It always bothers me when people say that sports betting is all bad news. Most likely this is because they have heard horror stories about problem gamblers or they’ve seen too many movies where gamblers have had bad runs and gambling problems. Regardless of where they got it from, a lot of people have a negative view of sports betting.
Now, to clarify before I go any further, I want you to realize that I am only going to be talking about sports betting without any research today. Sports betting can be considered gambling or considered a long term profitable endeavor. Without going too deep into things, gambling is playing a game of chance. If you’re not doing any research and just picking teams to win games, you’re probably closer to gambling than you are to making educated picks.
While this is up for debate, I’m going to error on this side as it’s what the naysayers I am addressing would say. Let’s give them the benefit of the doubt for this discussion and say that casual sports betting is considered gambling.
A Trip to the Movies
The purpose of this blog is to enlighten some of you who might have a negative view of sports betting or to equip some of you to explain sports betting better to friends and family that are giving you a hard time about it. If you’d like, you can even forward this blog to your friends and family and let them read our point of view first hand. I’ll be glad to have this virtual chat with them.
Imagine if you decide that you’re bored on a Saturday and you want to go to the movies to entertain yourself. Let’s take a peek at the costs associated. Let’s say you drive to the movies and have a car that gets great mileage and costs you about $1 in gas. (return home trip also $1, so $2 total in travel). As we’re going to continue to error on the side of caution, we won’t calculate in any wear and tear on your car.
You get to the movies and buy one ticket for $12. You also get a soda and popcorn which is an additional $12. You enjoy your two-hour movie and head on back home. For the course of the afternoon, you spent $26 and got two hours of entertainment. Basically, you paid $13 an hour to be entertained.
Let’s compare that to a sports bet. You’re bored on a Saturday, and you decide you want to bet on a game to entertain yourself. You don’t have to drive anywhere since you can bet online and can eat the food you have at home, so no additional costs there. You do have to pay the $20 for your bet on the football game. The game is three hours long.
Because of your wager, the game is much more exciting for you and keeps you on the edge of your seat for all three hours. For the course of the afternoon (and assuming you lost), you spent $20 and got three hours of entertainment. Basically, you paid $6.66 an hour to be entertained.
The Actual Cost of Gambling
As you can see, you actually paid LESS to be entertained than someone who went to the movies. But in reality, you paid even LESS than we are leading on to. When you go to the movies and spend $26, your expected monetary return on that $26 is $0. You will never be handed money after seeing the movie. If that theater exists anywhere, please let me know, and I will be going there every single day.
With your sports bet, though, you actually have the potential to WIN money from your entertainment. Let’s pretend that your bet is done with no information and is a complete gamble 50/50. At odds of -110, you stand to win $18.18 if your team wins AND get your original $20 back. If your team loses, you get $0.
Let’s calculate what your expected value on your betting endeavor is. We will calculate the expected value of the movie expenditures too just for completeness. Our only outcome for the movie theater is -$26 and that will happen 100% of the time.
Movie Ticket Expected Value = 100% * (-$26)
Movie Ticket Expected Value = -$26
Movie Ticket Hourly Expected Value = (-$26) / 2 hours
Movie Ticket Hourly Expected Value = -$13 per hour
Football Game Expected Value = [50% * (-$20)] + [50% * ($20+$18.18)]
Football Game Expected Value = (-$10) + [50% * ($38.18)]
Football Game Expected Value = (-$10) + ($19.09)
Football Game Expected Value = $9.09
Football Game Hourly Expected Value = $9.09 / 2 Hours
Football Game Hourly Expected Value = $4.45 per hour
Now, before you jump all over me here, this is NOT the expected value of the bet. Your expected value on the bet alone would be -$0.91 or -$0.30 per hour. The reason our number is different is we are calculating the $20 in as if we were paying for the entertainment as a sunk cost. This means that getting it back is a win. We do not get the $26 back from the movies but getting the $20 back from the bet is unexpected in our example and therefore is treated as a profit. When calculating the expected value of the bet only, the $20 is not treated as a profit.
The Importance of This Information
The purpose of this calculation is to demonstrate that everyone pays for entertainment. Whether you are paying a few bucks to spice up a game or you are paying a cinema to watch a movie, you are paying for entertainment. The point with sports betting is that you actually have the ability to win that money back PLUS additional profit. Even when you lose your bet, your cost per hour is going to be lower most of the time.
Now, we are making a lot of assumptions here that need to be pointed out. One, we are assuming that you are betting a smaller amount on the game. This can be an issue if you start requiring larger bets to get excited about the game. What is a small amount? This is an amount that has absolutely no bearing on your quality of life and does not affect your normal budget in any negative way, shape, or form. This is money that you are purely using for entertainment value.
If you start betting a lot of money on the games, this whole argument goes right out the window. Also, if you’re betting small amounts but betting on every single game, this argument goes out the window. I can see some of you looking at that as a loophole 🙂
We’re also assuming that you’re getting more entertainment value from placing a small bet on the game. If the game is just as fun for you without a bet or no less fun with a bet, then this argument also goes out the window.
The point is that no matter if you lose every single game, you are still coming out cheaper or comparable in regards to entertainment.
As long as you are fully in control of your gambling and only betting small amounts that will not affect you at all if you lose, you’re basically just paying for cheap entertainment. This ends up being no different than paying for a movie, or going to play putt putt, or even going shopping. If you’ve gone shopping with my significant other, it is EXTREMELY cheaper to bet on a game 🙂
Hopefully, if you’re one of those that have a negative view of gambling, you can start to see the other side of things here. If you’re using this article to explain this to someone else, hopefully, they can see the light. Sadly, in my experience, those that have a negative view can sometimes be extremely stubborn when it comes to changing their minds. Don’t beat yourself up if you can’t change someone’s mind. Just stop sharing with them that you’re sports betting. I am not saying to hide it, but I am saying you don’t have to put it in their faces.
Sports betting can be an extremely cheap hobby as long as you allow it to be and don’t ever let it get out of control.
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