Chapter 11: Beating the Odds
In this chapter, we delve into strategies to help you determine if you're truly beating the odds. While it’s impossible to know the outcome of most sporting events and whether you’ve just gotten lucky or not with a single bet, careful analysis and the right strategies can provide insights into whether your bets have positive Expected Value (EV). By utilising these methods, you can gauge whether your approach is correct regardless of yielding the desired short-term results.
How Do You Know You're Beating the Odds?
1. Closing Line Value (CLV) ‘Beating the Close’
Definition: CLV or ‘beating the close’ measures the difference between the odds you bet at and the closing odds before the event starts. If you consistently bet at better odds than the closing line, it suggests you’re beating the market.
Example: If you place a bet on the NFL (USA) New England Patriots at odds of $2.00, and the odds drop to $1.80 before the game, your CLV is +$0.20. Consistently achieving positive CLV indicates a successful betting strategy.
2. Return on Investment (ROI)
Definition: ROI is a measure of the profitability of your bets. It is calculated by dividing your net profit by the total amount wagered. For sports bettors, an ROI in the range of 4-6% is typical for those who are consistently profitable.
Example: If you wager $1,000 and make a net profit of $60, your ROI is 6%. An ROI significantly above or below this range can indicate whether your betting strategy is effective or needs adjustment.
3. Expected Value (EV) Calculations
Definition: EV represents the average amount you can expect to win or lose per bet based on the odds and probabilities. Positive EV bets are those where you anticipate a profit in the long run.
Example: If you place a bet with odds of $2.00, and the probability of winning is 60%, the EV is calculated as follows:
EV = (0.60 × 1.00) - (0.40 × 1.00) = 0.20
This means you can expect to make a profit of $0.20 per bet in the long run.
4. Bet Tracking and Analysis
Definition: Keeping detailed records of your bets, including the odds, stake, outcome, and other relevant factors, allows you to analyse your performance over time.
Example: By tracking all your bets, you can identify trends in your success rate and profitability, helping you refine your strategies and improve your betting decisions. One method that I used religiously was estimating an EV on every single bet I made and then comparing it to the actual ROI of my bets over the course of a season. If you’re perfect, your estimated EV and your actual ROI should be comparable after enough data points. If it’s not, then you may need to rethink and adjust how you’re calculating EV to better reflect your ROI. Collecting data can show inconsistencies and should be the bread and butter of any serious long-term profitable bettor.
5. Comparing to Sharp Bettors
Definition: Sharp bettors, or professionals, often have a keen sense of value and market efficiency. By comparing your results and strategies to those of sharp bettors, you can assess your performance.
Example: If you notice that sharp bettors consistently have better CLV and ROI compared to your own metrics, it may indicate areas for improvement in your approach.
6. Market Efficiency Tests
Definition: Evaluating how efficiently the market incorporates information can help you determine if your bets are well-placed. Efficient markets quickly adjust odds based on new information, so finding inefficiencies can be advantageous.
Example: If you spot an opportunity where the odds on an event have not adjusted for recent player injuries, you may have an edge if your bet accounts for this new information.
7. Hedging and Arbitrage Opportunities
Definition: Hedging involves placing additional bets to minimise risk, while arbitrage betting involves taking advantage of differing odds to guarantee a profit. Both strategies can indicate whether your initial bets were well-informed.
Example: If you place a bet on a golfer in the final round and later find opportunities to hedge or arbitrage, it can show that your initial bet had a positive EV based on available information.
Conclusion
Understanding whether you’re beating the odds involves a combination of these strategies. By analysing your CLV, ROI, EV, and other metrics, you can gain insights into the effectiveness of your betting approach. Remember, while you can’t predict outcomes with certainty, these methods can help you make data-driven decisions on whether you’re making good bets regardless of short-term results and improve your chances of long-term success.
If you’re ready to fine-tune your betting approach, explore our recommended betting tools and track your bets with the best available resources.
In the next chapter, we’ll explore how market agreement and resistance impact sports betting strategies and how understanding these concepts can enhance your overall approach.
