October 15, 2020

Sports Betting As An Investment

SPORTS BETTING SYSTEMS – What to look out for

In this article, we discuss what it requires to create a profitable sports betting system.

 

WHAT IS A SPORTS BETTING SYSTEM?

 

Before we go into depths of discussing the requirements of a good sports betting system, let’s talk a bit about what a sports betting system actually is.

A sports betting system is a method that tells you, the bettor, to back a specific bet when certain criteria are met.

  • In essence, a sports betting system is a method which should be possible to automate

So, just to make a few examples (these should NOT be interpreted as recommended systems, as they surely will deliver a negative P/L):

  • Always back the favorite team if the odds are between 1.4 – 2.0
  • Always back the favorite team if the odds are between 1.4 – 2.0 AND the favorite team is placed in Top 5 in the league
  • Always back the away team if the home team haven’t won it’s previous 3 home games and the odds on the away team are 3.0 or lower
  • Etc.

These are examples of easy to follow systems, that could also easily be automated with a software program. There are numerous software programs available on the market – just Google betting software and you will find a list.

Note that none of these simple systems require (or allow) the bettor to make any personal judgments. If the criteria are met, you should back the selection.

 

WHAT CONSTITUTES A GOOD SPORTS BETTING SYSTEM?

 

A good sports betting system is obviously one which delivers profits…

Digging a bit deeper than that, there are different factors to consider.

Yes, a sports betting system that delivers profits are essentially good, but that does not mean it will suit you as a bettor. And a system which on the surface looks good (i.e., it has delivered a profit) may in fact not be good at all. And it certainly does not mean you will love it.

If a sports betting delivers profits you have to examine it in order to figure out if

1) Can you expect the system to continuously deliver profits?

2) Does the strike rate (i.e., the number of winning bets compared to the number of total bets) suit you as a bettor?

3) Are the profits high enough for you to even bother doing it – what is the ROI?

 

Let’s examine these points closer.

 

Q: Can you expect the system to continuously deliver profits?

 

 

What we look for here is how the profits were generated. It may very well be that the system delivered a total profit

but if that was due to a single 7-fold bet at odds 120 that won, it may be worth considering if that is something you really can expect to happen again?

If the total profits were, say, 50 and it included the 7-fold winner, without it, it actually delivered a 70 points loss! Would you follow such a system? I sure wouldn’t!

So, you need to examine the system to find out how it delivers profits.

Which brings us to the next point:

 

Q: Does the strike rate suit you as a bettor?

 

You need to be very aware of how you are as a person. The psychological element of sports betting is often neglected but it is VITAL for you to know yourself inside-out. How do you handle a losing bet? Take it on the chin and move on or get extremely annoyed, angry or depressed?

You need to know this side of yourself before you decide if you want to follow a specific sports betting system or not.

Some systems are based on high odds, like in the example above – this means that you should expect a low strike rate (i.e., a lot of losing bets in a row), but when that winner finally comes – happy days!

Other systems are based on low(-er) odds, where the strike rate is much higher but obviously every single winner won’t make you buy the next Ferrari exactly.

So, you have to ask yourself: Who are you?

Please note: When looking at a system’s strike rate, you should be aware of the potential “drawdown” that the strike rate implies. We will look into money management, betting banks and “points” and how to calculate losing runs and drawdowns in a later article – all of which are essentials to know if you truly want to decide if a sports betting system is for you and if so, how you optimize using it.

Next up, we need to look at if the system, given the strike rate it has, is even worth your time and money.

 

Q: Are the profits high enough for you to even bother doing it? And what is the ROI (Return On Investment)?

 

A system delivering profits is obviously a good thing (given the considerations above) but off course you will also be interested in how big the profits are and what the real potential is.

If it is not a system you created yourself, there are some things you need to examine outside the strike rate (as discussed above).

What are the staking levels used in order to generate the profits claimed?

What is the number of bets per month (profits are usually stated per month)

It may be that a specific system can deliver $10,000 per month – but if this is based on 10,000 bets placed, you certainly won’t be doing that manually, so you need software to place it for you (and software is most often based on Betfair and perhaps other exchanges, so that could limit the potential of the system).

Opposed to that, it may be based on 15 bets at low odds so you need to back every single bet with a very high stake in order to achieve the potential profits. Is that something you’re willing to do, based on the system in question? Would it still be interesting if you scaled the staking levels down to a level that suits you better? Remember – you should only stake/risk at levels you are comfortable losing. You should NEVER stake so much that you are deeply emotionally affected by the loss (and, obviously, NEVER risk money that you can’t afford to lose!)

When you look at a system, rather than just looking at the profits, you should look at the return on investment. This parameter takes into account both the profits generated and the stake (the investment) these profits are based on.

So if a system provider claims that his system on average generates $10,000 of profit each month, you would want to ask: What is the ROI?

(The ROI is calculated as the Net profit divided by the Total Investment and is typically shown as a percentage point.)

So, if the system generated a monthly profit of $10,000 and the investment (i.e. the total stake) was $100,000, the ROI, in this case, would be 10,000 / 100,000 = 10%.

However, if the total investment was 1,000,000 in order to generate the profits, the ROI would only be 1% – and obviously spending $1 Mio. per month on a betting system (or $10,000 for that matter) is WAY above most people’s resources.

Some systems claim a high monthly profit based on staking something like $15 per point (or £10 if it is UK based – a standard used for most systems as the 1 point stake). This sounds realistic to most and so the system on the surface seems good. But then you find that the ROI is only 7%… why is that? What the system provider/seller didn’t mention was that each bet is based on 10 points, so, in reality, you should multiply the stake by 10 for each bet – i.e., for this example, the actual stake is $150 rather than the $15 you thought it was. And now suddenly this system does not seem as appealing anymore…

 

SUMMARY AND FINAL THOUGHTS

 

So, these are some of the most important parameters to look for when you search for a good sports betting system, be it one you buy or one you create yourself.

Just to recap what to look for:

  • Is the system profitable?
  • Can the profits realistically be duplicated in the future, given how they were achieved historically?
  • What is the strike rate? And does this match your temper?
  • What is the number of bets placed?
  • What are the staking levels for the system?
  • What is the ROI?

If you can provide positive answers to all of these (be honest to yourself – especially on number 3!), then the sports betting system in question could be relevant for you.

Advice: It is always recommended to only “paper trade” (i.e., not spending real money but only keep track of the bets on a spreadsheet) at first in order to get a feel for the system as well as getting confidence it works as expected.