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Sports Betting Roi - Return on Investment

Sports Betting ROI (Return On Investment) is a key metric that reveals how effectively your betting system is performing. It measures the growth of your betting bankroll over a specific period, helping you become profitable sports bettor in the world of sports betting as well as many factor such as betting tips and right mindset.

ROI – Return On Investment

Return On Investment (ROI) is a critical consideration for anyone who want to be a profitable bettor about sports betting, whether it's a profession or a hobby. ROI now matters more for those pursuing sports betting professionally due to the growth of online betting. But even casual bettors should understand ROI. In sports betting, ROI measures how much your betting bankroll has grown over a specific timeframe, like a month, year, or your entire betting journey. ROI tends to increase as you gain experience.

Calculating ROI

To Calculate ROI (Return On Investment) is easy. Here's how:

ROI Formula: Profit = (Money Won – Money Bet)

All a bettor has to do is take the initial amount they bet (total wagers), subtract it from their current total balance (including both wins and losses), and then turn that into a percentage.

For example, if someone started with $100 and ended up with $150:

($150 – $100) / $100 * 100% = 50%

So, the betting ROI would be +50%, which means they made a 50% profit, a pretty good result.

What is a Good Roi in Sports Betting?

In general, a 3-6% ROI (Return On Investment) is considered good. Professionals may aim for higher returns, but it's important to note that a consistent 3-6% ROI can add up and grow significantly over time.

Yield - Return per Bet

Yield is like a measure of how well you do with each bet or each amount you put in (your stake) in sports betting. It helps you see how effective your betting strategy is. It doesn't matter how much money you have to start with. It gives you a way to compare your success with other strategies or bettors. Unlike ROI (Return On Investment), Yield stays the same no matter how much money you have, and it usually doesn't go up over time.

Calculating Yield

To calculate yield, let's imagine a bettor who starts with $10,000 for betting. He divides this money into 100 equal parts which we'll call ‘units.' Then, over the course of a year, he places one bet per day for 365 days. Each bet is worth $100. At the end of the year, he won 195 bets and lost 170 bets, and now he has $12,760 in his account. So, his profit is $2,760, which is the difference between his final balance and his starting balance.

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Here are the key numbers:

  • Starting Balance: $10,000
  • Unit Size: $100
  • Number of Bets: 365
  • Bets Won: 195
  • Bets Lost: 170
  • Net Profit: + $2,760
  • Final Balance: $12,760

To calculate his yield (which shows how well he did per unit invested), you divide his profit by the total money he put at risk. So it's like this: Yield = 2760 / 36500 = 0.07562

That means his yield is 7.562%, showing how efficiently he made a profit with his betting strategy.

Influence of the betting odds

Different odds in betting can influence things. When we look at different bettors, one key difference is the odds they bet at. Many sports bettors, like sports bettors who bet on Asian Handicaps or US point spreads, often bet at odds around 2.000. On the other hand, bettors who focus on horse racing might have much higher average odds, like 10.000 or more.

Now, imagine two bettors, both with 2,500 bets in their records. We can use the same idea as before to understand their performance. The blue curve represents the bettor who bets at odds of 10.000, and the orange curve represents the bettor at odds of 2.000.

Take a look at the areas under the curves on both sides of the line where the yield is 5%. Even though both bettors have the same number of bets, it's much more likely that a 5% yield can happen by chance (without skill) for the bettor with odds of 10.000. This is because events with lower probabilities are more influenced by luck, both good and bad.

Betting at higher odds can lead to bigger profits (and yields) simply by being lucky. But the downside is that bad luck can also lead to bigger losses, as shown in the figure.

In fact, for the sports bettor at odds of 10.000 to achieve a 5% yield (or better) with the same likelihood as the bettor at odds of 2.000, they would need to make about 22,000 bets!

So, here's our second factor when evaluating how good an ROI is. When two bettors have the same yield, the one who achieved it with shorter odds is generally considered better. This means that higher yields (ROIs) are expected from bettors who bet at longer odds, assuming they have the same level of skill as those who bet at shorter odds. The numbers may look bigger, but they don't necessarily prove greater skill.

In summary, comparing yields for different bettors without considering the odds they bet on (and the length of their betting history) isn't a fair way to judge skill.”

In conclusion

Not all ROI in betting are equal. If one bettor has an ROI that is bigger than another has, it doesn't mean that they are better at betting. Bigger returns can come from shorter betting histories or betting at higher odds.

Having a high ROI might seem great in the short run but what really matters in the long term is how skilled the bettor is. By looking at the likelihood of different outcomes, you can get a better idea of what makes a good ROI.