games following your prediction that the odds should have been 2 to 1, but you are still getting paid out what the sportsbook put the odds at (5 to 1).
That’s right. We kept betting a bet that we were supposed to lose, but still made money. This is betting for value and NOT betting just to pick winners.
Single Bet vs. A Career
Hopefully, you’re starting to see the importance of betting for value. Something you may or may not have noticed is that the value bets only seem to pay off in the long run. This is an important takeaway. You may lose your first few bets for value. The purpose of a value bet is that you’re going to get paid MORE than you really should be when you do win.
You want to be looking at bets in regards to a long term strategy, not just trying to win a single game. This change in mindset is what sets the successful professionals apart from the amateurs who never make it.
Underdogs and Favorites
One thing I should point out as well is that you can find value on both sides of the coin. The above examples we gave only shows the value found in underdogs, but the same rules and principles apply to favorites as well. If you find a sportsbook that is drastically overpaying on someone that is a favorite, you should slam that bet as well.
For example, let’s say that the sportsbook has Team A as a -130 favorite. But you think that Team A is going to crush Team B and should be more like a -300 favorite. Bettors looking for value and bettors looking for a win/loss boost might both pick this bet, but one is doing it for the right reason, and one is doing it for the wrong reason. The bettor betting because of the value is utilizing long term winning practices.
This comes more into play when you decide NOT to pick a favorite to win a game. For example, if Team A is listed at -300 but you think that the game is going to be much closer and should be closer to -130, you should pass on this bet. Though Team A is expected to win, you are not getting paid as well as you deserve for this game if they do win. If you don’t believe me, run the same chart as I did in the second example above but with these different odds. You will be presently surprised that this is a losing bet.
While we’ve discussed the importance of value and hopefully that has set in, we do need to talk about how to calculate your Return On Investment (ROI) so that you can have the right stats to brag about to your friends.
The formula for ROI is your return divided by the cost of your investment. This is then expressed as a percentage. Let’s calculate Bob and Betty’s ROIs.
- Bob profited $107.81 over 10 bets of $100 each. This means that the total cost of Bob’s investment was 10 x $100 = $1,000. So Bob’s ROI is $107.81 divided by $1000 = .10781
- We then multiply that number by 100 to turn it into a percentage and get Bob’s final ROI of 10.78%.
- Betty profited $230.91 over the same $1,000 worth of bets. Betty’s ROI is $230.91/$1,000 = .23091
- We then multiply that number by 100 to turn it into a percentage and get Betty’s final ROI of 23.09%.
What Does This Mean
This means that for every $1 that Bob bets, he should expect to get a return of 10.78% or about 11 cents. For every $1 that Betty bets, she should expect to get a return of 23.09% or just about 23 cents. In this example, both of our bettors are profitably, but Betty is wildly more profitable than Bob even though she was a losing win/loss record.
I know I hit you with a lot of math here and you may have nightmares from school creeping it. For that, I am sorry. This stuff is extremely important though if you want to succeed and make it as a successful sports bettor. Judging your progress and success on the wrong metrics is a recipe for failure.
The bottom line is this. Win/Loss records are ONLY important for the teams competing. As a sports bettor, these mean nothing to you. What’s funny is that if anyone ever asks you what your win/loss record is, you know they have no idea what they are doing.