Why are there more Losers than Winners in the Sports Betting World?
A vast amount of gamblers never achieve betting returns high enough to crossover to the exclusive group of people who make a living from betting. Even worse, the majority of sports betting practitioners consistently lose more money than they win.
Punters learn the hard way that they lack knowledge and understanding of probabilities. They constantly overestimate their skills in judging the chances of predicting an outcome.
Bookmakers remain in business and thrive at the expense of the majority of gamblers who possess two perfect flaws in their thinking:
A degree of ignorance when it comes to calculating betting odds
This particular human behaviour guarantees bookmakers their profits but, it’s devastating for the bank balances of bettors. Does this sound familiar to you?
Good Knowledge and Understanding of Probabilities Required
To make money with sports betting, determining the probability of a bet outcome and calculating the corresponding odds for it are unavoidable.
Comparing the betting odds offered in the market with the expected fair price is a constituent part of discovering whether the odds offered for a bet are too high (containing value) or, too low (without value).
Here is an example:
The screenshot below shows an excerpt from Soccerwidow’s Value Calculator for the EPL game on 25/10/2014 between West Ham and Man City.
The statistical probability of a Man City win was 49%, corresponding to ‘true odds’ of 2.04 (100/49).
Translated into layman’s language the chance of Man City winning this match was approximately 50/50. Of course, this meant West Ham had a 50/50 chance of avoiding defeat (i.e. West Ham winning or drawing the game).
However, at kick-off the highest odds on offer for Man City to win were only 1.65, equating to a 60.6% chance (100/1.65).
Everyone who bought a bet on Man City to win placed their bets at the price corresponding to a 60.6% chance, whilst in truth City’s chances were only 49%.
Without a satisfactory knowledge and understanding of betting odds and probabilities, there were probably tens of thousands of punters backing Man City, clearly priced as the favourite in this match, at massively under-priced odds.
People who bet like this over and over again shouldn’t wonder why they lose more money than they win over the course of a season.
In contrast, the bookmakers make a good profit from bets of this nature. In this particular example, offering odds of 1.65 equates to a mathematical advantage over the punter in excess of 20%, meaning that their profit on a whole portfolio of bets like this is, in the long run, at least 20% or above.
Are you still with me?
You need to understand that the ability to calculate probabilities and odds is crucial and will enable you to better judge if odds are over- or under-priced (i.e. worthwhile or not).
Sports Betting Odds – How to Know that Odds are Fair
Betting odds which correspond to the theoretical calculated probability are called ‘fair odds’.
The West Ham v Man City match is by no means a one-off or even a rare example.
The market odds offered on any event very seldom represent fair odds. They are regularly either over- or under-priced.
Considering that there is always ‘error’ present in statistical calculations (deviation of predicted distributions to the actual observed results), any betting odds within a corridor of +/- 5% of the calculated probability can be called ‘fair’.
Soccerwidow’s Value Calculator has an error rate of approximately 3%. Translating this to our example, consistently betting on teams with a 49% chance of winning will produce an expected hit rate for similar matches of somewhere between 46% and 52% (49% +/- 3%).
As we have seen, the highest odds available for Man City to win prior to kick-off were based on a 60.6% probability. This was way outside the acceptable probability corridor and, therefore, the 1.65 betting odds were hugely ‘unfair’.
Laying Man City in this case would have been a ‘value bet’, certainly not backing them to win.
Compulsory Maths Lessons for Bettors
I am really sorry but, for anyone seriously interested in betting for a profit, a thorough and practical understanding of betting odds calculation is absolutely necessary.
Sadly, maths, statistics and probabilities have never been the most popular subjects in schools.
If you want to be a winner you need to make a stark choice: either force yourself to learn everything you can about probabilities and betting odds or, accept the fact you are gambling for entertainment purposes only with a strong prospect you will lose more than you will win.
If you value the money in your pocket there is no sense to continue betting on gut feelings alone waiting for the next ‘lucky streak’.
So long as bettors remain ignorant of betting odds calculation, bookmakers will continue to grow their businesses whilst bettors will continue to pay for it.
Betting odds are the prices for bets which very rarely represent the true probabilities of an event actually occurring. For the majority of bets offered in the market, odds are either over- or under-priced.
The ability to compare odds and buy bets at the best available prices is crucial for betting success, as is a deep understanding of probabilities and odds calculation. Without these attributes bettors are doomed to lose more money than they win.
However, before you decide to delve deeply into learning betting odds calculation, please consider carefully whether it is in fact a good use of your time. If you are not put off by the maths involved I can certainly assure you that the learning curve ahead is very, very steep and long.
Perhaps you can think of other things to concentrate upon and make money in a profitable, but more socially acceptable way?
If I haven’t persuaded you otherwise and you are still serious about wanting to make money with betting, then it is certainly worthwhile reading my other articles on this topic (see selection below) – and consider buying our Over/Under Betting Course and/or Value Calculator to help you master this subject.
Check out our store for more educational products on betting odds calculation: Soccerwidow’s Products
Here’s a selection of relevant and free explanatory articles delving deeper into the subject of betting odds calculation:
How do Bookmakers Tick? How & Why do they Set Their Odds as they do?
How Bookmakers’ Odds Match Public Opinion
What is Value? What is Value Betting?
What is the Ideal Sample Size for Accurate Predictions?
Probability, Expectation, Hit Rate, Value, Mathematical Advantage: Explained