A beginner's guide to variance in sports betting
Despite the buzz on social media, it's impossible to win every bet. Luck influences the results of sports betting to a large extent and therefore it is important to use a mathematical approach to your bets and always aim to bet on a higher number than the actual odds of the game.
If you bet on Liverpool to win on the eve of (2.), but at the time of the kick off the odds are 4/5 (1.80) You have found the value. Repeat this scenario thousands of times and statistics show that you will profit from your bets.
The amount of the bet ≠ Undoubted win
The fact that you have made such a bet on Liverpool does not mean that you are going to win. There are still 50 left. The probability of losing the bet is 4%.
Let's take the old example of a coin toss. While this is a 55/50 chance of getting heads or tails, if you flip a coin once, will it always hit the head five times? No.
Flip a coin 100 times, does it always land on your head 55 times? No. Flip a coin 1, 00 0 times, will it always land on heads 500 times? No, you get the idea!
Now let's get to know the term; "The Law of Large Numbers".
The Law of Large Numbers in probability and statistics states that as the sample size grows, its mean approaches the average for the entire population.
In simple terms, this means that the more times you flip a coin, the closer you get to a good 50/50 split.
Big numbers in sports betting
So how does all this relate to sports betting? Well, this is the same concept as a coin toss, but imagine you are making good bets.
I could be very technical here and show you some graphs and distributions to see exactly how value-added betting will turn out in the long run, but I'll keep this as simple as possible using the Liverpool example above.
If you are betting on Liverpool in the evening (2. ) - the implied 50% chance of winning - and they win, you double your money. But the true odds are 4/5 (1.80), which means they are actually 55. The chance of winning is 6%.
Repeat this process over and over and you are essentially betting on a scenario in which you double your money and there is 55. The chance of winning is 6%!
Basically, this is the same as saying to your partner; " If this coin comes up heads, you must give me $ 10. But if it comes up tails, I will give you 8 pounds "
Sports Betting Difference
But here's the problem: even if you value bet over and over again, it doesn't mean that you will be making a profit in the short term.
The only way to make profitable bets is to bet a lot for value, so the more bets you place, the closer you get to your expected results. ...
Some people will start quickly and make a lot of money in their first edge bets. For some, the opposite will happen. But be that as it may, overweight bets are always designed for the long term. Short-term is continuous variance.
Tips for reducing variance
- Betting on lower odds ranges. The higher your odds, the more likely you are to continue long losing streaks and the more bets you will have to place before your variance evens out.
- Set your maximum bet size. Never bet more than 2% of your total bankroll on a single game. As I mentioned above, just because you are placing an edge bet does not mean that it is correct!
- Take a long term approach to your rates.