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).