Calculate ROI in Sports Betting
Sports betting is always a lot of fun. Having a stake in the game you are watching seems to make the game much more enjoyable. Of course, it does help when you’re winning your bets. One way to see how efficient you are at your sports betting is to calculate your Return On Investment, also known as the ROI. You may not think of your bets as investments, but they’re not too far off in terms of potentially growing your money. Betting on sports while keeping the ROI in mind is a great way to make sure that you are on top of your bankroll and trying to stretch your profit as much as possible. So before you place your next bet, let’s learn about the ROI and how to use it when betting on games.
What Is An ROI In Sports Betting?
How to calculate your ROI is a fairly simple formula. First, you have to take your profit number, which is the Wager Return (how much the sportsbook paid you back) minus the Amount Wagered (how much you initially placed on your sports bet). Once you have your profit number, divide the Profit by the Amount Wagered.
For a real-world example, let’s say you put $100 on the Las Vegas Raiders at -110 odds. This wager would pay out $190 from the sportsbook, but what is your ROI? You would divide $90 (profit) by $100 (amount wagered) for an ROI of 0.90 or 90%.
What Is Considered A Good ROI In Sports Betting?
Not only is it important to understand what would be considered a good ROI but also what is reasonable. Because having a 90% total ROI from the previous example would be really, really good. However, this is not reasonable, as even the best sports bettors in the industry don’t come anywhere near this number. A good and reasonable ROI in sports betting is around the 5-10% range. Even an ROI this low takes a lot of practice, patience, and effort. And while that might seem like a small number, it can add up fairly nicely for your sports betting career.
The magic of compounding is that a small percentage can lead to big gains. For example, let’s say you have a 5% ROI with a starting bankroll of $1,000. The first month of your sports betting career would net you $50 in profit. This isn’t a big gain by any means, but next month you would be starting with a bankroll of $1,050. Maintaining the 5% ROI means that the month after that would get you $52.50 in profit. Again, while these numbers may seem small, you are still making a consistent profit that would see your original bankroll double in less than two years’ time.
Reward vs. Risk- What Is The Cause Of ROI In Sports Betting Fluctuation?
The nature of sports betting is that the odds are ever-changing. Understanding the nuances that go into the odds is complicated, but it is known that the odds change largely and are dependent on the expected outcomes of both the sportsbook and the public. In short, however, better payouts are found when betting on the underdogs as opposed to the favorites in the matchup. This would mean that if you more often than not pick the favorite in the matchup, you would have to place a larger number of bets in order to see a similar return on your investment as you would have with fewer bets on the riskier side.
Picking the underdog constantly in your bets comes with a higher risk threshold which could lead to volatility and make the picks more unlikely to succeed as opposed to betting on the favorite. While the underdogs have better value than the favorites for payout, they have to continually defy the odds, which is a tall task to take on.
As we said before, making a sports bet is akin to making an investment. You are leveling out the reward and risk with every bet you place. When you track your ROI over time, it shows you if you are balancing your bets well enough. Too much risk and you could see your profits plummet. Not enough risk, and there is little to no profit to gain.
Simple Betting Strategy For A Better Sports ROI
- Limit Your Sports
While it may be exciting to bet a little bit of money into each game that’s on for the day, a successful sports betting career focuses heavily on one sport and sometimes just one specific team or player. You may have a wide range of knowledge around a few different sports, but there is no bonus for being a jack of all trades in sports betting. When focusing on a specific sport or team means that you have more time to build a consistent strategy and learn from the previous errors you had made for your last bets.
Solely following a team like the Buffalo Bills, for example, can give you a good idea of honing in on what their strengths and weaknesses are. You’ll start to learn trends about how often they run the ball versus passing it, helping you with prop bets. You can see how the coach acts in the 4th quarter of a blowout game to see how that will affect the Over/Under bet. Little things like this make a big difference in growing your profit and the ROI of your sports betting career.
- Bankroll Management
The essence of managing your bankroll is to make sure that you don’t burn through all your money too quickly. There is volatility in sports betting and a good bankroll management strategy helps ensure that you will stay afloat after having to deal with the volatility. Disciplining yourself to only wager a couple percent of your total bankroll is a hard skill to learn and even harder to master. But it is a crucial skill nonetheless that will keep your sports betting career going for years to come.
ROI Sports Betting Moving Forward
Now that you know sports betting ROIs 101, it’s time to implement your formulas and get focused on the league you know best. Remember, a successful ROI doesn’t have to be a large number. Even a 2% ROI is still a positive profit and can grow your bankroll, even if they are slow gains. Now, who said some simple calculations couldn’t be fun? Read our other how-to pages to better your sports betting game!